07 April 2020

Cromwell Funds Management Limited (CFM) has issued a Supplementary Product Disclosure Notice (“SPDS”) for the Cromwell Direct Property Fund (“Fund”) to be distributed and read in conjunction with the Product Disclosure Notice dated 29 September 2017 (“PDS”) as follows.

Cromwell Direct Property Fund ARSN 165 011 905 | APIR CODE CRM0018AU
Cromwell Funds Management Limited ABN 63 114 782 777 | AFSL 333 214
Supplementary Product Disclosure Statement

This Supplementary Product Disclosure Statement (“SPDS”), dated 6 April 2020, is supplemental to the Product Disclosure Statement (“PDS”) dated 29 September 2017 for the Cromwell Direct Property Fund (“Fund”) issued by Cromwell Funds Management Limited (“CFM”). This SPDS contains important information that updates the PDS and should be read in conjunction with the PDS. Terms contained within this SPDS have the same meaning as set out in the PDS.

In deciding whether to acquire units in the Fund, you should consider the PDS and the SPDS. From 6 April 2020, applications to invest in the Fund can only be made on an application form from the PDS with approved wording, or an approved sticker, confirming that the applicant has received, read and understood the SPDS.

The information contained in the PDS and SPDS is general information only and has been prepared without taking into account your objectives, financial situation or needs. Therefore, in deciding whether to acquire an investment in the Fund, you should consider the PDS and SPDS and assess, with or without your financial or taxation adviser whether the product fits your objectives, financial situation or needs.

COVID-19

As at the date of issue of this SPDS, investors would likely be aware of global events surrounding the rapid spread of the “COVID-19” virus. These events have led to volatility in financial markets, disruptions to cross-border travel and supply chains and restrictions on day to day activities in Australia and around the world, with uncertainty as to when the situation might stabilise and the nature and extent of the flow-on effects across different sectors of the economy. As at the date of issue of this SPDS, the Australian Government has introduced a number of significant economic stimulus and support measures; and has foreshadowed the potential for additional steps.

INVESTMENT RISKS

Section 4 of the PDS sets out some of the key risks of investing in the Fund, including for example risks associated with changing economic conditions, risks associated with the property market, tenancy-related risks and also disaster-related risks.

Risks such as these, if they eventuate, can potentially impact a direct property investment fund, such as the Fund, in different ways, such as the level of income the Fund receives (and therefore the level of distributions) and the valuation of the Fund’s properties.

The current COVID-19 pandemic is a global event unprecedented in modern times. The precise impact this pandemic may have upon the broader economy and the potential flow-on effects on the Fund is not yet known.  What is known is that the impact on businesses will vary significantly. For example, in some cases the impact might be limited to a minor disruption during the period their workforce is required to work remotely while social distancing measures remain in place. In other industries, there may be longer term repercussions.

The Fund’s income is dependent upon its tenants paying their rent, in accordance with their leases. Depending on the nature of a tenant’s business, there is a risk that current events will adversely impact the ability of some tenants to meet their financial obligations. This may result in the Fund, as a commercial landlord, providing temporary relief to some tenants.

The Fund’s portfolio consists mainly of office assets which Cromwell believes are less likely to experience financial hardship than some other sectors (such as retail) during this time. Cromwell expects tenants within the portfolio to experience some mild to moderate disruption while social distancing measures implemented to fight the spread of COVID-19 remain in place, but they should be well positioned to recover as social distancing measures are lifted.

Cromwell continues to monitor the situation and will provide regular updates to investors on its website at www.cromwell.com.au/dpf.

If you have any questions or would like to know more about the Cromwell Direct Property Fund, please visit www.cromwell.com.au/DPF or contact Cromwell’s Investor Services Team on 1300 268 078 or email invest@cromwell.com.au.

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 29 September 2017 (PDS) and the supplementary product disclosure statement dated 06 April 2020 (SPDS). The PDS is issued by CFM and is available from www.cromwell.com.au/dpf or by calling Cromwell’s Investor Services Team on 1300 268 078. Applications for units in the Fund can only be made on the application form accompanying the PDS. 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.

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 a reliable indicator of future performance. Forward-looking statements in this update 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.