Given the performance of office properties in Sydney and Melbourne over the past few years, regional office property may be the last thing on the minds of investors looking for income.
Until, perhaps, they see the figures. Since inception in October 2004, the APN Regional Property Fund has produced a total return of 9.46%1 a year. In the year to 31 March 2019, that figure was 17.58%.
APN Regional Property Fund performance
The Fund currently offers the opportunity to invest in two A-grade office properties in fast-growing Newcastle, delivering a forecast distribution yield of 7.10%2 in FY20.
Yes, that’s Newcastle. The city has good transport links via freeway and rail to Sydney, just 160km south as the crow flies. With spectacular beaches, lakes and national parks within a short, usually traffic-free drive, a 1-bedroom city centre unit can be purchased for less than $400,0003.
From there, you can walk to work, via a host of high-quality cafes, to an A-grade office development that overlooks the harbour at 28 Honeysuckle Drive. Or you could catch the tram. Newcastle is Australia’s strongest non-metro office market and the properties at Honeysuckle Drive are among the best in the city.
APN has also recently executed heads of agreement with two tenants that increases the APN Regional Property Fund’s occupancy from 88% to 96% and Fund Weighted Average Lease Expiry (WALE) will increase from 2.9 years to 3.2 years as at 1 September 2019. That should support the security and stability of the Fund’s income.