The Opportunity
We are pleased to present our latest acquisition – a stand-alone food, retail and lifestyle centre including five National Brands based in Idalia, Townsville.
7 REASONS WHY WE SELECTED THE PRECINCT
1. SECURE, DIVERSIFIED INCOME
34 Tenants, including several leading National Brands. Staggered lease expiries with an excellent WALE of almost 4 years. No dependency on one or a small group of tenants. The property is near-new and unlikely to require significant capital expenditure.
2. THE VALUE
At $22 million, The Precinct has been purchased at a yield of 8.34%, which we consider to be very good buying in the current market. Comparable assets in the southern states would most likely sell at a yield of around 6.5%, commanding a sale price of around $28 million, for a similar income stream.
3. THE CONCEPT
The Precinct is an excellently-designed and constructed stand-alone food centre, with a small number of compatible lifestyle retail outlets. With 5 Major National food brands, the Centre is attractive to customers and retailers alike and is a recognised ‘destination’ food centre in Townsville.
4. LOCATION
Strategically located on one of Townsville’s major thoroughfares, less than 4km from the commercial centre of Townsville. Closely situated to the Army and Air Force bases (15,000 serving personnel); schools; residential developments; sporting complexes; and James Cook University.
5. INCOME DISTRIBUTIONS
Based on our forecasts, the net income of the Precinct Unit Trust is expected to average 9.7% p.a. over the next 7 years. We propose to make monthly income distributions at the rate of 8.8% p.a. providing adequate cash reserves for capital outlays and contingencies.
6. CAPITAL VALUE ENHANCEMENT
We see several opportunities for increasing the capital value of the property over a 5 to 6 – year term, including subdividing the property and creating a number of key stand-alone assets, each with an enhanced value.
7. WE LIKE TOWNSVILLE
The Capital City of North Queensland, with a major port, Universities, strategic military bases and a local economy that we believe has considerable near – term upside. Anticipated population increases should reflect directly in increased income and enhanced value for retail centres such as The Precinct.
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