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News release

Australia

JLL appointed to seek liquidity proposals


​Arena Investment Management Limited (Arena) as the responsible entity of Arena Property Fund (APF), Arena Office Fund (AOF) and Chevron Renaissance Property Trust (Chevron), today announced that it had formally appointed JLL to run an open market process to identify and seek to secure the best liquidity outcome for the investors of each fund.

All three funds have been frozen for investor redemptions since 2008, when the Global Financial Crisis had a significant impact on property values. In late 2011, Morgan Stanley Real Estate Investing (MSREI) acquired the business and together with Arena outlined a three stage plan:

1.  Stabilise the funds by MSREI underwriting recapitalisations of APF and AOF to enable distributions to be paid to investors and refinancing the Chevron mezzanine debt facility on more favourable terms for investors.
2.  Reposition the assets and allow time for the property market to improve.
3.  Provide liquidity to all investors, where market conditions are favourable and doing so is in investors’ best interests.

Mr David Ross, independent Chairman of Arena said “Given the success we have had in leasing the assets and the current strong property market conditions, the Board has resolved that now is a good time to test the market. We have asked JLL to run a process which will be open to receiving a broad range of proposals, including selling individual properties, portfolios of properties, or offers for investors’ units or business platform style transactions. In assessing proposals, the Board will have primary regard to what the proposals mean in terms of value to investors, the extent of liquidity provided, timing and implementation cost and risk. Our preference is to provide full liquidity to investors, if possible.”

Over the past two years Arena has successfully repositioned the office portfolio through active management and leasing, which has underpinned an improvement in the value of the properties.

Managing the divestment process on behalf of Arena will be Mr John Talbot (Managing Director
Investment and Advisory Group), and Mr Chris Key (Head of Corporate Finance) from JLL.

Mr Talbot commented “JLL is very pleased to be appointed to manage this important process on behalf of Arena and its investors. The property portfolio comprises nine investment grade assets that will be attractive to investors seeking a scale exposure, geographic and asset class diversity and favourable occupancy and WALE metrics. It represents a well leased portfolio with core-plus and value adding opportunities. The formal campaign will start on 8 September 2014 and we hope
to conclude a transaction by the end of this calendar year.”

Mr Key said “The process also represents an opportunity for groups seeking to invest in a scalable Australian platform. We expect there will be interest from several global fund managers and investors recognising the strategic appeal of the opportunity.”

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