Aspen Group has taken a $14 million hit to the value of its assets, writing down its Spearwood Industrial Estate as part of its annual portfolio review.
The Perth-based developer and funds manager said an independent valuation of the Spearwood estate declined to $68 million.
The estate’s major tenant, Leighton Contractors, is expected to exit the property once its lease expires in December.
Aspen said the Leighton lease represented around 68 per cent of the estate’s current income.
Other reasons given for the write-down were reduced earnings due to the slowing of the resources sector and an increase in capitalisation rate, from 10 per cent to 10.25 per cent.
The company’s Noble Park industrial estate and the Aspen Karratha Village retained their value, according to the independent expert.
However Woodside recently confirmed it would hand back 18 rooms it had leased short term in Karratha, reducing the occupancy of the estate to 90 per cent, or 162 rooms out of 180.
Aspen said it was seeking replacement occupants for the rooms.
Chief executive Clem Salwin said it was clearly disappointing to take a write-down on the Spearwood estate.
“However, our focus on our final remaining two substantial commercial assets, Spearwood and Noble Park, remains to manage them into a position to maximise value in a sale,” Mr Salwin said in a statement to the ASX.
“We are working expeditiously to achieve this goal.”
Aspen has been progressively selling off its commercial portfolio as part of a major restructure of its business operations.
It sold the Septimus Roe office tower on Adelaide Terrace to Singaporean development giant Far East Organisation in April for $91 million, a transaction which followed the March sale of its 50 per cent stake in Adelaide's ATO building for $29.5 million.
At 9:30AM, WST, Aspen shares were down 0.8 per cent, trading at $1.25.