16 December 2011
Cromwell Property Group (ASX: CMW) has announced the launch of a PDS to raise up to $49.25 million in a new unlisted Cromwell Ipswich City Heart Trust to be managed by the Group.
The Trust is a 7-year single property syndicate which will commence distributions at 7.75% pa and offers capital growth potential and tax-deferred income from the energy efficient Ipswich City Heart Building at 117 Brisbane Street, Ipswich, Queensland.
The Queensland Government’s Department of Public Works is pre-committed to 91% of the lettable area of the building for 15 years, with fixed 3.75% per annum rental increases for the term of the lease.
The building, which is valued at approximately $93 million, is targeting a 5 Star Green Star Office Design and Office As Built (Version 3) from the Green Building Council of Australia, representing "Australian Leadership" in environmentally sustainable design. The building is also targeting a 4.5 Star NABERS Energy Rating.
Construction of the 17,734 square metre, A-Grade commercial office and retail building will commence in January 2012, with the Trust having settled the land on 8 December and entered into a conditional agreement with a subsidiary of Leighton Holdings Limited to develop the property.
Practical completion is expected in September 2013 and the developer will enter into a 5 year lease on any areas of the property which remain vacant on completion of construction.
Cromwell Property Group will provide seed funding of up to $20 million and will subscribe for any units not issued by 31 December 2012, but is not expected to hold a long-term investment in the Trust.
The building will be part of ICON Ipswich, a master planned $1 billion urban renewal project in the heart of the Ipswich CBD.
The successful completion of the capital-raising is expected to generate initial and ongoing funds management fees which will have a positive impact on Cromwell Property Group’s earnings in future years.
For further information and to download a PDS, visit the Product Page at www.cromwell.com.au/ich
1] Capital growth and distributions are not guaranteed. Subject to assumptions and risks contained in the Product Disclosure Statement dated 16December 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