Overview
The investment in ACF should be viewed as a medium to long term
investment. The units in ACF are not listed on the ASX or any other
stock exchange.
Portfolio
ACF’s 24 centres are located within Queensland and South
Australia and have lease terms for 10 years from various
commencement dates in 2003 on a “triple net” basis. The majority of
ACF's centres are purpose built and have been constructed since the
mid 1990's.
The leases allow for fixed annual rent reviews of three percent,
with a rent review to market at the beginning of each of the two
five year option periods. The lessee is responsible for the first
$20,000 in capital expenditure on an annual basis with a further
agreed expenditure to be funded by ACF and amortised over the
remaining term of the lease.
Property Valuation Methodology
Investment properties are measured at fair
value and revalued on a regular basis to ensure the carrying amount
of each property does not differ materially from its fair value at
balance date. Consistent with the requirement to
independently value each property on a rolling basis every three
years, a valuation program is conducted in the second half of the
year.
These independent valuations are considered by the directors of
the responsible entity when determining fair value. When assessing
fair value, the directors will also consider the discounted cash
flow of the property, the highest and best use of the property and
sales of similar properties.
Debt Funding
ACF has debt facilities with the Commonwealth Bank of
Australia.
The Fund operates an interest only Term Debt
Facility which expires on 31 July 2013. The Fund uses a derivative
financial instrument (interest rate swap) to hedge its risks
associated with interest rate fluctuations. The derivative
financial instrument is initially recognised at fair value on the
date on which a derivative contract is entered into and is
subsequently remeasured to fair value.
|