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Investec expands in the ACT but no sign of ASX float

March 14, 2019

Investec Australia Property Fund's Canberra acquisition is located at 24 Wormald Street, Symonston. Photo: Supplied

Lucas Baird 

Investec Australia Property Fund has continued its expansion with a new acquisition in Canberra yet there remains no word on when it will attempt a float on the ASX after its portfolio value reached the much lauded $1 billion milestone in May last year.

The purchase of a 4720-square-metre, low-rise office building in the south-eastern suburb of Symonston marks the first major purchase for the fund since the milestone was reached.

In a statement accompanying the announcement, chief executive Graeme Katz made no mention of listing the fund in Australia despite previous claims in 2017 that a place on the ASX represented “the natural evolution for the fund”.

Mr Katz instead focused on acquisition’s alignment with “the funds strategy of investing in well-located, high-quality assets that provide a sustainable income stream for investors”.

IAPF laid down $29.8 million for the Canberra complex, which is located seven kilometres from the city’s central business district; three kilometres from the airport; and is tenanted by the Commonwealth of Australia.

The Commonwealth still has 8½ years left on its lease. It rents the offices at a passing rate of $453 with annual escalation of 3.5 per cent.

High spec and well located

“The property is purpose-built for the Commonwealth of Australia to a very high specification,” Mr Katz said. “The area is home to a number of businesses involved in the research, development, manufacture, processing, assembly, and marketing of advanced technology and scientific products.

“The property is well located in close proximity to major arterial roads including the Monaro Highway, Canberra Avenue and Hindmarsh Drive.”

Situated at 24 Wormald Street, Symonston, the offices takes IAPF’s exposure in the Canberra market to 10 per cent.

The initial yield for the acquisition is 6.93 per cent.

While also being the first purchase since the fund’s portfolio topped $1 billion, it’s also the first acquisition of 2018-19 financial year.

IAPF’s last purchase was an industrial complex in Melbourne in April last year, for which it paid $19.5 million.

IAPF is currently listed on the Johannesburg stock exchange.

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