Published May 2020
Potential Investors Update
Successful first year
FortHill had a successful first year. Payment of the quarterly dividends is underway and FortHill met the forecast set out in the 2019 Investment Memorandum (6.50% gross return). This is a pleasing result. Fonthill is in the process of growing the portfolio with several exciting new acquisitions as detailed below. To support these acquisitions, we will raise further equity in June and will send you details shortly. Industrial property remains a stable foundation within many investors' portfolios, providing steady returns and lower volatility in value than other asset classes. Please get in touch with us to register your interest in the next fundraise.
New acquisitions
We are pleased to announce growth in the portfolio with three new properties for approximately $46.6m. (And we are close to finalising a fourth acquisition.) These comprise high-quality assets, built by Calder Stewart, and are a continuing diversification of tenants and geography.
These assets will add over 28,000m2 of space and an annual rent roll of $2.6m. This will take the portfolio to 14 buildings, a rent roll of $13.0m, and approximately $215m in value.
- Tasman & Laminex Distribution / Warehouse, 10,333m2, $17.5m, 10-year lease (Gallagher Drive, Hornby Quadrant, Christchurch)
- OfficeMax Distribution / Warehouse: 10,825m2, $18.1m, 15-year lease (Detroit Drive, Izone Rolleston)
- DHL Distribution / Warehouse, 6,956m2, $10.9m, 8-year lease (Detroit Drive, Izone Rolleston)
Current Events - COVID-19 and Financial Stimulus
FortHill weathered the COVID-19 Lockdown in April/May well, with many of our tenants continuing to trade as essential services. FortHill proactively agreed partial rent rebates for Level 4 and this was well received by our tenants. We were pleased that almost all of our tenants re-opened in Level 3. Overall, the impacts for FortHill were small.
We see significant positives flowing from the financial stimulus, including: a 'lower for longer' borrowing cost, and re-introduction of depreciation on industrial property.
For us, it remains 'business as usual' in managing and growing a high-quality portfolio of industrial properties, with long-term tenants who operate in core sectors of the economy. We continue to look carefully at 'our customer's customers' when we assess new investment opportunities.
Please contact us for more information about any of these matters.