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CorVal is a specialist Sydney based property fund manager and investor whose executives and shareholders have a long and deep history in the Australian property industry.
CorVal’s objective is to provide investors with access to Australian real estate opportunities that deliver strong risk-adjusted returns, by investing in simple investment vehicles that offer complete transparency, an absolute focus on performance and a strong alignment of interests.
CorVal aims to deliver real estate investment solutions for institutional, wholesale and retail investors through the establishment of tailored unlisted property investment vehicles including joint ventures and funds.
CorVal’s specific investment strategy is to target institutional-grade commercial real estate in Australia’s major markets that offer value-creation opportunities. In the current environment CorVal expects to source attractive investment opportunities through:
- the acquisition of assets that are mispriced as a result of the ongoing tight credit market conditions, or due to the distressed position of over-leveraged owners or sales forced by banks;
- the refurbishment, re-leasing or re-positioning of existing tenancy areas;
- the focus of a boutique, specialised manager on asset and property management to drive operational efficiencies and increase net property income; or
- the strategic acquisition of assets that are beyond the reach of private investors and either too small or out of favour with either A-REIT investors and/or large offshore investors.
To give you a flavour for the some recent property investments, we have provided a brief overview of both the Corval PACT Trust and the CorVal Ingham Trust.
CorVal PACT Trust: June 2014 – Intended Syndicate Term 5 Years
The CorVal PACT offered investors an opportunity to invest in three properties comprising of industrial warehousing and manufacturing facilities in established industrial markets throughout Australia (one each in Sydney, Melbourne and Perth) for A$37.55m with a blended acquisition yield of 8.6%. These Properties were leased to entities controlled by ASX listed PACT Group Holdings Ltd (ASX code PGH), with the lease obligations guaranteed by the group (market cap circa A$1bn).
The lease terms were for fifteen (15) years under a triple net structure with the tenant responsible for all outgoings, repairs, maintenance and capital expenditure on the structure and plant and equipment over the full lease term.
The projected base case equity IRR was 13.2% p.a. (pre-performance fee) with an average projected Trust Earning Per Unit (EPU) of 10.5% p.a. over the intended five year investment term of the Trust.
CorVal Ingham Trust: October 2014 – Intended Syndicate Term 7 Years
The Corval Ingham Trust offered investors the opportunity to invest in portfolio of properties that were acquired under a sale and leaseback transaction from Inghams Enterprises Pty Ltd (Ingham), with lease terms of between 20 to 25 years (WALE of 22 years) and blended portfolio acquisition yield of 8.6%.
The tenant was Ingham, Australia’s largest poultry producer with a market share of approximately 36%. The business was founded in 1918 and its present day operations trace back to the 1960’s, when the company entered into major supply agreements with the likes of Woolworth and KFC. Ingham’s gross sales have grown from A$1.93bn (2011) to A$2.27bn (2014).
The lease for each property was structured on a triple net basis, with the tenant responsible for all outgoings, repairs, maintenance and capital expenditure over the full lease term.
The projected base case equity IRR was 14% p.a. (pre performance fee) with an average projected Trust Earning Per Unit (EPU) of 11.2% p.a. over the intended seven year investment term of the Trust.