INVESTEC AUSTRALIA PROPERTY FUND - Voluntary announcement Acquisition of warehouse and distribution property

Voluntary announcement – Acquisition of warehouse and distribution property

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
Operated by Investec Property Limited (ACN 071 514 246; AFSL 290 909) (“Responsible Entity”)
Share code: IAP
ISIN: AU60INL00018
(“IAPF” or the “Fund”)


     VOLUNTARY ANNOUNCEMENT – ACQUISITION OF WAREHOUSE AND DISTRIBUTION PROPERTY


1.   Introduction

     The Fund is pleased to advise unitholders that it has entered into a contract with Logos Properties Holding Pty
     Ltd as trustee for the Hydrive No.1 Trust to acquire a warehouse and distribution facility located at 36-42
     Hydrive Close, Dandenong South VIC 3175 (Property) for AUD 19 450 000.

     The purchase price equates to an annualised property yield of 6.3% (5.9% post all transaction costs). The
     purchase price plus all transaction costs will be funded through the existing syndicated debt facility with
     Westpac Banking Corporation and Australia and New Zealand Banking Group at an expected all in funding
     cost of 3.58% per annum. The Fund’s gearing post the acquisition of the Property will be 37.6% with a
     weighted average cost of debt of 3.71% and hedged to 86.4% for an average of 6.2 years.

     The effective date of the acquisition of the Property is the settlement date under the contract for sale, which is
     scheduled for 19 April 2018.


2.   Rationale for acquisition of the Property

     The acquisition of the Property is consistent with the Fund’s strategy of investing in well located, high quality
     assets. The Property represents an attractive investment for the following reasons:

     -    The Property is located in the established Melbourne industrial precinct of Dandenong South,
          approximately 32 km south east of the Melbourne CBD, with excellent access to major arterials and
          freeways including the South Gippsland Highway, Eastlink (M3) and the Monash Freeway (M1).
          Dandenong South is home to other significant companies such as Amazon, Carter Holt Harvey, Toyota,
          Swire Cold Storage and Bosch.
     -    Significant major infrastructure projects, such as the Westall Road Extension, the AUD 100 million North-
          East Link and the AUD 300 million Moordialic Bypass, are either underway or planned to commence in
          the immediate vicinity of the Property which will improve connectivity and accessibility.
     -    The Property has a gross lettable area of 14 635m² split across warehouse and distribution facilities (13
          958m²) and associated office accommodation (677m²). The site coverage is only 44% with the potential to
          develop additional lettable area or create full drive-around access.
     -    The Property is leased to a subsidiary of ASX-listed Pact Group Holdings Ltd (ASX: PGH), which is one
          of Australia’s leading suppliers of milk and juice packaging. Pact Group Holdings Ltd is the largest
          manufacturer of rigid plastic packaging products in Australia and employs over 4 000 people across
          seven countries.
     -    The WALE is 7.1 years with annual fixed escalations of the greater of 3.5% and CPI with a ratchet at
          expiry.
     -    The acquisition increases the Fund’s exposure to Victoria, which is one of Australia’s best performing
          economies.
     -    The acquisition is accretive to the Fund from a distribution perspective.

3.   Property specific information

      Registered description         Certificate of Title Volume 11571 Folio 423, being Lot 26 on 403554J
      Title                          Freehold
      Sector                         Industrial
      Location                       Dandenong South, 32 kms south east of the Melbourne CBD
      Year built                     1997 (extension in 2001)
      Site area                      32 780m2
      GLA                            14 635m²
      Rent per m2                    AUD 83/m²
      Vacancy                        0%
      WALE                           7.1 years
      Estimated transaction costs    AUD 1 138 000

     The Property has been valued at AUD 19 450 000 as at 7 March 2018 by Urbis Valuations Pty Ltd (ABN 28
     105 273 523). The valuer, Shane Robb, is an independent valuer and is an Associate of the Australian
     Property Institute and a Certified Practicing Valuer (registration no.62534).


4.   Categorisation

     The acquisition of the Property is not categorisable in terms of the JSE Listings Requirements. Accordingly, the
     information provided in this announcement is for information purposes only.




     Johannesburg
     6 April 2018


     Financial Advisor and Sponsor
     Investec Bank Limited

Date: 06/04/2018 10:35:00 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.