Ipswich City Heart Trust

The Cromwell Ipswich City Heart Trust ("ICH" or "the Trust") is a ‘back to basics’, single-property syndicate which has the Queensland Government’s Department of Public Works as the major tenant.

The Trust is a 7-year investment distributing 7.75% pa paid monthly and offering capital growth potential¹ and tax-deferred income² from the energy-efficient Ipswich City Heart Building at 117 Brisbane Street, Ipswich, Queensland.

THE ASSET

The $93 million³ Ipswich City Heart Building is a 9-storey commercial office/retail building to be constructed on a site located at 117 Brisbane Street in the heart of the Ipswich CBD.

The property will form part of one of Australia’s largest regional urban renewal projects, ICON Ipswich, a $1 billon revitalisation project which will span four city blocks and deliver approximately 170,000 sqm of master-planned commercial, retail, residential and public space to deliver a “new generation” city centre.

The Ipswich City Heart Building will incorporate approximately 15,600 sqm of office space over 9 levels, in addition to approximately 2,134 sqm of retail space over the lower ground, ground and mezzanine levels.  Also included are 206 basement car parks, 9 moped parking bays and facilities for 120 bicycles. The design for the tower aims to allow engagement with the street and retail and café spaces.

Approximately 91% of the net lettable area of the Ipswich City Heart Building will be leased to the Queensland Government’s Department of Public Works until 2028. The 9% balance of the property (comprising retail space) will be subject to a 5-year lease arrangement with a subsidiary of ASX-listed Leighton Holdings, to be progressively replaced as new tenants are secured.

Ipswich is located approximately 40 kilometres south west of Brisbane and is in the top five national growth catchments in Australia, with the current population (estimated at 175,000) projected to increase by 164% (to 462,000) by 2031.

FEATURES OF THE TRUST

• 7.75% pa monthly distributions
• 100% tax deferred distributions forecast to 30 June 2014 
• 7-year investment term 
• 52.5% gearing ratio 
• Potential for capital growth 
• Simple transparent structure with no capital support of distributions

FEATURES OF THE ASSET

• 100% of the net lettable area precommitted 
• Long weighted average lease term 7 years past the proposed end date of the Trust 
• 17,734 sqm net lettable area 
• Targeting a Five Star Green Star office Design and As Built rating under the Green Building Council of Australia (GBCA) Green Star - office Version 3 rating tool

EXPERIENCED FUND MANAGER

Cromwell Property Group is an Australian property investment company with a proven track record of developing high-quality, high-yielding investment products. With investor returns relying on the continued occupancy and improvement of the portfolio, Cromwell is committed to internal property management for its $1.9 billion assets under management.

Featured Properties

Ipswich City Heart

Owner:

Cromwell Ipswich City Heart Trust

Sector:

Commercial / Retail

Address:

117 Brisbane Street, Ipswich, QLD

Acquisition Date:

08/12/2011

Valuation Date:

30/09/2013

Upon completion, the Ipswich City Heart Building will be a 9-storey commercial office/retail building in the heart of Ipswich CBD. It is targeting a 5 Star Green Star Office Design and Office As Built (Version 3), representing “Australian Leadership” in environmentally sustainable design. The building is also targeting a 4.5 Star NABERS Energy Rating.

Notes

1] Capital growth and distributions are not guaranteed. Subject to assumptions and risks contained in the Product Disclosure Statement dated 16 December 2011 ("PDS").
2] The proportion of distributions that are tax deferred is dependent on a number of factors (for example building amortisation and depreciation of plant and equipment) and may vary from year to year.  Deferred tax may be payable, in whole or in part, on the sale, transfer or redemption of units in the Trust.
3] Based on “as if complete” valuation by m3property (Qld) Pty Ltd.