Syndicate investor seeks flexibility

An increasing number of investors are beginning to prefer open-ended, sector specific trusts over the previously popular fixed interest syndicates, according to property and mortgage specialist Australian Unity Investments (AUI).

The fund manager’s head of property, Martin Hession, said many syndicate investors had indicated they wanted a more flexible investment.

“Many of our syndicate investors have told us that they now prefer greater flexibility and liquidity than syndicates generally provide,” he said.

To meet this change in preference, AUI has so far sold or converted four of its property syndicates, with the latest seeing the fund manager let go of three industrial properties in its Property Syndicate No.6.

One industrial warehouse and a factory in Hallam, Victoria, have been purchased by AUI’s Property Income Fund for $8.8 million, while a warehouse in Blackburn, Victoria, has been sold to Bunnings Property Management for $19 million.

“The purchase of two of the properties by AUI’s Property Income Fund has allowed our investors to maintain ownership of top-quality properties that better suit their needs while creating further diversification for the trust,” Hession said.

The properties in Property Syndicate No.6 were purchased in June 2000 for $24.4 million, with the syndicate reaching the end of its investment term in June 2007. The remaining properties in the syndicate had already been sold.