The investment strategy of the Fund is to acquire, manage and grow a diversified property portfolio of offices, convenience retail shopping centres and industrial properties in Australia. 

Benefits of investing in the Australian Unity Diversified Property Fund

This Fund is designed for investors who want:

• Consistent, stable income distributions paid quarterly

• To invest in a portfolio of diverse commercial properties 

• Potential for modest capital gains over the medium and long term 

• Lower volatility returns 

• Potential tax-deferred income

Investor suitability

This Fund is typically suited to investors who:

1. seek regular income payments;
2. want exposure to a diverse property portfolio;
3. do not need immediate access to any of their investment in the short-term;
4. are looking to diversify their existing property portfolio; and
5. have at least a five-year investment outlook.

About the Fund

The Fund is an unlisted property fund that owns properties across Australia, diversified across retail, office and industrial sectors.

The Fund's tenant base is diverse and includes many of Australia's most successful companies and brands.

The Fund's diversification strategy aims to provide investors with stable and consistent income through periods of economic change.

Features of the Fund

• Distribution of income paid quarterly and sourced primarily from tenants with contracted leases - the majority sourced from investment grade credit rated, and/or ASX listed, companies.

• Managed by a specialist investment manager with skilled employees who have an average of more than 20 years' experience in the property industry.

• Access to a diversified portfolio of property investments, including some strategic assets with the ability to further enhance income and the potential for capital growth over the medium to long-term.

• Potential for tax deferred income.

How the Fund works

Investor applications are pooled with borrowings from lenders to purchase, maintain and/or redevelop direct property and related assets for the Fund.

Rent from the Fund's properties and income earned on its other assets generate income. This income is used to meet the interest expenses on the Fund's borrowings, management fees, property-related expenses and appropriate ongoing Fund expenses. We may also retain some income as a provision for items such as future expenses or capital requirements. Once these costs and provisions are met, the remaining income is distributed to investors.

The capital growth (or loss) on your investment is largely attributed to revaluations of the Fund's properties and changes in value of other assets including interest rate derivatives and the level of borrowings held by the Fund.

Investment objectives

We aim to deliver:

1. a stable income stream that is at least 1% p.a. above the average Commonwealth Government 10-year bond yield, calculated on a rolling basis over the previous five-year period (Fund Cash Yield Benchmark); and
2. a total return (income and capital growth) above the MSCI/Mercer Australia Core Wholesale Monthly Property Fund Index (Total Return Benchmark Index), while providing a consistent level of income. We will also seek to deliver tax deferred components within the Fund's income.

How we invest your money

The Fund predominantly comprises Australian commercial assets including directly owned properties (such as offices, shopping centres and industrial properties), unlisted property trusts and listed Australian REITs. A summary as at 30 June 2019 is provided in the table on page 5 of the PDS. A full list of properties and investments in listed Australian REITs and unlisted property trusts is set out in the table on page 9 of the PDS.

Investment process

The investment strategy of the Fund is to acquire, manage and grow a diversified commercial property portfolio of offices, shopping centres and industrial properties in Australia. Properties are predominantly situated in capital cities and major regional and metropolitan centres although the Fund may invest outside these areas if appropriate.

The Fund may also invest in property trusts (i.e. listed and unlisted managed investment schemes) including those managed by Australian Unity provided the proposed investment meets the Fund's investment objective.

Diversification of properties is sought to provide the portfolio with a more consistent source of income across variability in the economic cycle, or through times of upgrading and developing certain properties.

Diversification occurs at different levels including by property type, geographic location, tenancy mix, lease terms and size of properties.

New property developments may be considered, with a view to retaining ownership in the medium term. Speculative development is not part of the Fund's strategy.

We will look to sell assets where we believe it is appropriate for the Fund and investors. We consider a range of factors including but not limited to:

• the potential for future capital appreciation of existing properties relative to other properties available on the market;

• the impact of new competition, changes in local economic conditions and demographic changes;

• the overall portfolio composition and any requirements to rebalance the portfolio;

• the Fund's liquidity requirements under the Capped Withdrawal Facility; and

• the Fund's level of borrowing.