Ann: Distrib Upgrade & Acquisition 69 Rivergate Pl Murairre, page-2

The unexpected distribution increase is a pleasant surprise. Distribution jumps from 18.6cps (FY14) to 20cps (FY15) -- a 7.5% increase. 20cps distribution is almost 8.7% yield at current share price. Approx 45% is deferred cap gains. Broker consensus is that TIX distribution wouldn't exceed 20cps until FY17.

Yamaha Centre acquisition
A valuation report from Colliers to a previous owner (Trinity) in May 2012 offers some insight. (See link below). Market values have jumped up since early 2012, and TIX would certainly have a current valuation.
http://www.asx.com.au/asxpdf/20120917/pdf/428rlbpbtys8kn.pdf

Colliers says the property is high quality. It was built in 2008 (low maintenance cost), has a single tenant with long lease, excellent riverfront location (gee, looks like it even has its own mooring for boats!), apparently avoided Brisbane flooding (but road access was apparently cut off and has risk of being on the riverfront), etc. The property value in early 2012 was $24.25M, so TIX purchase price of $27M is about 11% higher (probably base price, but might include transaction costs). TIX properties increased 8% this past year, so the Yamaha purchase is likely within current valuation.

Yield compression is increasingly evident, though. The 8% initial yield for the Yamaha Centre is the same as the recent Greens Biscuits property acquisition but a little below the Woolworths purchases and (I think) TIX average yield (around 8.4%?). Also, the cpi only increase rate isn't as good as fixed rates above historic cpi (such as 3.25% for Greens), but better than the Woolies deal (2.5% fixed increase).