KMPF Industrial 02 is a single asset closed end fund (the Fund) invested in an industrial property located at 23-25 South Pine Road, Brendale, Queensland (the Property). The Property is located directly next to Strathpine station in Brendale, approximately 16 kilometres northwest of the Brisbane Airport and 18 kilometres north of Brisbane’s CBD.

The Property is a significant land holding in Brendale’s industrial precinct, currently experiencing the lowest vacancy rate on record. At the time of acquisition in April 2024, the Property was fully leased with a WALE of 4.2 years.

The initial thesis was that industrial rents continue to see underlying growth due to demand and supply imbalance. The current rent is considered materially below market for similar properties. There is an opportunity for strong rental growth upon lease renewal or re-tenanting in mid-2028.

Austral Pty Ltd is the major tenant (occupying circa 86% of the Property). It is wholly owned and guaranteed by Eagers Automotive Limited (formerly known as A.P. Eagers Limited), an ASX-listed automotive retail group in Australia and New Zealand with a history of over 110 years, and a market capitalisation exceeding AUD3.8 billion at the time of acquisition.

Key Points:

• The Property is 100% leased to two tenants, Austral Pty Ltd and Specialised Access. Both lease agreements are subject to annual rent reviews, with rental increases linked to CPI
• The Property is zoned ‘Centre zone’, which allows for a majority of mixed commercial and residential uses. The zoning of the Property combined with its proximity to the Strathpine train station, present as a strategic land holding with potential for income and capital growth
• Multiple exit options are available, subject to status of lease renewal discussions with the existing tenants and market condition under the short, mid or long-term scenarios. The targeted returns assume an exit in the mid-term time period (4-5 years). KM Property Funds (Trustee) will work towards maximising returns as and when the market and asset are exhibiting the right fundamentals for a sale event
• The Fund is closed.