Apart from participating in a specific property
OzProp gives investors the opportunity to participate in a Trust which is invested in multiple properties. The Trust created for this is the OzProp Diversified Class (ODT). Investors thus obtain diversification across the entire portfolio spread and thereby reducing the risk of exposure to any one particular Class Asset.
ODT is currently open for investment. By investing in ODT, unit holders benefit from an allocation of units in the existing and future property assets without having to continuously invest as new opportunities arise.
ODT also offers its investors the opportunity to top up their investment with every round of equity raising. This allows investors to participate without being hampered by timing issues of specific acquisitions.
ODT has a distribution target range of 6 – 8% p.a. on Current Unit Value which is paid quarterly, and a target rolling 5 year IRR of > 8 % p.a. Distributions to unit holders consist of free cash flow from rental income streams (including retained income) and capital gain.
At present ODT holds an interest in the following assets:
|OzProp Gladstone Shopping Centre Class of Units||RETAIL – Neighbourhood Shopping Centre|
|OzProp Margate Medical Class of Units||MEDICAL|
|OzProp QT Centre Class of Units||RETAIL/OFFICE|
|OzProp Blackwood Class of Units||RETAIL/OFFICE|
|OzProp Townsville Class of Units||RETAIL – Neighbourhood Shopping Centre|
|OzProp Coolum Class of Units||CHILDCARE|
|OzProp Noosa Class of Units||RETAIL – Neighbourhood Shopping Centre|
|OzProp HC Class of Units||RETAIL – Bulky goods centre|
|OzProp LC Road Class of Units||LOGISTICS – Cold storage|
|OzProp FV Class of Units||OFFICE|
|OzProp LC2 Class of Units||LOGISTICS – Cold storage|
|OzProp BST Class of Units||LOGISTICS – Industrial|
Although ODT will have a small portion invested in cash, it will keep that to a minimum to avoid a ‘cash drag” thereby reducing returns for investors.
Therefor new investment monies are initially allocated to the OzProp Cash Class Units (ODC). ODC has been established in order to create a “cash-rich” Trust for the purpose of investing in the existing commercial property portfolio of OzProp Diversified Class Units (ODT) at the point of a new acquisition. ODC unit holders will immediately benefit from an interest return on their initial investment of 1.75% per annum premium above the Official Cash Rate (as set by the Reserve Bank of Australia) until such time units are invested in ODT’s portfolio. Unit holders also benefit from the Trust’s ability to acquire assets via OIT on favourable terms due to having cash readily available.
The interest return to ODC is derived from both interest paid by banks on deposit and an underwriting fee paid by OzProp Capital Pty Ltd.
OzProp Diversified Cash Class Units (ODC) Overview
- Interest rate 1.75% above the Reserve Bank Official Cash Rate
- Interest paid quarterly
- Investment funds only invested with major Australian Banks
- Forecast all up interest rate return as at 1st August 2020: 2.00 % per annum
- Once converted into ODT units: forecast distribution 6.50% per annum (paid quarterly)
ODC Class Units will be redeemed in exchange for ODT Class Units on a pro-rata basis at any time ODT participates in further investment in additional property prior to the Expiry/term date. Once units in ODT have been issued, unitholders will be entitled to the income return from the commercial property portfolio of ODT Class Units. The historical 12-month distributable income at the date of this document was 6.50% of Current Unit Value (CUV) per annum. In addition, the investors will share in retained income as well as possible capital appreciation.