FOLKESTONE REAL ESTATE INCOME FUND AT OXLEY PERFORMANCE as at 31 March 2015 MARCH 2015 QUARTER REPORT CENTRE UPDATE The Centre continues to perform well. As at the end of February, the Centre’s moving annual sales turnover was $30.8 million, up from $30.1 million in January and $26.7 million in June. Importantly, February sales were 28% higher than the same month in the prior year, which was driven by a 39% increase in the Woolworths’ turnover. This sales growth is confirmation that customers are shifting their grocery shopping to the Centre. The vacant 40 square metre store on the street front has now been leased to the adjoining barber, who has expanded, following the success of their existing store. Discussions continue with a potential tenant in relation to the Centre’s remaining vacancy of 80 square metres. However, at the time of reporting, a lease had yet to be signed. The Vendor’s rental guarantee remains in place until the earlier of a lease commencing or April 2016. DISTRIBUTIONS The distribution for the March Quarter 2015 was 2.0 cents per unit and will be paid on 20 April 2015. This is in line with Forecast Distribution FY15 8.0% Forecast Tax Deferred FY15 100% our forecast annualised distribution of 8.0% for FY15. Fund Gearing 45.9% Property Value $35.0m MARKET UPDATE Total Assets $36.2m Retail investment activity reached $7.5 billion in 2014, surpassing the $7.4 billion in 2013, an all-time record high for the third consecutive calendar year. Gross Debt $16.6m Net Assets $17.9m Units on Issue 20.6m NTA (with mark to market of interest rate hedges) $0.87 NTA (without mark to market of interest rate hedges) $0.91 Fund Expiry April 2020 APIR Code FLK0006AU Investor demand for neighbourhood retail centres has continued in the 1st quarter of 2015. Birkdale Fair, a Woolworths anchored centre in the eastern suburbs of Brisbane, sold in March for $23.3 million on a yield of 7.44%, while Beaudesert Fair, located between Brisbane and Ipswich, sold in January for $18.5 million on yield of 7.4%. These sales compare to the Fund’s acquisition in April 2014 of The Station Oxley on an 8.0% yield. The latest ABS retail sales show that food retailing grew in February by 1.2% monthon-month, after a 0.8% fall in January. The trend in food retailing sales is softening, partly reflecting the strong competition between the major grocery retailers which is pushing grocery prices down. This was highlighted by Woolworths in their 2nd quarter 2015 market update where they reported food and liquor quarterly sales growth (on a like for like basis) was 1.2%, the lowest since 2012. 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/oxley/ 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 Oxley (ARSN 167 537 199). 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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