GDI Property Group notched a bargain when it purchased a CBD office centre known to Adelaide locals as the Black Stump - a landmark building that will underpin a new fund that promises a regular income distribution of at least 10 per cent per annum.

The group's new fund, the GDI Premium Office Trust, bought The Grenfell Centre for $76 million. According to an independent estimate, this purchase price is some 47 per cent below new replacement costs of $143 million.

Steve Gillard, GDI's managing director, said that besides the attractive purchase price, the building has all the key ingredients that will appeal to prospective investors looking for a reliable income.

For a start, the building has an average lease expiry of 7.6 years. Key tenants include the Reserve Bank, Optus, Jones Lang La Salle and law firm Minter Ellison.

The fund will also benefit from the timing of the purchase as the centre was previously an AMP-owned asset which has been heavily refurbished in the past two years, with $16 million spent on capital works.

Gillard also said that the Adelaide CBD has defied the vacancy problems experienced by other cities following the global financial crisis.

"If you look at the vacancy rates across the country, the average vacancy rates have actually decreased here…it is the only CBD in Australia where the vacancy rates have decreased from 4 to 3.4 per cent," said Gillard.

The new seven-year, fixed life fund is directed at wholesale investors with a minimum investment of $50,000. The regular income distribution p.a. for FY2010 is pegged at 10 per cent and then 10.5 per cent the year after. Gillard stressed that these distributions will be "paid out of cash and not capital".

The fund is looking to raise $48.5 million by June 30 this year although judging from its previous fund raising, which was oversubscribed, Gillard said they could close sooner once they've reached their target.

Established in 1993, GDI has $280 million in funds under management (FUM) and boasts 21 successfully completed property funds. Its key differentiator is that the average life of a fund is three-and-a-half year as management does not focus on growing FUM nor highly-geared projects.

"We're not a hoarder of funds under management. If there's a great profit for investors, we'll sell the building," said Gillard.