Nov 19 2018Add to Favorites
Off the back of successfully settling a $48m syndicated first mortgage for a residential apartment development in Sans Souci just weeks ago, Sydney-based real estate investment manager Centennial Property Group (CPG) opened a new fund with a focus on the industrial and logistics market, Centennial Industrial and Logistics Fund II (CIL II). The fund, available only to wholesale and private high net worth investors, opened on 1 November and was seeking to raise c. $38 million. CPG closed the fund less than two weeks later, well before the official close date, due to oversubscription.
“The industrial fund will hold four high-quality industrial warehouse assets and is targeting an internal rate of return (IRR) of 12.2%, with annual distributions forecast at 6.5% and made to investors quarterly,” says Kim Kitchen, Director of Distribution and Marketing at CPG.
“We have been finding a number of our regular family office and self-managed superannuation investors have been attracted to the offering as a result of the strong underlying asset base, together with the good yield and prospect for growth.”
Australian self-managed superannuation funds (SMSFs) have an estimated 19% of their c.$700b value invested in real estate. With major banks such as Westpac and CBA announcing that loans to SMSF’s will no longer be provided to buy property, syndicated investment via a fund is an attractive alternative solution to achieve property investment exposure.
“Over recent years we have needed to close investment rounds early on a number of occasions, often prior to promotion outside our existing client base, due to oversubscription. This is an indication of the attractiveness of this investment structure to high net worth investors and we believe also testimony to the quality and success of our investment style and management.”
“With this fund in particular, we are finding the predictability of income has been very attractive to investors, particularly those funding income streams within their SMSFs,” says Ms Kitchen. “We are now actively seeking further assets in this industry to potentially create an additional fund given market demand.”
CIL II is a five to seven-year industrial fund which will initially target four high-quality industrial assets in Victoria with a total combined purchase price of $60.45m. The fund will be geared to approximately 50% LVR. The subject properties are 92% occupied and the aim of the fund is to drive income and increase the yield, using various value-add strategies to maximise the exit value for investors.
Centennial Property Group has completed more than $1 billion of transactions and produced an average internal rate of return across the portfolio of over 25%.
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.”
CapitaLand Commercial Trust Management Limited, the Manager of CapitaLand Commercial Trust (CCT or Trust), is pleased to report distributable income of S$83.1 million for the quarter ended 31 December 2018 (4Q 2018), an uplift of 10.7% from 4Q 2017. Distribution per unit (DPU) was 2.22 cents, 6.7% higher than the 2.08 cents a year ago. Gross revenue and net property income for the quarter increased by 14.8% and 16.6% year-on-year respectively. The better performance was largely attributed to the contributions from newly acquired Asia Square Tower 2 and Gallileo, which more than offset the loss of income from the divestment of Twenty Anson.
Residential developer Legacy Property is set to commence a syndicated equity raise for its 7th and final stage of Caddens Hill, with minimum investment amounts starting at $250,000, targeting 17.5% investment return over the twelve month construction period. Legacy Property has $3bn of projects completed and in progress consisting of c.3,600 dwellings . 14 projects have been completed with another 7 underway, gross completed project values range from $85m to $248million for each project.
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