The Australian Unity Diversified Property Fund has purchased an industrial property in Melbourne’s south-east for $15.1 million. The price reflects an initial yield of 7.6 per cent.
The property, 19 Corporate Avenue, Rowville, is a 20,950 sqm site which incorporates a modern, 12,300 sqm corporate office and warehouse facility. It is in a well located, tightly held industrial pocket and is leased to Regal Beloit Corporation until April 2022.
The acquisition adds to the strength of the existing holdings in the Diversified Property Fund, which also purchased an A-grade commercial office building at 200 Victoria St, Carlton in November 2014.
Mark Lumby, head of property funds – retail at Australian Unity Real Estate Investment, said the Fund is well positioned to provide a sustainable and growing level of income to investors.
“Quality income investments are highly sought after in today’s market. The Fund continues to build on its core strength of diverse commercial property to deliver on its objectives for investors,” said Mr Lumby.
As a result of the new purchase, the Fund’s asset diversification is 30 per cent industrial, 33 per cent retail and 37 per cent office property, with assets spread across New South Wales, Queensland, Victoria and Western Australia.
For the year to 30 June 2016, the Fund is forecasting a distribution range of between 8.0 and 8.3 per cent*.
Since taking over management of the Fund from Westpac in 2010, Mr Lumby said Australian Unity has actively managed the portfolio to improve its diversification, bolster its financial position and improve investor benefits.
“We’ve recently launched a capital raising offering units at a 5 per cent discount to the Fund’s net asset value,” said Mr Lumby.
“Raising equity at a discount to fund withdrawal requests provides a greater level of liquidity to those investors electing to exit their investment than the current capped withdrawal offer.
“It will also enable us to maintain the quality and diversification of the Fund’s assets, and support its sustainable growth—making it more attractive to new investors over the longer term.”
The Fund is seeking to raise a maximum of $50 million during a limited capital raising period that is expected to remain open for up to 12 months.
Australian Unity Real Estate Investment (AUREI) is the property funds management business of Australian Unity, a national healthcare, financial services and retirement living organisation that has been operating for more than 175 years.
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. Its value proposition includes combining its investment expertise with insights from the broader Australian Unity Group and providing a deeper perspective that is delivered in a straightforward and transparent way.
* The distribution return range forecast is for the full year to 30 June 2016 and is made on the basis of a number of assumptions and estimates. It is based on the ex-distribution security price as at 30 June 2015. The forecast distribution return range is not guaranteed and is provided only to indicate current distribution projections for the Fund. We emphasise that investment decisions should not be based on forecast returns, past performance, distribution rate, or the ratings given by a ratings agency for the Fund, since these can vary, and are current only to the date of this publication. For more information on the basis for the forecast distribution return range, refer to the latest Fund update at australianunityinvestments.com.au/dpf.
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03 8682 4548