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The year ahead

The 2024/25 financial year is shaping up to be a very busy one for Natgen, both in relation to existing Natgen Trusts and also for future initiatives.

In relation to Natgen Investment Trusts, we see ongoing value in various property categories based on the replacement cost of assets and the medium term impact this will inevitably have on rental rates and occupancy costs for tenants.

Well-located regional retail assets will maintain value and income generation potential. As always, we prefer retail categories which demonstrate low elasticity of demand, namely food retailing, household items retailing, and service delivery to regional consumers. These are our bread-and-butter tenants within our existing shopping centres and will continue to be vital in the future of the various Natgen portfolios.

Our sociological observations regarding non-capital city CBD office assets are playing out across the regional markets which we follow. As such, our focus remains on this style of asset as time progresses. Whilst eventually CBD office assets will reset, the short/medium term opportunities exist in our areas of focus.

Whilst premium industrial assets remain fully-priced, there remain opportunities in the industrial space where income return can be enhanced either during the latter parts of lease terms or upon the re-leasing of assets at the end of long reversionary lease terms. Natgen will seek to leverage our growing development expertise to isolate and consider these opportunities.

Development management is an important skillset within the Natgen business offering. With personnel growth in the past year, our development skills have continued to broaden. We envision future development offers during the 2024-25 year, as existing development projects mature and head toward practical completion.

Another addition to our list of value opportunities in commercial real estate is Specialty Assets. In my parlance, this includes properties which house specialty services, such as carwashes, medical centres and any other locationally-relevant businesses.

2024 Trusts To Date
Natgen Investment Trust QC24

Location:  116 Siganto Drive Helensvale, QLD & 76 Lake Street, Cairns QLD

Investment Status:  FULLY SUBSCRIBED

Purchase Date:  May 2024

Purchase Price:  $14.25M

Return:  9.02% per annum (Paid Monthly)

Fund Term:  5-6 Years

Tenants:  Diverse tenancy profile of national and local tenants. Tenants include Commonwealth Bank of Australia and Alder Group.

Natgen Investment Trust CO24

Location:  Johnstone Street, Collie, WA

Investment Status:  FULLY SUBSCRIBED

Purchase Date:  February 2024

Purchase Price:  $10M

Return:  8.5% per annum (Paid Monthly)

Fund Term:  5-6 Years

Tenants:  Woolworths supermarket and 8 specialty tenants

CO24 & QC24 Settlements + Update

Collie Central Shopping Centre, the central asset of Natgen Investment Trust CO24, was settled into the Trust on 1 May 2024.

The Natgen Investment Trust QC24 assets include:

  • 76 Lake Street, Cairns – a two storey banking / office building in the heart of Cairns. The ground floor consists of a modern banking chamber, together with business banking facilities. The upper level of the building has been refurbished and divided into office suites, leased to a variety of tenants under a head-lease arrangement to Hyatt Legal. The Trust settled the acquisition of this property on 12 July 2024.
  • 116 Siganto Drive, Helensvale – Alder Place is a trophy office building of 4 levels, facing the M1 motorway at Helensvale on the northern end of the Gold Coast. A winner of a Master Builders Association national award for design, the building provides high standard office accommodation for its four tenants, including Alder Constructions, which built the building and remains as the anchor tenant.

The Trust settled the acquisition of this property on 18 July 2024.

Leasing Update
We have recently received formal notification of the exercise of an option for renewal of the supermarket lease at Central Plaza Inverell. This option exercise ensures that Ritchie’s IGA will be leasing the premises for a further 10 years

The Natgen management team has been monitoring this upcoming lease renewal and have proactively held talks with Ritchies to ensure that we are across their ongoing needs and future expectations for the Centre. This option exercise increases the weighted average lease term for the Centre to 5.7 years.

At Natgen, we feel it is important that our investors are kept well informed as to the progress of their investments. On this basis, you can expect to hear from us as follows:

  • Monthly Distribution Statements – each month when distributions are transferred to your nominated bank account, you will receive an emailed distribution statement and an SMS confirming the transfer.
  • Quarterly Reports – in October, January and April, you will receive an update on the progress of the Trust property, including general management matters and important information about future matters.
  • Annual Report – following the end of the financial year (30 June), you will receive an Annual Report, including audited financial statements for the Trust. We aim to have the Annual Report released by the end of August each year.
  • Annual Tax Statement – with the Annual Report, you will also receive a Tax Statement outlining the information required to be included in your annual tax return.
The Year Ahead
The year ahead will, no doubt, present a series of opportunities and ongoing risks associated with the current environment. We at Natgen continue to monitor the real estate and finance markets on a daily basis to seek to formulate our ongoing views on value within the market. From time to time, we share this view with you. In every case, we seek to take a long-term perspective, as is appropriate for our asset class, and to synthesise the information available to us into a cogent position.

Our future investment offers will reflect these positions, as will our approach to managing assets for our current unitholders. We are always particularly interested in feedback from our investors and the broader community of Natgen followers and welcome it at any time.

I wish you well for the financial year ahead.
New Head of Funds Management

We are pleased to welcome Peta Tilse to the Natgen family as Head of Funds Management. Previously holding a similar position at the listed Cromwell Property Group, Peta brings over 25 years’ financial service experience gained in funds management, and wealth management. As a top performing fund manager, Peta managed institutional cash and fixed income portfolios (in excess of $5b) for Suncorp Investments, and as an Executive Leader, led Cromwell Property Group’s Retail Funds Management business.

In private wealth management, Peta worked for investment banks UBS and Goldman Sachs JBWere, later working at Levantine Wealth (a boutique wealth manager) for family offices and SMSF clients. As an asset consultant for Research-IP she worked with investment committees, designing multi-asset portfolios for wholesale clients.

Peta’s education includes a Master of Applied Finance, Graduate Diploma in Applied Finance, Bachelor of Business (Banking and Finance), and RG146. Peta has completed the FASEA exam, as well as a Diploma and Advanced Diploma in Financial Planning. She also completed the AICD short course in Governance Foundations for NFP Directors.

Peta has served on the Property Councils of Australia’s Fund Manager’s Roundtable and FINSIA’s Regional Council. Her other pro-bono activities include talking about Finance on ABC Radio, acting as a Non-Executive Director, and Chairing the Finance & Risk Committee for a charity.

At Natgen, Peta will provide our funds management business with further depth and assist in the development of new Natgen investments for the benefit of our Unitholders.

Natgen provides clients with well-considered, carefully measured commercial investment opportunities, accompanied by professional advice from our experienced leaders.

If you’d like to be notified of future investment opportunities, request an Investor Information Pack or contact us directly at invest@natgen.com.au

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