Elanor Investors Group has announced plans to delist the ASX-listed Elanor Retail Property Fund (ERF) with the REIT consistently trading at a discount since its 2016 listing.
The fund’s portfolio includes Tweed Mall and Manning Mall in NSW, Gladstone Square and Northway Plaza in Queensland, and Glenorchy Plaza in Hobart.
The REIT had sold its Auburn Central property at a 4.9% book value premium and its Moranbah Fair property at book value to address its trading price discount, in addition to a buyback programme throughout 2020 and 2021.
Under the proposal, the Tweed Mall property will be spun off into a new unlisted fund, reaping $87 million in proceeds that will be shared in a special distribution to shareholders.
Elanor is buying back shares at $0.79 per share, but is also allowing shareholders to stay invested after the delisting via a new open-ended, unlisted multisector real estate fund.
The new unlisted fund will be seeded with the Manning Mall, Gladstone Square, Northway Plaza and Glenorchy Plaza properties totalling more than $106 million.
ERF Chair Paul Bedbrook said the board had conducted a rigorous review of the proposal and believed it was the most attractive path to maximising value for shareholders.
“The board believes in the fundamentals underpinning the ERF reliable income retail portfolio and that the proposal is in the best interests of ERP securityholders,” Bedbrook said.
The REIT’s largest shareholder, MA Asset Management, had already agreed to not participate in the buyback scheme and would retain its shares in the new unlisted fund after the delisting.
Elanor Investors Group intended to maintain a combined investment in the new unlisted fund, as well as the Tweed Mall fund, equivalent to its current investment in ERF.