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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MP Funds Management update 1st Oct 2019 and investment pipeline: MP Funds Management has completed its co-investment into the acquisition of a 52,000sqm office asset in Brisbane CBD, right opposite the railway and with 98% of rental income underpinned by government tenants.
MP Funds Management has provided investment funding for approximately $1.3b in unlisted real estate since 2013 and has provided an investment return of approximately 21% annually. Whilst MP Funds Management focuses on unlisted real estate, I am always fascinated by innovation and I personally will sometimes invest in other areas. Recently I caught up with the founder of a very clever new Australian – based app called Stake https://stake.com.auwhich is a Business-to-Consumer based platform that enables Aussies to get direct exposure to the USA equities market.
United States of America
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.
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