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Sydney, Aus, Aug 3, 2009 - (ACN Newswire) - The Ale Property Group, established in November 2003, is a leading real estate investment trust (REIT) with a portfolio of over 100 pubs across the five mainland states in Australia. The group generates its income by leasing out these properties to members of the largest hotels operator in Australia namely the Australian Leisure and Hospitality Group Limited (ALH). With most of these lease terms being fixed for at least another 19 years to come, the group enjoys a strong and long term income stream with relatively low risk in comparison to its peers.
 | | The ALE Property Group |
In an interview with Eugene Yao from ACN Newswire, Mr Andrew Wilkinson (Managing Director of the ALE Property Group) discussed his company and its underlying strength.
The below is an edited version of the interview:
1. What are some of the key strengths of The ALE Property Group in comparison to other REIT in the market?
The ALE Property Group business profile is very "uncommon" in the industry. Apart from the fact that we only invest in quality establishments with good locations, all our properties are also being leased out to members of one the most credible and experienced operator/tenant in the market-The ALH Group. This operation structure provides us with a few advantages over our competitors particularly in areas such as length of lease term and our low cost term interest rate hedging.
2. Can you tell us a bit more about the cost management approach undertaken by the ALE Property Group?
Unlike a regular landowner, the maintenance and refurbishment costs and land tax (except in QLD) are all being taken care of by ALH. This arrangement also protects the Group from future uncertainty such as unexpected maintenance expenses. The Group has also got a relatively low management expense ratio. Currently, the management cost only represents a mere 0.24% of the group asset value, whereas the industry standard is around 1.0%. The group is proven to be successful in maintaining our cost at a level much lower than most of our competitors.
3. What about risk management?
Since all of our properties are being leased out to ALH under 19 year term leases, vacancy risk is not an issue for our group. Financially, the Group has also taken various steps to ensure we have minimized our risk to the lowest level possible. Over the last few years, we have waited patiently for the right opportunity to refinance and hedge interest rates. As a result, the Group now has 100% of the debt hedge for up to 14 years at a low fixed interest rate.
4. How well does The ALE Property Group perform as an investment option for its security holders?
To deliver true value to our investors has always been the guiding principle in our management philosophy. In what has been the most difficult market since our listing in 2003, the Group has still managed to deliver a distributable profit for our security holders consistent with the Board's guidance. The Group has also maintained its position as the best performing REIT in the market with a total return of 21.1% per annum over the last five year period. To put it into perspective, let's say if you had invested $1 back at the time of our IPO initial offer, you would have received over $1.30 in distribution (income) by now, plus the capital gain of the security to more than $2.30 today.
ABOUT MR ANDREW WILKINSON
Andrew was appointed Managing Director of the Company in November 2004. He joined the ALE Property Group as Chief Executive Officer at the time of its listing in November 2003.
Andrew's career includes nearly 30 years in funds management, consulting, finance and investment banking with organisations including ANZ Capel Court and Schroders.
For further information please visit http://www.alegroup.com.au.
Topic: Corporate Announcement
Source: Goldpoly International Limited
Sectors: Real Estate & REIT
https://www.acnnewswire.com
From the Asia Corporate News Network
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