ISPT’s Urban Workshop in Melbourne CBD ranks as top-performing unlisted trust with 12.8% annual return
ISPT’s 50 Lonsdale Street Property Trust has been the best-performing unlisted property trust over the past 12 months to September 2012, according to Mercer/IPD Australia Monthly Property Fund Index.
The trust, which holds the Urban Workshop, a 69,000-square-metre A-grade commercial building, delivered investors a return of 12.8% over the last 12 months, compared with an average annual distribution yield for the wholesale core property sector as at September 2012 of 6%.
Designed by John Wardle Architects, Hassell and NH Architecture and developed by ISPT, the Urban Workshop was constructed in 2006 and stands in the parliamentary precinct of Melbourne's CBD on Lonsdale Street.
It comprises ground-level foyer and coffee shop, 33 levels of office accommodation, five levels of basement parking and a leisure centre.
It adjoins the Madam Brussels Lane retail precinct, named after notorious Melbourne brothel owner Madame Brussels, who opened her first establishment at 8 Lonsdale Street in the late 1880s and ended up owning eight brothels in the district.
Following construction the Urban Workshop won numerous awards, including the 2006 Royal Australian Institute of Architects Victorian Chapter Sir Osborn McCutcheon Award for Commercial Architecture; the Marion Mahony Award for Interior Architecture; and the Joseph Reed Award for Urban Design and The Melbourne Prize.
It has a 4 ½-star NABERS energy rating.
The building was valued at around $400 million as of September 30 2012 and is currently 100% leased, with tenants including Telstra, superannuation administrator Superpartners and accounting firm GMK Partners.
The chart below shows the top performance of the ISPT 50 Lonsdale Street Property Trust as well as the wide spread of returns across funds, ranging from 4.9% to 12.8% over the last 12 months.
Click to enlarge
Dr Anthony De Francesco, managing director of IPD in Australia and New Zealand, says total returns for Australian unlisted core wholesale property funds have softened since their peak of 9.8% in August 2011, reflecting “general weakness across most of the macroeconomy”.
“The persistence of the sovereign debt crisis in Europe will continue to dampen global economic growth and constrain asset prices and fund returns.
“A possible downside risk to the Australian economy is the joint slowing of China’s economy and the ending of the mining boom. Both of these factors will prove to be detractors of growth to the Australian economy," he says.