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INVESTEC AUSTRALIA PROPERTY FUND - Voluntary announcement - Acquisition of new property

Release Date: 12/03/2019 07:45
Code(s): IAP     PDF:  
 
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Voluntary announcement - Acquisition of new property

INVESTEC AUSTRALIA PROPERTY FUND
Operated by Investec Property Limited (ACN 071 514 246; AFSL 290 909) (“Responsible Entity”)
and registered in Australia as a managed investment scheme under the Corporations Act 2001 (Cth) (Australia)
(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”)


                     VOLUNTARY ANNOUNCEMENT – ACQUISITION OF NEW PROPERTY


1.   Acquisition

     Unitholders are advised that the Fund has entered into and completed a contract for sale with Westtech
     Holdings Pty Limited (ABN 44 113 585 069) to acquire an office building located at 24 Wormald Street,
     Symonston ACT 2609 (Property).

     The effective date of the acquisition of the Property is the settlement date under the contract for sale which is
     today’s date, being 12 March 2019.

2.   Purchase consideration

     The purchase consideration is AUD 29,750,000 which represents an initial passing yield of 6.93% (6.55% post
     all transaction costs).

     The purchase consideration and all transaction costs have been funded through the existing syndicated debt
     facility with Westpac Banking Corporation and Australia and New Zealand Banking Group Limited at a margin
     of 110 basis points for a 12 month term. The Fund’s gearing post the acquisition of the Property will be 38.93%
     with a weighted average cost of debt of 3.86% and hedged to 77.00% for an average of 5.3 years.

3.   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 Responsible Entity is actively seeking opportunities to grow and diversify the Fund’s asset base,
     enhance unitholder value and contribute to sustainable income growth. The acquisition of the Property
     represents an attractive investment for the Fund for the following reasons:

     •        Long term contracted income with a lease expiry of 8.5 years and fixed escalations of 3.5% per
              annum
     •        Strong covenant, 100% leased to Commonwealth of Australia (Attorney-General’s Department)
     •        Purpose built facility constructed in 2007 to the specification of the Commonwealth of Australia with a
              high level of plant redundancy
     •        On-site car parking for 113 vehicles
     •        Sophisticated corporate tenants in immediate precinct including Telstra, Aristocrat, Australian
              Pesticides and Veterinary Medicines Authority, Canberra Eye Hospital and WOTSO
     •        The purchase price represents a rate per m² of AUD 6,303 which is below recent comparable sales
     •        Purchase price is at a discount to replacement cost of approximately 11%
     •        The Property is located in close proximity to key arterial road networks: Canberra Avenue (300m),
              Monaro Highway (1.2km) and Hindmarsh Drive (1.3km)
     •        The acquisition is accretive to the Fund
4.   Specific information relating to the Property

       Registered description        Certificate of Title Volume 1744 Folio 73
       Title                         99 year Crown leasehold (commenced in 2005)
       Sector                        Office
       Location                      Symonston, 7 kms south east of the Canberra CBD
       Year built                    2007
       Site area                     5,185m2
       Gross lettable area           4,720m²
       Rent per m2                   AUD 453/m² (gross office rent)
       Vacancy                       0%

     The Property has been valued at AUD 29,750,000 as at 8 February 2019 by Savills Valuations Pty Ltd (ABN
     73 151 048 056). The valuer, Philip Harding, is an independent valuer and is recognised by The Australian
     Property Institute as a Certified Practising Valuer.

5.   Categorisation

     The acquisition is not a categorised transaction in terms of the JSE Listings Requirements and is therefore not
     subject to unitholder approval. This announcement is voluntary and for information purposes only.




     Johannesburg
     12 March 2019


     Financial Advisor and Sponsor
     Investec Bank Limited

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