NAB launches property fund, investor sentiment up
National Australia Bank (NAB) has launched its first property-linked investment since the downturn, signalling its belief in a return of retail investor confidence in the sector.
“This is the first time in two years we’ve felt like retail investors are ready to put their money in property,” said John McClusky, managing director and head of global markets.
The CorVal Industry House Trust has received a ‘Recommended (Upper End)’ rating from research house Lonsec, which listed amongst its rationale that the trust has a sound defensive cash flow profile and a good pre-tax yield. Lonsec also said the trust would be in a position to “draw upon the significant property and funds management experience of key executives”, including Rob Rayner, executive director, CorVal.
However, Lonsec did acknowledge some risks, noting the lack of diversification of the single commercial property asset, as well as geared investment structure and lower tax-deferred distributions.
Also, while viewing favourably the opportunity to co-invest with experienced cornerstone investor Andrew Roberts, the former owner of Multiplex, Lonsec said there was greater independence risk given that Roberts is also a 50 per cent shareholder in the responsible entity, CorVal Partners.
The trust offers an investment in a single property asset — a 14-storey commercial office building leased 99 per cent to the Commonwealth Government — through an unlisted structure.
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