Australian Unity forms JV with Singapore’s Keppel Capital

Australian Unity forms JV with Singapore's Keppel Capital

Australian Unity, a company providing healthcare, financial services, as well as retirement and living services, has formed a strategic 50:50 joint venture partnership with a wholly owned subsidiary of Keppel Capital Holdings Pte Ltd (Keppel Capital), the asset management arm of Singapore based Keppel Corporation Limited.

The joint venture-(Australian Unity Keppel Capital Pty Ltd (JV Co)- aims to provide attractive income yield and total return to investors over the long term through establishing funds focused on the Australian metropolitan office property sector, according to a statement by Keppel Capital.

At the same time, the JV Co has entered into a share sale agreement (SSA) to acquire a 100% stake in Australian Unity Investment Real Estate Limited (AUIREL) for a purchase consideration of approximately A$400,000. AUIREL, which is currently a wholly-owned subsidiary of Australian Unity, is the Responsible Entity of the Australian Securities Exchange (ASX)-listed REIT, Australian Unity Office Fund

Completion of the transfer of the ownership of the Responsible Entity to the joint venture is expected to occur on or before 28 February 2020.

“Keppel Capital is a logical and compelling joint venture partner for Australian Unity. Keppel has demonstrable experience sourcing assets and capital that will supplement Australian Unity’s activities in the Australian metropolitan office sector. Keppel’s purpose of providing solutions for sustainable urbanisation also fits strongly with Australian Unity’s focus on the health, wealth and living of Australians,” said Mark Pratt, Executive General Manager, Property of Australian Unity’s Wealth & Capital Markets business.

Australian real estate continues to be an attractive asset class, generating attractive income returns in a low yield environment.”

“Our partnership with Australian Unity marks a significant milestone for Keppel Capital as we seek to deepen our Australian footprint. Australian real estate continues to be an attractive asset class, generating attractive income returns in a low yield environment. Leveraging the strengths and network of Australian Unity, we are excited to commence this partnership to create investment opportunities for investors in the Australian metropolitan office markets,” said Ms Christina Tan, CEO of Keppel Capital.

Australian Unity noted that the announcement released on 29 January 2020 by SOF-XI Legs Holdings Limited, a member of the Starwood Capital Group, in relation to its intention to make, itself or through an affiliate, a conditional all-cash off-market takeover offer for Australian Unity Office Fund (AOF). ”The formation of the joint venture with Keppel Capital is unrelated to this announcement and is the result of a number of months of confidential detailed discussion and negotiation between Australian Unity and Keppel Capital” said in a statement.

Australian Unity is being advised by Greenhill and Herbert Smith Freehills and Keppel Capital is being advised by Hamilton Locke.