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INVESTEC AUSTRALIA PROPERTY FUND - Unaudited interim condensed financial results for the six months to 30 September 2013

Release Date: 21/11/2013 08:50
Code(s): IAP     PDF:  
Wrap Text
Unaudited interim condensed financial results
for the six months to 30 September 2013

INVESTEC AUSTRALIA PROPERTY FUND
Incorporated and registered in Australia in terms of ASIC (ARSN 162 067 736)
Registered in terms of the Collective Investment Schemes Control Act No. 45 of 2003
Share code: IAP
ISIN: AU60INL00018
(“IAPF” or “the Fund”)


Unaudited interim condensed financial results
for the six months to 30 September 2013

Highlights
- These interim results reflect only the pre-listing position of the Fund
  - Walker portfolio  six industrial assets  only assets for this period
- Primary listing on the JSE Main Board on 23 October 2013. Offer
  significantly over subscribed
  - Secondary listing on Bermuda Stock Exchange to comply
    with SARB regulations
  - AUD129.9 million property portfolio comprising six industrial
    and two office assets
  - Portfolio occupancy of 99.4%
  - WALE of 6.7 years
  - Average lease escalations of 3.7%
  - No gearing on listing  provides significant headroom to
    pursue acquisitions

Statement of comprehensive income                                                   
                                                                        Unaudited   
                                                                    Six months to   
                                                                     30 September   
$A'000                                                                       2013   
Revenue, excluding straight-line rental revenue adjustment                  2 288   
Straight-line rental revenue adjustment                                       274   
Revenue                                                                     2 562   
Property expenses                                                           (305)   
Net property income                                                         2 257   
Other operating expenses                                                    (209)   
Operating profit                                                            2 048   
Finance costs                                                               (792)   
Finance income                                                                 30   
Profit before taxation                                                      1 286   
Taxation                                                                           
Total comprehensive income attributable to equity holders                   1 286   
Reconciliation of attributable earnings to distributable earnings                   
Total comprehensive income attributable to equity holders                   1 286   
Less: Straight-line rental revenue adjustment                               (274)   
Distributable earnings                                                      1 012   
Number of linked units ('000)                                                       
Units in issue at the end of the period                                    22 000   
Weighted average number of units in issue                                  22 000   
$A per unit                                                                         
Distributable income per unit                                                0.05   
Earnings per unit                                                            0.06   
Headline earnings per unit                                                   0.06   


Statement of financial position                                            
                                                               Unaudited   
                                                           Six months to   
                                                            30 September   
$A'000                                                              2013   
ASSETS                                                                     
Non-current assets                                                48 152   
Investment property                                               47 878   
Straight-line rental revenue adjustment                              274   
Current assets                                                     3 571   
Trade and other receivables                                          130   
Cash and cash equivalents                                          3 441   
Total assets                                                      51 723   
EQUITY AND LIABILITIES                                                     
Contributed equity                                                22 000   
Retained profits                                                   2 030   
Total unitholders' interest                                       24 030   
Non-current liabilities                                           26 733   
Borrowings                                                        26 733   
Current liabilities                                                  960   
Trade and other payables                                             960   
Total equity and liabilities                                      51 723   
Net asset value per unit ($A)                                       1.09  
 
Condensed statement of cash flows                                          
                                                               Unaudited   
                                                           Six months to   
                                                            30 September   
$A'000                                                              2013   
Cash generated from operations                                     1 884   
Finance income received                                               30   
Finance costs paid                                                 (622)   
Net cash flow from operating activities                            1 292   
Net cash flow from investing activities                                   
Net cash flow from financing activities                                   
Net increase in cash and cash equivalents                          1 292   
Cash and cash equivalents at the beginning of the period           2 149   
Cash and cash equivalents at the end of the period                 3 441   


Condensed statement of changes in equity                                    
                                                                Unaudited   
                                                            Six months to   
                                                             30 September   
$A'000                                                               2013   
At the beginning of the period                                     22 744   
Total comprehensive income attributable to equity holders           1 286   
Balance at the end of the period                                   24 030   

Segmental reporting
All of the properties owned by the Fund at 30 September 2013 are industrial properties.

Basis of accounting
The unaudited interim condensed financial results for the period ended 30 September 2013 have been prepared in
accordance with the recognition and measurement criteria of International Financial Reporting Standards ("IFRS"),
the presentation and disclosure requirements of IAS 34: Interim Financial Reporting, as issued by the International Accounting
Standards Board (IASB).

The accounting policies applied in the preparation of the results for the period ended 30 September 2013 are in terms of
IFRS and are consistent with those adopted in the Pre-Listing Statement dated 25 September 2013.

Commentary

Introduction
Investec Australia Property Fund ("the Fund" or "IAPF") is an Australian real estate investment trust listed on the JSE Limited
("JSE"). The Fund offers investors exposure to the direct Australian property market via an inward listing on the JSE, as well
as providing exposure to the Australian dollar.

The Fund allows for the tax-efficient flow-through of net rental income to unitholders. The Fund is an uncapped and open-
ended fund and existing and future unitholders will hold a participatory interest in the Fund, which entitles unitholders to a
pro rata share of the underlying income generated by the Fund and a pro rata beneficial interest in the assets of the Fund.
The Fund is registered as a Managed Investment Scheme in Australia governed and operated by Investec Property Limited
and managed by Investec Property Management Pty Limited.

At 30 September 2013, the Fund comprised six assets with a total gross lettable area ("GLA") of 32,380m2 independently
valued at AUD 46.65 million. Post-listing, the portfolio comprises eight assets with a total GLA of 50,681m2 independently
valued at AUD 129.85 million.

The objective of the Fund is to grow and diversify its asset base by investing in high quality commercial real estate assets
(office, industrial and retail) that are well located in major metropolitan cities or established commercial precincts in Australia
and New Zealand.

Financial results
The results presented in this report cover the six-month period from 1 April 2013 to 30 September 2013 and are prepared
for the purposes of complying with the JSE Listings Requirements. The results cover a period that precedes the private
placing and listing of IAPF on the JSE.

During the reporting period the Fund was 100% owned by a subsidiary of Investec Bank (Australia) Limited ("IBAL").
Prior to the listing a distribution was paid to IBAL equating to the distributable earnings of the Fund from its inception
in December 2012 up to 18 October 2013 (being the date new units were allocated pursuant to the private placing).
This amounted to AUD 1.86 million (of which AUD 1.01 million related to the period covered by this report).

The first reporting period post the private placing and listing of IAPF will be for the year ending 31 March 2014, and the
first distribution to new unitholders will be for the period from 18 October 2013 to 31 March 2014. This will be paid in
June 2014.

Listing of IAPF
IAPF established a primary listing on the JSE on 23 October 2013 in the "Real Estate  Real Estate Holdings and Development"
sector of the Main Board.

Prior to listing, the Fund raised capital by way of a private placing of 112,685,000 units at AUD 1.00 each, which units were
listed on the JSE on 24 October 2013. The private placing was significantly over subscribed.

The proceeds of the private placing were used to acquire the Punt Road property and the Elizabeth Street property
(which both transferred on 25 October 2013) and to repay the debt on the balance sheet at 30 September 2013.

Prior to the private placing the Fund was owned by IBAL and had 22,000,000 units in issue.

Property Schedule                                                                                    
                                                                         % of                 % of   
                                                        Valuation   portfolio      GLA   portfolio   
                                             Sector          ($A)    by value     (m2)     by area   
Walker Portfolio  pre-listing                                                                       
48 Hawkins Crescent, Ipswich QLD         Industrial     3,500,000         2.7    2,044         4.0   
47 Sawmill Circuit, Hume ACT             Industrial     8,800,000         6.8    5,535        10.9   
57 Sawmill Circuit, Hume ACT             Industrial     8,200,000         6.3    7,079        14.0   
24 Sawmill Circuit, Hume ACT             Industrial     8,500,000         6.5    6,300        12.4   
44 Sawmill Circuit, Hume ACT             Industrial     8,600,000         6.6    4,639         9.2   
2  8 Mirage Rd, Direk SA                Industrial     9,050,000         7.0    6,783        13.4   
Total pre-listing portfolio                            46,650,000        35.9   32,380        63.9   
Post-listing acquisitions                                                                            
449 Punt Road, Cremorne VIC                  Office    28,700,000        22.1    6,384        12.6   
35  49 Elizabeth Street, Richmond VIC       Office    54,500,000        42.0   11,917        23.5   
Total post-listing acquisitions                        83,200,000        64.1   18,301        36.1   
Total portfolio  post listing                        129,850,000         100   50,681         100   


Debt facility
The Fund has secured a debt facility of up to AUD 125.00 million with Westpac Banking Corporation  one of Australia's largest
banks. The facility is for a three-year term and the Fund will hedge at least 75% of its interest rate exposure.
At 30 September 2013 the facility was drawn to AUD 26.84 million. This was used to fund the acquisition of the Walker
Portfolio. Post-listing the entire amount drawn was repaid. The Fund therefore has significant capacity in the debt facility to fund
future acquisitions.

Unit capital
At 30 September 2013 the Fund had 22,000,000 units in issue at AUD 1.00. Post the private placing the total number of units
in issue increased to 134,685,000.

Unitholders
Pre-listing
IBAL held 100% of the units in issue at 30 September 2013.

Post-listing
Investec Property Fund Limited and IBAL are the only unitholders holding in excess of 5% of the Fund's total issued units,
holding 18.56% and 16.33%, respectively.

The total number of unitholders at 30 September 2013 was 1, and the total number of unitholders on listing was 1,509.

On behalf of the Board of Investec Property Limited

Richard Longes                                                    Graeme Katz
Chairman                                                          Chief Executive Officer
21 November 2013

Important Disclosures
Investec Property Limited (Investec Property) AFS licence 290909 is the Responsible Entity for the Investec Australia
Property Fund (the Fund) ARSN 162 067 736, an Australian registered managed investment scheme registered in
South Africa as a Foreign Collective Investment Scheme (CIS) and listed on the JSE Limited.

Investec Property is not an authorised deposit-taking institution for the purposes of the Banking Act 1959 (Cth). Neither
investments in the Fund nor Investec Property's obligations represent deposits or other liabilities of Investec Bank (Australia)
Limited ABN 55 071 292 594 (Investec Bank) or any Investec Group entity. Investments in the Fund are subject to
investment risk, including possible delays in repayment and loss of income and capital invested. Neither Investec Bank nor
any Investec Group entity: (i) guarantee or otherwise provide assurance in respect of the obligations of Investec Property;
(ii) guarantee any particular rate of return or the performance of the Fund; or (iii) guarantee the repayment of capital from
the Fund.


Directors of the Responsible Entity
Richard Longes# (Non-executive chairman)
Sam Hackner (Non-executive)
Graeme Katz (Executive)
Samuel Leon (Non-executive)
David Gonski# (Non-executive)
Sally Herman# (Non-executive)
Michael Crawford# (Non-executive)
# Independent

Directors of the Manager
Graeme Katz (Executive)
Zach McHerron (Executive)
Matthew Liston (Executive)
Jason Sandler (Executive)
Samuel Leon (Non-executive)

Investec Australia Property Fund
Registered in Australia in terms of ASIC (ARSN 162 067 736)
Registered in terms of the Collective Investment Schemes Control Act 45 of 2002, as amended
Share code: IAP
ISIN: AU60INL00018

Company Secretary of the Responsible Entity
Anthony Rubin (BCom, BAcc, Member of Australian Institute of Chartered Accountants)

Registered office, postal address of the Responsible Entity and date of establishment of the Fund
Australia:
Level 23, Chifley Tower
2 Chifley Square
Sydney
New South Wales
2000
Australia

Local representative office:
2nd Floor
100 Grayston Drive
Sandown
Sandton
2196
South Africa

Fund established on 12 December 2012 in Sydney, Australia. Registered as a Managed Investment Scheme with ASIC under the
Corporations Act 2001 on 6 February 2013. On 23 August 2013 the Registrar of Collective Investment Schemes authorised the Fund to
solicit investments in the Fund from members of the public in the Republic of South Africa in terms of Section 65 of the Collective Investment
Schemes Control Act, 45 of 2002, as amended.

Responsible Entity
Investec Property Limited
(ACN 071 514 246 AFSL 290 909)
Level 23, Chifley Tower
2 Chifley Square
Sydney
New South Wales
2000
Australia

Manager
Investec Property Management Pty Limited
(ACN 161 587 391)
Level 23, Chifley Tower
2 Chifley Square
Sydney
New South Wales
2000
Australia

Transfer Secretaries
Computershare Investor Services Proprietary Limited
70 Marshall Street
Johannesburg
2001
(PO Box 61051, Marshalltown, 2107, South Africa)
Sponsor
The Corporate Finance division of Investec Bank Limited
2nd Floor
100 Grayston Drive
Sandown
Sandton
2196
(PO Box 785700, Sandton, 2146, South Africa)
Custodian
Perpetual Corporate Trust Limited
(ACN 000 341 533)
Level 12, 123 Pitt Street
Sydney
New South Wales
2000
Australia
Independent Party
FirstRand Bank Limited
BankCity, 3 First Place
1st Floor, corner Simmonds and Jeppe Streets
Johannesburg
2001
(PO Box 7713, Johannesburg, 2000, South Africa)

For a copy of the Fund's results, refer to the website:
www.investecaustraliapropertyfund.co.za
Date: 21/11/2013 08:50:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). 
The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of
 the information published on SENS. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, 
indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on,
 information disseminated through SENS.

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