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 1300 366 100

06 January 2009
Direct Property

Direct Property Fund Update

March Quarter 2007


Download the Direct Property Fund Update

Download the Funds Performance report


The performance shown in the Fund Update is the gross performance of the fund. To view the net performance of the fund or of the different unit classes of the fund download the Fund Performance Report or visit Fund Performance.

Gross performance returns and benchmark performance shown do not include expenses, fees or tax. Net performance returns are prepared on an exit-to-exit fee basis which includes all ongoing fees and expenses.


Portfolio activity

The Merrill Lynch Direct Property Fund invests in the Merrill Lynch Property Trust (the Trust). The Trust has made further acquisitions over the quarter.

  • The Trust acquired an industrial property,1667-1669 Centre Road, Springvale for $5.95 million on a 9.0% yield (pre-acquisition costs). The property is located within an established industrial location approximately 20 kilometres south east of Melbourne. In addition to a strong underlying land value, the property provides two detached office warehouse tenancies totalling 7,847 square metres. NMHG Distribution Pty, Ltd trading as Yale Forklifts, occupies the front tenancy, while Interhampers, a Christmas hamper assembler, occupies the rear tenancy.
  • In January 2007, the Trust increased its investment in the Macquarie Goodman Hong Kong Fund by $3.3 million. This amount represented the outstanding monies committed at the time the original units were acquired in June 2006.

  
Composition may not total 100% due to rounding.

Portfolio review

We conducted the annual revaluation of two properties over the March quarter.

  • 615 St Kilda Road, Melbourne, VIC. The property rose in value, up 5.1%, due to strong property investment market conditions and the increased likelihood of the tenant renewing their lease upon expiry in March 2008.
  • 26 Rodborough Road, Frenchs Forest, NSW. The property decreased in value (-5.1%) over the twelve month period reflecting the difficulty in re-leasing level 3, post the expiration of the lease to Raytheon in August 2006.

 
Gross returns
Benchmark returns#
Out-performance*
3 Months
2.06%
3.70%
-1.65%
6 Months
5.72%
8.17%
-2.45%
1 Year
13.80%
18.34%
-4.54%
3 Years (pa)
14.08%
15.28%
-1.20%
5 Years (pa)
12.60%
13.67%
-1.07%
10 Years (pa)
12.85%
11.76%
1.09%
Since inception
(pa)(30/6/1993)
11.97%
10.23%
1.74%
Past performance is no indication of future performance.
*Shows the difference between Gross return and Benchmark return.
#Mercer Direct Property Index
Long term performance returns show the potential volatility of returns over time. Gross performance figures quoted are calculated with no allowance for management fees, operating expenses or tax on income.

Portfolio structure

The Trust currently comprises 19 properties, together with unlisted investments in the Centro Direct Property Fund, the Macquarie Goodman Wholesale Fund, Macquarie Goodman Hong Kong Fund, the Japara Aged Care and Retirement Property Trust, and the GPT Wholesale Office Fund.


Investment objective

The primary aim of the Fund is to provide investors with exposure to a diversified portfolio of direct property investments by selectively acquiring quality investment properties which provide a blend of income and capital growth.


Fund strategy

The investment style of the Fund is to offer investors exposure to a property fund that is diversified sectorally and geographically. We have a track record of managing direct property for more than ten years. Value has been created by identifying asset management turnaround opportunities, identifying emerging locations, acquiring assets well below replacement cost where valuation upside is apparent, and managing the development of assets secured by pre-commitments. We have engaged external property managers to provide specialist property management services to the Fund.


Designed for investors who…

  • Want a fund that provides income and capital growth from a portfolio of direct property investments.
  • Have a long-term investment horizon.
Portfolio structure

The portfolio currently comprises 19 properties, together with unlisted investments in the Centro Direct Property Fund, the Macquarie Goodman Wholesale Fund, Macquarie Goodman Hong Kong Fund, the Japara Aged Care and Retirement Property Trust, and the GPT Wholesale Office Fund.
BlackRock Investment Management (Australia) Limited ABN 13 006 165 975 AFS Licence Number 230523 RSE License No L0000116
The Merrill Lynch name and logo are trade marks of, and used under license from, Merrill Lynch & Co., Inc.