Primewest Closes its second trust at $83m
Herdsman Offices, Western Australia.
Primewest Closes its second trust at $83m
Helen Shield
The West Australian, 2017
Property syndicator Primewest has closed its Diversified Income Trust No 2, which it started in May with the $27.4 million purchase of an A-grade Herdsman Business Park office building.
It has spent $83.4 million on four property assets.
Since May, Primewest has added a large format retail centre in Tasmania, a shopping centre in Port Pirie, 230km north of Adelaide and an office building in the south-eastern suburbs of Melbourne, taking its total spending to $83.39 million, less than the $125 million originally flagged.
Primewest director John Bond said the first diversified income trust, launched this year, had closed oversubscribed so Primewest had responded to strong investor demand by bringing on a second fund earlier than anticipated.
The second fund had also been quickly oversubscribed and targeted attractive assets across four States, he said.
Primewest purchased 20 Parkland Road, an A-grade, eight-level office building in the Herdsman Business Park for $27.4 million in May.
The 4825sqm building purchased from Decmil, was mostly leased to Decmil, which extended its lease from six years to seven with another five-year option. Other tenants were BMT JFA Consultants and Tox Free Australia.
The Harvey Norman Centre in Moonah, a suburb in Hobart, purchased for $14 million, is leased to Harvey Norman for 21 years and also has long-term leases to BCF and Beacon Lighting, for an average weighted lease expiry of 8.55 years and an annual income of $1 millionplus.
The fund paid $10.3 million for the two-level suburban office in the south-eastern Melbourne suburb of Notting Hill, on the corner of Business Park Drive and Gardiner Road.
It acquired Pirie Plaza Shopping Centre, an 11,000sqm neighbourhood shopping centre, anchored by a Coles supermarket, a Kmart, plus a Coles Express and 17 specialty stores, for $10.3 million.
Mr Bond said each of the assets had scope for an immediate increase in cash flow and, over the longer term, a rise in their capital value.
“We see a significant opportunity to add significant value to the assets as well as deliver strong returns to our investors,” Mr Bond said. “This second trust provides a solid income distribution to investors which is very appealing in the current market.” Primewest has more than $2.5 billion in assets.