Investa Office Fund (IOF)



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General Information
Company Name: Investa Office Fund
Stock Code: IOF
Website: www.investa.com.au/IOF
GICS Sub-Industry: Diversified Real Estate Investment Trusts
Market Cap ($M): 2,082
Equiv. Shares (M): 614

Current Price Data+
Current Price Open High Low Last Close Volume Price Movement
$ 3.390 $ 3.390 $ 3.410 $ 3.365 $ 3.390 2,325,206 0%

Current Broker Consensus Recommendation more
Recommendation: Hold (3)
Recommendation Date: 17th Sep 2014
Brokers Surveyed: 4

Company Overview

Business Description:
The Investa Office Fund (IOF) has been formed by the stapling of the units in two Australian registered schemes, Armstrong Jones Office Fund and Prime Credit Property Trust. The principal activity of the Trusts is investment in real estate. IOF owns an internationally diversified portfolio of office properties, many leased to government and blue chip tenants.

Strategy Analysis:
IOF's main focus is exiting offshore markets and reinvesting in Australia. Most offshore assets have sold. Recent acquisitions include stakes in two high quality domestic properties, the Deutsche Bank building in Sydney and the Telstra Headquarters in Melbourne. IOF is also very focused on leasing up vacant and soon-to-expire space. This will be difficult in Europe and will require major incentives to attract tenants, which is preferable to having empty space. IOF generally looks to invest in CBD office buildings and intends selling non-core suburban offices. It has switched its strategy from increasing diversification by investing in overseas markets to now selling foreign assets and focusing on Australia. Investa Office Fund reported NPAT down 68.8% to $53.7m for the half-year ended 31 December 2012. Revenues from ordinary activities were $100.7m, up 9.7% from the same period last year. Basic and Diluted EPS was 8.7 cents compared to 26.2 cents last year. Net operating cash flow was $71.1m compared to $76.2m last year. The interim dividend declared was 8.75 cents compared with 7.80 cents last year.


Financial Summary
Year to Jun NPAT EPS EPS chg (%) PER DPS Yield (%) Franking (%)
2016  F 146.9 23.9 2.6 14.2 19.9 5.9 0.0
2015  F 143.2 23.3 1.9 14.5 19.1 5.6 0.0
2014  A 140.6 22.9 2.2 13.6 18.5 5.9 0.0
Source: Morningstar analyst estimates.

Peer Comparison
EPS Growth (%) P/E (%) Dividend Yield (%)
Company Mkt Cap 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F 2014 A 2015 F 2016 F
BWP Trust (BWP) $1,587 M -0.2727 0.0326 0.0206 16.5223 16.0000 15.6764 5.93 6.25 6.38
CFS Retail Property Trust (CFX) $6,085 M -0.0071 0.1126 -0.0014 16.0499 14.4252 14.4461 6.82 6.91 7.05
Dexus Property (DXS) $6,031 M -0.2670 0.0766 0.0140 13.9447 12.9522 12.7733 5.64 6.13 6.46
Goodman Gp (GMG) $9,006 M 0.0702 0.0732 0.0652 15.0481 14.0217 13.1633 4.01 4.32 4.58
Investa Office Fund (IOF) $2,082 M 0.4908 -0.3066 0.0335 10.1103 14.5806 14.1074 5.46 5.64 5.88

Market Comparison
Earnings P/E Ratio P/B Ratio P/E Growth
IOF 1.29 10.84 1.01 10.00
Market 0.94 15.6 1.28 1.74
Sector 1.47 13.2 1.06 3.60

Directors
Name Position Start Date
Mr Campbell Hanan Alternate Director 01 July 2013
Mrs Ming Long Chief Financial Officer,Executive Director 07 July 2011
Mrs Deborah R Page Non-Executive Chairman 07 July 2011
Dr Peter Dodd Non-Executive Director 07 July 2011
Mr Scott MacDonald Non-Executive Director 07 February 2011
Mr Peter Rowe Non-Executive Director 07 July 2011

Management
Name Position
Jonathan Callaghan Joint Company Secretary
Dorothy Mioduszewska Joint Company Secretary

Substantial Shareholders
Holding Name
45,597,778 (7.43%) Morgan Stanley Investment Management Ltd
42,890,350 (6.98%) Commonwealth Bank Group
47,919,414 (7.80%) Westpac Banking Corp/BT Investment Management Ltd
44,686,196 (7.28%) Mitsubishi UFJ Financial Group INC

Calendar of Events
Date Event
18 August 2015 Report (Prelim)
13 March 2015 Report (Interim)
19 February 2015 Report (Interim)
23 October 2014 AGM
© 2011 Morningstar, Inc. All rights reserved. The data and content contained herein are not guaranteed to be accurate, complete or timely. Neither Morningstar, nor its affiliates nor their content providers will have any liability for use or distribution of any of this information. To the extent that any of the content above constitutes advice, it is general advice that has been prepared by Morningstar Australasia Pty Ltd ABN: 95 090 665 544, AFSL: 240892 (a subsidiary of Morningstar, Inc.), without reference to your objectives, financial situation or needs. Before acting on any advice, you should consider the appropriateness of the advice and we recommend you obtain financial, legal and taxation advice before making any financial investment decision. If applicable investors should obtain the relevant product disclosure statement and consider it before making any decision to invest. Some material is copyright and published under licence from ASX Operations Pty Limited ACN 004 523 782 ("ASXO"). DISCLOSURE: Employees may have an interest in the securities discussed in this report. Please refer to our Financial Services Guide (FSG) for more information at www.morningstar.com.au/fsg.asp.

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