Denison Diversified Property Fund
CEO’s Update Quarterly Update- 31 March 2015
Dear Investors,
Denison Funds Management Limited (‘Denison’) as
responsible entity for the Denison Diversified
Property Fund (‘DDPF’ or ‘Fund’), is pleased to
present Investors an update on their investment in
DDPF.
Asset Management Update
During the March Quarter, we have undertaken
significant capital works across the portfolio. This has
included the completion of exterior painting at the
Blacktown asset and the replacement of a large
awning at the Campbelltown asset. We believe this
has significantly improved the appearance and value
of these assets.
During this quarter, we have been successful in
securing new and existing tenants across the portfolio
in what has proven to be a challenging leasing market
for the start of 2015.
Notably we have renewed the existing major tenant,
Department of Community Services, at Shellharbour
for a new 4-year lease term. They occupy 1,318 sqm
at Shellharbour, which represents 42% of the total
net lettable area (NLA) at this asset.
We have also been successful in leasing the last
remaining vacant space at the Artarmon asset. The
new tenant, Prime constructions have leased 1,195
sqm for 6 years. We are pleased to confirm Artarmon
is now 100% occupied with a strong 5-year weighted
average lease expiry (WALE).
Investor Survey
Thank you to the investors who have completed the
investor survey, your valued feedback is appreciated.
We had noted in the last newsletter that the survey
should be completed by 30 April 2015, as we are still
receiving responses we have extended the
completion date to 31 May 2015.
We urge those investors who have not yet completed
the survey to take this opportunity provide their
valued feedback. The survey can be completed online
via our website or by completing the paper survey
mailed with the last newsletter. We are pleased to
offer a $25 Coles/Myer gift card to the first 100
respondents.
The results of the survey will be published in out next
quarterly update. As always, we will keep Investors
updated via quarterly newsletters and more regular
updates on our activities via our website
www.denisonfm.com.au.
Warm regards,
Matthew Burrows
CEO, Denison Funds Management Limited
Denison Funds Management Limited (ACN 095 920 648) operates under AFSL: 224 663
A. Level 45, 19 Martin Place, Sydney NSW 2000 Registry 1300 935 900 Head Office +61 9222 8222
W. www.denison.com.au E. [email protected]
DDPF Snapshot
DDPF – Snapshot
Number of Assets
Value of Portfolio
Occupancy Rate
WALE (Area) –Years
Net Assets
Units on Issue*
Unit Price **
Gearing Ratio***
31-Dec-14
31-Mar-15
Asset Snapshot
17
17
$213,700,000.00
$213,700,000.00
89.22%
89.40%
3.94
3.75
Financial Snapshot – 31 December 2014
$46,294,387
$46,609,043
106,182,005
106,182,005
$0.44
$0.44
76.20%
76.20%
Change
0%
0%
0.2%
-4.8%
0.7%
0%
0%
0%
* Units on Issue are inclusive of the preference units which rank in priority to fully paid ordinary units. The redemption price of the
preference units is equal to the price at time of issue. Rounded to 2 decimal Places.
** As part of the FARI III Bond, DDPF issued warrants to FARI III that are able to convert to ordinary DDPF units. If exercised, the warrants
will represent approximately 30% of DDPF’s units on a fully diluted basis (based on issued units at the time of exercise).
*** Gearing Ratio - Total Interest Bearing Liabilities / Total Assets
Market Update
National Overview
Over the last six months, commodity prices have collapsed from their 2014 highs pushing volatility into the
domestic economy and triggering difficulties for both government and business. Given the commodity price
driven nature of the Australian economy, monetary policy is beginning to play a central role in stimulating the
domestic economy with staggered rate cuts in 2015. The drop in Australian interest rates have driven
investors’ appetite for yield and they are investigating alternate asset classes. Commercial, industrial, retail,
and residential property have benefited from this monetary stimulus with cap rate compression a core
depiction of the general property market. In more detail, the property market is divided between mining and
non-mining states, showing Sydney and Melbourne continuing to outperform Brisbane and Perth.
Limited CBD buying opportunities as well as investors risk appetites are increasing property values in the
secondary CBD office, metro office, and industrial markets. The suburban property sectors within Australia are
currently undergoing a valuation shift, reflecting the limited supply and a move to CBD periphery markets. The
differential between the prime, secondary and suburban markets are beginning to tighten with suburban
properties showing the strongest compression ratios within the last six months. Rental growth is forecasted to
remain flat in the near term and valuation increases accredited to cap rate compression rather than underlying
property fundamentals.
CONTACT US
Registry Services
E. [email protected]
P. 1300 935 990
Denison Funds Management Limited
C/- Link Market Services Limited
PO Box 3721, Rhodes NSW 2138
Head Office
E. [email protected]
P. +61 2 9222 8222
W. www.denisonfm.com.au
Denison Funds Management Ltd
Level 45, 19 Martin Place Sydney, NSW 2000
Disclaimer: This newsletter contains general information only taken from sources believed to be accurate. The accuracy, adequacy or
completeness of any information and any forward looking statement is not warranted. No account is taken of the needs, objectives
and circumstances of any particular person and liability is not accepted for any decision made in reliance on this information. Past
performance is not an indicator of future performance.
Denison Funds Management Limited (ACN 095 920 648) operates under AFSL: 224 663
A. Level 45, 19 Martin Place, Sydney NSW 2000 Registry 1300 935 900 Head Office +61 9222 8222
W. www.denison.com.au E. [email protected]