Multiplex is looking to raise $169 million to buy a portfolio of CBD office assets valued at $640 million.
The Multiplex Acumen Prime Property Fund will be listed on the Australian Stock Exchange and has an annualised forecast cash distribution of 7.75% in FY2007 increasing to 8.00% in FY2008
The fund’s portfolio will comprise 77% of government and major corporate tenants with 80% of property income supported by fixed reviews of between 3.50% and 4.75% per annum.
The fund’s portfolio will comprise the new $123.5 million American Express building at Sydney’s King Street Wharf; 50% of Ernst & Young Centre and 50 Goulburn Street, World Square, Sydney acquired for a total of $256.25 million; 25% of Southern Cross Tower, Melbourne valued at $130 million; Defence Plaza, Melbourne valued at $67 million and a portfolio of Listed Property Trust securities valued at $63 million.
A further $ 1 billion worth of properties may eventually find their way to the fund including Site C Latitude, Sydney; Stage 4B, King Street Wharf, Sydney; Southern Cross West Site, Melbourne; Bishops See, Perth; City Square, Perth.
The weighted average lease expiry by income of the portfolio is 10 years.
Multiplex Capital’s managing director Ian O’Toole said the fund offers investors an opportunity to invest in an impressive portfolio of assets, exhibiting particularly strong characteristics and located in markets that are well positioned to perform positively.
“Investors will benefit from the portfolio’s strong underlying cash flows underpinned by major corporate and Government tenants and an outstanding lease expiry profile.
“This investment is projected to deliver an attractive and stable income stream during the forecast period, backed by the experienced and high performing property funds management division of Multiplex Group, Multiplex Capital, which has in excess of $5 billion of funds under management. The Fund is another clear demonstration of our strategy to create a constellation of externally managed funds. Multiplex’s ability to source or create new product provides a competitive advantage in the continued success and growth of the Group’s funds management business going forward,” he added.
O’Toole said a recent report by Savills Australia found tenant demand has rebounded strongly across all major CBDs resulting in high levels of absorption and improved levels of occupancy.
“With the majority of office markets, particularly Sydney, having a limited supply outlook, the forecast for rental growth in the short to medium term is positive,” he added.
Fund units will be issued at $1.00 per Unit with a minimum investment of 10,000 units.
The lead equity arranger is National Australia Bank, who is also acting as joint lead manager with ANZ for distribution of equity in the fund.
By Nelson Yap
