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Highviews Building, Blacktown NSW - Update
The Roads & Traffic Authority of NSW (RTA), a tenant in the WRF V3 Property Syndicate, confirmed their intention to vacate the premises on lease expiry from 30 September 2007.
WRF held an investor meeting on Monday 16 April 2007 to seek approval from unit holders for a special resolution to proceed with the sale of the Highviews Building in Blacktown. It was resolved that WRF would proceed with the sale of the property and return capital to investors.
The strategy was twofold and involved;
Resolution 1
Investors voted to accept resolution one which was to proceed with the sale of the building.
We can advise that we have commenced our marketing campaign for the sale of the property and the interest to date has been positive. The property is being sold through an “Expression of Interest” campaign closing on the 17th May 2007 at which point we will then review the offers in line with investor’s expectations.
Resolution 2
Resolution 2, which authorized WRF to purchase another property with the proceeds from the sale of the highviews building, was not passed and consequently the proceeds from the sale of the Highviews building will be returned to investors by way of a capital distribution payment once settlement has taken place.
It is anticipated that should WRF receive an acceptable offer for the property, we would expect settlement to take place prior to 30 December 2007.
Questions and Answers
What will the syndicate distributions be for the remaining term?
If the Highviews building is sold we anticipate the estimated distribution to be between 8.75% -9.0% for the remainder of the term.
What will the Loan to Value Ratio (LVR) be on the remaining assets of the syndicate?
The gearing would be at or below 65% LVR of the remaining properties.
What will the estimated Capital Return be from the sale of the Highviews Building?
WRF estimate that investors will receive approximately 25 cents per unit capital distribution from the proposed sale. The estimated Net Tangible Assets (NTA) of the syndicate would be 76 cents per unit after the capital distribution from the sale of the Highviews Building.
What about Capital Gains Tax?
Investors would not be liable to pay capital gains tax on the distribution of capital unless the property reached a sale price of over $24million.
What about the remaining term of the Syndicate?
The remaining two properties 11 Queens Road Melbourne and Parkinson Shopping Centre provide for both growth potential, diversification of income as well as taxation benefits.
The expected return for the syndicate for the remaining term will be in the order of 9% and the growth on the remaining two properties is positive.
Vacancies have decreased in recent months and there has been an increase in base rental (income). WRF are currently having valuations prepared on the remaining two properties and based on the above achievements, we anticipate the following increase in value:
Existing Valuations as at 31 March 2006
Parkinson Shopping Centre QLD $13,500,000
11 Queens Road Melbourne VIC $21,500,000
Valuations as at 30 April 2007
Parkinson Shopping Centre QLD $14,500,000
11 Queens Road Melbourne VIC $22,500,000
In the remaining three years of the Syndicate we anticipate strong growth from these assets, with an expected return to investors of approximately 90 cents in addition to the 25 cents made in capital return from the sale of the Highviews building.
WARNING: The information provided in this investment update has been carefully prepared and reviewed and are based on various assumptions available to the Manager at the time. Neither the Manager nor any company related to the Manager
guarantees the performance or success of the Syndicate, the total distribution or the repayment of investors’ subscription or any capital. Advisors and Investors should appreciate that factors which affect results may be outside the control of the Manager or may not be capable of being foreseen or accurately predicted. Accordingly, actual results may differ from these forecasts.
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