Stirling has acquired two industrial assets at a 19% discount to replacement cost in Newcastle’s premier industrial estate and has exchanged on a third asset, a Large Format Retail centre, MacGregor Home, in South Brisbane’s most dominant large format retail precinct.
The three institutional quality assets are in high growth locations (population growth in Brisbane is 72% higher and Newcastle 63% higher than Sydney) with strong national tenants and are land rich.
Stirling’s Enhanced Yield Fund offers investors a premium return relative to peers:
- Cash distribution of 7.9% p.a. paid quarterly, and
- Total return of 13.3% p.a., gross tax effective for high tax bracket investors as a result of depreciation and tax deferral benefits
Stirling is focused on identifying mispriced institutional quality assets in great locations with strong tenants offering above-average risk-adjusted returns.
As testament, their first three funds were all oversubscribed and are all outperforming original forecasts including the third fund which is currently forecasting 30%+ p.a. against original 15% p.a. forecast.
WHY THEY PARTICULARLY LIKE THESE ASSETS
- Compelling Acquisition Values: 6% and 6.2% yields
- Strong Fundamentals: 5.9 year WALE
- Established Tenants: The Good Guys, James Lane and Port Hunter Conveyors which has a 34 year track record of successfully operating in the manufacturing services industry
- Growth: 3.2% p.a. fixed rental increases
- Liquidity: 3.5 years
- Co-Investment: $1.0M from Stirling directors
- Priority Locations:
- Steel River industrial estate is one of the regions premier industrial parks home to Star Track Express, CSIRO, Grace Removals, Ullrich Aluminum and Jaycar
- MacGregor LFR is home to Nick Scali, Super Cheap Auto, Amart, Rebel, Beacon Lighting, Snooze and TK Maxx
- Both enjoy excellent exposure to major arterial roads
- Performance: Large Format Retail in QLD has performed very strongly over the long term with an average annual sales growth of 7% since March 1983 outperforming NSW at 5.3% and Victoria at 5.2%
- Independent Fund Research and Ratings Recommendation: Core Property has provided a “Recommendation” rating on the Fund which “indicates that the product has an above average grade profile across a number of Core Property’s parameters and has the potential to deliver above average risk adjusted total returns.”
Click here to read the 4-page flyer with all the important information on the Fund.
About Stirling Property Funds
Stirling Property Funds is an AFS licence-holder with a team of proven funds management executives with senior-level experience in funds management, commercial, industrial and retail investment and asset management, finance, and town planning.
The company draws upon the strategic combination of fund management skills and positive track records of former Centuria Property Funds and M&G Real Estate executives in collaboration with the CEO of successful property development and funds manager Legacy Property.