The A$2.1bn (€1.2bn) AMP Capital Wholesale Australian Property Fund (WAPF) has taken a number of measures to enhance liquidity, including deferral of up to A$400m in acquisitions and development, during the COVID-19 pandemic.
AMP Capital, as the responsible entity for WAPF, said the measures include ”maintaining stable distribution and a solid balance sheet with low debt, providing investor certainty around redemptions and ensuring that the unit price is fair”.
WAPF’s manager, Christopher Davitt, wrote to investors informing them that WAPF would allow investors to redeem up to 20% of their holding within 90 days, with full payment for any redeemed units over and above this threshold within 12 months.
Davitt wrote that withdrawals would be limited to 5% of net asset value of the fund per calendar quarter.
“Accommodating investors who may be experiencing financial distress or who wish to rebalance their portfolios, was an important consideration in taking this approach,” he said, adding that, to ensure that the unit price was fair, valuation of the assets would be updated monthly instead of quarterly.
The lowly-geared fund has immediate access to almost A$460m, made up of A$325m in undrawn debt, A$101.4m in listed Australian property securities and A$33.4m in cash.
Other sources of liquidity include cash reserves, raising equity from new investors, increasing the level of debt, selling property securities, selling direct property or a combination of these measures.
The fund owned interests in 26 properties, and might elect to sell one or more of these to enhance liquidity, AMP Capital said.
To conserve cash, the fund – which remained open to new investment – had temporarily abandoned its planned A$200m to A$400m of acquisitions and would not commence development projects this year.