IIG TAC Property Trust
The TAC building at 60 Brougham Street, Geelong (Property) is an eight-level A-Grade office building, located at the northern end of the central business district in Geelong, Victoria. The Property was developed for the Transport Accident Commission (TAC) and completed in December 2008.
TAC occupies all of the office space and 321 car parking bays. TAC’s lease, which is for approximately 92% of Net Lettable Area (NLA), contributes approximately 93.5% of net prop- erty income and had an initial term of 20 years. At the end of FY17, the Property’s weighted average lease expiry (WALE) was approximately 10.9 years, the initial term of the TAC lease had 11.5 years remaining.
Other tenants, as of 30 June 2017, were Fernwood Investments, leasing approximately 3% of NLA to operate a gym, and Rush Hour Café, leasing approximately 1.5% of NLA. IIG has also leased approximately 3% of NLA, using the space for ‘The Workshop’, a 45-desk co-working and innovation space. At settlement of the Property, the Trust was forecast to deliver an average pre-tax yield of circa 10.0% per annum to investors over the Trust term. Distributions to date have met that forecast. The cash yields are largely tax deferred.