Charter Hall Group, one of Australia’s leading integrated property groups with $18 billion of assets under management, today announced the launch of its fourth Direct Industrial Fund (DIF4) which features a target income yield of 6.5%1 plus capital growth.
DIF4 will invest in a portfolio of high quality industrial property that is 99.8% occupied and has a long weighted average lease expiry (WALE) of more than 15 years.
The initial portfolio comprises exposure to a portfolio of 27 industrial logistic assets geographically dispersed throughout Australia. The total gross assets of DIF4 is initially $84 million and is expected to grow in future years to over $400 million as additional equity is raised and deployed.
DIF4 will be conservatively geared with a target range of 30-45% which provides yield and growth enhancement to an initial 15-year WALE portfolio.
DIF4 has been launched to coincide with the realisation of the DIF1 portfolio where investors realised a 14.2% IRR over the six-year period since inception.
Charter Hall head of Direct Property Nick Kelly said: “The DIF4 launch builds on the successful history of our Direct Industrial Funds series, with the first three funds having raised over $400 million in equity, and have all outperformed the benchmark MSCI/IPD Unlisted Core Wholesale Property Fund Index over the life of the fund.
“Like its predecessors, DIF4 is designed to provide investors with a sustainable, relatively high income yield plus the prospect of capital growth from an investment with low correlation to equity and bond markets. It will suit investors who seek a stable, tax advantaged income paid quarterly looking to invest for a five-year term.
“Importantly, DIF4 provides an institutional-quality investment opportunity to individual private investors, including the million strong SMSF member market, who typically are seeking strong and stable yields in a low interest rate environment.” Mr Kelly added.
Steve Bennett, Direct Fund Manager said: “Direct property, also known as unlisted property, as an asset class has been a leading performer when compared to other investment markets. The outlook continues to be attractive for the industrial sector. DIF4 provides the individual investor the opportunity to gain exposure to this asset class which exhibits the critical qualities of long WALE, high quality tenants, with conservative gearing”.”
Charter Hall has two of the top ten performing funds in the Property Council of Australia’s latest unlisted retail sector index compiled by IPD/MSCI.
