Investors in the Cromwell Riverpark Trust (the Trust) have overwhelmingly voted in favour of extending the syndicate for an additional five years. The single asset Trust, which successfully raised $91 million from retail investors, was launched in 2009 by the Trust’s responsible entity, a subsidiary of the Cromwell Property Group (ASX: CMW), with the purchase of Energex House, home to Queensland Government-owned corporation Energex Limited.
The Trust has returned investors 14.9% p.a over its 7 year term (note 1), with distributions increasing from 8.25 cents per unit in the first year to 11.0 cents per unit today. There has also been significant capital growth in line with the rising property valuation, with the unit price increasing 66% from the original NTA of $0.90 per unit to the “Matching Price” (note 2) of $1.49 per unit.
A high percentage of the near 2,000 unitholders voted at a Unitholder Meeting last week to either extend the Trust or sell the sole asset, and terminate the Trust. More than 83% of unitholders voted on the resolution to extend the Trust term, with 77.8% in favour, exceeding the 50% required. The second resolution to amend the Trust’s constitution in order to implement the Rollover Proposal was also approved, with 95.83% of votes cast being in favour. This high percentage exceeded the 75% required for this resolution.
Cromwell Funds Manager Hamish Wehl said the vote was a great result for unitholders of the Trust.
“Given the Trust’s impressive record, it is unsurprising that unitholders have overwhelmingly voted to extend the term for a further five years. This type of high-quality investment, with consistent distributions and potential capital growth upside is rare in the current market,” Mr Wehl said.
“We see this as a vote of confidence in Cromwell’s offering and ability to consistently deliver returns and provide predictable monthly income to investors. It is a testament to our successful ‘back-to-basics’ approach and expertise in identifying quality assets.”
“As was the environment when we launched the Trust in 2009, there is currently uncertainty in global markets and again we’re seeing falling interest rates. This makes simple investments backed by a high quality asset, strong tenant profile and long lease term even more attractive.”
For unitholders wishing to exit the Trust, Cromwell has implemented a “Matching Facility” where units can be sold to existing unitholders looking to acquire additional units.
About Energex House
Energex House completed practical construction in August 2010 and was valued at $173 million at that time. This was the first commercial building to underpin the masterplan Newstead Gasworks precinct in Brisbane’s inner north-east. As of 30 June 2016, the asset has been independently valued at $237 million, representing a 37 percent increase in less than six years.
The asset is 92 percent leased to Queensland Government-owned utility provider, Energex Limited, which still has nine years remaining on the lease. As one of Queensland’s most energy efficient commercial buildings, Energex House has earned a Six Star Green Star rating and a 5.5 Star NABERS rating.
Notes
1. Calculated since inception to 30 June 2016 based on the Matching Price.
2. Matching Price calculation disclosed in the Notice of Meeting and Explanatory Memorandum dated 20 May 2016.
