HSBC Private Property Trust

The HSBC Private Property Trust  was a hybrid strategy fund that invested in direct property and listed securities (A-REITS). Fortius Funds Management was contracted as the investment manager of the direct portion of the HSBC Private Property Trust from 1991 until 2005, when the HSBC Australian Asset Management business was sold to Challenger.

In the penultimate year (2004) before the sale of the HSBC Australian Asset Management business the HSBC Private Property Trust held approximately 57% direct property, 41% listed securities (A-REITS) and 2% cash. The Fund size was approximately $606m, the direct property portfolio average asset size was $34m. 

During the Fund’s life direct asset individual investments ranged in size from $192m to $1.1m. The fund was mandated to use no debt. The direct property portfolio was predominantly office and industrial assets, with some exposure to retail and residential, and assets were mostly in the Core and Core-Plus categories.

The 5 year performance of the fund (for the period ending April 2004) was 12.11% pa, outperforming the benchmark (InTech Property Composite Index) by 1.71% pa. The 10 year performance of the direct asset portion of the fund between 1995 – 2005 was 13.79% pa ungeared.

Below are a selection of assets owned by the Trust in the years 1991 – 2005.


330 Collins Street, Melbourne


Strategy: 

Upgrade, re-lease 

       

Outcomes: 

Location: 

Melbourne, VIC

 

  • Purchased as part of a portfolio. 

NLA: 

18,631 

 

  • Refurbished. 

Date Acquired: 

2002 

 

  • Reletting 50% pre-lease to NAB. 

Disposal Date: 

2006 

 

 


343 Little Collins Street, Melbourne

 

Strategy: 

Upgrade, re-mix, re-lease

   

Outcomes: 

Location: 

Melbourne, VIC 

 

  • Modest refurbishment and service upgrade.

NLA: 

11,665

 

  • Reconfigured retail arcade and created additional NLA.

Date Acquired: 

2002 

 

  • Received strata title subdivision approval. 

Disposal Date: 

2004 

 

  • Sold to Lend Lease.

 

353 Little Collins, Melbourne



Strategy: 

Reconfigure, re-let, divest 

 

Outcomes:  

Location: 

Melbourne, VIC 

 

  • Reconfigured the ground floor retail premises  

NLA: 

4,400 

 

  • Upgrade to Equitable Place. 

Date Acquired: 

2002 

 

  • Re-let retail shops.  

Disposal Date: 

2005

 

  • Sourced occupiers for upper floors and sold to hotel operator.

Elizabeth Street Portfolio, Melbourne



Strategy:

Buy portfolio, sell via individual strategies 

 

Outcomes:  

Location: 

Melbourne, VIC 

 

  • Acquired 97, 105, 107, 117 Elizabeth St, Melbourne. 

Date Acquired: 

 2002 

 

  • Individual strategies including upgrade and leasing.  

Disposal Date:  

2003 

 

 

 

 

 


23 Lakeside Drive, Burwood, Melbourne



Strategy: 

Higher and better use conversion 

  

Outcomes: 

Location: 

East Burwood, VIC 

 

  • Property acquired with high passing yield.  

NLA: 

5,770 

 

  • High income retained by trust.

Date Acquired: 

1998

 

  • Marketed as higher and better use conversion (data centre). 

Disposal Date: 

2003 

 

  • Sold to owner occupier.

 116 Miller Street, North Sydney

 

 

Strategy: 

Upgrade, re-let 

  

Outcomes:  

Location: 

North Sydney, NSW 

 

  • Acquired with 70% vacancy and a 2% net income. 

NLA: 

11,291 

 

  • Cosmetic Refurbishment. 

Date Acquired:

1999 

 

  • Re-let to 100% occupancy within budget and ahead of time. 

Disposal Date: 

2005 

 

 

 

10 Bridge St, Sydney 



Strategy: 

Upgrade, re-lease 

  

Outcomes: 

Location: 

Sydney, NSW 

 

  • Acquired building off market.

NLA: 

8,425 

 

  • Transferred development rights from adjoining property.

Date Acquired: 

1995 

 

  • Retrofited building including new facade and increased NLA.  

Disposal Date: 

2006 

 

  • Leased and sold.


20 Bridge Street, Sydney


Strategy: 

Development 

Outcomes: 

Location: 

Sydney, NSW 

  

  • Acquired off market as part of a multi-building amalgamation.

NLA: 

19,849 

 

  • Obtained development approval.

Date Acquired: 

1995 

   

  • Negotiated pre-lease to ASX. 

Disposal Date: 

1999

 

  • On-sold to off-shore buyer prior to completion of the construction.

309 George Street, Sydney


Strategy: 

Upgrade, subdivide, re-mix, re-lease

  

Outcomes: 

Location: 

Sydney, NSW 

 

  • Bought with a short term lease back to CBA. 

NLA: 

8,889

 

  • Mezzanine floor converted to additional floor. 

Date Acquired:

2001

 

  • Split retail into 3 George Street frontages.

Disposal Date: 

2005 

 

  • New lease negotiated over all space- old and new. 

 

50 Margaret Street, Sydney 



Strategy:  

Refurbish, rental reversion

      

Outcomes: 

Location: 

Sydney, NSW 

 

  • Acquired as an under rented asset. 

NLA: 

 8,860

 

  • Opportunity for rental reversion and refurbishment. 

Date Acquired: 

1999 

 

 

Disposal Date:  

2005 

 

 


6 Bridge Street, Sydney

 

 

Strategy: 

Upgrade, strata 

 

Outcomes:

Location: 

Sydney, NSW

 

  • Refurbish.

NLA: 

1,685

 

  • Transfer development rights to 10 Bridge St, Sydney.

Date Acquired: 

1995

 

  • Strata title conversion.

Disposal Date: 

2000

 

  • Floors sold individually.

Kings Cross Commercial and Signage, Sydney 

Strategy: 

Create stratum, upgrade, re-lease 

 

Outcomes:

Location: 

Sydney, NSW 

 

  • Acquired mixed use asset off market.  

NLA: 

3,640 

 

  • Create stratum and upgrade and re-leased retail.

Date Acquired: 

2004 

 

  • Re-let commercial on long term lease. 

Disposal Date: 

2006 

 

  • Attached Coca Cola sign to stratum subdivision.

3A Bessemer Street, Blacktown, Sydney 



Strategy: 

Upgrade, re-lease 

     

Outcomes: 

Location: 

Blacktown, Sydney 

 

  • Benefited from over-rented income stream. 

NLA: 

11,520 

 

  • Multi pronged strategy: renegotiate longer term tenure, re-lease or sell. 

Date Acquired: 

1996 

 

  • Capital works upgrades.

Disposal Date: 

1999 

 

 


Smith Street and Denison Street, Hillsdale, Sydney 


 

Strategy:  

Reposition, divest

Outcomes:

Location:  

Hillsdale, Sydney 

  • Purchase with short term lease back

NLA: 

2.63ha

  • Potential for rezoning

Date Acquired:

2002

               
  • DA obtained

Disposal Date: 

2005 

              
  • Demolition and remediation completed 
 
  • Sold to a developer

8 Rodborough Rd, Frenchs Forest, Sydney 

Strategy: 

Development 

 

Outcomes: 

Location: 

Frenchs Forest, Sydney  

 

  • Acquired as part of adjoining site.  

NLA: 

8,170 

 

  • Identified and negotiated tenant pre-commitment. 

Date Acquired: 

1996 

 

  • Developed and on-sold. 

Disposal Date: 

2001 

 

 

357 Warringah Road, Frenchs Forest, Sydney

 

Strategy: 

Subdivision, upgrade, re-lease 

   

Outcomes:

Location: 

Frenchs Forest, Sydney

 

  • Subdivided land for redevelopment. 

NLA: 

9,473 

 

  • Refurbished.

Date Acquired: 

1996 

 

  • Sold off office and warehouse separately.

Disposal Date: 

2003 

 

 



460 Pacific Hwy, St Leonards, Sydney 

 

Strategy: 

Refurbish 

      

Outcomes: 

Location: 

St Leonards, Sydney 

 

  • Acquired on sale and lease back terms.  

NLA: 

5,545 

 

  • Explored refurbishment and strata subdivision. 

Date Acquired:

2000 

 

  • Sold property to strata developer above book value. 

Disposal Date: 

2003 

 

 



8 Bayswater Road, Homebush Bay, Sydney



Strategy: 

Subdivide, re-lease 

   

Outcomes: 

Location: 

Homebush Bay, Sydney 

 

Short term lease back to vendor.

NLA: 

18,900 

 

Subdivide surplus land - sold to adjoining owner. 

Date Acquired: 

2003

 

Re-leased building on a long term lease. 

Disposal Date: 

2005 

 

 



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