St Hilliers Enhanced Property Fund No.1 has acquired an industrial site at 146-148 Sussex Street, Coburg, Victoria for $10.25 million. The property is the fifth for the Fund and sees it fully allocated more than 18 months ahead of schedule.

The property was purchased from GWA International Limited and will continue to be leased to GWA's subsidiary Caroma Industries. The lease is for 5 years with a further 5 year option and represents a rental yield of 13%.

The property comprises 40,352 square metres of "Industrial 1" zoned land approximately 9 kilometres north of the Melbourne CBD. The site has two main buildings including warehouse facilities and office accommodation.

The off market transaction was concluded by Knight Frank's Industrial Director, Nicholas Ott who acted exclusively for GWA International Limited.

St Hilliers Enhanced Property Fund No.1, is an unlisted property investment vehicle designed to deliver attractive returns to wholesale investors with a blend of investment and enhancement returns. The Fund is a closed end vehicle with a six year life span and is targeting an internal rate of return of 15 per cent per annum on drawn equity, before tax and net of all fees and Fund expenses.

The Fund Manager's Chief Executive Officer, Matt Joyce said: "The Fund is already exceeding investor expectation being fully allocated ahead of schedule. We are particularly pleased with the purchase of the Coburg property and in securing a tenant of Caroma's quality."

The Fund's strategy was to acquire medium size tenanted properties that provide an immediate income stream. In conjunction with the Fund, St Hilliers then applies its expertise to maximise the investment value of the property via refurbishment, redevelopment or repositioning in the marketplace.

According to Mr Joyce, the investment objective is to seek a middle course between higher risk development and passive ownership of long-term leased property.

Executive Chairman of St Hilliers, Tim Casey said St Hilliers Enhanced Property Fund No1. had now acquired its full complement of properties and the enhancement phase would commence shortly.

"St Hilliers has an established track record in property development and construction and the investors in this Fund will benefit from our experience and ability to effectively control costs and manage property enhancement programs," Mr Casey said.