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Orchard settles Boundary Hotel

30 June 2008

Orchard Funds Management today confirmed settlement on the Boundary Hotel in Melbourne for $17 million on a yield of 7.08% to ALE Property Group.

Boundary Hotel was originally purchased by the Orchard Diversified Property Fund (the Fund) in 2001 for $7.5million. With a strong Internal Rate of Return (IRR) of 16.8%, which included approximately $2.5 million of refurbishment, this latest sale is viewed as a positive outcome for the Fund.

Commenting on the sale, Orchard’s Head of Property Funds Management Darren Brusnahan said “The sale of Boundary Hotel is consistent with our strategy of taking advantage of investment cycles and crystallising gains for our investors when opportunities arise. In fact, in the first half of this year we are pleased to report we have transacted over $85 million worth of property sales”.

Boundary Hotel is located on a major arterial road in East Bentleigh, approximately 15kms from the Melbourne CBD. Constructed in 1924 and fully refurbished in 2001, it features a gaming room, bistro, pub TAB, lounge bar and drive through bottle shop.

The property was acquired by ALE subject to a lease to a subsidiary of Australian Leisure and Hospitality Group (ASX Code: ALH). The existing lease had approximately three years remaining. Established over 16 years ago, the Fund has a proven track record delivering strong returns of 11.49% p.a. over the past ten years¹.

With portfolio exposure to over 400 quality traditional and non-traditional property assets, it continues to offer strong diversification benefits, regular tax deferred income, and capital growth potential to investors.


¹Total return is equal to the change in the unit price including reinvestment of distributions, annualised for ten years to 31 March 2008.