Becton unitholders to vote on Century replacement

Century Funds Management has accepted a request from unitholders in the $100 million Becton Office Fund No 2 to propose itself as a replacement as responsible entity for the fund.

Since Becton was installed as responsible entity of the fund in 2007, direct property assets have dropped by more than half from $207 million to $102 million, and distributions have dropped from 8.7 cents per unit to 2 cents per unit, according to Century’s parent company Over Fifty Group (OFG).

If elected at the meeting next month, Century proposes to reduce management fees, restore value and increase distributions, OFG said.

Century also plans to issue documentation to unitholders to vote on the Becton Diversified Property Fund, the Becton Retail Fund, the Becton Industrial Fund and the Becton Office Fund — making it five funds with a total of $900 million in property assets in which Century proposes to replace Becton as responsible entity.

Chris Garnaut, principal of Garnaut Private Client Advisers and adviser to a group of unitholders in some of the Becton funds, said advisers who had clients in the Becton funds were disappointed about their poor performance and financial position, which could only be remedied with the appointment of a new responsible entity.

Owen Lennie, spokesperson for investor’s organisation The Light of Day, said there had been dozens of complaints to the CBA from investors in the funds angry about the bank charges being applied.

“Investors will be hopeful that the reported statement of John McBain from Century that he expects more favourable financial terms from the CBA will turn into concrete results,” he said.

Becton said it did not believe the Century proposal was in the best interests of investors, and added that it would provide a detailed response to the Century proposal — as well as an update on the recapitalisation of the fund — in the next few days.

In the past six months Becton has secured leasing agreements to the value of $18.2 million in gross annual rent, and reduced the debt of the funds by $108 million, the company said.

Becton has asked investors to wait until they have considered Becton’s response before voting to replace the manager with Century.