PROACTIVE funds manager GDI Property Group has announced a capital return to investors of the GDI No. 25 Income Property Fund of $2 for every dollar invested in May 2006.
The one dollar unit invested in May 2006 in the GDI No 25 Fund was used to acquire levels 4 and 8 at 12 St Georges Terrace,
Recently, the WA Government made a costly mistake by failing to exercise a lease option which had expired on April 30 2008. As a result, GDI served the Government with notice to quit, to vacate the premises or enter into a new lease at market rents.
And in Perth’s tight office market the Government had little option but to renew and saw rental costs jump three folds as it has no option but to sign a new lease agreement at 12 St Georges Terrace.
A Heads of Agreement was signed from August 01 for a new seven-year lease at $550 per sqm – the previous rent was $160 per sqm including car spaces. As a result, the rent will increase from $519,000 pa to $1.4 million pa.
GDI’s managing director Steve Gillard said the capital return of $5.5 million ($2 per $1 unit) is to be paid to GDI 25 Investors on September 09.
Gillard said subsequent to the lease agreement, Levels 4 and 8 have now been revalued, at $16.2 million, well up from the $6.08 million purchase price at May 2006.
At current valuation each $1 unit has an NTA of $4.70.
Gillard has forecast an increase in distribution from 9 cents to approximately 20 cents per unit per annum after the capital return of $2 per $1 unit.
The boutique fund manager recently launched its No. 29 GDI Office Fund.
Gillard told Australian Property Journal the fund is targeting high net worth and wholesale investors who have become disillusioned with the listed property sector.
The No. 29 GDI Office Fund is looking to buy up to $100 million worth of assets across Australia and has secured its first property, 251 Adelaide Terrace which was purchased for $35 million – a substantial discount to valuation of $41 million on June 23 2008. The property is let to 25 tenants and provides an initial net yield 10.6% pa.
The fund has also bought a second asset at
“If you are buying an undervalued asset, that is multi-let, high yielding and is below replacement costs, the risks are limited.
“We are targeting properties that have dual exit strategies by either one line sale or through a strata title sub-division process.
Gillard said feedback from the high net worth private and wholesale investors have been “fantastic”.
“There is still plenty of investors and capital around, these investors have recently been disillusioned by the listed property sector but the recognise GDI’s management of purchasing, refurbishing, strata sub-division, leasing and holding the properties until we can realise full value and sell,” he continued.
Gillard said he is very confident the initial fundraising will close on December 31 2008 or earlier.
Australian Property Journal
