Brisbane based Cromwell Corporation could not help themselves but pay $158 million for two properties in Sydney and Melbourne that assists in setting up a brand new vehicle for property punters.
The deal announced yesterday relieves Record Realty of two significant properties in Hurstville in Sydney’s southern suburbs and the 20 level Australia Post headquarters at 321 Exhibition Street, Melbourne, and at the same time “unofficially” launched the Cromwell Property Fund.
The package was sold on a yield of around 7.3%.
For Record Realty, the sale of the two properties allows it to cash up as it closes in on two major property acquisitions.
According to Record’s chief executive Stewart Tillyard the sale of the two properties represents a significant return for investors in a relatively short period.
Tillyard said the turnaround of a $20.75 million gain provides unitholders with a benefit of $6 – $7 million.
He added that the sale demonstrates the fund’s continuing strong performance clearly stating its objective of optimizing returns for unitholders.
“It is an opportune times to divest the properties to realise profits and releases capital to acquire further investment opportunities which are tailor-made for Record Realty. For investors it locks in the first component of the next distribution,” Tillyard concluded.
Cromwell executive chairman Paul Weightman said the properties would further enhance the quality, diversity and scale of assets being acquired for the CPF, allowing the new Cromwell fund to enter the market as a very competitive unlisted investment product.
The CPF is the strongly anticipated follow-up product to the successful Cromwell Diversified Property Trust. The CDPT closed in April after raising nearly $445 million from over 6,500 investors.
"The CDPT was an extremely popular investment product with a wide range of investors attracted to our commitment to delivering a stable monthly income. The new Fund will provide a quality diversified investment vehicle for Cromwell’s extensive client base." Weightman said.
A PDS for Cromwell Property Fund is expected to be released in July, which is around the time the Brisbane based property group will settle on its latest acquisitions.
By Ted McDonnell
