Graeme Katz

Investec Australia Property Fund (IAPF or fund) has closed its offer earlier than expected due to strong investor demand, and is expected to list on the Australian Securities Exchange (ASX) on Tuesday, 28 May 2019.

IAPF successfully raised a total of AUD 102 million through the proposed issue of 76.9 million new units (offer), which was significantly oversubscribed. To meet this excess demand, 45 million units (with a value of AUD 59 million) owned by Investec Property Fund Limited will also be sold to certain institutional investors who participated in the offer (IPF sale).

The early closure of the offer follows a local roadshow led by joint lead managers, J.P. Morgan and Macquarie Capital, which attracted interest from property specialist funds and general equities funds well in excess of the maximum offer amount.

The offer and the IPF sale price is AUD 1.32 per unit, which is above the minimum subscription price for the offer.

Graeme Katz, CEO of the fund, said: “We are delighted with the positive reception and support from both institutional and retail investors.

“We are particularly pleased to see such strong appetite from Australian investors to list the fund on the ASX,” Mr Katz said.

“Demand was strong, given the current and ongoing outlook for industrial and office properties in Australia and New Zealand.

“The fund’s primary listing on the ASX, in addition to its current primary listing on the JSE, will set it up for the future and will stand to benefit our unitholders, existing and new.”

The fund has a mandate to invest in office, industrial and retail property located in Australia and New Zealand. It is managed by an experienced team of property specialists who have an established track record of managing geographically and sectorally diversified properties. The fund’s portfolio of 28 properties has an occupancy rate of 99.4% with a weighted average lease expiry of 4.7 years and is anchored by quality tenants.

Units in the fund are expected to commence trading on the ASX on a deferred settlement basis on Tuesday, 28 May 2019 (Sydney time) under the ticker ‘IAP’, with normal trading commencing on Thursday, 30 May 2019 (Sydney time).

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) has announced a $26.0 million acquisition in one of Perth’s core industrial suburbs, taking the value of the Fund’s total portfolio to $405.5 million.

The 40,824 square metre site is located at 54 Miguel Road, Bibra Lake, 21km south of the Perth CBD in close proximity to the Kwinana Freeway and the Roe Highway and provides easy access to the Port of Fremantle.

The property comprises 21,956 square metres of warehouse, 402 square metres of office accommodation and significant hardstand. The property is 100% leased to CTI Freight Systems Pty Ltd, a wholly-owned subsidiary of ASX-listed transport logistics and business services specialist CTI Logistics Limited, for 12 years.

Bibra Lake is considered the premier southern industrial precinct of Perth with neighbouring tenants including Bidvest Logistics, Sims Metals and Masters.

The initial passing yield on acquisition is 7.94% pre-transaction costs, and the lease includes annual rental increases of the greater of 3% and CPI. The acquisition will be fully funded with debt which will take the Fund’s gearing to 37%.

IAPF CEO Graeme Katz said: “The acquisition represents an opportunity to gain entry to the WA market without direct exposure to the resources sector. The property is used by the tenant as a distribution warehouse servicing a number of underlying customers in the document storage, food, beverage and agricultural industries.

“The property is attractive given it is located in close proximity to strategic infrastructure including the Port of Freemantle and main highways and provides a flexible layout that could be split in the future to accommodate multiple users.

“The Fund has now acquired nine properties with a combined value of $211.0 million since the rights issue late last year, and demonstrates our ability to source well-located assets underpinned by long-term leases in a competitive market,” Mr Katz added.

IAPF, listed on the Johannesburg Stock Exchange under the Real Estate Holdings and Development sector, provides South African investors with direct access to the Australian commercial and industrial property market.

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) yesterday announced the acquisition of an $18.15 million property in one of Brisbane’s core industrial suburbs. The acquisition brings the value of the Fund’s total portfolio to $379.45 million. The acquisition will be fully funded with debt which will take the Fund’s gearing to 33%.

The 21,930 square metre site is located at 85 Radius Drive, Larapinta, 21km from Brisbane’s CBD, and comprises 10,088 square metres of recently constructed warehouse and associated office. Larapinta is considered the premier southern industrial precinct of Brisbane with other tenants in the surrounding area including Woolworths, Toll, BP and Toyota.

The property is 100% leased until December 2021 to Coil Steels Pty Limited which is part of the Kanji Group, an established family-run building materials business that owns several successful subsidiaries across Australia. The initial passing yield on acquisition is 7.80% pre-transaction costs, and the lease includes annual rental increases linked to CPI.

IAPF CEO Graeme Katz said: “The acquisition is the eighth property acquired by the Fund since our rights issue late last year, reflecting management’s ability to unlock off-market transactions in a very competitive market.

“We believe the addition of the Larapinta property to the Fund’s portfolio aligns well with our strategy of investing in well-located assets underpinned by long term leases.”

IAPF, listed on the Johannesburg Stock Exchange under the Real Estate Holdings and Development sector, provides South African investors with direct access to the Australian commercial property market.

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The acquisition increases the Fund’s exposure in New South Wales and brings the value of the Fund’s total portfolio to $347 million. The acquisition will be fully funded with debt which will take the Fund’s gearing to 29%.

The 16,461 square metre industrial warehouse is located at 66 Glendenning Road, in one of Sydney’s most established industrial precincts. The property is 100% leased to McAlpine Hussmann Pty Ltd, a manufacturer of bespoke refrigeration display cases for the commercial refrigeration market, servicing customers such as Woolworths, Coles and IGA.

The initial passing yield on acquisition is 7.66% which represents an attractive spread over the Fund’s borrowing costs. The lease expiry is four and a half years from the settlement date and contracted annual rental growth is 3.0%.

“The acquisition is the seventh property acquired by the Fund since the rights issue in October 2014. Approximately $177 million of acquisitions have been made in the past six months which demonstrates management’s ability to source opportunities in a very competitive market.

We are pleased to increase the Fund’s exposure to the NSW market, particularly in a location such as Glendenning. The acquisition aligns well with the Fund’s strategy of investing in well-located, high quality assets underpinned by strong tenant covenants,” he added.

IAPF, listed on the Johannesburg Stock Exchange under the Real Estate Holdings and Development sector, provides South African investors with direct access to the Australian commercial property market.

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) yesterday announced the acquisition of a $38.9 million office building in the heart of Sydney’s growth corridor. The acquisition, with a scheduled settlement date of 31 March 2015, is the Fund’s first office acquisition in New South Wales and brings the value of the Fund’s total portfolio to $328 million.

The 11,610 square metre office building, situated at 21-23 Solent Circuit in Baulkham Hills, is located 36 kilometres from the Sydney CBD. The property, located in the Norwest Business Park, will greatly benefit from the construction of the North West Rail Link, due for completion in 2018.

The property is 85% leased with scope to deliver additional income to the Fund through active leasing of the vacant space. The annualised property yield on a fully leased basis would be 9.46%.

The weighted average lease expiry is five and a half years and contracted average annual rental growth rates range from CPI to 4.0%. The property is occupied by high quality tenants comprising a mix of listed, international and national companies, including Clarendon Homes, Novo Nordisk, Bosch and PwC.

IAPF CEO Graeme Katz said the acquisition is accretive to the Fund and represents an attractive spread over the Fund’s borrowing costs.

“We are pleased to make the first office acquisition for the Fund in Sydney. Confidence appears to be growing in the NSW economy and the acquisition increases the Fund’s overall exposure to this market.

“Again, the acquisition aligns well with the Fund’s strategy of investing in well-located, high quality assets,” he added.

IAPF, listed on the Johannesburg Stock Exchange under the Real Estate Holdings and Development sector, provides South African investors with direct access to the Australian commercial property market.

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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.

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) has announced the acquisition of two new industrial properties located in Newcastle and the western Sydney suburb of Wetherill Park, for a joint purchase price of $26.9 million.

The acquisitions contribute to a successful year of growth for the Fund, having announced the acquisition of $147.4 million of properties over the past 12 months.

The two newly acquired properties are underpinned by long-term leases to a single tenant, and provide the Fund with a blended yield of 7.92%.

The 12,500 square metre industrial property at Wetherill Park is located 34 kilometres from the Sydney CBD, with 11 years remaining on the lease and an option for a further five years. Average contracted annual rental growth for the property is approximately 3%.

The Newcastle property is situated five kilometres from the Port of Newcastle and 10 kilometres from the CBD. The current lease on the property runs until January 2021, with a contracted 3.75% rental growth and an option for a further 10 years.

IAPF CEO Graeme Katz said, “We believe these latest acquisitions are consistent with the Fund’s strategy of investing in well-located, high quality assets.Both properties are conveniently located in established industrial precincts and secured by strong lease covenants”

Mr Katz said the Fund was in a strong position to pursue acquisition opportunities, having recently paid its gearing down to zero following a successful rights offer in October.

“We are actively seeking opportunities to grow and diversify the Fund’s asset base, enhance value and contribute to sustainable income growth for our investors,” he said.

On completion of the acquisitions, the Fund’s portfolio will comprise nine industrial properties and five office properties.

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.

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) has announced the Fund’s third acquisition since listing late in 2013, with the purchase of an office development newly completed in July 2014, strategically situated in Brisbane for $65.5 million.

The acquisition will take the portfolio to $250 million post the completion of the transaction, representing asset growth of 86% since listing.

The property, situated at 757 Ann Street in the Fortitude Valley area adjacent the Brisbane CBD, provides 10 levels of office space with a retail component on the ground floor and is fully leased, generating income underpinned by high quality tenants. It benefits from excellent road access to the CBD and Brisbane Airport and is well served by various public transport options. The area is characterised by newer office buildings, significant newly developed high-density residential accommodation and good quality restaurants and cafes.

IAPF CEO Graeme Katz said: “This major addition to the Fund is a value accretive transaction secured on attractive terms representing an initial yield of 8.35%. It aligns well with our aim to grow the asset base byinvesting in high-quality properties situated in key metropolitan areas. We are pleased with this third excellent opportunity identified in the 10 months since listing which has enabled us to effectively deploy capital towards income enhancing transactions.”

The property is let to major tenants including a 10 year lease with Ventyx (a subsidiary of the $52 billion NYSE-listed ABB Group) for 60% of the office space, a 5 year lease with Corporate House Services (“CHS”) for 20% of the office space (CHS provides an efficient alternative to traditional office spaces for small to medium users by offering potential tenants ready-to-go workspaces with complimentary support services) and the remaining space let to a related party of the vendor, SIP Australia, supported by a cash backed guarantee for the full 5 year lease period. These medium to long term leases include a contracted annual rental growth of a minimum of 3% and represent a weighted average lease expiry of 7.54 years.

The purchase of Ann Street is another off-market transaction identified and secured through the strength of the Investec Property network in Australia.

The effective date of the acquisition is expected to be before the end of October 2014, subject to the fulfilment of related conditions, including the completion of due diligence, commencement of all leases, regulatory and unitholder approval for the acquisition and the execution of the proposed rights offer.

On completion, the portfolio will comprise six industrial and five office properties; all located in established commercial precincts within major metropolitan areas.

IAPF was listed on the JSE in October 2013 under the Real Estate Holdings and Development sector and allows South African investors access to the Australian property market.

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Graeme Katz

Investec Australia Property Fund (“IAPF” or the “Fund”) last week announced the purchase of an A-grade office building in Canberra for AUD25.8m, representing an annualised property yield of 7.84%.

The Manning Clarke building – 186 Reed Street, Tuggeranong, ACT – is a single tenanted four level building with a net lettable area of 5,403m2 which recently underwent a significant upgrade and refurbishment. It also includes 158 car parks within the total 9,458m2 site area.

IAPF CEO Graeme Katz said: “The addition of the Manning Clarke building to the Fund aligns well to our strategy of investing in high-quality office properties situated in key metropolitan areas. We continue to seek growth and diversification opportunities that enhance unitholder value and contribute to sustainable income growth.”

The property is leased to The Commonwealth of Australia (Department of Human Services) on a 10-year lease expiring in February 2023 at a weighted average annual rent of AUD414m2.  The lease has two further four year options with annual contracted growth of 3.5%.

The acquisition was funded through existing debt facilities which saw the Fund’s gearing rise from 14.4% to 26.8%.  The debt has been 100% hedged at an all-in rate of 4.70% in line with the Fund’s hedging policy.  The acquisition is effective 15 May 2014 with no conditions precedent attached.

Commenting on the Canberra office market Mr Katz said: “The building is located in the Tuggeranong Town Centre where the economic viability is underpinned by the presence of various government departments, with limited examples of transference.  There is close to 0% vacancy for A and B-grade office space and the Department of Human Services leases 85,000m2of the total of 150,000m2 office space in that market.”

This acquisition marks IAPF’s second purchase since listing on the Johannesburg Stock Exchange (“JSE”) late last year. The portfolio now boasts six industrial and four office properties, all located in established commercial precincts within major metropolitan areas.

IAPF was listed on the JSE in October 2013 under the Real Estate Holdings and Development sector and allows South African investors access to the Australian property market.

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