Jul 24 2019Add to Favorites
In July 2015 we co-invested with another investment Manager, providing funding for a 120- lot residential subdivision in Schofields. Initially, our financing was to be a secured second mortgage however the senior lender, CBA refused the second-ranking security.
The subdivision had a development approval in place and pre-sales with 10% deposits to primarily local owner -occupier buyers, sufficient to cover CBA’s first ranking mortgage and interest as well as our principal and interest position.
The land subdivision process is generally straightforward and so construction risk was minimal. There was no material contamination and so the decision was made that a springing security would be sufficient (essentially springing into place once CBA was paid out).
The subdivision construction, registration and settlements went smoothly with principal repaid in full and interest payment in September 2016, making an 18% IRR.
Mandi Prager is the principal of MP Funds Management. MP Funds Management has provided investment funding for over $1.1bn of real estate-based investments across 22 transactions and produced an average annualised investment return of 21-22% (IRR).
MP Funds Management is working on a range of high-quality deals for co-investment and institutional debt arrangement in the hotel sector, retail shopping centre sector, commercial office sector, development sector and acquisition of bulk residual brand new residential apartment product (at a discount). Our key focus is the eastern seaboard of Australia.
MP Funds Management fee structure is largely performance-based and aligned with investors receiving their principal investment and base return in the first instance, with our fees being largely performance-driven.
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In November 2014 we co-invested with another Manager into the acquisition of a 13-level North Sydney CBD office tower for a purchase price of $36.75m or $4,665 per sqm. A total of $19.5m equity was invested with a gearing ratio of 65%, debt was locked in at a rate of c.4% for the intended five-year investment period.
MPFM has a key focus on real estate-based investment opportunities specifically along the eastern seaboard of Australia with strong underlying property fundamentals and target investment returns of between 15-40% on a risk-adjusted basis.
In 2014 we co-invested with former Managing Director and board member Steve Day, in the headstock of real estate investment management business, Propertylink. Investing in and managing major industrial warehouse portfolios, office tower portfolios, and infrastructure projects, other Propertylink co-investors included Goldman Sachs and London’s Duke of Westminster.
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