13/03/2014 - 09:59

Aspen continues asset sell-down

13/03/2014 - 09:59

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Aspen continues asset sell-down

Developer and fund manager Aspen Group has continued selling its non-core assets, offloading its 50 per cent stake in Adelaide’s Australian Taxation Office building as well as its interest in the adjacent Adelaide City Central development site.

Aspen said the sale of the ATO building would result in proceeds of $29.5 million, after allowing for its share of the existing debt associated with the building.

The sale is conditional on approval of the project’s financier, which Aspen expects to receive in coming weeks.

The company's Septimus Roe Tower on Adelaide Terrace in Perth, independently valued in December at $94 million, remains on the market.

Aspen also today announced its Aspen Development Fund had sold its stake in the Adelaide City Central development site, for $12 million.

Settlement of the sale is expected to occur within 12 months.

Aspen Group chief executive Clem Salwin said the transactions were an important step in the company’s efforts to become simpler and more focused.

“The sale of the complex Adelaide City Central development site means that the disposal program for non-core development assets is now substantially complete,” he said.

“The sale of our interest in the Adelaide ATO office building is the first transaction of our commercial property portfolio program.

“Although the majority of proceeds are expected to be utilised for debt reduction, these sales put the business in a stronger position for both commencing capital management initiatives, as well as potential reinvestment in the business.”

Meanwhile, Aspen also gave investors an opportunity to bail out of its Aspen Parks Property Fund, which has battled to produce a positive return due to the downturn in resources industry spending.

Aspen announced today that it would provide a partial waiver of the management fee for the Aspen Parks fund, reducing it to 1 per cent of gross assets.

The fee waiver equates to around $1.1 million for the financial year, Aspen said.

The group also said it would also give investors the opportunity to exit the fund through a one-off liquidity facility.

The facility will allow investors to withdraw up to $1.47 million, priced at the net asset value of the fund, Aspen said.

“The scale of the fall-off in resources industry investment is unprecedented in the history of the fund,” Mr Salwin said in a statement.

“This has had a broad impact on businesses serving the resources industry; this includes Aspen Parks.”

Mr Salwin said the fund remained a long-term strategic investment for Aspen, despite the downturn in earnings.

Aspen Group holds an 11 per cent co-investment stake in the fund, which owns a portfolio of 21 holiday park and resources accommodation properties across Australia. 

The fund contributed $2.59 million to Aspen Group’s revenue in the six months to December 31, down 12.1 per cent on the previous corresponding half-year due to falling management and performance fees.

“We are committed to improving the returns in the fund and recognise the importance of this business to Aspen Group,” Mr Salwin said.

“These additional initiatives underline this commitment.”

At 2:00PM, WST, Aspen Group shares were down 1.2 per cent, trading at $1.24. 

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