The real estate investment trust sector is defying the IPO market slowdown, with another REIT set to front investors just days since the Newmark Property REIT secured its ASX berth.

The latest entrant is Acure Asset Management’s Acure Core Plus REIT, which will contain industrial, neighbourhood retail, large format retail and fuel stations across three Australian states.

The 10 properties set to comprise the trust have been independently valued at $244.3 million, according to a term sheet seen by Street Talk, with a weighted average lease expiry profile of 8 years by income.

The offer size will depend on how many existing unit holders seek to realise their investment, but it’s estimated to be at least $90 million, if not up to $113.9 million.

The REIT is slated to come to market in December with a market capitalisation of $166.3 million.

The portfolio includes the Australind Village Shopping Centre in Western Australia, Shepparton Home Centre in Victoria, the SteelMains Naval Base and Somerton sites, the AVK Currumbin industrial site and multiple BP service stations spread throughout Western Australia.

It has forecast funds of operation yield of 7 per cent and annualised distribution yield of 7 per cent. Income is underpinned by fixed contractual rental increases, supported by long leases.

Overall, it has a 98 per cent occupancy rate and bankers are selling its “solid growth outlook” thanks to attractive lease structures and embedded rental growth from the slated price increases.

The portfolio has a 2.8 per cent weighted average fixed rent review and 70 per cent of its leases have fixed rent reviews.

The Perth-based property investment firm behind the REIT, Acure Asset Management, has appointed Shaw and Partners as joint lead manager and underwriter.

Article source: AFR, 17 November 2021