This article is from the Australian Property Journal archive
Stockland is looking to snare a slice of the growing unlisted retail property sector with the launch of its first shopping centre fund.
The Stockland Direct Retail Trust No.1 is the first in a series of neighbourhood shopping centre funds to be offered to retail investors, the offer seeks to raise $39.6 million.
Stockland’s chief executive of unlisted property funds division Robb Macnicol said the launch of the fund builds on the success of Stockland’s five unlisted office, hotel and residential funds, and signals the further delivery of the group’s unlisted property funds management strategy.
“The SDRT series of neighbourhood shopping centre funds provides a strategic, long-term capital partner for Stockland’s retail projects business and enhances our strong platform for growth as we continue to expand our unlisted property funds business,” he added.
SDRT 1 will provide retail investors with exposure to a diversified portfolio of shopping centres valued at more than $86 million with a portfolio weighted average lease expiry of more than 6.2 years.
The centres are the Pacific Pines Shopping Centre and Benowa Gardens Shopping Centre in Queensland; Tamworth HomeSpace bulky goods centre in New South Wales and Fremantle Shopping Centre in Western Australia, which is currently being developed.
The forecast annualised cash yield of the fund is 7.75% in 2007, rising to 7.85% in 2008.
“The four centres identified for this fund should benefit from Stockland’s significant management, leasing and development expertise to maximise long-term performance.
“The portfolio is diversified by geography and income with exposure to national supermarkets, bulky goods and specialty stores. The properties house more than 70 retailers including anchor tenants Woolworths and Bi-Lo (a Coles subsidiary) plus other national well-known national chains.” Macnicol said.
The offer will be fully underwritten by National Australia Bank. The offer is scheduled to close on December 07, 2006, but will close earlier if fully subscribed.
nabCapital’s head of structured property finance Arthur Psaltis the Bank has worked closely with Stockland to develop this fund.
NAB is also supporting the offer with a $60 million debt facility to the fund and a limited liquidity facility, which facilitates unitholder exit.
“This is the first time in our five raisings to date we have offered investors a formal liquidity facility and we expect it to enhance the market appeal of the fund,” Psaltis said.
Stockland is one of Australia’s largest shopping centre owners. The group’s shopping centre division generates sales in excess of $4.8 billion per annum across its portfolio of 41 centres and has a low vacancy rate of 0.2% of gross lettable area in its retail portfolio.
Stockland’s unlisted property funds division has over $540 million in assets under management. Additional funds are planned for retail and wholesale investors in the year ahead.
By Kathryn O’Meara
