Key Information on the Fund
- Centrally located within South Hedland and a key growth area of the Pilbara
- Original land and construction cost of $36 million
- Purchasing at $12.5 million – 65% under replacement value
- Positive cash flow commencing from inception
- Significant tax deferred income
- Numerous yield enhancement opportunities
- Flexibility with multiple exit strategies
Leveraging off the success of the Pilbara Growth and Income Fund, Westbridge Funds Management is excited to be launching this new Pilbara opportunity as a single-asset investment consisting of a unique and “one of a kind” six-storey residential building located at 10 Forrest Circle, South Hedland.
This off-market purchase offers investors an average 10.4% p.a yield (5 year average from Year 2).
Opportunities exist to improve distributions by way of value-add strategies. A modest 5% increase in average rent would see the 5 year distribution increase to 11.8%.
The sensitivity table below presents key performance indicators related to income opportunities.
This investment opportunity is open exclusively to wholesale investors.
This Fund is now fully subscribed.
Some key assumption points and how they relate to potential yield enhancements are as follows:
- Debt coverage assumed (50%).
- Opportunity for significant savings on insurance costs as part of the government’s potential intervention on insurance costs across the North-West.
- The annual rental growth is forecast at a modest 3.5% per annum, with the opportunity to achieve higher increases, particularly as currently short-term rents are rising faster with low vacancy rates and a strong local economy keeping housing demand high.
- Prices are yet to reach replacement value. Given the trade shortages, construction costs are rising, increasing replacement value and delaying competition, meaning reduced supply.
Centrally located and "one of a kind"
- Unique six-storey building with 77 strata titled apartments in central South Hedland, surrounded by amenities
- A modern apartment complex completed in 2014 and built with quality by reputable builder Hickory
- Architecturally designed by Hodge Collard Preston and the well-renowned Fender Katsalidis
- An in-demand product and location currently enjoying a low vacancy rate of 4%
- Good mix of well sized 1,2 and 3 bedroom fully furnished units with a modern design
- Diversify of income with high level of quality corporate tenants, ~30% of units rented to private tenants, remaining rented to corporate clients with the largest tenant at ~15%
- There is a shortage of accommodation in Hedland, particularly of this standard
- Multiple exit strategies including:
- Ability to sell down apartments to individual investors (property already individually strata titled)
- Potential to sell in one line to the emerging “own to rent” investors looking for whole buildings, once efficiencies are put in place
Prime Central Hedland Location
Built in 2014, the complex is located in the heart of South Hedland on Forrest Circle, within walking distance to all of the town’s main amenities, including the Hedland Health Campus, McDonald’s and main shopping centre.
Located off one of the main arterial roads leading into South Hedland, Hamilton Road, which connects to the Great Northern Highway, the complex is strategically located to benefit from easy access to the Port Hedland town centre – 14km north, and the Port Hedland Airport, approximately 10km northeast.
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