Executive summary
Peak Equities Pty Ltd (“Peak”) is pleased to present the Corio Unit Trust (‘the Trust”), offering ownership participation in a new, pre-leased Industrial Facility located at 75 Obriens Rd, Corio, VIC. Peak has contracted to purchase the land and high-clearance warehouse upon completion to the specifications of the contracted tenant, Thornton Engineering Pty Ltd, with a 20 year “Triple Net Lease”.
Thornton Engineering, the vendor and tenant, manufactures, designs and fabricates large-scale structural steel, pressure vessels, heat exchangers, steel plate and pilings to clients throughout Australia. The company has been operating on this site since 1999 and is a recognised industry leader with strong ties to the region. The company currently occupies three adjoining warehouses, the most recent of which was recently developed with an identical design to the proposed new construction. Thornton Engineering’s builder will be undertaking the construction, with close supervision by a Quantity Surveyor appointed by Peak Equities Pty Ltd.
The total cost of the property, upon completion of construction, will be $21.25 million, which we consider represents very attractive value in today’s highly competitive industrial marketplace. The exceptional lease covenant, supported by personal and bank guarantees, will provide Investors with long-term income security with genuine prospects for capital growth.
The completed warehouse will have a net lettable area of 10,480 sq. metres (subject to final survey), on an allotment of 28,890 sq. metres. The site will accommodate further expansion if required and the purchase will benefit from a 50% stamp duty concession.
Thornton Engineering is a highly reputable family-owned business, manufacturing steel products for heavy industry, resources companies and government projects. The new warehouse is required by the company to accommodate its expanding business.
Investors in the Corio Unit Trust will be asked to contribute their investment in 3 instalments matching the terms of the land purchase and construction contract - 37.5% of the investment amount upon the commencement of the project; 55% upon substantial completion of the building; with the final contribution of 7.5% payable upon commencement of the lease. The 20-year lease term will commence once the construction has been completed and a certificate of occupancy has been issued.
All instalments will be held in a solicitor's trust account until completion of the project and issue of a Certificate of Occupancy. The Vendor has agreed to pay the Corio Unit Trust interest on all contributions, which will enable the payment of monthly income distributions to investors at the rate of 7.1% p.a. on the amount contributed on each instalment date.
The construction process is expected to take approximately 12 months, with completion estimated at the end of 2022.
Pursuant to this Offer, Peak will be raising investor equity of $12 million. Applications for Units may be made on the form attached to this Information Memorandum.
We commend this offer for your consideration.
On behalf of the Board
David Borsky
Managing Director
