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Elanor Investors plans IPO of A$243M retail property fund

Elanor Investors Group is preparing for the IPO of aretail property-focused fund, which will initially own a portfolioindependently valued at A$243.2 million in Australia.

Elanor Retail Property Fund will be formed through thecombination of Elanor Retail Property Fund I and Elanor Retail Property FundII, and two shopping centers that it bought. The centers are TweedMall, which it purchased from VicinityCentres, and Northway Plaza Shopping Centre.

The new fund will invest in retail property acrossAustralia, with a focus on quality, high-yielding neighborhood and sub-regionalshopping centers. 

The fund's initial portfolio will comprise five shoppingcenters, with their valuation reflecting a weighted average cap rate of 7.7%,an average weighted lease expiry of 5.1 years and a 96.7% occupancy rate.

The malls are the Auburn Central Shopping Centre,Tweed Mall Shopping Centre and the Manning Mall Shopping Centre in New SouthWales; the Glenorchy Plaza Shopping Centre in Tasmania; and the Northway PlazaShopping Centre in Queensland.

Elanor Retail targets to distribute 90% to 100% of itsdistributable earnings and forecasts a 7.9% distributable earnings yield forthe calendar year ending Dec. 31, 2017. Its market cap is expected to top A$170million.

Elanor Funds Management Ltd. will be the responsibleentity of the fund. Elanor Investors, meanwhile, will serve as the fund'smanager and is expected to retain an approximately 15% stake in the fund uponits listing. 

The product disclosure statement on Elanor Retail isexpected to be filed with the Australian Securities and Investments Commissionon or around Oct. 14, according to a news release.

Moelis & Co. serves as the lead manager andunderwriter for the IPO.

As ofOct. 3, US$1 was equivalent to A$1.31.