The initial public offer (IPO) is expected to raise $225 million with 112.5 million securities being offered at a price of $2.00 per security. This is a 3.3 per cent premium to the net tangible asset backing per security of $1.94. The offer will consist of an institutional offer, a broker firm offer and a priority offer.
The distribution yield for Industria is expected to be 8.2 per cent for the 2014 financial year, growing to 8.4 per cent in the 2015 financial year. It will have a target gearing range of 30 to 40 per cent, with an initial gearing of 33.8 per cent.
The portfolio of Industria will consist of 18 established, high quality industrial, technology park and business park assets located across Sydney, Melbourne, Brisbane and Adelaide.
It has been independently valued at $378 million with the average building age at 6.3 years and the average lease expiry at 5.8 years. According to APN, the portfolio will provide investors with steady cash returns and the potential for income and capital growth over time.
Industria fund manager Laurence Parisi said APN was pleased to be able to offer investors the opportunity to own an interest in this portfolio alongside APN and its funds.
“We believe the young age and long average lease expiry of the portfolio, combined with the contracted fixed and CPI linked rental increases on a majority of underlying leases, will underpin future returns for investors,” said Mr Parisi.
APN Property Group Limited has subscribed for 6.25 million securities under the offer, representing a total of $12.5 million. Combined with the existing securities managed by APN FM and valued at $25 million by the offer, Industria will list with a market capitalisation of $250 million.
Industria will be formed by stapling securities in the Australand Wholesale Property Fund No.6 (AWPF6) with securities in entities owned by APN Development Fund No. 1 (ADF) and the APN Wholesale Direct Property Pool (WDPP). The offer will be completed when it is approved by AWPF6 investors at a meeting held in early December.
Macquarie Capital and UBS will act as bookrunners for the offer.
