Forza Capital is delighted to announce that the sale of 15-31 Pelham Street, Carlton, the sole asset of the Forza Pelham Street Fund settled on 1 February.
15-31 Pelham Street is an office building comprising 6,000m2 of Net Lettable Area and 175 car parks on a land allotment of 3,772m2. Located in the prime inner Melbourne suburb of Carlton, the property was leased to 9 tenants on an average lease expiry of approximately 4.5 years. Acquired for $20.6m in the midst of the Greek debt crisis in 2012, the property was sold in December 2016 for $37.05m to a local private investor. Given the asset was purchased on an 8.25% yield and sold on a 6.04% yield, Forza Capital believed this to be an opportune time to de-risk our investors’ position and realise the asset.
This Fund has delivered an outstanding result to investors, especially given the investment was producing annual distributions of approximately 9.25% per annum. Our analysis indicates the following return metrics to investors in our Fund:
|Internal Rate of return||23.6%|
|Total Income Return||$0.41|
|Total Capital Return||$0.95|
This investment goes to show the types of performance that can be obtained by taking counter cyclical positions on quality assets. At the time Pelham Street was acquired, investors were not buying quality assets which could be secured at very attractive prices.
History will repeat itself and counter cyclical buying will once again emerge. We encourage our investors to be prepared (and liquid) and have the conviction to support good opportunities when counter cyclical buying once again presents.