This article is from the Australian Property Journal archive
Funds manager Australian Public Trustees is giving investors the opportunity to invest in its new Government Property Trust.
APT is seeking to raise up to $10 million from retail investors and $20 million from institutional investors for its Government Property Trust, which it launched in February 2005.
The Government Property Trust will have assets of $75 million on completion of the capital raising and an LVR of 55%.
According to APT director Don Christie, the trust’s fixed rate of return is underpinned by strong government tenants and a solid geographical spread of properties.
The trust is guaranteeing investors a fixed return of 8.25% per annum for 3 years, payable quarterly and a right to redeem or re-invest after 3 years.
“Offering a fixed rate of return is unusual for property trusts.
“However, government-leased properties offer a stability of income that is difficult to find in the retail, commercial or industrial sectors. For this reason, we have purpose-built a portfolio of government-leased properties that can offer a stable and reliable income to investors. In our view, the average investor is seeking not only relatively high income, but stable income, and that’s what an investment in the Government Property Trust offers,” Christie said.
Investors will have a direct ownership interest in the trust’s assets by the issue of preference units, which provide investors with preference to distributions and redemption, but no capital gain.
The primary purpose of this capital raising is for the trust to buy a Canberra government-leased property.
The trust is set to buy the Department of Health and Ageing building in Canberra for $37.50 million, a five storey property, including one floor of undercover car parking.
The trust’s assets already include the ATO building in Geelong, Victoria and two Centrelink buildings in Western Australia valued at over $30 million
APT specialises in government-leased assets, and at the completion of this capital raising will have funds under management of $140 million.
“Government-leased assets deliver to investors a more secure forecast yield and relatively low risk,” APT’s chief executive officer Darren Olney-Fraser said.
According to Olney-Fraser, APT will remain on the outlook for further acquisitions of suitable government-leased properties for the Government Property Trust.
“At the completion of the current capital raising period the trust will have a war chest of between $6.7 million and $11.4 million, and it is our intention to seek further properties for acquisition by the Trust,” he concluded.
By Adam Parsons
