National Australia Bank (NAB) has launched its first property linked investment product in two years with the release of the CorVal Industry House Trust.
The underlying asset for the new fund is a Canberra based 14 storey commercial office building that has an occupancy level of 99 per cent with the main tenant being the Commonwealth Government. The building has a five star energy rating and was completed in 2006.
"This is the first time in two years we've felt like retail investors are ready to put their money in property. Although they're definitely not interested in just any property investments - investors are incredibly selective," NAB head of global markets investments John McClusky said.
"The underlying features of the CorVal offer definitely ticks the boxes for what people are looking for - it's newly built in a great location with the Commonwealth Government supporting the long term cash flows. And it's a pretty straightforward investment - we've put together a simple, transparent fund structure. The stats are very solid," he said.
The trust is unlisted and has been forecast to deliver returns of 8.15 per cent per year to June 2010 and 8.25 per cent per year to June 2011. It was officially launched last Friday and while it was developed by the bank's wholesale arm it has been made available to retail investors via NAB franchises.
"This is the first offer by CorVal, and is in response to what we believe retail investors and advisers have been looking for. That is, a fund that has a clean yield focus, with strong underlying property fundamentals, strong tenant covenant, long lease terms all housed together in a simple to understand fund structure," CorVal executive director Rob Rayner said.
