INFORMATION MEMORANDUM MAJOR FOOD & RETAIL CENTRE THE PRECINCT – TOWNSVILLE
8.8% P.A. INCOME PAID MONTHLY
WHY PEOPLE CHOOSE PEAK EQUITIES
Opportunity and Returns
Diversification and Liquidity
Communication and Information
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.
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.
1. Peak Equities Pty Ltd is trustee of the PRECINCT UNIT TRUST (“the Trust”), created on 01 December 2016. The principal
activity of the Trust will be the acquisition and management of the investment property at 40- 42 Stuart Drive, Idalia, Townsville QLD.
2. Peak Equities is currently finalising a comprehensive Due Diligence investigation
and analysis of the property. Subject to the satisfactory outcome of that process, an unconditional contract will be executed by both parties.
3. The property will be purchased for $22,000,000. Peak Equities will arrange non-
recourse bank funding bank funding for 65% of the contract purchase price.
4. The Precinct Unit Trust has a proposed holding period of 5-7 years and, as with each of Peak Equities’ Syndicates, includes a guarantee of liquidity (return of capital) after 5 years.
5. The Trustee will raise Equity Capital from Investors of between $10.35 million.
6. Peak Equities Management Pty Ltd (the Manager) has secured Underwriting for the equity capital raising from a non-related private source. All costs associated with
the equity capital raising will be paid by the Manager from its own resources.
7. Exchange of contracts with the Vendor is scheduled for early to mid February with
settlement during March 2017.
8. Each Investor may apply for between 200 and 1,000 ordinary Units of $1,000 each
in the capital of the Trust (Investment Value $200,000 to $1,000,000). Applications may only be made on the Application Form attached to this Information Memorandum.
9. The Offer is available exclusively to Sophisticated Investors as defined in the
Corporations Act. New investors will be required to provide an accountant’s certificate confirming that they qualify as a Sophisticated Investor.
Investors will also be required to provide proof of identity in conformity with the Federal Anti- Money Laundering and Counter-Terrorism Funding Legislation.
10.Investors will be required to lodge a deposit equal to 20% of the value of their total investment upon acceptance of their Application. Deposit funds will be lodged directly into the solicitor’s trust account and will be applied in the first instance to payment of the deposit on purchase of the investment property and stamp duty as required.
11.The remaining 80% subscription price will be payable around the end of February 2017, within 7 days of written request from the Trustee. Unit certificates will be issued by the Trustee upon receipt of the balance payment by each investor
12.Prior to confirming their investment, intending Unitholders will be provided with a copy of the Trust Deed and the Unitholders’ Deed of the Precinct Unit Trust, and will be required to sign a Deed agreeing to be bound by the terms of those documents.
‘The Precinct’ 40-42 Stuart Drive &
18 Village Drive, Idalia, Townsville QLD 4811
A thoughtfully designed retail complex with a key focus on food and associated lifestyle tenancies. The property features three “drive through” outlets, supported by an attractive combination of more than 30 fast food/ restaurant/ gourmet/ and fresh food tenants. Soundly constructed in three stages by a reputed development group, the property is single-story, with all air-conditioning and other plant situated off-roof, which should minimize the exposure to future capital expenditure.
Net Lettable Area:
WALE at acquisition:
Number of tenants:
Current net income:
$1,835,420 (fully leased basis)
Developed in 3 stages between 2009 and 2013
Property Overview - Continued
•A proven food based centre with the majority of tenants complementing and supporting one another.
•A tenant mix which is strongly targeted to its demographic audience.
•Three drive-thru fast food offerings.
•A stable tenant history since the first stage opened for business in 2009.
•Exposure to a busy arterial road and a growing population base.
•Major traffic generators in the trade area include a number of schools; the Lavarack Army Barracks; the Murray Sporting Complex; a GP Super Clinic; James Cook University; Fairfield Waters Estate and the RAAF Base.
•Exposure to a vibrant local economy with $1 billion of public funded projects currently underway and a further $3.3 billion of residential development forecast across some 20 estates.
•A major residential (over 50’s) development is currently under construction abutting the Property.
Townsville – Location Particulars
The Precinct neighbours the fast-growing and affluent residential district of Fairfield. The development of the Fairfield Waters Estate will accommodate some 2,300 families
Adjoining or nearby commercial properties to ‘The Precinct’ include McDonalds, BP, GP Super Clinic; Chem-Mart Pharmacy, Dental Clinic, Goodstart Childcare, a future tavern site and a large retirement village.
The Murray Sporting Complex has become the sporting hub of the Townsville, North Queensland Region and is home to sporting fields and facilities for the AFL, Basketball, Wheelies Basketball, Cricket, Hockey, Soccer, Darts, Netball, BMX and is directly opposite the Townsville Pony Club and Velodrome
Convenient to Lavarack barracks, James Cook University, Townsville General Hospital, ‘The Precinct’ is a favourite shopping, lunch and dinner destination for the entire Townsville population.
Townsville Economic Development
Townsville, the largest city in Northern Australia, is a gateway to Queensland’s extensive mining and agricultural regions.
It is recognised as Northern Australia’s largest economy at $11.426 billion (value added, as at April 2014) and is a hub for growth and investment opportunity.
The city boasts a population of approximately 190,000 and an annual growth rate of 2.5% (2003-2013) (Australian Bureau of Statistics, 2012). This year Townsville is celebrating its 150th anniversary since being declared a municipality.
According to demographer Bernard Salt, ‘no city of comparable size has quite the connection into the future prosperity of the Australian nation as does Townsville’ (QLD Gov Website).
Townsville offers ‘stability, urban concentration and prosperity’ along with ‘a unique mix of employment drivers’ and ‘the highest average disposable household income among Australia’s 20 largest urban centres outside of a State or Territory capital’.
The Port of Townsville is the region’s major sea link for exporting the vast mineral wealth of the North West Minerals Province and North Queensland’s extensive agricultural produce, as well as receiving vital supplies for regional industry and the community.
As Australia’s largest garrison city, the Australian Defence Force is a pivotal component of the local economy, contributing around $800m annually to gross regional product (GRP).
Townsville is the tropical education and science hub for North Queensland. It has a concentration of world class education, training and research facilities, which are recognised internationally. It is the gateway to World Heritage listed rainforest and reef, tropical islands, national parks, wetlands, historical, military and outback experiences.
More than one million visitors spend over $662 million per year in Townsville. The city is serviced by the well-located Townsville Airport aviation hub servicing a catchment of 250,000 people, which is projected to more than double by 2030.