Key Features
Clear investment criteria to acquire a quality portfolio
The Fund aims to provide Investors with sustainable
and stable income and the potential for capital growth.
To achieve this, the Responsible Entity is seeking to
progressively acquire and manage a $250 million diversified
portfolio of quality industrial Properties in established
Australian industrial precincts with an emphasis on
those positioned near major transport infrastructure. The
Responsible Entity will acquire Properties for the Fund in
accordance with clear investment criteria pertaining to
property grade, location, tenant quality, occupancy and
WALE. For more detail on the investment criteria, refer to
section 3.2.
Focus on yield
For the Forecast Portfolio, the Responsible Entity is forecasting
average annualised distributions from the Fund to Investors
holding Wholesale Units of 7.5 cents per Unit for the years
ending 30 June 2015 and 30 June 2016 (refer section 8).
This forecast distribution level compares favourably to
prevailing income returns on cash, term deposits, bonds,
listed REITs and shares in companies listed on the ASX.
The Responsible Entity aims to grow the rental income of
the Fund by targeting industrial properties with long-dated
leases to highly regarded tenants, fixed rental increases and
minimal ongoing capital expenditure requirements.
Tax-deferred income
The Responsible Entity anticipates that distribution
payments to Investors will contain some portion of taxdeferred income.
Tax-deferred income arises through the different treatment
of expenses and depreciation allowances on buildings
and plant and equipment within a building for accounting
and taxation purposes. For further information on the tax
implications of investing in the Fund, refer to section 10.1.
Growth potential
At the date of this PDS, the Responsible Entity considers the
Fund has the potential to purchase Properties at attractive
prices, creating an opportunity for capital growth over time.
Reduced capital volatility
Australian direct property has historically experienced lower
volatility than that for listed Australian and international
shares and securities in listed REITs. As a result, investing
in direct property can potentially lower an investor’s overall
portfolio risk.
The Fund is not listed on a stock exchange and therefore
the Unit Price will reflect the value of its underlying assets.
Unlisted funds are not as liquid as listed REITs, which can be
bought and sold at any point when the stock exchange is
open for trading. Refer to section 6.2.
Gearing policy
The Responsible Entity has a gearing target of 45% for the Fund.
Active portfolio management
The Properties will be held and actively managed in the Fund
to generate a stabilised income return to Investors. Each
Property will regularly be assessed for its income outlook
and strategic value.
If the Responsible Entity considers it appropriate to take
advantage of a strong selling opportunity, it may sell
Properties prior to the conclusion of the Fund’s initial sevenyear term. The Responsible Entity anticipates that any net
sales proceeds will be returned to Investors and not used to
acquire additional Properties.
Liquidity Event
The Fund will have an initial seven-year term comprising
the Investment Period followed by the Asset Management
Period which will conclude on or about 30 September 2021.
Prior to the conclusion of the initial seven-year term, on
or about 31 March 2021, there will be a Liquidity Event,
where the Responsible Entity will provide Investors with the
opportunity to realise their investment through the completion
of a withdrawal request form. This form will allow each
Investor to nominate the number of Units (if any) they wish to
redeem at the conclusion of the initial seven-year term.
If, at this time, the Responsible Entity receives withdrawal
requests from Investors in respect of more than 50% of the
Units (excluding Acquisition Units) on issue, the Fund will be
wound up with the Responsible Entity completing an orderly
sale of the Properties or procuring the sale of all Units.
Alternatively, if the Responsible Entity does not receive
withdrawal requests from Investors in respect of more than
50% of the Units (excluding Acquisition Units) on issue, the
term of the Fund may be extended for a further period of
up to three years. In that case, the Responsible Entity will
implement a liquidity strategy and use its best endeavours to
fund the withdrawal requests received from Investors.
The Constitution gives the Responsible Entity the power to
list the Fund without Investor approval. If the Responsible
Entity does so, no Liquidity Event will apply in respect of the
Fund as Investors can seek to exit their investment through
trading their Units on the ASX.
Risks
You should read this PDS in full before deciding whether to
invest in the Fund and if you are in any doubt, you should
consider consulting your financial adviser, stockbroker or
other professional advisers.
Section 6 sets out some of the key property investment
risks, fund investment risks and general investment risks
which are relevant to an investment in the Fund.
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