Following an increase in investor inflows Australian Unity’s Property Income Fund (PIF) has purchased a commercial property in Port Adelaide, South Australia, for $8 million.
Established in 1999, the fund invests in a diverse mix of income-producing direct assets, unlisted funds and listed property securities, which generate a steady, competitive distribution stream and capital growth.
The latest acquisition is a commercial office building located at 296 St. Vincent Street, Port Adelaide, South Australia, located approximately 12 kilometres from Adelaide’s CBD. It comprises a two storey building with a net lettable area of 3,537 square metres and 39 onsite car parking spaces. The initial passing yield is 9.25 percent.
The property is 100 percent leased with a weighted average lease expiry of 2.5 years, to tenants including Flinders Ports, China Shipping, South Australian Housing Trust and Community Bridging Services.
Alex Fisher, portfolio manager, said with Government bond yields currently at two percent and PIF currently paying a distribution yield of more than six percent generated from real income from property rental yield, the fund continues to appeal to investors.
“PIF also offers a daily liquidity facility and doesn’t have any debt which provides investors with additional comfort.
“This acquisition is in line with the long-term strategy to grow and diversify the fund through acquisition of new assets, as well as improving existing properties.
“We believe that the outlook for commercial property is positive and continue to look for opportunities for further acquisition and development.
“With Australian commercial property markets offering higher comparative yields than other international property markets, we believe strong demand from overseas investors for local commercial property is set to continue, providing ongoing support for valuations.
“We believe the fund is well-positioned to provide investors with a consistent, sustainable level of distribution income over the medium term.
“PIF- wholesale units has returned investors 13.38 percent over one year (distribution return 6.71 percent), 10.67 percent over three years (distribution return 7.13 percent) and 10.24 percent over five years (distribution return of 7.14 percent) – as at 31 May 2016.”
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