30 July 2015

In May 2015, Cromwell Funds Management (“CFM”) drew investors’ attention to the Cromwell Direct Property Fund’s accumulation of significant cash holdings which had a negative impact on the underlying earnings of the Fund. At the same time, the Reserve Bank of Australia further reduced Australian cash rates due to economic uncertainty.

As a responsible fund manager, CFM determined it would adopt a conservative approach and reduce distributions to 4.75 cents per unit (“cpu”) until it was in a position to deploy the cash holdings to the acquisition of suitable income generating asset/s capable of supporting a more attractive distribution yield.

We are pleased to announce that the Fund has agreed to acquire two properties for a total consideration of $44.2 million and can now increase distributions to 6.00 cpu.  The August distribution, expected to be paid on 10 September, will reflect the increased distribution.

64 Allara Street is a seven level commercial office building in the heart of Canberra in the ACT. The major leases to Jacobs and CIC provide a secure cash flow with 90% of gross passing income collectively, and lease expiry dates in 2021 and 2018, respectively. Further details, click here

Masters Parafield is fund-through project in the burgeoning suburb of Parafield, north of Adelaide. The 3.7 hectare site will be the home of a new Masters Home Improvement Centre, a Hungry Jack’s and two other smaller retail tenancies with a combined net lettable area of 17,679 sqm. Further details, click here

The increased distribution is consistent with the Fund’s Distribution Policy of distributing no more than 100% of the Fund’s expected profits available for distribution in the medium term (see Section 1.5 of the Fund’s PDS). Based on the current unit price of approximately $1.10, this distribution equates to an annualised yield of approximately 5.5% pa.

If you would like to know more about the Cromwell Direct Property Fund please go to www.cromwell.com.au/DPF or call Cromwell Investor Services on 1300 276 693.

Disclaimer:
Cromwell Funds Management Limited ABN 63 114 782 777 AFSL 333214 (“CFM”) has prepared this notice and is the responsible entity of, and the issuer of units in, the Cromwell Direct Property Fund ARSN 165 011 905 (“Fund”). In making an investment decision in relation to the Fund, it is important that you read the product disclosure statement dated 21 August 2013 (“PDS”) and the supplementary product disclosure statement dated 28 May 2014 (“SPDS”). The PDS and SPDS are issued by CFM and are available from www.cromwell.com.au/dpf or by calling Cromwell Investor Services on 1300 276 693. Applications for units in the Fund can only be made on the application form accompanying the PDS with approved wording, or an approved sticker, confirming that the applicant has received, read and understood the SPDS. This notice has been prepared without taking into account your objectives, financial situation or needs. Before making an investment decision, you should consider the PDS and SPDS and assess, with or without your financial or tax adviser, whether the Fund fits your objectives, financial situation or needs. CFM and its related bodies corporate, and their associates, do not receive any remuneration or benefits for the general advice given in this notice. If you acquire units in the Fund, CFM and certain related parties may receive fees from the Fund and these fees are disclosed in the PDS and SPDS.

Please note: Any investment, including an investment in the Fund, is subject to risk. If a risk eventuates, it may result in reduced distributions and/or a loss of some or all of the capital value of your investment. See the PDS and SPDS for examples of key risks. Past performance is not indicative of future performance. Forward-looking statements in this notice are provided as a general guide only. Capital growth, distributions and tax consequences cannot be guaranteed. Forward-looking statements and the performance of the Fund are subject to the risks and assumptions set out in the PDS and SPDS.