September 2013

> December 2014
WHOLESALE AUSTRALIAN PROPERTY FUND
Aims to provide investors with income and long-term capital growth by investing in a diversified portfolio of
Australian office, retail and industrial property
Summary
Performance – as at 31 December 2014

In the 12 months to 31 December 2014 the Fund returned 10.9%
which was comprised of a 7.5% distribution and 3.5% growth.
Inception Date: 31 Mar 1985

Strong cash inflows allowed all of the fund’s debt to be retired.
The portfolio’s allocation to A-REITs was increased to 10%.

The Fund acquired 7-9 French Ave, Brendale, a modern industrial
facility in Brisbane for $18.65 million which is expected to deliver
an income yield of 8.0% in 2015. The property is let until 2022.

The Fund’s occupancy remained excellent at 98% and its average
lease expiry steady at 3.5 years.
Performance is annualised for periods greater than one year.

All properties in the portfolio were valued during the quarter
resulting in a 1.1% rise. Valuation growth was strongest in the
retail and office portfolios which recorded growth of 1.4% and
1.3% respectively.
Past performance is not a reliable indicator of future performance. Performance figures are
calculated using exit prices, are net of management fees, ongoing fees and expenses,
assume distributions are reinvested and tax is not deducted. The Distribution return reflects
total distributions paid from the Fund, while the Growth return reflects changes in the capital
value of units.
Management costs: 0.95% (of gross assets)
%
3 mth
1 yr
3 yr
5 yr
incept
Distribution
1.75
7.46
7.26
7.11
8.53
Growth
0.34
3.47
1.90
1.34
0.65
Total return - after fees
2.09
10.93
9.16
8.45
9.17
Investment Approach
The Fund primarily invests in direct property and may also invest in
Australian listed property securities and cash to assist in managing the
Fund’s return profile and liquidity. The Fund targets assets which have
high occupancy rates and stable income streams underpinned by
leases to long term, secure commercial and government tenants.
For more information visit ampcapital.com.au/funds
Fund summary
Assets / Liabilities
Casula Mall, Sydney
State
NSW
Sector
Retail
Valuation
$142.0m
Cap Rate
7.25%
Occupancy
100.0%
Tenants
63
WALE
2.8 yrs
124 Walker St, North Sydney
NSW
Office
$72.3m
Bond One, Walsh Bay
NSW
Office
$81.2m
8.25%
91.4%
24
1.8 yrs
7.50%
100.0%
5
12 Moore St, Canberra
ACT
Office
4.4 yrs
$44.5m
8.75%
91.0%
18
1B Unwin St, Rosehill
NSW
3.8 yrs
Industrial
$17.6m
10.00%
100.0%
2
20 Holbeche Rd, Arndell Park
3.1 yrs
NSW
Industrial
$11.1m
9.00%
100.0%
1
1.1 yrs
CentralWest DC, Laverton North
VIC
Industrial
$49.0m
7.75%
100.0%
1
4.8 yrs
2 Pound Rd West, Dandenong
VIC
Industrial
$19.2m
8.25%
100.0%
2
3.7 yrs
200 Greens Rd, Dandenong
VIC
Industrial
$20.6m
8.00%
100.0%
3
5.0 yrs
121 Evans Rd, Salisbury
QLD
Industrial
$29.3m
8.75%
100.0%
2
3.5 yrs
7-9 French Ave, Brendale
QLD
Industrial
$18.7m
7.50%
100.0%
1
7.1 yrs
7.91%
98%
122
3.5 yrs
AREIT portfolio
$55.9m
Cash + other assets
$13.1m
Total Assets / Portfolio Average
$574.7m
Total Liabilities
-$13.2m
Net Assets
$561.5m
Regional allocation
Sector allocation
$9.2m
1%
$48.0m
9%
$44.5m
9%
Retail
New South Wales
Victoria
Queensland
Australian Capital Territory
$55.9m
10%
Office
$89.0m
18%
Industrial
$324.2m
64%
A-REITs
Cash
$142.0m
25%
$165.7m
29%
$198.0m
35%
> WHOLESALE AUSTRALIAN PROPERTY FUND
Fund commentary
Market commentary
The Fund continued to meet its objective of providing investors
with income and long-term growth. In the 12-months to 31
December 2014 the Fund returned 10.9% per annum, of which
7.5% was distributed to investors and 3.5% came in the form of
growth.
The December quarter saw a continuation of the themes that
have been in place for some time: improving levels of leasing
activity in the Sydney and Melbourne office markets, but rising
vacancy in Brisbane and Perth; rising prices for retail assets; and
below-trend occupier demand for industrial property. IPD reported
that commercial property returned 9.9% in the 12 months to
September 2014.
Cashflows into the Fund were strong over the quarter and allowed
the Fund to repay all of its debt. In addition, the portfolio’s
allocation to A-REITs was increased to 10% and the Fund
acquired, 7-9 French Avenue, Brendale.
The property acquired is a modern industrial facility located in a
well-established industrial precinct approximately 18kms north of
the Brisbane CBD. This market is improving quickly, having
recently attracted tenants such as Aldi, Bunnings and Supa Retail
Group. The improvements were completed in 2012 and have
been constructed to a very high specification. The tenant, BJ Ball
is one of the largest distributors of paper and packaging products
in Australia and has a lease which runs to 2022. The property was
purchased for $18.65 million and is expected to deliver an income
return of approximately 8.0% in 2015. Following the acquisition,
the Fund’s direct property weighting to NSW is 63.9%, reduced
from 66.3%.
All properties in the portfolio were valued during the quarter
resulting in an overall rise of 1.1%. Valuation growth was
strongest in the retail and office portfolios which recorded growth
of 1.4% and 1.3% respectively.
An ongoing program of life-cycle investing is in place and during
the quarter capital was invested in the following projects: amenity
upgrade at Casula Mall; lift refurbishment at 12 Moore St,
Canberra; foyer upgrade, 124 Walker St, North Sydney.
The Fund’s occupancy remained excellent at 98% and its average
lease expiry steady at 3.5 years. A high priority in 2015 will be to
renew expiring tenants including: 3P Learning & Professional
Advantage (124 Walker St, North Sydney); Linfox (2 Pound Rd,
Melbourne); and Tyres 4U (121 Evans Rd, Brisbane).
Office – Leasing market activity continued to increase in Sydney
and Melbourne the vacancy rate is expected to fall to c.10%. In
contrast, demand in Perth and Brisbane remained weak and both
markets are expected to record vacancy rates above 15% in
Q4/2014. Investor interest in the sector remained strong and the
pricing benchmarks set earlier in 2014 were consolidated in the
final quarter of the year. The two largest transactions in Q4/2014
were both made by Chinese investors.
Retail – in Q4/2014 a number of extensions were completed to
large regional shopping centres, including Macquarie Centre in
Sydney. These new-generation centres have been designed to
facilitate the entry and expansion of international mini-majors
such as William Sonoma, West Elm, Forever 21, Furla, Sephora,
H&M, Zara, Uniqlo and Daiso. Retail sales growth rose though
store rents remained steady.
Industrial – demand for industrial space was generally unchanged
over the quarter, remaining below trend. Nationally headline rents
were generally stable, whilst the incentives required to attract and
retain tenants have increased. Transaction activity remains
buoyant and yields for prime property with long leases firmed
considerably over the course of 2014.
Outlook
While conditions in the occupier markets do not support a case for
a rise in effective rents in most markets, strong demand from a
broad base of buyers is supporting values. AMP Capital forecast
prime commercial property to return 8.0% to 8.5% over the
medium term.
Investment objective
The objective of the Fund is to provide investors with income and long-term capital growth.
Facts
Net assets
$561.540m
Distribution frequency
Quarterly
Minimum suggested time frame
5 Years
Date of last distribution
31 December 2014
Minimum initial investment
$10,000
Distribution cents per unit
2.11
Buy/sell spread
Nil
Important Information
This publication has been prepared to provide general information only and does not take into account the financial objectives, situation of needs of any particular person. It
is not intended to take the place of professional advice and you should not take action on specific issues in reliance on this information. Before making an investment
decision, you need to consider (with or without the assistance of an adviser) whether this information is appropriate to your needs, objectives and circumstances. Past
performance is not necessarily indicative of future performance. Unless specifically stated, the repayment of capital or performance of our products is not guaranteed. This
information is provided for persons in Australia only and is not provided for the use of any person who is in any other country.
For more information
T: 131 737
APIR Code NML0001AU
F: 03 8688 5796
National Mutual Funds Management Ltd
W: www.ampcapital.com.au
ABN 32 006 787 720, AFSL 234 652

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