Australia / Brisbane
Mar 12 2018Add to Favorites
In November 2017, real estate investment manager and advisory group, Ashe Morgan, closed its capital raising for its recent purchase of the Health and Forestry buildings in Brisbane adding to the assets it now manages on behalf of its investors. The purchase was unusual in that the group chose to utilise only equity for the acquisition. Where traditional purchasers requiring bank debt for funding may have been hamstrung by the characteristics of the asset and the large amount of immediate vacancy, Ashe Morgan chose to eschew debt entirely in its strategy.
‘Our capital raising was oversubscribed significantly faster than we anticipated - in fact, we had over three times the allocation required from our investors and we believe that is a reflection of the quality of the asset and the fact that we acquired the asset with all equity, which meant there was no bank or debt risk,’ said Ashe Morgan Principal Mendy Moss.
‘The $66 million acquisition price for the portfolio is below replacement cost for the asset and we are confident of implementing a strong turnaround strategy for an asset which has been continuously occupied by the State Government for 34 years and is due for a major upgrade,’ he said.
‘We are fully aligned with our co-investors. Ashe Morgan invests in every deal that we do and we anticipate strong returns for this asset as a result of our active and rigorous management of the portfolio together with our robust repositioning strategy,’ said Moss.
The property is currently comprised of two 20 storey office towers, with around 26,000sqm of net lettable area, on a land holding of 3,449 sqm. The purchase of the property through an ‘off market’ transaction represented a rare opportunity to acquire a sizeable, existing commercial asset with significant refurbishment potential within the Brisbane CBD.
A development application was recently lodged for a transformation scheme developed by award-winning architects Fender Katsalides which envisages the two towers being connected, with additional floor added above to create a new modern 42,000 sqm A grade building, offering large floorplates of 1,800sqm, a new city laneway, skydeck, all new services and a modern facade.
As well as working closely with local leasing agents to understand the local supply-demand dynamics, Ashe Morgan has an elevated knowledge of the Brisbane commercial market from its current and previous investments in Brisbane [read the full Valley Heart editorial here "Ashe Morgan sell Fortitude Valley Heart car park for $64m" ].
Residential developer Legacy Property is set to commence a syndicated equity raise for its 7thand final stage of Caddens Hill, with minimum investment amounts starting at $250,000, targeting 17.5% investment return over the twelve-month construction period.
MP Funds Management (MPFM) has made its first investment of 2019, a co-investment with another group that MPFM has a successful and ongoing co-investment relationship with. The acquisition of the Crossroads Homemaker Supercenter (the subject property) is an opportunity of scale and dominance in one of Australia’s most significant growth regions. The centre offers an existing net lettable area of 47,997sqm on 143,997sqm land over 4 separate lots. 93% of the property income is underpinned by national retailers including Bunnings Warehouse, Freedom, Fantastic Furniture, the Good Guys and Nick Scali.
Dexus today announced its result for the half year and reaffirmed its guidance for distribution per security growth of circa 5% for FY19. Dexus Chief Executive Officer, Darren Steinberg said: “It has been a productive six-month period where we have added value through enhancing our development pipeline and attracting new investors to our funds management business. This has all been achieved while maintaining low balance sheet gearing. “In our office portfolio we continue to outperform the MSCI office benchmark1 over one, three and five years through driving higher rents and lower incentives, particularly in Sydney which has been reflected in property valuations during the period. “In our funds management business, we now have $15 billion under management with investors and partners that can invest alongside us through the cycle, reinforcing our objective of being the wholesale partner of choice in Australian property.”
Creating an account with MP Report allows you to save articles and update your preferences to filter the content based on your interests and what content you would like to receive from us via our email alerts and newsletter.SIGN UP HERE >