Cromwell Property Trust 12 extended for five years
The Cromwell Property Trust 12, which now only holds one asset – the Australian Tax Office (ATO) building in Melbourne – has extended the term of the trust for another five years.
Cromwell Funds Management (CFM) held a meeting for unitholders in the fund on 17 December, 2020, to decide on the future of the trust which had reached the end of its initial seven-year term on 31 October, 2020.
A total of 84.18% of unitholders in the register who were eligible to vote did so, with 82.82% of those who voted, voting in favour of the term extension. The trust would now continue for a further five years, with maturity extended to 31 October, 2025.
The matching facility proposal received 98.57% of the total votes cast by eligible unitholders voting in favour, setting in motion the matching of buyers and sellers of units in the trust.
By including a matching facility in the proposal, CFM was able to provide investors who wished to exit the trust with an opportunity to sell their units to unitholders wishing to buy more.
The proposal also included the sale of one of two of the trust’s assets, the Rand Distribution Centre, on 14 December, 2020, and a $0.6184 per unit special distribution for unitholders.
The trust now only held one asset - the Australian Tax Office (ATO) building at 19 George Street in Dandenong, Victoria.
The building is 93% leased to the ATO until September 2030 and as of 31 October 2020, it was independently valued at $107 million, a 52% increase in less than seven years.
The firm said distributions were forecast to be 5.75 cents per unit p.a. from 1 July, 2021, which would be an increase of 0.25 cents per unit each July over the further term, giving a distribution yield of 6.2%.
Access to the trust was only available through the Cromwell Direct Property fund, which was a unitholder in the Cromwell Property Trust 12.
According to FE Analytics, Cromwell Property Trust 12 had returned 167% since inception on 1 October, 2013 to 30 November, 2020.
Over the previous three years to 30 November, 2020, it had returned 49.26%, while the Direct Property fund had returned 19.67%, while the Australia direct property sector had an average return of 5.19%.
Hamish Wehl, Cromwell head of retail funds management, said the result endorsed CFM’s view that regular, reliable income from quality assets is a high priority for many investors, with few willing to wind up the trust in an environment where similar secure income streams are difficult to obtain.
“Unitholders have been very supportive of the Trust, which has provided security and stability over the initial seven-year term by generating consistently high yields, at a time when interest rates have been reducing,” Wehl said.
Return of the Cromwell Property Trust 12 and Direct Property fund versus sector over the previous three years to 30 November 2020
Recommended for you
There is one specific risk that is a significantly higher concern for financial services directors compared to companies overall and is impacting their risk appetite, according to the AICD.
Global fund managers are shunning bonds, with the asset class seeing the largest drop in allocations in more than 20 years.
Australian Ethical has seen its funds under management reach $10 billion, driven by organic customer growth and superannuation contributions.
Financial advisers will have access to private equity investments run by WTW for the first time as it launches a pooled fund to provide savers with access to traditionally institutional assets.
