Australian Unity launches new property trust

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Australian Unity Investments has launched the Australian Unity Rockdale Property Trust, which owns a modern retail building in south Sydney at 395 West Botany St, Rockdale.

Mark Lumby

The property is currently leased to Fitness First Australia and Repco. There is also a lease on an adjoining car park to provide 123 parking spaces across the site and it is the trust’s intention to acquire this car park.

The term of the trust is six years and distributions are forecast at 8.5 per cent a year for the seven months to 30 June 2015.  The offer opened to investors on 20 October 2014 with applications accepted from 17 November 2014.  The offer closes on 12 December 2014.

The trust offers a competitive distribution derived from a property that is 100 per cent occupied with a long weighted average lease expiry profile of 9.4 years – reflecting some of the key metrics sought by financial advisers and investors seeking a sustainable and growing level of income, according to Australian Unity Real Estate Investments (AUREI).

The Australian Unity Diversified Property Fund (DPF) currently owns the units in the trust.  DPF’s decision to sell its units aligns with its strategic objective of reducing its retail exposure to a more neutral position.

Mark Lumby, AUREI’s head of property funds – retail, said that the location of the property, combined with well-known tenants on long-term leases, meant that the trust was well positioned to deliver not only a growing level of income but good prospects for capital growth.

“We are forecasting distributions to investors of 8.5 per cent a year for the seven months to 30 June 2015 and 8.85 per cent for the year to 30 June 2016.

“The underlying growth in distributions is supported by annual rent increases from the two tenants.”

Mr Lumby said while a decision was previously made to sell the property from DPF to rebalance its asset allocation, AUREI recognised the attractiveness of the property for income focused investors seeking a sustainable and growing level of income.

“The offer is seeking to raise $9.9 million.  Our research suggests there is strong appetite amongst advisers and their clients for investment opportunities such as this, providing a competitive distribution yield with the potential for capital growth,” Mr Lumby said.

The Trust has a 4 and ¼ star superior rating from SQM Research.

Australian Unity Investments is the funds management arm of Australian Unity, a national healthcare, financial services and retirement living organisation that has been operating for more than 170 years. A mutual organisation it provides services to some 600,000 Australians, including 320,000 members.

Australian Unity Real Estate Investment is the property funds management business of Australian Unity Investments.  AUREI was established in 1998 and, through its unlisted property funds, owns and manages more than 50 properties in the healthcare, retail and commercial sectors across Australia.  It has more than $1.8 billion in funds under management (as at 30 September 2014).

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Further information:

Mark Lumby – Phone: 03 8682 4548

23 October 2014