In October 2020, Cromwell Funds Management’s (CFM) fourth ‘Back to Basics’ trust, the Cromwell Property Trust 12 (Trust) reached the end of its initial seven-year term and the future of the Trust was subsequently taken to a Unitholder vote.

On Thursday 17 November 2020, Unitholders voted to extend the Trust for a further five years to 31 October 2025. Also successful was the resolution to amend the Trust’s constitution, setting in motion the Matching Facility, allowing unitholders to buy or sell units (subject to scale back, which will be determined and announced on the Trust’s web page on 23 December 20201).

The results of the vote is as follows

Resolution 1 – Further Term Resolution (Extraordinary Resolution)
  • 53,863,533 votes in total were cast, the equivalent of 84.18% of the total votes that may have been cast by Trust unitholders eligible to vote on the resolution.
  • 52,993,533 units (612 unitholders) voted in favour of Resolution 1 (For), representing 82.82% of the total votes that may have been cast by eligible unitholders (thus exceeding the required 50%).
  • 870,000 units (22 unitholders) voted against Resolution 1 (Against), representing 1.36% of the total votes that may have been cast by eligible unitholders.
  • 50,000 units (2 unitholders) abstained from voting on Resolution 1.
Resolution 2 – Constitutional Amendment Resolution (Special Resolution)
  • 53,803,533 votes in total were cast.
  • 53,033,533 units (615 unitholders) voted in favour of Resolution 2 (For), representing 98.57% of the total votes cast by eligible unitholders (thus exceeding the required 75%).
  • 770,000 units (17 unitholders) voted against Resolution 2 (Against), representing 1.43% of the total votes cast by eligible unitholders.
  • 110,000 units (4 unitholders) abstained from voting on Resolution 2.

The Trust now continues with one property, the Australian Tax Office Building at 19 George Street in Dandenong, Victoria.

Trust background

Launched in October 2013 as a closed-end fixed term unlisted property trust with three assets, the Trust has been a stellar investment for Unitholders, generating high yields at a time when low interest rates have reduced the returns offered by cash and term deposits.

The Trust returned 14.9% per annum annualised since inception (29 October 2013) to 31 October 2020. Over the same period, monthly distributions per unit have increased from 7.75 cents per unit p.a. to 9.25 cents per unit p.a.

The Net Tangible Asset (NTA) value when the Trust was established in October 2013 was $0.89, and as disclosed in the Notice of Meeting and Explanatory Memorandum (EM) sent to Unitholders prior to the vote, the Pro Forma Balance Sheet reflected an NTA of $1.5695 at the release of the EM on 13 November 2020, representing a 76% increase since inception.

Sale of Rand Distribution Centre

On 14 December 2020, the Rand Distribution Centre settled for a sum of $63,050,000. The price achieved was an exceptional result given the property was last independently valued at $53,000,000 in September 2019 and was acquired in 2013 with an ‘as if complete’ value of $32,750,000. The sale price represents an increase of 92.5% on this amount.

As part of the maturity proposal, the sale of the Rand Distribution Centre provided Unitholders with a Special Distribution of $0.6184 per unit, which was paid to all Unitholders on 16 December 2020.

Australian Tax Office Building

19 George Street, Dandenong is 93% leased to the Australian Taxation Office (ATO) until September 2030 and has a 5.5-Star NABERS Energy Rating, a 5.5-Star NABERS Water Rating, and a 6-Star Green Star Office As Built v3 rating. As of 31 October 2020, the asset was independently valued at $107 million, a 52% increase in less than seven years.

The ATO lease has just under ten years remaining with two further five-year options. The blue-chip tenant and lengthy lease term insulates the Trust’s income from COVID-19 induced market volatility, with the ATO not exposed to the same market conditions as a private enterprise.

Unitholders who elected to remain invested for the Further Term will receive a 6.2% distribution yield.  This is calculated on a distribution of 5.75 cents per unit p.a. from 1 July 2021 at a Matching Price of $0.9349 per unit. Distributions increase at a rate of 0.25 cents per unit each July over the Further Term.

Cromwell Funds Management would like to thank all Unitholders for participating in the vote and look forward to providing ongoing management and investor services throughout the Further Term. Access to the Trust is only available through the Cromwell Direct Property Fund, which is a unitholder in the Cromwell Property Trust 12.


1. All dates following the Meeting are indicative only. CFM reserves the right to vary these dates without prior notice although CFM will endeavour to achieve these dates. Any changes to the above dates will be announced at www.cromwell.com.au/c12.