Allco managed property trust Record Realty (RRT) has bought US-listed Government Properties Trust (GPT) for US$610 million.
Allco managed property trust Record Realty (RRT) has bought US-listed Government Properties Trust (GPT) for US$610 million.
The purchase brings the total value of RRT’s assets up to $2.1 billion across 41 properties in Australia, Germany and the US. RRT fund manager Stewart Tillyard said the acquisition 'completed the vision' Allco had for the fund when it listed it on the Australian Stock Exchange in December 2002. The 22 assets of GPT are 95 per cent leased to the US Federal Government.
They include buildings occupied by the FBI, US Immigration Services, Drug Enforcement Agency and Environmental Protection Agency."It is almost the perfect marriage", Tillyard said. "The assets all have long-term leases to the US Government - no greater tenant quality can we get."
The trust, which aims to pay investors a distribution of 11 cents a year, is 85 per cent geared. Tillyard defended the high debt levels by pointing out the average lease length of 10 years meant the trust had a guaranteed income stream with which to pay down the debt. "RRT now has a global portfolio of properties offering diversification and scale with high-quality tenants", he said.
"This will ensure RRT has a secure income stream to enable the pay down of debt and the delivery of optimum total returns." The distribution is to be paid through periodic refinancing of that debt. In July, RRT bought a portfolio of commercial properties in Germany for Eu333 million. It has since been revalued at Eu350 million, a 5.1 per cent increase on the initial investment
