Stronghold Precincts Property Fund

Stronghold Property Group is raising further capital for its unlisted real estate fund that invests in commercial office assets in metropolitan business parks.

The Fund currently holds three assets ($33.3M) in the Brisbane Technology Park, Eight Mile Plains QLD, the largest commercial business park precinct in Queensland covering 33 hectares. Stronghold ‘s parent company, Graystone Property Group manage c35% of the assets in the park. The Fund’s also owns a fourth asset ($14.0M) located in the Westlink Green BTP, Darra QLD, a new business park located next to the Darra train station. All the properties are fully occupied, with a portfolio Weighted Average Lease Expiry (WALE) of 3.3 years.

The Fund was established in 2019 and currently has $48.1M of assets, with the Manager targeting to grow the Fund to $400M over the medium to long term. This growth is expected to be delivered via the Graystone relationship which develops and manages properties in the Brisbane Technology Park, assets sourced from other business parks, and the potential to acquire other Stronghold investment trusts as they reach maturity.

Stronghold was established in 2013 in conjunction with Graystone Group, a fully integrated development, construction and property management group with a 30-year track record of developing integrated business precincts across southeast Queensland. Graystone Group maintains a majority ownership in Stronghold, in conjunction with management. The relationship with Graystone is a key feature for Stronghold, providing an alignment with a recognised development manager within the southeast Queensland business park sector.

The fund is open ended with monthly distributions forecast to deliver a 6.9% yield in FY22 and 7.1% yield in FY23, based on the current Issue Price.

The Fund has a target Loan-To-Valuation Ratio (LVR) range of 35% – 45%, with a maximum LVR of 50%. The Fund currently has total drawn debt with St George of $21.5M with $14.7M held in the main Fund and $6.8M held in the Westlink sub trust. The facility are for a term of 2 years and the estimated all in cost of debt is 2.08%.

Further information on the Fund is outlined below for Premium Members. If you would like more information, please complete the registration form on the right.

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About Warwick Petschack

Warwick has over 25 years of property investment and management experience. Principally responsible as Managing Director for Capital Management Australia and Joint Managing Director for Chauvel Capital Partners and Editor of Australian Property Markets News.

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