Tuross Head

Performance Commentary

The September 2018 quarter was 17% down on last year. This was due to the weather being extremely cold coupled with the Ski season being a bumper season. This has been a historical trend. In addition, our upgrade works resulted in some accommodation being out of action. However, compared to the same quarter year 2017, the December 2018 quarter was 6% up. The cause of the increase came from the 5 renovated beachfront cabins. This was extremely positive as apart from photos on Facebook no other marketing had taken place. Overall the asset is performing slightly better than on acquisition and we are seeing positive trends for the overall operation.

Current projects

  • Soft Furnishing in all elevated cabins finished December 2018.
  • Painting of external cabins – 12 of the 20 elevated cabins have been repainted as well as the 5 Beachfront cabins. Remaining 8 elevated cabins will be painted between February and September 2019.
  • Launch of the updated website is in its final stage and expected to go live in March 2019.
  • Playground Equipment – new playground is expected to be installed by Easter 2019. It is targeted towards the 2-12 age group and will enhance the family experience.
  • Disability Parking – a new concreted Disability Parking spot is expected to be built by Easter 2019.
  • New Amenity Block – a completely new amenity block including Disability amenities to be built in the current location.

These projects will satisfy our obligations with council for both our Program of works and our schedule of works for our operation certificate. Once completed we should receive a 5-year certificate of operation. All completed projects will enhance the guest experience. Reviews from the park guests on works already completed have been excellent.

Future Strategy

Once the current projects have been finalised, a new concept plan will be presented to council with additional works for the park upgrade. Preliminary discussion with Council has already taken place. Our aim will be to extend the time of our tenure at Tuross Beach.

Barclay Motor Inn

Occupancy was 60% during the period to 31 December 2018, which is slightly down on the corresponding period in last year. This is consistent with the area.

Fine tuning of the administration continued with new software integration.

Works have been conducted through the year:

  • Most beds have been replaced and triple sheeting implemented.
  • Half the rooms have had Heat Pumps replaced with the remaining to occur in January.
  • Our new website should be active in the coming months.

Recent reviews from the clients have been positive. We will continue improving the motel’s premises in accordance with our Program of works to provide a better experience for our customers and, consequently, increase the cashflow.

Barclay Motor Inn

Stewarts Bay Lodge

Our current strategy is to be moving away from the events sector and target more of the tourism market based around the Three Trek Walks. Occupancy in this sector has doubled.

Works conducted through the year:

  • New business systems have been implemented and more staff training have been provided. This results in more accurate records and reporting, while reducing staff working hours.
  • IT infrastructure has been upgraded to minimise data usage and increase efficiency in the administration tasks. Remote connection is also possible now for office staff.
  • New chalet and cabin balustrades have been installed; top car park has been upgraded.
  • Sites power infrastructure has been upgraded to comply with OH&S.

Some other minor capex works have been conducted mainly to clean the premises and increase the overall appeal. Relationships with the Body Corporate have been excellent. Reviews from customers have also been positive.

Stewarts Bay Lodge

Beach Drive Motel

The Motel continues to meet its monthly rent obligations in a timely manner and cash flow is tracking well. Some works have been conducted through the year to comply with safety regulations:

  • All balustrades have been replaced.
  • External painting has been done.

New Acquisitions

We currently have a finance application with NAB for the potential acquisition of a new property in the north coast NSW. The metrics of this acquisition, broadly are:

  • Acquisition circa $5.8 mil
  • Yield on acquisition of 10%
  • Non-cyclical operation – will smooth earnings profile of the entire group
  • Substantial depreciation schedule

We continue to monitor numerous sites each month to find the right assets for the Fund to acquire.

Prima facie, this site meets our criteria.


We are pleased to have distributed 3c per unit. This is our first of many future distributions. We are targeting a minimum distribution of 6-7% p.a. and higher when we have strong periods. We are conscious of ensuring we have cashflow to expand existing operations, reduce the overall NAB debt and acquire new sites in the future.

We continue to target a mid-teen return for the fund overall.