ISPT acquires two key assets in US
Leading Australian property fund and investment manager, Industry Superannuation Property Trust (ISPT), has boosted its ISPT Grosvenor International Property Trust with the acquisition of two key US assets in California and North Carolina for a total of US$173.3m (A$204.2m).
The international fund, created by ISPT with Grosvenor Fund Management as Fund Manager in December 2004, now has assets under management exceeding A$900m. In the 2007 financial year alone the Grosvenor International Property Trust acquired five properties, taking its portfolio to eight investments (11 properties) diversified across the office, retail and industrial sectors in the US, Continental Europe and the UK.
The two recent acquisitions include the Research Tri-Centre in Durham, North Carolina, for US$106.4m (A$125.4m) after acquisition costs, and the US$66.9m (A$78.8m) purchase of Gateway Village shopping centre in Los Angeles, California.
Research Tri-Centre represents the ISPT Grosvenor International Property Trust ’s first foray into the burgeoning research and development market on the US east coast and Gateway Village Shopping Centre is a community centre located in the fast growing community of Valencia.
According to ISPT, the Grosvenor International Property Trust is an international core property fund which has been established to invest in international property markets in a similar way the ISPT Core Fund invests in Australia. ISPT’s Core Fund currently has A$5.5bn under management.
The focus for the Grosvenor International Property Trust is to continue to diversify its geographical asset base across the various sectors and provide investors with secure, stable returns underpinned by high quality property investments with good tenant profiles and long lease terms.
As the Grosvenor International Property Trust grows they may take on more risk in a similar way the Core Fund undertakes slightly riskier development and refurbishments opportunities.
These latest acquisitions support this focus, as both assets are strategically located in strongly performing business and demographic markets, offering secure and attractive returns to investors as well as providing further diversification to the Trust.
The Grosvenor International Property Trust is currency hedged and unlike other trust models its set up and acquisition costs are not amortised over an extended period, but written off wholly at the time. In this way, the Trust carries no costs moving forward to the next financial year.
ISPT expect the Grosvenor International Property Trust could eventually grow to between $2.5 and $3bn, reflecting what they believe to be the optimum weighting in overseas investment as a proportion of our property portfolio.
Research Tri-Centre, Durham, North Carolina
The Research Tri-Centre is the ISPT Grosvenor International Property Trust ’s first industrial property market acquisition in the United States. Approximately 48 kilometres north west of Raleigh, North Carolina’s capital city, the new acquisition is well located just two kilometres from the Interstate 40(140) running east/west across the US and in close proximity to the US’s largest industrial park, the 2,832 hectare Research Triangle Park.
IGIPT’s Research Tri-Centre lies on a 52.6 hectare site comprising 10 buildings and 3.3 hectares of undeveloped land. A low average lease expiry per annum provides a secure income stream to the Trust.
The property represents approximately 10% of the Durham industrial submarket, allowing flexibility in meeting tenants’ demands.
The quality tenant mix was a major attraction to the property coupled with the opportunity to secure a major future land bank.
Major tenants included Bowe Bell & Howell and GlaxoSmithKline, who together occupy 22% of the net lettable area, as well as FedEx, Digital Lifestyle Outfitters and UPS Supply Chain.
Gateway Village Shopping Centre, Valencia, Los Angeles, California:
The 15,500 square metre Gateway Village Shopping Centre is located in the masterplanned community of Valencia, one of the fast growing residential areas of Los Angeles County. The community retail centre comprises three single-storey strip centres, two pad sites and occupies a 6.8 hectare site.
It is 90% leased to over 30 national and regional tenants. The large tenant is LA Fitness, which occupies 29% of the net lettable area.
The Gateway Village acquisition is accretive to income distributions. Gateway Village was completed only two years ago and is located in a strong retail trade area with limited competitive development opportunities.
30-Aug-2007