This article is from the Australian Property Journal archive
ELANOR Investors Group is finalising plans to list its new real estate investment trust, Elanor Retail Property Fund, on the ASX.
The fund’s portfolio will initially comprise five retail shopping centres valued at $243.2 million, with a weighted average capitalisation rate of 7.7%, weighted average lease expiry of 5.1 years and 96.7% occupancy.
The fund will be formed from the stapling of Elanor’s Retail Property Fund I and Retail Property Fund II, as well as its new acquisitions in the Tweed Mall Shopping Centre, which it purchased from Vicinity Centres for $81.25 million late in August, and Northway Plaza Shopping Centre in Bundaberg.
The portfolio will also include Auburn Central Shopping Centre, Manning Mall Shopping Centre in Taree, and Glenorchy Plaza Shopping Centre.
Managing director and chief executive office Glenn Willis said the fund will invest in Australian retail property, with a focus on “quality, high-yielding” neighbourhood and sub-regional shopping centres.
Elanor completed a $30 million institutional placement in July, which it put forward to establishing the new REIT, as well as its Elanor Commercial Property Fund, which it seeded with its recently-purchased 12,390sqm office building at 34 Corporate Drive in Cannon Hill.
The fund will target a distribution of 90% to 100% of distributable earnings and will offer investors a forecast distributable earnings yield 7.9% for the 2017 calendar year.
Anchor tenants will contribute around 51% if the portfolio’s base rental income, with non-discretionary retailers which comprise around 45% of its gross lettable area.
Elanor Funds Management Limited will be the responsible entity of the fund, which will be externally managed by Elanor.
It’s expected the fund will have a market capitalisation of in more than $170 million, with Elanor to have an investment in the fund of around 15% at IPO.
Elanor will receive a base management fee of 0.65% of the gross asset value of the fund, and be entitled a performance fee of 20% of the amount by which the total return exceeds 12%, as well as other fees in relation to property management.
The group posted a statutory profit of $4.13 million for the 2016 financial year on the back of a strong performance by its funds management business.
Australian Property Journal