FOLKESTONE REAL ESTATE INCOME FUND AT SYDNEY OLYMPIC PARK MARCH 2015 QUARTER REPORT PROPERTY UPDATE As at 31 March 2015, the building was 100 per cent occupied. The weighted average lease expiry (WALE) by income was 7.0 years, with Thales occupying 100 per cent of the office space and 6.4 per cent of the retail area until December 2022. DISTRIBUTIONS The distribution for the March Quarter 2015 was 2.125 cents per unit and will be paid on 20 April 2015. This is in line with our forecast annualised distribution of 8.5 per cent for FY15. MARKET UPDATE Sydney’s metropolitan office markets registered strong investment volume and improving leasing conditions in the second half of 2014 and this has continued into 2015. Tenant enquiries have strengthened and the overall Sydney office metropolitan office vacancy rate fell from 9.2 per cent to 7.9 per cent over the six months to 1 January 2015. According to Colliers, the Sydney Olympic Park A Grade vacancy was at 8.5 per cent which represented a marginal 10 basis point decline over the second half of 2014. There was limited leasing activity over the period and no sales activity. In March, the NRMA announced it was investing $40 million and moving more than 500 staff to a new headquarters in Sydney Olympic Park. Construction of the six-storey office building, immediately adjacent to the Fund’s building in Murray Rose Ave, is scheduled to commence in August with completion anticipated in 2017. NRMA group CEO Tony Stuart said “Sydney Olympic Park had become a significant growth area and he saw it as the new “hub” of the west — given it is home to more than 14,000 workers, students and residents and 140 businesses”. A further 53,000 square metres of commercial office space has been approved or mooted in Sydney Olympic Park but is awaiting pre-commitment prior to construction. However, some of this may be developed for residential purposes instead as the precinct becomes more attractive for residential living. PERFORMANCE as at 31 March 2015 Forecast Distribution FY15 8.5% Forecast Tax Deferred FY15 68.0% Fund Gearing 44.9% Property Value $31.0m Total Assets $32.6m Gross Debt $14.6m Net Assets $16.4m Units on Issue 16.5m NTA (with mark to market of interest rate hedges) $0.99 NTA (without mark to market of interest rate hedges) $1.04 Fund Expiry Dec 2017 APIR Code FLK0005AU FURTHER INFORMATION For further information please contact your financial advisor or contact Folkestone as per the details below. Adrian Harrington Head of Funds Management t: 02 8667 2882 e: [email protected] Lula Liossi Investor Relations Manager t: 03 8601 2668 e: [email protected] Michael Baker Head of Distribution t: 02 8667 2888 e: [email protected] w: http://folkestone.com.au/fundsmanagement/private-funds/sydney-olympic-park/ DISCLAIMER: This report is issued by Folkestone Funds Management Limited ACN 138 125 881 AFSL 340990 (FFM) as Responsible Entity of the Folkestone Real Estate Income Fund at Sydney Olympic Park (ARSN 158 784 224). The report has been published for information purposes only. The information contained in this report is of a general nature only and does not constitute financial product advice. In preparing this report the author has relied upon and assumed, without independent verification, the accuracy and completeness of all information available from public sources or which has otherwise been reviewed in preparation of the report. The information contained in this report is current as at the date of this report and is subject to change without notice. Past performance is not an indicator of future performance. Neither Folkestone Limited (FLK), FFM, nor any of their respective associates, related entities or directors, give any warranty as to the accuracy, reliability or completeness of the information contained in this report. Except insofar as liability under any statute cannot be excluded, FLK, FFM, and its associates, related entities, directors, employees and consultants do not accept any liability for any loss or damage (whether direct, indirect, consequential or otherwise) arising from the use of this report. All investment is subject to investment risk, including possible delays in payment or loss of income and principal invested. None of FLK, FFM or any of their respective associates, related entities or directors guarantee the performance of the Fund or the repayment of monies invested. Folkestone Funds Management Limited ACN 138 125 881 AFSL 340990 Sydney Office Level 10, 60 Carrington Street Sydney NSW 2000 Melbourne Office Level 12, 15 William Street Melbourne VIC 3000 e: [email protected] www.folkestone.com.au t: +61 2 8667 2800 f: +61 2 8667 2880 t: +61 3 8601 2092 f: +61 3 9200 2282
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