Charter Hall Group has closed its Direct Industrial Fund (DIF), having raised more than $115 million since its launch in July 2010 and effectively being oversubscribed by 5 per cent.
DIF, a closed-end retail investor fund, currently has a $156-million portfolio located across Australian metropolitan industrial markets.
The portfolio is 100 per cent leased to national tenants, including Australia Post, Coles Group, Woolworths, Grace Worldwide and Toll Holdings. It has a weighted average lease expiry of 12.5 years.
All equity raised has been allotted, providing DIF with the capacity for new acquisition opportunities of up to $45 million, which will take the fully invested portfolio value to about $200 million.
“Given the current global economic conditions, investors are seeking stable returns with reduced capital volatility and with the spread between property yields and bonds the highest on record, we are seeing increased interest in property,” Charter Hall Direct Property head Richard Stacker said.
“This demand, coupled with the strength of DIF’s portfolio, has resulted in very strong interest in DIF from financial advisers and their clients, and over 70 per cent of the capital raised has been sourced from self-managed superannuation funds.
“This raising is one of the largest unlisted ‘retail investor’ property fund capital raisings achieved within the property funds management industry since 2007.”
Charter Hall is currently in the process of finalising the product disclosure statement for DIF 2, which is expected to be open for investment later this year.
In other funds management news, Vanguard Investments fee cuts announced in June for seven of its index funds came into effect yesterday.
The Vanguard Australian Shares Index Fund fee is now 0.18 per cent a year from 0.34 per cent.
Its Australian Fixed Interest Index Fund now charges 0.24 per cent a year, from 0.29 per cent, and its International Fixed Interest Index Fund Hedged is now 0.26 per cent a year from 0.34 per cent.
Reductions were also made to its Australian Property Securities Index Fund, International Shares Index Fund, International Shares Index Fund Australian Dollar Hedged and International Shares Index Fund NZ Dollar Hedged.
“We’ve been in Australia now for 15 years so these fee reductions are a reflection of the build up of scale within seven of the biggest funds,” Vanguard corporate affairs and market development principal Robin Bowerman said.
“As Vanguard is a mutual structure in the United States, we’ve got a long history of passing back to consumers as we build economies of scale. After a number of years of a low, negative environment, costs really do matter, so by lowering the fees we’re doing a good thing for investors because while they can’t control the performance of investment markets, we can control fees.”
Bowerman said the market-leading fee levels were in line with Vanguard’s low-cost products across all the asset classes.
