IAPF acquires a new property, reports a successful year of growth in 2014
Graeme Katz
Investec Australia Property Fund (“IAPF” or the “Fund”) has announced the acquisition of a new property in Derrimut, Victoria for $8.1 million.
The acquisition, effective from 22 December 2014, concluded a successful year of growth for the Fund, bringing the total purchase price value of properties in 2014 to $155.5 million. The Fund’s portfolio is now comprised of ten industrial properties and five office properties.
The 18,000 square metre industrial (warehouse) property is located in one of Melbourne’s most established industrial areas with excellent road access and visibility, located 19 kilometres from the Melbourne CBD.
The acquisition of the property represents an attractive investment for the Fund as it is accretive based on the positive spread between the property yields and funding costs. The purchase price represents an annualised property yield of 7.72% (7.25% post all transaction costs).
The majority of the income (93%) is underpinned by a lease to Wilhelmsen Manufacturing Australia Pty Ltd (WMA), whose principle business activities comprise of industrial engineering design solutions. WMA is owned by Skips AS Tudor Norway, the private investment vehicle of the Wilhelmsen shipping and logistics family.
The balance of the income (7%) is underpinned by a lease to iOM Pty Ltd (iOM) in respect of a prominent advertising sign that fronts the Western Freeway.
IAPF CEO Graeme Katz said: “This acquisition concluded a very successful year for the Fund and is consistent with the Fund’s strategy of investing in well-located, high quality assets. We will remain active in seeking opportunities to grow and diversify the Fund’s asset base, enhance unitholder value and contribute to sustainable income growth for our investors throughout 2015.”
There are depreciation allowances which will provide a tax shield on distributions payable to unitholders.
IAPF was listed on the Johannesburg Stock Exchange in October 2013, and is the first inward listed vehicle to provide South African investors with direct access to the Australian commercial property market.
