Well - an announcement similar to todays announcement wasn't completely unexpected (see my valuation) however the details of this transaction are particularly interesting.

To me it seems like Elanor initially intended to raise the funds for this asset from wholesale/sophisticated investors only. I am aware that EOI's were sent to Wholesale investors in early Feb. Whether it was Elanor's intention to raise some of these funds from ECF the whole time remains unclear. I'm happy NTA and distribution guidance have both been maintained. I do however wonder whether unitholders will get charged fees in both the listed vehicle and the syndicate..

The investment itself seems to be aggressive. a 5.25% cap rate and 4.25% passing yield are very low - considering you can buy a 10 year bond and get 3% at the moment.

In my RL portfolio I will likely participate in the rights offer and sell back into the market - pending market reaction to this announcement.

I will take a while to digest this announcement and update my valuation in the next few months.

Announcement main points below:

Elanor Commercial Property Fund (“ECF” or “Fund”) is acquiring a 49.9% stake in an Elanor Investors Group (“Elanor”) managed fund that will acquire a significant commercial office property located at 19 Harris Street, Pyrmont, NSW (“19 Harris”)

Valued at $185 million, 19 Harris is a high-quality, carbon neutral, commercial office building that meets the requirements of the modern office era

ECF’s investment in the managed fund (“19 Harris Trust”) represents a proportionate NTA value of $41.5 million • Elanor will contribute to the Acquisition through an $8.4 million capital contribution (“Elanor Contribution”) 1 o The Elanor Contribution to the Acquisition results in ECF’s total net purchase price being $35.1 million, reflecting a 15.6% discount to the NTA value of the 19 Harris Trust

As a result, ECF’s NTA per security will be maintained at $1.19 post transaction • ECF launches a fully underwritten 1 for 8 accelerated non-renounceable entitlement offer (“ANREO” or “Offer”) to raise $36.6 million to partially fund the Acquisition