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Jasper’s Industrial Income Plus Fund delivers strong performance for FY22

Jasper’s Industrial Income Plus Fund delivers strong performance for FY22

Strong Performance

Jasper is proud to share that the Industrial Income Plus Fund (Fund) has ended a successful financial year (FY22) by securing new lease agreements and delivering a portfolio valuation uplift. The Fund continues to be 100% occupied with a remaining weighted average lease term of 7.5 years.

Over the latest quarter, total portfolio income grew due to leasing events at Westpoint Drive. This helped drive valuations up $3.75m for the quarter to $75.5m (+5.2%). The Fund has now delivered a total return of 36.70% since inception, or 27.88% per annum (unrealised). Asset valuations have now increased $8.07m (12.0%) since acquisition of each property into the Fund. For comparison, the table below highlights the difference in annual returns delivered by the Fund compared to the broader New Zealand property sector.

Asset Management

Over the quarter, Jasper worked with our property manager on a series of preventative and defensive maintenance works and has delivered insurance cost efficiencies across the portfolio.

42 Westpoint Drive

Futura Trailers successfully expanded into the rear unit. Jasper recognised Futura's rapid growth over the last couple of years as an opportunity to build a relationship with a high-growth business and help facilitate this growth within the Westpoint Drive facility. In addition, Jasper successfully executed a market rent review on the front unit. The new lease and growth in rent highlights the strength of the current industrial leasing market for well-appointed industrial stock in prominent submarkets.

63 Tidal Road

Jasper is working closely with Scott Tech on a range of value-add works. The works are currently being scoped and include building services and tenant racking upgrades.

6 Rymer Place and 2-4 Yashili Drive

The Fund acquired two new properties during FY22, located at 6 Rymer Place and 2-4 Yashili Drive. These assets collectively added $42.25m to the Fund's GAV and $1.9m of income.

At Yashili Drive, 16 Gateway is a new industrial unit development under construction opposite the NZ Drinks facility. Pokeno is experiencing rapid population growth and is increasingly supported by community and transport infrastructure projects. As the popularity of the submarket increases, market rents are expected to grow as new comparable evidence comes to market.

ESG

Jasper has begun investigations into a range of Environmental, Social and Governance (ESG) initiatives to make impactful contributions, improve site efficiencies and drive cost reductions across the portfolio.

Market Conditions

The Auckland industrial property market continues to show robustness in 2022 despite inflation and interest rate headwinds. Record-low industrial vacancy rates contribute to a lack of supply of industrial space across the Auckland Region. Growth in e-commerce and the transport/logistics sectors is driving demand for warehouse space, especially in locations with access to motorways and transport infrastructure. The Fund's assets are well positioned to benefit from this demand, located along main arterial routes with proximity to motorways.

Outlook

The Fund has ended a successful final quarter of FY22, delivering strong total returns for investors (unrealised). The Fund's assets are well-positioned to withstand future inflation and interest rate headwinds, with a range of high-quality tenants delivering robust, stable income. The Fund remains 100% occupied and is secured by personal or bank guarantees over 78% of portfolio income.

The focus for the remainder of 2022 is to continue to explore value-add opportunities. The Fund's medium to long-term objective is to provide stable cash flows and capital appreciation.

Find more information on the Jasper Industrial Income Plus Fund and the assets within the fund here.

Vernon Sequeira - Jasper

Vernon Sequeira

Investment Manager

Posted on 30 May 2022

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