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Key Features
Trust Summary
As at the date of this PDS, the Trust owns three retail shopping centres and two industrial facilities located on the Sunshine Coast, Queensland (including the recently acquired BlueScope Steel Coolum property), as well as a commercial office property located at Varsity Lakes on the Gold Coast, Queensland. The direct property component of the Trust’s Existing Portfolio is currently valued at $97,660,000.
As at the date of this PDS, the Trust has contracted to purchase:
- a newly constructed A grade commercial office building in Townsville, Queensland, anchored by Queensland Rail;
- a newly constructed A grade retail and commercial centre adjacent to Chancellor Homemaker Centre (one of the Trust’s existing properties) on the Sunshine Coast, Queensland, anchored by the Commonwealth Bank of Australia;
- an A grade office building in Canberra, Australian Capital Territory, anchored by the Canberra Eye Hospital;
- an A grade office building in Canberra, Australian Capital Territory, fully leased by Telstra Corporation Limited;
- an industrial property in Toowoomba, Queensland, which comprises an existing industrial facility, together with a state-of-the-art, newly constructed purpose-built printing facility anchored by APN Printing Services Limited
As at the date of this PDS, the Trust also has an investment of 8.77 million units in the Principal Property Securities Fund (PPSF).
Information in this PDS regarding the Trust’s investment portfolio will be updated from time to time on the Manager’s website (provided the information is not materially adverse to the Offer, in which case a supplementary PDS will be issued).
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Nature of the Trust
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The Trust is an open-ended unlisted unit trust that invests primarily in a range of property-based assets, including direct property holdings, listed and unlisted property trusts and property syndicates. The Trust may also invest to a lesser extent in other income producing equities, such as property investment companies, income funds or share funds, and maintain a proportion of its investments in cash.
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The Manager
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Reed Funds Management Limited, holder of Australian Financial Services licence 247376, is the responsible entity and manager of the Trust. The Manager is a member of the Reed Property Group.
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Trust Assets
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• Central One Townsville
• Chancellor Village Business Centre
• Canberra Eye Hospital
• Telstra House Canberra
• APN Toowoomba
• Silver @ The Exchange
• APN Yandina
• Chancellor Homemaker Centre
• Chancellor Village Convenience Centre
• Noosa Gateway
• BlueScope Coolum and
• Investments in listed and unlisted property trusts.
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Properties weighted average lease term
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8.8 years (weighted by income).
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Cooling off
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As at the date of this PDS, a 14 day cooling-off period applies to applications for investment in the Trust.
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| Distributions |
Based on the Existing Portfolio and New Acquisitions, the Manager expects a substantial portion of distributions will be tax-deferred in the medium term. Distributions for the 12 month period ending 30 June 2007 were 8.5 cents per Unit, which provided a distribution yield of 8.5% pa (before tax), based on the initial Unit Price of $1.00. Distributions are made quarterly, following the end of September, December, March and June in each year. Distributions may either be paid by electronic funds transfer to an Investor’s account, or they may be reinvested to acquire additional Units.
If no bank account details are provided by an Applicant, distributions are automatically reinvested by the Manager into Units.*
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Amount to be raised
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For as long as proceeds raised under this PDS can be invested in accordance with the Trust’s investment criteria, then the Trust will remain open for new investment.Equity raised under this PDS will initially be used by the Manager to assist in funding the New Acquisitions and to reduce the Trust’s borrowings.
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| Minimum investment |
$5,000 and thereafter in multiples of $1,000.
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| Trust size |
Expected to be approximately $202 million, after the Trust completes its purchases of the New Acquisitions (inclusive of cash and other Assets).
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| Gearing |
The Manager’s target LVR for the Trust is between 60-65%, however, this level may be exceeded for periods of time when necessary to facilitate the acquisition of new investments by the Trust.
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| Offer will open |
The Trust remains open for investment.
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| Unit Price (calculated daily) |
As at the date of this PDS, the Unit Price was $1.05 per Unit. However, the Unit Price varies. It is calculated by the Manager, usually daily, and published on the Manager’s website.
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| Fees |
Management and other fees are payable by the Trust.
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Asset allocation
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| Asset type |
Asset range % |
Allocation upon completion of new acquisitions % |
Long term target allocation % |
| Direct property |
40-99 |
90 |
70 |
| Unlisted property securities |
0-30 |
0 |
15 |
Listed property securities/equities
(direct and indirect)
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0-20 |
8 |
13 |
| Cash |
0-10 |
2 |
2 |
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| Liquidity |
To date, the Manager has made limited withdrawal offers to Investors every six months, with up to 3% of the net asset value of the Trust being made available to fund withdrawals each year.
To provide more flexibility to Investors, the Manager will now facilitate daily withdrawals from the Trust, with up to 0.5% of the net asset value of the Trust being made available to fund withdrawals every calendar month (6% of net asset value each calendar year).
It is important for Investors to note that their ability to withdraw from the Trust is only a limited one, due to the cap placed on the level of withdrawals which can be made, each month. Investors should therefore still treat their investment in the Trust as long-term and primarily illiquid. See Section 4.13 for more information.
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| Superannuation funds |
Superannuation funds are able to invest in the Trust, subject to their own constitutions and investment criteria.
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| Sectoral diversification |
Retail: 23%; Office: 40%; Industrial: 20%; Healthcare: 5%; Other/LPT's: 6%.
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| Distribution reinvestment plan |
Distribution reinvestment plan available.
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* Prospective Investors should note that past performance is not an indication nor a guarantee of likely future performance.
Note: The above only represents a summary of the Offer. Prospective Investors who wish to participate in the Offer should read this PDS in its entirety. The Manager urges prospective Investors to seek independent advice before making a decision to invest in the Trust. |
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