Primewest has bought a third investment for its Diversified Income Trust No 4 – this time in the New South Wales Central West town of Dubbo.
The refurbished Dubbo City Toyota and Lexus dealership and Servco service centre at 2-12 Bourke Street is being acquired for $12.5 million.
The purchaser is forecasting a 6.5 per cent cash distribution paid monthly and 9.5pc internal rate of return factoring equity.
It has also just launched a capital raising seeking $9.5m – the bulk of which is attributed to its latest buy.
On a 3744 square metre site at the south east corner of River Street, the Dubbo property came with a 20-year lease to the Japanese marques.
It is within a car yard hotspot in the town’s commercial centre – opposite dealerships selling Hyunudai, Isuzu, Jeep, Kia and Subaru.
About 400 kilometres north west of Sydney, Dubbo is the largest town in the Oriana region – its population of nearly 40,000 making up about a third.
Primewest executive chairman John Bond previously said it intended to target high quality properties for PDIT4 – with both returns of between 6-8pc and capital appreciation prospects.
A long weighted average lease expiry – set to increase to 8.9 years once the car dealership settles – appears another feature, as does its heavy weighting of essential service tenants (story continues below).
Across its various trusts, the manager and developer has assets worth $4.5 billion.
Primewest Diversified Income Trust No 4’s other assets
Following the transfer of 2-12 Bourke Street in July, Primewest Diversified Income Trust No 4’s portfolio will be worth $75m.
The fund was seeded last October, when Primewest paid Gowing Bros $30.5m for the Moonee Markets Shopping Centre in Coffs Harbour.
On 2.1ha at the north east corner of Pacific Highway and Moonee Beach Road, and with its eastern boundary fronting Sullivans Rd, that 10,751 sqm refurbished complex is anchored to Coles.
The purchase price was 20pc lower than the building replacement cost, the investment house said at the time.
In January, PDIT4 made its second purchase, outlaying $32m for Mandurah Greenfields in Perth – Primewest’s home town.
Developed in 2017 and anchored to Woolworths, the Western Australia shopping centre contains 5918 sqm of lettable area and sits on a 1.97ha block.
Mandurah is about a 50 minute drive south of the CBD.