Artifex Property Group is seeking to raise $42.9m in capital to assist in the acquisition of Allara House, 48 Allara Street, Canberra.
The Property is a seven-level commercial office building, located in the Finlay Crisp Centre, a landmark building complex in the Canberra Civic Precinct.
Located on the fringe of the Canberra CBD, the property benefits from its proximity to major arterial roads and the CBD light rail which will shortly have a stop directly outside the Property.
The Property was previously owned by Dexus but acquired by Artifex together with SC Capital in 2019. Artifex have since completed $13M of upgrades to the building structure and introduced the ACT Government as a tenant to the property. The capex program involves upgrading the buildings core services, installing ESG materials and systems, upgrading end of trip facilities, new lifts, a redesigned ground floor plaza and extensive refurbishments across all floors.
The building is fully leased by the ACT Government on a 20-year lease with fixed annual rental increases of 2.5% p.a. and a five-year option to extend. As part of the lease, the tenant is completing the fitouts and refurbishment works for four government entities – the Human Rights Commission, the Restorative Justice Unit, the ACT Civil and Administrative Tribunal, and the Government Solicitors Office. The tenant will receive a rental incentive of $1.35M p.a., over the term of the lease with the vendor paying for the first 7-years of the incentive by way of a rental guarantee.
Artifex Property Group is a boutique Sydney based investment firm with a strong focus on asset management to deliver superior returns. The business was founded by the four current directors who has over 80 years’ combined experience in asset management across listed, wholesale and private equity property structures. Since 2017 the Manager has been involved in $1.7B of commercial property transactions.
The Fund is an unlisted managed investment scheme for wholesale investors.
The fund is closed ended single asset trust with quarterly distributions forecast to deliver a 5.25% yield in FY22 and an average of 5.68% over the 5 year term of the trust.
The Fund has secured a 5year term debt facility for the acquisition based on an LVR of 50%. The loan is estimated to have an all-in cost of 2.10% p.a. based on 50% of the loan being fixed.
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