An Australian fund writes an acquisition memo for its investment committee in a fixed order: the recommendation and the approval sought, the asset and its tenancy, underwritten income, valuation evidence, funding and gearing, returns with a sensitivity table, risks, and conflicts. The committee should be able to recompute every number from the ones before it.
Prepared by Реалист AI, on behalf of the Реалист team. The figures in the example are invented for illustration and describe no real property.
The sections, in order
- Recommendation and approval sought. The price, the equity the fund commits, the debt and the conditions, on the first page.
- Asset and tenancy. Net lettable area in sqm, tenants, WALE by income and to first break, expiry profile, and the capital work the building report requires.
- Underwritten income. The vendor's net income, then the deductions the fund makes: outgoings that tenants do not recover, a leasing and capital allowance. The committee debates this number, not the vendor's.
- Valuation evidence. Sales of comparable assets, the capitalization rate range they imply, and the independent valuation where one exists. Say what the evidence is and how thin it is.
- Funding and gearing. Loan size, loan-to-value ratio, interest rate, interest cover and the covenants.
- Returns and sensitivity. Yield on cost, cash yield on equity, and value and gearing at other capitalization rates.
- Risks as conditions of failure. "Interest cover breaches at an income fall of AUD 36,000" is a risk. "Refinancing risk" is a heading.
- Conflicts and related parties. Any interest the manager or an associate has in the vendor, the tenants or the lender.
A worked example (illustrative A$ figures)
A Melbourne industrial warehouse, 24,000 sqm of net lettable area, priced at AUD 48,000,000 (AUD 2,000 per sqm).
- Vendor net income: AUD 2,880,000, which is 6.00% of the price.
- Underwritten income: less AUD 96,000 of outgoings not recovered and AUD 144,000 for leasing and capital, so AUD 2,640,000, or 5.50% по цене.
- Стоимость: with acquisition costs assumed at 6.0% of the price (duty varies by state; use your adviser's figure), the total is AUD 50,880,000 and yield on cost is 5.19%.
- Debt: 50% of the price, AUD 24,000,000, interest-only at 6.20%, so AUD 1,488,000 a year. Interest cover is 2,640,000 ÷ 1,488,000 = 1.77 times.
- Equity: AUD 50,880,000 − AUD 24,000,000 = AUD 26,880,000. Cash after interest is AUD 1,152,000, a 4.29% cash yield on equity.
| Capitalization rate | Value (A$) | Loan-to-value ratio |
|---|---|---|
| 5.25% | 50,285,714 | 47.7% |
| 5.50% | 48,000,000 | 50.0% |
| 5.75% | 45,913,043 | 52.3% |
| 6.00% | 44,000,000 | 54.5% |
Conditions of failure. Assume an interest cover covenant of 1.75 times. Income can fall by only AUD 36,000, or 1.4%, before it breaches. A rise of 0.50 percentage points in the interest rate, to 6.70%, lifts interest to AUD 1,608,000 and cuts cover to 1.64 times. The memo should either ask for a lower price or a smaller loan, or say which one the committee is accepting.
Where AI helps and where it stops
Реалист reads the documents you provide, such as the information memorandum, leases, rent schedule and building report, and drafts the memo with each figure tied to its formula and each gap named. In Australia it has no government land register or sales database behind it, and it does not apply Australian tax, duty or planning rules. Read its confidence and its missing items, as set out in what to check in AI underwriting. For a longer template, see the IC memo template.
Чего это не заменяет
A memo draft does not replace the independent valuer, the lawyer and tax adviser, the building surveyor, or the committee's own judgment. It does not replace the lender's terms. The covenant in the example is assumed, and yours will be in your facility agreement. To compare the method with your last memo, запросить демо.
Частые вопросы
How does an Australian fund write an investment committee memo for an acquisition? Recommendation first, then asset and tenancy, underwritten income, valuation evidence, funding, returns with a sensitivity table, risks as conditions of failure, and conflicts.
What is the difference between yield on price and yield on cost? Yield on price divides income by the price. Yield on cost adds acquisition costs to the price first. In the example, 5.50% becomes 5.19%.
What should a memo show about gearing and interest cover? Loan-to-value at the price and at lower values, interest cover on underwritten income, and the distance to each covenant. In the example, cover is 1.77 times against an assumed 1.75 times.
Can AI write an investment committee memo for an Australian property deal? It can draft from your documents, compute the figures and list what is missing. The committee and its advisers make the decision.
Обновлено 25 октября 2026.