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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JohannesburgSA

Investec Property Australia, a division of Investec Bank (Australia) Limited, is pleased to announce its intention to list Investec Australia Property Fund (“IAPF”) on the Johannesburg Stock Exchange (“JSE”).

The Fund, which is expected to list on 24 October 2013, will be listed under the Real Estate Holdings and Development sector.

Sam Leon, Non-Executive Director of IAPF, said: “Investec Australia Property Fund is a unique investment opportunity, offering South African investors direct exposure to the Australian property market and currency. The objective of the Fund is to invest in high quality, sustainable and well diversified real estate in Australia. The Fund at the outset is a solid, sustainable platform that is well positioned for growth.”

IAPF is an Australian domiciled real estate investment trust (“REIT”) with a property portfolio which consists of a diverse mix of industrial and commercial assets (eight in total) located across Australia. The properties are well located in major metropolitan cities or established commercial precincts in Australia and have long-term leases and quality tenants in place.  Furthermore, the Fund will be managed by an experienced and entrepreneurial management team on the ground in Australia.  The team’s solid track record coupled with its ability to leverage off the Investec platform provides the Fund with scope for significant growth in the future.

Graeme Katz, CEO of Investec Australia Property Fund, said: “The Australian property market has attractive opportunities and with a long term view, we are confident in the Fund’s ability toenhance value and deliver sustainable returns and long term capital growth for prospective unitholders.”

The Fund’s board comprises of an extremely experienced team, with a mix of South African and Australian members.

Further information is available in IAPF’s pre-listing statement.

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