Unlisted Funds

    • MPG Retail Brands Property Trust

      The MPG Retail Brands Property Trust is a diverse open ended Fund that invests in retail properties and investments. The Trust is seeking to raise $10.0M through the issue of 10.0M Ordinary units at $1.00 per unit. Funds raised will be used, in conjunction with a bank loan, to acquire the Beaudesert Central Shopping Centre in Beaudesert, Qld. Following the acquisition, the Trust will have a portfolio of seven direct retail properties (88.5% of the portfolio), three unlisted property trusts managed by the RE (9%) and cash (2.5%). The portfolio occupancy will be 99% with a WALE of 6.2 years and a weighted portfolio capitalisation rate of 6.6%. Major brand tenants Coles, Woolworths, Bunnings and Target account for 50% of income. The Trust’s Responsible Entity is MPG Funds Management Limited, which is part of McMullin Property Group, founded by the late Ian McMullin (founder of Spotless Group). McMullin Property Group has also announced it will purchase new Liquidity Units and use the funds to reduce the LVR to 54.9% (from the 62.4%), against an LVR covenant of 65%.  Liquidity units rank equally with Ordinary Units, however have an additional redemption feature which McMullin Property Group has agreed it will not exercise if the LVR is above 55% in the remaining five years of the current term. McMullin Property Group will accept a lower distribution of 6.72% on their Liquidity Units, which PIR considers to show strong support for the Trust. The Trust is targeting distributions in FY18 of 7.25% and in FY19 of 7.35%.

      Recommendation:
      A
    • Centuria Sandgate Road Fund

      The Centuria Sandgate Road Fund ("the Fund”) is a closed-ended, single-asset fund with an initial term of six years to 1 July 2023.
      The Fund is seeking to raise $68.9M through the issue of 68.9M units at $1.00 per unit which will be used in conjunction with
      bank debt to acquire 1231 Sandgate Road, Nundah Qld for $106.25M. Recently constructed in 2012, the Property is located approx. 4kms from Brisbane Airport and 10kms from the Brisbane CBD. The Property is an A grade 8 level office building with ground floor retail tenants, a WALE of 9.4 years and is 100% occupied. Around 81% of rental income is supported by government leases. The Manager is targeting an FY18 distribution of 6.5%, and is forecasting this to increase to 8.0% p.a. by the sixth year. Fixed annual rent increases of 3.5% - 4.0% p.a. are expected to support valuations and any risks to tenancies.

      Recommendation:
      AA
    • DJ Property Limited (Investment)

      DJ Property Limited (Investment) is an unlisted public company undertaking a capital raising through the offer of ordinary shares at an issue price of $10.00 per share. The Offer represents an investment in a debt finance company which provides loans to related entities within the DJ Group for commercial properties secured by way of a second ranking mortgage. This investment replaces unsecured debt on the balance sheet of the two unlisted property trusts holding the properties and potentially fund future property acquisitions depending on the amount raised under this capital raising. The shares currently provide a 10.0% p.a. total return by way of $0.70 p.a in franked dividends with $0.30 p.a in franking credits. Dividends are paid monthly and are a pass through of the interest the Company receives on $3.0M of loans, equivalent of the average initial passing yield (or net property income) of the properties. The Company has indicated that future income returns may reduce to 8.5% - 10.0% p.a. over the next 12-18 months, subject to the purchase of new properties.

      Recommendation:
      A-
    • SCA Unlisted Retail Fund 2 ("SURF 2")

      The SCA Unlisted Retail Fund 2 ("SURF 2") is a 5 year, unlisted property fund that is offering investors the opportunity to subscribe for 29.5M units at $1.00 per unit. Funds raised will be used, in conjunction with debt to purchase two retail properties from SCA Property Group (ASX: SCP), the Katoomba Marketplace and Mittagong Village in NSW, for a combined total of $55.1M. The property metrics are attractive: a long WALE of 17.2 years, 100% occupancy with 94% of the rental income secured by long term leases with Woolworths Limited (Woolworths supermarket, Big W discount department store and Dan Murphy's liquor store), offering a low risk income yield over the term of the Fund. The Manager is forecasting distributions of 7.00% p.a. in FY18 and FY19 paid quarterly, in arrears. PIR considers the Fund would appeal to investors seeking a predictable and sustainable income yield, supported by a strong corporate tenant and long term tenancy agreement in place.

      Recommendation:
      AA
    • Bundaberg Retirement Fund

      The Bundaberg Retirement Fund provides an opportunity to invest in the Liberty Villas Retirement Village in Bundaberg, Qld. The Manager is offering 6.75M units at $1.00 per unit to wholesale and sophisticated investors, with forecast distributions of 8.75% pa for the 7 year life of the Fund (the Manager has an option to extend the Fund to 9 years). The Property provides low cost accomodation for seniors who are healthy and do not require any medical services. The Fund is leveraged to the maximum bank covenant of 50%, however has excess cash to cover a 6.7% fall in the current valuation. With occupancy levels returning to above 90% following refurbishments after the 2013 floods, the Property is well placed to benefit from secure tenancies as a result of an ageing population. The Fund has relaunched its offering to investors and this report reflects the updated offering.

      Recommendation:
      A
    • Centuria Scarborough House Fund

      Centuria has launched the Scarborough House Fund as a single asset, five year unlisted property fund which is seeking to raise $46.09M through the issuance of 46.09M units at $1.00 per unit. The funds will be used, along with debt, to purchase a 100% leasehold interest in Scarborough House, an A grade office building located at 8 Atlantic Street, Woden Town Centre ACT for $72.3M. The Property is 100% occupied, with a WALE of 8.2 years. The main tenant is the Commonwealth Department of Health (98.6% of rental income) which is currently on a 9 year lease expiring in July 2025. The Property is positioned in the heart of the "health district" in Woden, and the Manager is forecasting distribution yields of 7.00%-8.45% p.a over the five year term, with an option for unitholders to extend the Fund at the end of the initial term. The Property offers a compelling investment, with a government secured tenancy which is well outside the initial term of the Fund, an initial LVR of 40% (against a bank covenant of 57.5%) and an expected distribution yield in the high single digits.

      Recommendation:
      AA
    • Westlawn Property Trust

      Westlawn Property Trust is seeking to raise up to $20.0M through the issuance of up to 25.3M units in the Trust at A$0.79 per unit. The net proceeds of the Offer will be used to initially reduce debt and subsequently provide capital for future acquisitions. The Trust is an open ended property trust established in 1994 and invests in a diverse mix of property assets (commercial, office, retail) as well as redevelopment projects and property investments (including listed and unlisted funds). As at June 2016 the Trust owned 10 core property assets valued at $156.9M; a major redevelopment project at Lennox Head NSW (valued at $30.0M); 6 non core properties marked for redevelopment (valued at $2.1M) and $1.4M worth of units in an unlisted trust. The Trust offers a diverse mix of core property assets providing underlying rental income, however PIR considers the upside potential to come from the development project currently underway at Lennox Head. PIR calculates that for every $0.79 invested, the Trust is expected to deliver a $1.476 return over five years (consisting of a $0.79 return of capital, $0.325 in distributions and $0.361 in capital gains). Investors need to take into account the Trust is subject to taxation with distributions having a franking credit component attached.

      Recommendation:
      A+
    • Fortius Green Square Commercial Trust

      Fortius Funds Management will offer units in the Fortius Green Square Commercial Trust as a six year unlisted trust (with a 1+1 year year option to extend) that owns and operates Taylors House at 965 Bourke Street, Waterloo NSW. The Trust is seeking to raise $39.1M through the issue of 39.1M units at $1.00 per unit to wholesale investors, which it will use in conjunction with a $35.5M bank loan to purchase units in the Trust, reflecting an underlying property value of $73.0M (plus acquisition costs). The Trust is forecasting distributions of 7.25% - 8.75% p.a. over its initial 6 year term. The Property has an attractive occupancy rate of 100% (including rental guarantees on the parking) and a WALE of 6.6 years. The main tenant, Study Group occupies 86% of the NLA and operates the successful Taylors College education business at the Property. Study Group has recently committed to a further 7 year lease term, expiring in January 2024.

      PIR considers the Trust to offer an attractive investment proposition with an exposure to a resilient sector, located in a highly sought after and densely populated suburb in inner Sydney.

      The Offer is open to wholesale investors only.

      Recommendation:
      AA
    • PE Capital Y Fund

      PE Capital has established the Y Fund as an open-ended enhanced cash trust targeting a net return of above 5.0% p.a. (after fees and costs). The Fund aims to deliver returns higher than traditional cash and fixed income products through a mix of ~80% investment grade cash products (cash, fixed income and hybrid securities) and ~20% in the PE Capital P1 Fund (a property development fund also managed by PE Capital targeting 18% p.a. returns). The P1 Fund is supported by a General Security Agreement that provides the Y fund with first ranking security, secured by corporate and capital partners, on the 18% returns. The Fund aims to offer semi annual distributions and a daily withdrawal facility.

       

      Recommendation:
      AA-
    • Barwon Healthcare Property Fund

      The Barwon Healthcare Property Fund is an open ended fund that invests in property assets in the healthcare sector. Established in October 2014, the Fund is seeking to raise funds to acquire additional assets as part of its initial three year acquisition cycle. The Fund provides an opportunity to invest in the healthcare property sector which has delivered relatively better risk adjusted total returns when compared to core property sectors.  The existing portfolio consists of medical centres, diagnostic imaging facilities, and a government mental health facility with an attractive WALE of 5.3 years and 100% occupancy. New units in the Fund will be issued at NTA (currently around $1.05) and based on the current portfolio PIR forecasts distributions of 6.8 – 8.6 cents per unit for the FY17-FY19 period. The offer is open to sophisticated and professional investors only.

      Recommendation:
      AA-
    • Bundaberg Retirement Fund

      The Bundaberg Retirement Fund provides an opportunity to invest in the Liberty Villas Retirement Village in Bundaberg, Qld. The Manager is offering 6.75M units at $1.00 per unit to wholesale and sophisticated investors, with forecast distributions of 8.75% pa for the 7 year life of the Fund (the Manager has an option to extend the Fund to 9 years). The Property provides low cost accomodation for seniors who are healthy and do not require any medical services. The Fund is leveraged to the maximum bank covenant of 50%, however has excess cash to cover a 6.7% fall in the current valuation. With occupancy levels returning to above 90% following refurbishments after the 2013 floods, the Property is well placed to benefit from secure tenancies as a result of an ageing population. 

      Recommendation:
      A
    • Oliver Hume - Holmview Qld - Stage 2

      Oliver Hume is offering up to 1.0M shares at $1.00 per share as part of its Stage 2 capital raising for its development at Holmview, Queensland. The capital will be used to develop the next 27 lots, following the 47 lot development in Stage 1. Over an 18 month period from 31 August 2016 to 28 February 2018 investors are expected to receive a $0.157 dividend with $0.067 in franking credits, and a return of the initial $1.00 investment. The capital raised will have a fourth ranking mortgage on the development site. The offer is for sophisticated and professional investors only. 

      Recommendation:
      A+
    • Centuria Zenith Fund

      The Centuria Zenith Fund is a closed ended, single asset unlisted fund with an initial term of five years to July 2021. The Fund seeks to raise $78.7M through the issue of 78.7M units at $1.00 per unit to acquire a 50% stake in the Zenith office complex in Chatswood, NSW. The Fund is co-investing with a fund managed by BlackRock, a leading global financial institution. Expected distributions are 7.6% pa in FY17 and 7.7% pa in FY18 rising to 9.8% pa in the fifth year. With an 94.8% occupancy, the twin tower office complex has a WALE of 2.7 years and is expected to benefit from the increased transport facilities in Chatswood as well as the expected 'spill over' of tenants as a result of Sydney CBD office withdrawals. The RE is planning to split the title of the two towers, with a potential upside in valuation as a result of a deeper buyer pool. The Fund's gearing is expected to peak in FY18 with an LVR of 54.0% against a covenant of 60.5%. Investors need to consider the trade off between the modest headroom against the LVR covenant versus the potential growth in market rents, the repositioning of Chatswood as a major commercial hub and potential valuation upside by the creating of two separate titles.

      Recommendation:
      AA-
    • The Stables Property Fund

      Placer Property Ltd is offering up to 16.52M units at $1.00 per unit to invest in the Stables Shopping Centre, Adelaide SA. The property was recently constructed (2015), with 100% occupancy (including rent guarantees), and 77% of the rent will be sourced from long term leases (Woolworths 61%, medical centre and pharmacy 16%). PIR estimates an average annual distribution yield of  around 7.8% over the six-year term and a pre-tax IRR in the range of 8.0 - 11.0%.

      Recommendation:
      AA-
    • Oliver Hume - Holmview Qld - Stage 1

      Oliver Hume is offering up to 1.5M shares at $1.00 per share to sophisticated and professional investors only. The $1.5M capital will be used in conjunction with a $6.5M debt facility to subdivide and develop 47 lots in Stage 1 as part of 104 lot subdivision in Holmview Qld. Investors are expected to recieve a 14c distribution with 6c franking credits at the end of the estimated project period for the 16 months to September 2017.

      Recommendation:
      A+
    • Living Cities Development Group (ASX: LCG)

      Living Cities Development Group (ASX Code: LCG) has launched a Public Offer to raise a total of $7.6m through the issuance of up to 38 million shares at a price of A$0.20. The Retail Offer consists of 15 million shares at $0.20 each to raise $3.0m maximum and is in conjunction with $4.6m in private placements.

    • GDI No.42 Office Trust

      The GDI No. 42 Office Trust is a two-asset property syndicate that will be managed by GDI.  The Information Memorandum (IM) projects that the term of the Trust will be seven years. The Trust seeks to raise $65.5M by issuing 65.5M units at $1.00 each. Initial gearing will be 35%. Gearing will rise to a maximum of 40%, as the Trust draws down debt to pay for capital expenditure which includes tenant incentives and property refurbishment costs.

      The Trust’s two proposed office sector properties are located at 223-237 Liverpool Rd (Hume Highway), Ashfield in Sydney and at 235 Stanley St, Townsville. The combined purchase price is $88.5M funded by equity of $65.5M and the balance by debt.

      This unlisted Trust is for wholesale investors including sophisticated and professional investors only.

      Recommendation:
      AA-
    • Centuria ATP Fund

      The Centuria ATP Fund (the Fund) is a closed-ended, multi-asset fund with an initial term of five years to March 2021. The Fund’s Responsible Entity, Centuria Property Funds Limited will manage the asset together with its associated entities. The Fund will acquire three commercial office buildings within Sydney’s Australian Technology Park (ATP). The three assets are the
      NICTA Building, the Biomed Building and the International Business Centre (IBC) Building for $104M. The purchase price is at a small discount to the independent valuation of $108.8M.

      Recommendation:
      A+
    • Peet Werribee syndicate

      The Peet Werribee Land Syndicate is a closed-ended, single-asset fund. Its Responsible Entity (RE) is Peet Funds Management Limited which will manage the asset together with its associated entities. PFML is a wholly owned subsidiary of the ASX listed Peet Limited.

      The sole asset of the Syndicate is a residential land sub-division project located at 383 Black Forest Road, Melbourne. This will be purchased from an associated entity of Peet Limited. The RE’s plan is to develop the land into a residential estate and sell the resulting lots. The RE estimates the subdivision of land will yield 906 lots that will be developed in 23 stages over seven years. The Gross Realisation Value (GRV) of the project is ~$197M (including GST).

      The RE is offering up to 25M units for sale under the offer at A$1.00 per unit. On application, the initial equity payment is $0.70 per unit with the balance $0.30 per unit payable in June 2017.

      Recommendation:
      AA
    • DomaCom Fund

      A platform to facilitate fractional property investing

      Recommendation:
      A+