Quattro IPO back on, as it halves NZ property portfolio, cuts capital raise by 28%

Quattro Income REIT, an Australian asset management company, has resumed plans to list a New Zealand property portfolio, albeit a smaller number of properties, and has shaved nearly a third off the capital it wants to raise in a public offer on the ASX.

The Sydney-based investor will seek to raise A$220 million in an initial public offer, from a previously planned A$305 million, selling units at A$1 a piece, it said in a statement. Quattro's portfolio has also been reduced to A$320 million from A$431 million, after it halved the number of properties to focus only on commercial office buildings.

Last week the company shelved its IPO plans, saying “despite the extensive local and international marketing of the IPO, which generated very positive feedback, the current market volatility has prompted us to put the transaction on hold for the time being."  Heightened uncertainty on the ASX and in global markets had seen the S&P/ASX 200 Index decline some 4.7 percent over the past three months.

The portfolio will be made up of two commercial properties in Wellington, Spark Central, bought from Ian Cassel's The Wellington Company, and Precinct Properties New Zealand's 125 The Terrace building and the SAP Tower in Auckland, also bought from Precinct.

Quattro had been in talks to acquire Goodman Property Trust's [NZX: GMT] Enterprise Park at Wiri and SuperCheap Auto, part of the Savill Link Estate in Otahuhu and RJ Holdings' AIA Building in Auckland. Earlier this week Goodman's chief executive John Dakin told BusinessDesk the deal for Quattro to acquire two of its Auckland industrial estates was still on the table, as the businesses waited for the stock market volatility to ease.

The fund forecasts its distribution yield at 8 percent in 2015 and 8.82 percent in 2016, and boasts operating earnings growth of 8.5 percent in 2015 and 8.8 percent in 2016, Quattro said in a statement. Quattro is hoping to lure investors with an average 99 percent occupancy rate, with a weighted average lease to expiry of 7.3 years and an average yield of 7.9 percent. Its initial gearing will be 32 percent, it said.

The company expects to lodge a product disclosure statement with the Australian Securities and Investments Commission on Nov. 6.

(BusinessDesk)