09 August 2013

Cromwell Property Group (ASX: CMW) is pleased to announce the creation of a new unlisted property trust, Cromwell Property Trust 12 (the Trust), which has contracted to acquire three assets from EPC Pacific Pty Ltd, a direct property, investment and development division of the Pacific Group of Companies.

The assets comprise an existing office building in South Melbourne, Victoria, an office building under construction in Dandenong, Victoria and an industrial building under construction in Direk, South Australia. The combined value is approximately $129 million, with the majority of the purchase price for the under construction assets payable as each is completed.

Units in the new unlisted Trust will be offered under a product disclosure statement to be issued later this year by Cromwell Funds Management Limited (CFM), the responsible entity of the Trust.  CFM intends to raise approximately $77 million. The balance of the purchase price will be funded by a debt facility which CFM expects to finalise later this year.

Pending the completion of fund raising for the Trust, Cromwell will provide seed funding of approximately $30 million.  This will allow settlement of the acquisition of the South Melbourne building and the land upon which the Dandenong and Direk buildings are being constructed. This seed funding will be progressively repaid as units are issued to investors.

Following the successful completion of the Cromwell Box Hill Trust which closed early and oversubscribed in April 2013, Cromwell anticipates strong demand from direct retail investors and financial advisors for the new Trust.

The assets being acquired by Cromwell Property Trust 12 are:

 

Rand Distribution Centre, Direk 

ATO Building, Dandenong 

Dorcas Street, Melbourne 

Address

Lot 902 Caribou Drive, Direk, South Australia

11-13 Robinson St, Dandenong, Victoria

10-16 Dorcas St, South Melbourne, Victoria

Status

Under construction. 

Due for completion in December 2013

Under construction. 

Due for completion in September 2015 

Fully leased, 

recently refurbished

Sector

Industrial

Office 

Office 

Valuation

$32,750,000¹

$70,390,000²

$25,543,000 [3]

Land Area (m2)

58,628

3,145 

1,484 

Lettable Area (m2)

10,312

13,803 

7,567 

Major Tenant

Rand Transport

Australian Tax Office

Dimension Data 

Occupancy

100%

100%

100% 

WALE (years)

20 (from completion)

14 (from completion)

6 (from 30 June 2013)

1.) Based on 'as if complete' valuation by CBRE, dated 24 June 2013
2.) Based on 'as if complete' valuation by Savills, dated 30 June 2013
3.) Based on valuation by Savills dated 30 June 2013.  

Cromwell CEO, Paul Weightman, said “The quality of the asset portfolio, size, and acquisition structure make them ideal assets for a new unlisted property trust which will build on the success of Cromwell’s previous unlisted trusts”.

EPC Pacific CEO, Patrick Smith said "We are delighted to be contracting with a team of very professional people at Cromwell and look forward to delivering two high quality, long term properties for their investors.”

EPC Pacific currently has over $300 million of active property development throughout Australia and is also undertaking a programme of transformation and upgrade of a further $200 million of existing investment assets.

Media Enquiries:
Daryl Wilson
Executive Director
+61 402 046 883
dwilson@cromwell.com.au

Cromwell Securityholder Enquiries:
Investor Services Centre 
1300 276 693
invest@cromwell.com.au

This announcement is not financial advice or a recommendation to acquire Cromwell Property Group securities or units in the Cromwell Property Trust 12 (the Trust).  This announcement has been prepared without taking into account the objectives, financial situation or needs of any investors.  Before making an investment decision prospective investors should consider the appropriateness of the information provided having regard to their own objectives, financial situation and needs and seek such legal, financial and/or taxation advice as they deem necessary or appropriate.

This announcement sets out an intention to register and  launch a new managed investment scheme: the Cromwell Property Trust 12.  The responsible entity of, and the issuer of units in, the Trust will be Cromwell Funds Management Limited (ACN 114 782 777, AFSL 333214), a wholly owned subsidiary of Cromwell Corporation Limited.  

Before making any decision to acquire or hold units in the Trust it is important that an investor reads the Trust’s product disclosure statement ("PDS").  The PDS will be made available when the Trust is first offered to investors, which is expected to be  later this year.  The PDS, when finalised, will be available from www.cromwell.com.au or by calling Cromwell Investor Services on 1300 276 693.  

This announcement contains certain “forward-looking” statements.  The words “intends”, "expected”, “proposed”, “forecast”, ”target”, and “will” and other similar expressions are intended to identify forward looking statements.  Forward-looking statements, opinions and estimates provided in this announcement are based on assumptions and contingencies which are subject to change without notice.  Forward-looking statements including projections, indications or guidance on future earnings or financial position and estimates are provided as a general guide only and should not be relied upon as an indication or guarantee of future performance.  There can be no assurance that actual outcomes will not differ materially from these statements. To the fullest extent permitted by law, the Cromwell Property Group and its directors, officers, employees and advisers disclaim any obligation or undertaking to release any updates or revisions to the information to reflect any change in expectations or assumptions.

An investment is subject to investment and other known and unknown risks, some of which are beyond the control of Cromwell, including possible delays in repayment and loss of income and principal invested.  Cromwell does not guarantee any particular rate of return or the performance of its investment funds nor does it guarantee the repayment of capital or any particular tax treatment. Investors should have specific regard to the risks for the Trust outlined in its PDS when available.