Ballina trust’s bid to expand its assets and lower debt
BALLINA based property investment fund manager, Clarence Property, has launched its first capital raising in six years for its flagship unlisted Westlawn Property Trust, in a bid to raise up to $40 million to retire debt and fund new acquisitions.
The trust will issue 25.3 million units at 79c per unit to lift issued capital from $120 million to $140 million and lower borrowings to $80 million and gearing from 49% to 39%.
Clarence managing director Peter Fahey said that if the offer was fully subscribed, it would be extended to raise a further $20 million and reduce gearing to 29%.
The capital raising is only the fifth in 22 years for Westlawn, which has not failed to pay a monthly distribution to unit holders since its inception in 1994.
"Westlawn has a solid history of delivering stable, tax-friendly monthly distributions to its investors," Mr Fahey said.
"We've always understood that property is a long-term investment, so we are positioned to be around for the long term."
Included in the company's portfolio is the 80-hectare Epiq residential and commercial land development site at Lennox Head.
The site is approved for around 500 house lots, along with a supermarket, commercial precinct and a retirement living precinct.
The first stage of the development is well underway with the first 51 house lots all sold for a total of $12.8 million. These are due to settle in mid-2016.
Mr Fahey said the current capital raising will give the trust the potential to extend its portfolio to $300 million in assets.
"We see excellent opportunities to acquire new commercial and retail properties in strategic locations that will potentially allow us to improve returns for our unit holders," he said.