MPG Property Income Trust
Looking for regular monthly income from quality property investments?
MPG Property Income Trust offers a diversified investment opportunity targeting regular, tax-advantaged monthly income. The Trust invests primarily in a portfolio of unlisted property trusts managed by MPG, alongside ASX-listed property securities and cash.
Key features include a targeted yield of 6.00% per annum, a diversified property portfolio with quality tenants, and an experienced management team with a strong track record. The Trust offers a defined exit strategy and a limited withdrawal facility for added flexibility. While the investment is designed for wholesale investors, it provides exposure to a stable and income-focused property strategy.
- Forecast regular monthly income of 6.00%pa1
- Quality key tenants of underlying MPG property Trusts including:
- Bunnings, Coles, Woolworths, Australian Federal Government and various State Governments.
- Wholesale investors only
The Trust will invest in a portfolio of unlisted property trusts managed by MPG, ASX listed property securities and cash. The Trust aims to provide Investors with sustainable and stable, tax-advantaged monthly income.
MPG intends to pay distributions monthly in arrears from 30 June 2023 and distributions are forecast to be 6 cents per unit pa1 (6.00% pa1 for initial $1.00 investors) pro-rata for the forecast period. The Trust will have an initial five year term ending on or around the fifth anniversary of the Closing Date unless the investments are sold earlier. Where Investors decide the term of their investment in the Trust is to be extended beyond its initial five year term, the Trustee intends to implement a liquidity strategy to assist Investors wishing to realise their investment in the Trust. This will include a first right of refusal for existing investors to purchase the units of those wishing to exit at this point. The Trust also intends to operate a Limited Withdrawal Facility on a quarterly basis under which Investors may request partial unit redemptions of up to 5% of issued units per quarter (20% per annum). This Limited Withdrawal Facility is operated at the sole discretion of MPG and is subject to asset liquidity.
MPG is an experienced specialist property funds manager with a highly skilled and motivated team that extends across asset management, property management, property development and property investment. MPG and associates of the McMullin Group have over 40 years’ experience in property investments, development and management.
1 Estimate only and not guaranteed to occur.
A diversified portfolio of unlisted property trusts managed by MPG, ASX listed property securities and cash.
Attractive regular tax-advantaged returns - Targeted cash yield of 6 cents per unit pa1 (6.00% pa1 for initial $1.00 investors) to be paid monthly. Depreciation and building allowances mean a proportion of this income will be tax-advantaged.
Diversified Property Investment - Investments in an underlying portfolio of Trusts provide broad multi tenant, geographical and sector diversification. Low gearing – The Trust does not intend to have any borrowings at the Trust level however the underlying investments that the Trust invests in may have some gearing with at least 50% being hedged.
Defined exit strategy – The Trust has a defined exit strategy at the end of the initial 5 year term and intends to operate a Limited Withdrawal Facility on a quarterly basis under which investors may request partial unit redemptions of up to 5% of Issued Units per quarter (20% per annum). This facility is operated at the sole discretion of MPG and is subject to liquidity.
Experienced manager with a proven track record – MPG Funds Management Ltd. has significant commercial property investment, management and development experience, and over $1 billion of funds under management.
Reduced capital volatility – Australian direct property has historically experienced lower volatility than listed Australian and international shares and REITs.
MPG believes direct investment into commercial property plays an important role in the construction of a balanced investment portfolio, based on attractive income yield and potential for capital growth.
Investment Objective
The core investment objective is to generate regular tax-advantaged income returns from a diversified portfolio of MPG Property Trusts, ASX- listed property securities and cash that targets regular monthly tax-advantaged income.
Trust Strategy
The Trust will invest in a diversified portfolio of MPG Property Trusts, ASX-listed property securities and cash providing diversification by property, sector, geographical location and tenancy mix.
Target Portfolio Weighting
The target portfolio allocations of the Trust are as set out below.
| Investment Class | Target Allocation |
| Property Trusts managed by MPG | 80-90% |
| ASX-listed property securities, liquid investments and cash | 10-20% |
The Trustee may change these allocations in the future. While we aim for the Trust to operate within the above target ranges, factors affecting the fund or its underlying portfolio may result in investments moving outside the
target allocation ranges from time to time. We intend that the Trust will hold a minimum of 10-20% of the total assets in ASX-listed property securities, liquid investments and cash to facilitate liquidity requirements and to enhance returns.
Diversification
The Trust invests in properties across the retail sector (predominantly neighbourhood shopping centres and large format), government office and social infrastructure within the following ranges over the long-term:
| Retail Office | Social | Infrastructure | Industrial |
| 40-65% | 5-20% | 15-30% | 0-5% |
The above splits describes the diversification of the underlying property trusts managed by MPG, not what this Trust will be investing in directly.
Property Trusts Managed by MPG
A benchmark allocation of 80-90% of Trust gross assets will be allocated to property trusts that are predominantly managed by MPG.
Investment Criteria - MPG Property Trusts
- Property Trust Managed by MPG Funds Management
- Portfolio to consist of at least five individual holdings
- No single holding to represent more than 30% of the MPG trust portfolio
- Forecast distribution yield of each underlying trust to be greater than 4%
- Consideration to be given to the targeted property sectors diversification splits as outlined in this IM.
Initial Portfolio
The targeted initial portfolio is anticipated to include the following MPG property trusts:
| Trust Name | Target Allocation |
| MPG Essential Services Property Trust | 30.0% |
| MPG Retail Brands Property Trust | 30.0% |
| MPG Hardware Trust 2 | 22.0% |
| MPG BW Trust 2 | 15.0% |
| MPG KM Trust | 3.0% |
Upon allotment of Ordinary Units in the Trust, the Trust intends to either subscribe to a new issue of units under an offer document such as a PDS or IM for a trust on the same terms and conditions as offered to other investors
or purchase residual units at the conclusion of a periodic rollover process of a trust after these units have firstly been offered to other investors for purchase.
ASX-listed property securities, liquid investments and cash
We intend to have a benchmark incidental investment allocation of 10-20% in ASX listed property securities, liquid investments and cash managed by MPG Funds Management.
Investment Criteria - ASX listed property securities
- Property REIT listed on the ASX
- Market Capitaisation greater than $100 million
- Liquidity - Total investment amount less than 7 times the average daily traded for that stock over the previous three months
- Yield greater than 5.5% per annum
- Target 10-12 individual holdings each representing less than 12% of the total portfolio.
Investment Approach
Our approach is to actively manage the diversified portfolio of MPG Property Trusts, ASX-listed property securities and cash assets that will be held for the medium to long term. For the underlying Trusts managed by MPG, it is our intent to continue actively managing these assets which will involve renewing current leases and targeting new tenants for any vacant space. Upgrading and refurbishing specific assets to attract and maintain occupancy and improve asset values may also be undertaken. We will work with building consultants to develop asset management plans and to identify value-add opportunities.
MPG Funds Management
MPG Funds Management Ltd (ACN 102 843 809) (MPG) was established in December 2002 as a specialist property funds manager and currently has funds under management in excess of $1.1 Billion.
MPG is an unlisted public company that holds an Australian Financial Services Licence (AFSL 227114) to act as a trustee for managed investments schemes and is owned by interests associated with the McMullin Group.
MPG aims to provide its investors with property investment opportunities that offer the potential for reliable income returns, capital growth and taxation benefits. MPG prides itself on its ability to source high quality properties, its experienced personnel, its innovative strategies and the strength of its developed networks.
MPG prides itself on its ability to source high quality properties, its experienced personnel, its innovative strategies and the strength of its developed networks.
MPG is the Trustee of the Trust and governs it in accordance with the Trust Deed. MPG is responsible for the application and redemption of Units, valuation and management of Trust assets, administration and payment of income distributions from the Trust. MPG has also undertaken preliminary work to set up this trust structure including preparation of this IM, undertaking acquisition due diligence, organising the preparation of legal documentation, applications for banking finance as well as other administrative tasks.
MPG currently is the trustee for thirteen other direct property funds and has developed an outstanding track record in the business of property trusts and managing property assets.
In 2020 and 2008, MPG was named as one of the fastest growing Australian company in the BRW Fast 100 Awards. In 2007, MPG was named as the tenth “Fastest of the Fast” growing companies in BRW magazine’s “Fast Starters” edition. In 2013, MPG was the winner of the IAIR Award for Excellence in Property Investment Management/Boutique in Australia.
Trevor has significant commercial experience gained over the past 30 years including over 19 years’ experience as a partner of Big 4 accounting firm Deloitte Touche Tohmatsu where he held the position of Managing Partner of the Victorian Growth Solutions Division and had a significant number of property industry clients. He is currently Chairman of MPG Funds Management and oversees net assets in excess of $1 Billion. He is a Fellow of the Institute of Chartered Accountants.
Qualifications: FCA, Grad Dip Bus Admin
Eddie has held senior executive positions in the financial services and funds management industries for over 30 years. Much of this was with the National Mutual Group (now AMP Ltd), where he held a number of CEO/Executive Director positions including a funds management company (which included the listed National Mutual Property Trust and a range of other unlisted property and equity trusts), a Public Trustee company and Financial Planning Group.
Brett is a Chartered Accountant and Licensed Real Estate Agent and has significant experience gained in establishing and operating managed investment schemes. Prior to working with MPG, Brett held positions with Deloitte Touche Tohmatsu in the Corporate Finance, Audit and Growth Solutions divisions. He holds a Graduate Diploma in Applied Finance and Investment and Bachelor of Commerce. He is a Fellow of the Financial Services Institute of Australia, Registered Tax Agent and is a holder of a Public Practice Certificate.
Qualifications: CA, F.FIN, B.Comm, Grad Dip App Fin & Invest
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