Australian Unity’s Diversified Property Fund has acquired an office and warehouse in the Osborne Naval Shipyard in South Australia for $48.25 million.
The property at 620 Mersey Rd, Osborne is leased until 2030 (with two five year options) to Australian Naval Infrastructure, which is wholly owned by the Commonwealth Government of Australia.
Situated on the Le Fevre Peninsula, 21 kilometres north west of the Adelaide city centre, the quality two-level office, warehouse and 330 space carpark has a five star green star rating. The property was designed by Woods Bagot and constructed in 2010. The total size of the property is about 25,140 sqm, and includes two vacant pad sites earmarked for future development.
Ms Nikki Panagopoulos, fund manager of the circa $526 million Diversfied Property Fund said the acquisition is an excellent fit for DPF’s portfolio and presented investors a rare mix of high quality office and industrial property with a blue-chip tenant wholly owned by the Commonwealth Government of Australia.
“The acquisition of this property will cement the Fund’s weighted average lease expiry of eight years, augment the Fund’s monthly distribution returns and increase the portfolio’s diversification, she said.
The Fund has recently completed revaluations across approximately 30 per cent of its portfolio, resulting in a valuation increase of 1.1% on its prior valuations.
“The Diversified Property Fund owns defensive income producing assets, many of which have been expanded and improved over the last five years in line with community demand which has proven to be an effective way to maintain consistent returns for investors as well as supporting valuations during a challenging 2020, Ms Pangopoulos said.
In October the Diversified Property Fund announced it would seek $50 million from the market to fund its circa. $100 million development pipeline and acquire new assets.
Ms Panagopoulos said existing direct investors and financial advisers had shown strong interest in the offer with the targeted direct to investor offer campaign launched yesterday.
The Mersey Rd acquisition has been funded using a combination of DPF’s equity and existing debt facility, which had $80 million of undrawn debt and a loan to valuation ratio of ~46.7% as at 30 September 2020.
The Fund’s portfolio now includes eleven properties ranging from industrial warehouses, to neighbourhood retail and convenience centres, and metropolitan office properties. The Fund has continued to deliver stable and consistent returns despite current volatility, thanks to its exposure to defensive tenants providing essential services including; supermarkets, pharmacies, food retailing, ecommerce and refrigerated warehousing.