Discovery Investment Services
Corporation Pty Ltd
Commercial Office Fund
The Commercial Office Fund has invested into the Brisbane and Melbourne markets. These markets are well positioned to assist the Fund in achieving its investment objective of a high level of tax-sheltered income combined with capital growth over the medium to long term.
Key Features
Commercial property offers investors a number of benefits, both as a stand-alone investment, and as part of a balanced investment portfolio. These benefits are summarised below;
- Attractive Income Returns – forecast to commence at 8.2%,
- 100% Tax-sheltering expected for at least the first 2 years,
- Income distributions accrued from the day your investment is lodged, and
- Initial portfolio of 4 commercial properties.
All of the above factors combine to make commercial property a unique investment that is likely to provide benefits to any balanced investment portfolio, in terms of total return (taking into consideration cashflow, capital growth, and taxation benefits), and diversification.
Why Invest In Commercial Office Property?
A relatively strong domestic economy, recent tax cuts and a stable interest rate environment has kept consumer sentiment relatively high. This has flowed through to the labour market, and as a result of this growing labour market, tenant demand is forecast to continue growing across Australia’s major office markets driven by an increase in white-collar employment, positive economic growth and the increasing importance of the services sector for the Australian economy.
Additionally a shortage of new office buildings coming onto the market, due to the significant increases in construction costs, has contributed to a shortage of leasing space available for most capital cities and has lead to a further tightening of the office market. Even in a market such as Melbourne, which had a number of new/refurbished properties come onto the market, the overall vacancy rate has fallen from 10.1% in June 2004 to 7.7% in July 2005.
As a result of this increasing demand for office space and a shortage of new office buildings being constructed, we expect this will have a positive impact on rents which should help underpin the prospects for growth in the values of these properties in the medium to long term.