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INVESTEC AUSTRALIA PROPERTY FUND - Voluntary Announcement Acquisition of Property

Release Date: 11/08/2020 08:02
Code(s): IAP     PDF:  
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Voluntary Announcement– Acquisition of Property

Established in Australia and registered with ASIC as a managed investment scheme (ARSN 162 067 736)
Operated by Investec Property Limited (ACN 071 514 246; AFSL 290 909) (“Responsible Entity”)
Registered as a foreign collective investment scheme in terms of the Collective Investment Schemes Control Act
No.45 of 2002
Unit code: IAP
ISIN: AU0000046005
(“IAP” or the “Fund”)


1.       Acquisition

         Unitholders are advised that the Fund*(1) has entered into agreements to acquire an industrial facility to be
         constructed at Lot 3, Belconnen Crescent, Brendale QLD (Property).

         The Property is being acquired on a fund-through basis. The Fund has entered into:

         -        a nomination agreement with Felton Property Group Pty Limited (Developer) under which the
                  Developer has nominated the Fund for the purposes of exercising a call option to acquire the Property
                  from the current owner, Alberton Holdings Qld Pty Ltd (Owner), pursuant to a contract for sale of land;
         -        a development agreement with the Developer under which the Developer will undertake the
                  development of the Property on behalf of the Fund.

         The effective date of the acquisition of the Property is the settlement date under the contract for sale of land
         which, subject to satisfaction of certain conditions, is anticipated to occur in October 2020.

    2.   Purchase consideration

         The total purchase consideration is AUD 15,624,000 which represents an initial yield of 6.25% (6.13% post all
         transaction costs). The purchase consideration comprises an initial payment of AUD 3,885,500 to the Owner
         under the contract for sale of land, with the balance to be progressively paid to the Developer under the
         development agreement.

         The purchase consideration and all transaction costs will be funded through the Fund’s existing syndicated
         debt facility with its existing financiers.

3.       Rationale for acquisition of the Property

         The acquisition of the Property represents an attractive investment for the Fund for the following reasons:

         -        Brand new, high quality 9,300m² generic warehouse and distribution facility which would suit multiple
         -        10,852m² of hardstand and 95 on-site car parks
         -        Depreciation benefits from new construction with no near term capital expenditure forecast
         -        Lease to Outdoor Supacentre Pty Ltd (trading as 4WD Supacentre), a national business which
                  supplies camping and 4WD accessories
         -        Lease term of 6 years at AUD 105/m², which reflects a market rent
         -        Annual fixed escalations of 2.75%
         -        Attractive acquisition yield of 6.25%
         -        Fund-through acquisition structure is stamp duty efficient, saving approximately 23 basis points
         -        The Fund will earn a coupon of 6.25% on the initial payment to the Owner under the contract for sale
                  of land and the amounts progressively paid to the Developer under the development agreement from
                  the effective date until commencement of the lease to the tenant (anticipated to be in June 2021)
         -        Opportunity to partner with a developer that may provide the Fund with future opportunities
                  The acquisition is accretive to the Fund

4.   Specific information relating to the Property

         Registered description        Proposed Lot 3 on Survey Plan yet to be registered cancelling Lot 1000 on Survey Plan
                                       290310 Title Reference 51090279
         Title                         Freehold
         Sector                        Industrial
         Location                      23 kms north of the Brisbane CBD
         Year built                    2020 (to be constructed)
         Site area                     21,078m2
         Gross lettable area           9,300m²
         Rent per m2                   AUD 105/m² (net)
         Vacancy                       0%

     The Property has been valued at AUD 15,624,000 (“as if complete”) as at 3 July 2020 by Savills Valuations Pty
     Ltd (ABN 73 151 048 056). The valuer, Leigh Atkinson, is an independent valuer and is recognised by The
     Australian Property Institute as a Certified Practising Valuer (API Member: 65688, QVRB: 2385).

5.   Categorisation

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

    Through a wholly-owned trust, Investec Australia Sub Trust No.6

     11 August 2020

     Financial Advisor and Sponsor
     Investec Bank Limited

Date: 11-08-2020 08:02:00
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