Charter Hall is one of Australia’s leading property fund managers. This property giant has over 28 years of experience in investment properties and Unlisted funds across the sectors of industrial, retail, commercial, and social infrastructure. The Charter Hall Group (CHC) is listed on the ASX. Whereas Charter Hall Direct (CHD) is a fund manager for unlisted property trusts. Today, we will analyse three of CHD’s Unlisted direct property funds. These include Direct Industrial Fund No.4, Direct Office Fund, and Direct PFA fund.
Analysis of Direct Industrial Fund No.4
Direct Industrial Fund No 4 (DIF4) consists of high-quality properties that are strategically positioned near major distribution and logistics companies.
Charter Hall Direct Industrial Fund No.4 consists of long leases of industrial property in Australia which are open for investment. DIF No 4 Is open to investors and contains the following features
- 20% current income yield
- 3 years WALE (Weighted Average Lease Expiry)
- $409 million portfolio valuation
- High occupancy levels 100%
- Low correlation to equities
- Minimum Investment 20,000
According to Commercial Real Estate Australia, a good property rental yield for industrial offices is 4.50-4.85%. The DIF4 is offering a 6.20% income yield. In turn, providing investors with higher than average returns. A WALE of 10.3 years is attractive to future investors. Why? Because a longer WALE results in both a longer income stream and a reduction of vacancy risk. Moreover, DIF4 only invests in property with a 99% occupancy level. Thus, ensuring unitholders are not exposed to the risk of vacancy costs. Also, the low correlation to equities and low minimum investment increases the quality of the investment.
Furthermore, the high demand for logistics and distribution-based properties, increasing DIF4’s ability to attract institutional investors and increase market share. Moreover, DIF4 has won both local and international awards. For example, the 2019 CoreData SMSF service provider award and the 2019 Zenith Investment partners and Professional Planner Finalist Fund award. Thus, reiterating how DIF4 is a promising investment fund.
Analysis of Direct Office Fund (DOF)
Direct office Fund consists of a range of high-quality Australian office properties. The property portfolio under DOF focuses on office buildings in the CBD. DOF is open to investors and contains the following features
- 70% current income yield
- WALE (Weighted Average Lease Expiry) of 8.4 years
- High occupancies levels 99% low correlation to equities
- Minimum investment of 20,000
- Portfolio valuation of 2.09 Billion
According to Commercial Real Estate Australia, a good property rental yield for office properties is 4.60 – 4.85%. The DOF fund is offering a 5.70% income yield. In turn, providing investors with an excellent return on investment. A WALE of 8.4 is still attractive to investors. Why? Because 8.4 is relatively high and longer WALE results in both longer income streams and a reduction of vacancy risk. Moreover, DIF4 only invests in property with a 99% occupancy level. Thus, ensuring unitholders are not exposed to the risk of vacancy costs.
If Direct Office Fund is an Investment that instantly grabbed your attention, then don’t hesitate to learn more. Just click on this link https://www.charterhall.com.au/investments/funds/charter-hall-direct-office-fund
Analysis of Direct PFA fund
Direct PFA fund’s portfolio consists of strong Australian office properties anchored by the government and other highly regarded corporate tenants.
PFA is open to investors and contains the following features
- 00% current income yield
- WALE of 7.9 years
- High occupancy levels
- Low correlation to equities
- Portfolio valuation of 1.21 billion
- Minimum investment 20,000
According to Commercial Real Estate Australia, a good property rental yield for office properties is 4.60 – 4.85%. In turn, PFA’s income yield of 7.00% provides investors with an excellent return on their investment. Consequently, making the PFA fund a superior investment in the property market.
Moreover, the direct PFA fund has a relatively high WALE of 7.9. This means that investors will benefit from a longer income stream and will not be exposed to vacancy costs.
Furthermore, Australia’s office market has one of the world’s most substantial rental growth and returns due to the growing local economy, stable employment rate, and population growth. Thus, making Direct PFA have an eye-watering valuation of 1.21 billion and constitute a promising investment.
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The information above should not be taken as financial advice. Youth Investment Group has no liability for personal financial interests or investment decisions. You should make your own investment decisions based upon your own research and what you believe is best for you.
Written by Thomas He, an associate of YIG.