Nick Kelly

Charter Hall Group, one of Australia’s leading integrated property groups with $18 billion of assets under management, has announced the launch of its fourth Direct Industrial Fund (DIF4) which features a target income yield of 6.5%[1] plus capital growth.

DIF4 will invest in a portfolio of high quality industrial property that is 99.8% occupied and has a long weighted average lease expiry (WALE) of more than 15 years.

The initial portfolio comprises exposure to a portfolio of 27 industrial logistic assets geographically dispersed throughout Australia. The total gross assets of DIF4 is initially $84 million and is expected to grow in future years to over $400 million as additional equity is raised and deployed.

DIF4 will be conservatively geared with a target range of 30-45% which provides yield and growth enhancement to an initial 15-year WALE portfolio.

DIF4 has been launched to coincide with the realisation of the DIF1 portfolio where investors realised a 14.2% IRR over the six-year period since inception.

Charter Hall head of Direct Property Nick Kelly said: “The DIF4 launch builds on the successful history of our Direct Industrial Funds series, with the first three funds having raised over $400 million in equity, and have all outperformed the benchmark MSCI/IPD Unlisted Core Wholesale Property Fund Index over the life of the fund.

“Like its predecessors, DIF4 is designed to provide investors with a sustainable, relatively high income yield plus the prospect of capital growth from an investment with low correlation to equity and bond markets. It will suit investors who seek a stable, tax advantaged income paid quarterly looking to invest for a five-year term.

“Importantly, DIF4 provides an institutional-quality investment opportunity to individual private investors, including the million strong SMSF member market, who typically are seeking strong and stable yields in a low interest rate environment.” Mr Kelly added.

Steve Bennett, Direct Fund Manager said: “Direct property, also known as unlisted property, as an asset class has been a leading performer when compared to other investment markets. The outlook continues to be attractive for the industrial sector. DIF4 provides the individual investor the opportunity to gain exposure to this asset class which exhibits the critical qualities of long WALE, high quality tenants, with conservative gearing”.

Charter Hall has two of the top ten performing funds in the Property Council of Australia’s latest unlisted retail sector index compiled by IPD/MSCI.

———-

[1] DIF4’s forecast average distributions for the initial portfolio of 6.5% pa over the period from 1 November 2016 to 30 June 2017 (annualised) and the subsequent financial year to 30 June 2018

The post Charter Hall launches new direct industrial fund to meet investor demand for income yield and resilient growth appeared first on AdviserVoice.

Nick Kelly

Charter Hall Group (the Group) has announced its market leading unlisted Direct Office Fund (DOF) has launched a new round of equity raising with the ability to accept a further $250 million from investors.

DOF is an unlisted property fund investing in a diversified and growing portfolio of high quality Australian office properties. DOF currently comprises nine fully leased office buildings in Sydney, Melbourne, Brisbane and Perth valued at over $842 million.

DOF aims to provide investors with sustainable and stable, tax advantaged income and the potential for capital growth. The current distribution yield for the fund is 6.6%1 per annum, an attractive offer in an environment with lower prospective income returns from other asset classes, particularly cash, fixed interest and bonds.

“Following strong investor demand and Charter Hall’s ability to access a pipeline of high quality, well located Australian office property, the fund is targeting to grow its property portfolio to over $1.2 billion,” said Steven Bennett, Fund Manager of DOF.

DOF achieved a total return of 20.1% per annum in the 12 months to June 30, 2016. This compares to the benchmark (MSCI/IPD Australian Unlisted Wholesale Property Fund Index) return of 12.8% over the same period.

“DOF has provided investors with annualised distributions of 7.5 cents per unit paid quarterly plus strong capital growth to date, which is forecast to grow to an annualised 7.75 cents per unit for the year ending 30 June 2017.

The DOF portfolio has a 100% occupancy rate, which is substantially above the Property Council of Australia’s occupancy benchmark and a 9.2 year weighted average lease expiry (WALE), which is the highest in the sector.

Additionally, the Fund has been strategically weighted to the Sydney and Melbourne office markets which are forecast to have the highest growth rates and which comprise over 70% of the Funds’ assets by value.

Nick Kelly, Head of Direct said: “DOF is a flagship fund for the Charter Hall Direct business. Its key characteristics of long average lease terms, investment in strategic markets with a strong weighting to the Sydney and Melbourne, conservative gearing and high quality tenants, is representative of the Charter Hall approach to property investing.”

The post Charter Hall’s Direct Office Fund to grow to $1.2 billion with new equity raising appeared first on AdviserVoice.

Nick Kelly

Charter Hall Group has announced its Direct Property business continues to deliver market leading returns for investors with its funds holding five of the top 10 ranked positions in the Property Council/IPD Unlisted Core Retail Property Fund Index for the 12 months to January 2016.

Over the year to January 2016 the core retail unlisted property sector outperformed the Australian share market, Australian fixed income and Australian listed REITs on a one, three and five-year basis according to leading industry analysts in research for the Property Council of Australia undertaken by MSCI.

Australian core unlisted property (retail and SMSF investor funds) provided a total return of 27.9% in the 12 months to January 2016, out-performing all other major asset classes for this period.

Longer term (five year) results for the various sectors were: unlisted retail property funds 17.2% pa; REITs 14.6% pa; Australian bonds 9.1% pa; and Australian equities 5.6% pa.

MSCI is a leading global property global analyst and producer of commercial real estate indices with a property database of 80,000 institutional held properties valued in excess of A$1.7 trillion across
33 countries.

The Australian index run by MSCI is The Property Council/IPD Unlisted Core Retail Property Fund Index and comprises 29 funds.

The 12 fund managers represented in the index are Australian Unity, Centuria, Charter Hall and Cromwell and a range of other smaller boutique industry participants.

The number one performing fund was the Charter Hall Direct Office Fund (DOF) – Wholesale A unit class, recording a 58.1% return over 12 months and 24.8% pa over three years.

DOF benefited materially from the sale of an asset on Sydney’s lower north shore after Charter Hall worked through a long term project to transform its use to a mixed-use residential site. DOF, which invests in a high quality, long leased Australian office portfolio, is currently open to investment with an income yield of 6.6% pa and a minimum investment of $20,000.

DOF is likely to close shortly with less than $15 million of equity investment capacity available.

DOF’s Fund Manager, Steven Bennett, said “The exceptional outcome for DOF investors this year follows repositioning of an asset and the acquisition of accretive investments, resulting in DOF becoming Australia’s longest lease duration office fund with an average lease expiry of over 9 years. In the background, our team is working tirelessly on other such opportunities across the broader platform.”

“The results speak volumes for the benefits of investing in quality commercial property and for selecting the right fund manager with a strong ability and track-record in adding value.”

Charter Hall’s Head of Direct Property, Nick Kelly said “The performance results detailed in the index were a significant pointer to the strong performance of unlisted property funds and Charter Hall’s pre-eminent position in the sector.”

“Having the top performing fund, and four more in the top 10, is a testament to the skills, discipline and business model of Charter Hall. Where we can, we take material positions in markets, selective decisions in asset acquisition and transformational investments that add value for our clients.”

Charter Hall Direct has another compelling investment opportunity available for investment that will close in 2016. The Direct Industrial Fund No.3 (DIF3) is the third in a series of unlisted industrial property funds specialising in owning long-leased industrial assets, with a track-record of outperformance of peers and benchmarks. DIF3 is currently offering an income yield of 7.0% pa. DIF3 follows Charter Hall Direct Industrial Fund No.2, the sixth best performing fund and the original Charter Hall Direct Industrial Fund, rounding out the top 10.

The post It’s official: Unlisted property is #1 asset class appeared first on AdviserVoice.