Elanor Investors enhancing its capital raising capacity via expansion initiatives

Elanor Investors Group (ASX:ENN) is an Australian Securities Exchange listed investment and funds management business with approximately $ 1.35 billion in assets under management (AUM) across Australia and New Zealand. It was established in 2009. Elanor’s key operating divisions comprise- Funds Management; Hotels, Tourism and Leisure; and Real Estate.

Elanor strategically acquires and unlock value in real estate assets that have the potential to provide strong income and capital growth, thereby generating strong returns for both Elanor’s security holders and funds management capital partners. The Group’s existing listed and unlisted property funds managed for wholesale, retail and institutional investors are as below.

With a market capitalisation of around AUD 184.03 million and ~ 99.48 million outstanding shares, the ENN stock settled the day’s trading at AUD 1.850 with ~ 579,551 shares traded on Thursday, 23rd May 2019. In addition, the Group has an annual dividend yield of 8.07% (As per ASX).

On 11th April 2019, Elanor Investors Group informed the market of a strategic alliance agreement signed with Rockworth Capital Partners Pte Ltd that would support both the groups to grow their funds under management (FUMs). The move positioned Elanor to capitalise on future growth opportunities as Singapore-based Rockworth is an established real estate funds and asset manager with an Australian portfolio of ~ AUD 850 million. In addition, it also enhances the Group’s capital raising capabilities.

The major elements of the alliance included Rockworth acquiring a strategic interest of 18% in Elanor, both the parties increasing AUM through identifying, co-investing as well as co-managing new opportunities/assets, and lastly Rockworth founder and CEO, Lim Kin Song joining the Elanor Board of Directors.

In accord with this, Rockworth subsequently became a substantial shareholder in Elanor upon purchase of 17,932,967 fully paid stapled securities (18.03% stake). This was accomplished partly via the acquisition of 14.4 million stapled securities from existing security holders and the remaining through placement of 3.5 million new fully paid stapled securities by Elanor at AUD 1.85 each for a total consideration of AUD 6.5 million on 12^th April 2019.

Also, in April 2019, Elanor reported yet another successful acquisition of two Australian hotels by the Elanor Metro and Prime Regional Hotel Fund, which was established in October 2017 and now holds a diversified portfolio of 11 hotels valued at over $ 191 million, including the latest transaction. The two accretive acquisitions include the Clare Country Club and the Barossa Weintal Hotel for $ 14.45 million.

Expanding its portfolio, the Group has announced the incorporation of three new managed funds in the last three months. These include:

• The Elanor Luxury Hotel Fund (ELHF), a new multi-asset accommodation fund established in April 2019. ELFH, at inception, would have an initial asset portfolio of two Australian high-quality premium hotels valued at ~ $ 99 million. These include- Mayfair Hotel Adelaide, a 170-room upper upscale hotel; and Adabco Boutique Hotel, a 69-room upscale hotel, both located in Adelaide SA.
• The Fairfield Centre Syndicate, established in March 2019, which has also recently acquired a sub-regional shopping centre Neeta City for $ 85.3 million, located in Fairfield.

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• In the same month, the Stirling Street Syndicate was established and it has also acquired the high-quality commercial office property located at 34-50 Stirling Street, Perth for a consideration of ~ $ 24 million.

The first half of CY2019 has been quite eventful for the Group’s business as its Belconnen Markets Syndicate also received ACT Government approval for the Stage 1 of its planned $ 100-million revitalisation of Belconnen Markets precinct in Canberra.

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