Trust update

The re-lease of Farrell Place and the renewal of leases at Heidelberg, with a view to sale of the assets and return of capital to investors, remained the focus of the trust throughout the quarter.

Distributions and redemptions

The annualised distribution has been reduced to 9 cents per unit, from 18 cents per unit, effective 1 July 2010. This is due to capital works required at Farrell Place and leasing incentives needed at Heidelberg.

Debt

The trust is considering drawing down the as yet undrawn $1 million in this facility to finance part of the works at Farrell Place.

Leasing

The Commonwealth Ombudsman has vacated Farrell Place and vacated the building and the Department of Climate Change will assign its lease. The trust is now in advanced discussions with L&H, who bought the major tenant Hagemeyer a few years ago, regarding lease renewals at Heidelberg.

Capital expenditure

During the June quarter the trust accepted tenders for the works required on the air conditioning at Farrell Place. The budget for these works has been set at $1.875 million. However, only part of this budgeted works will be undertaken this calendar year.

Asset values

There were no valuations undertaken during the quarter. The assets were valued in September at $22.20 million.

Sale of Funds Management business

On 6 October 2010, Becton announced the sale of its Funds Management business to 360 Capital Group. We are working on obtaining all the necessary approvals and settling the sale before the end of the calendar year. The sale is the culmination of more than two years’ work to achieve a longer term capital management solution for the funds. It will provide the funds with the backing of a debt-free specialist property funds manager which in turn will provide the funds with enhanced prospects of attracting capital where needed. For further information about the sale please refer to the CEO’s letter in this edition of Review and to the FAQs on the Becton Investment Management website: www.bim.com.au.