Sep 24 2018Add to Favorites
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.
Propertylink was set up with a key focus on industrial logistics property and listed on the ASX with the aim to be an attractive Australian platform combining a large industrial portfolio with a successful investment business with $1.9b funds under management.
The Australian IPO yielded our MP Funds Management investment partners a net annual internal rate of return of 21%.
Most recently just a few days ago, private equity-backed logistics platform ESR is set to take over Propertylink in a $723.4 million deal ($1.20 per share) after both sides announced they had struck a binding agreement on the buy-out.
The deal follows nearly a month of due diligence by the powerful Asia-based platform, which only recently established a presence in the Australian market, and seeking a local industrial platform in Australia, acquired the CIP platform from Charter Hall in July in a $102.5 million deal.
ESR has also taken minority stakes in both the listed Centuria Capital Group, 14.9% and the Propertylink platform, 19.9%.
In September this year, Propertylink launched a $755m takeover bid for the listed Centuria REIT, at the same time taking an 18% stake in the business.
In response to Propertylink's bid for Centura, ESR as a minority shareholder in both Centuria and Propertylink put forward their bid for Propertylink.
As part of its offer to acquire Propertylink, ESR also confirmed it plans to vote its 19.89 percent stake against a move by Centuria to spill the Propertylink board.
ESR is a pure play, pan-Asia logistics real estate platform, one of the largest in the region, with assets under management of more than $US12 billion.
ESR is backed by Dutch pension fund managers APG and PGGM, Canada's CPPIB, Goldman Sachs, Chinese insurance giant Ping An, and South Korean conglomerate SK Holdings.
We really love retail property at the moment at MP Funds Management because we see opportunity in the disruption. Australia’s population is growing, our living is getting denser and whilst the advent of online shopping is creating change in the sector, human behaviour causes us to gravitate towards food and entertainment. Whilst some of the retail tenants may be outmoded or a centre underperforming as a result of this evolution, it’s fair to say that well-located and underperforming CBD- located centres, which have a strong demographical catchment area can be turned around with some TLC and well thought out repositioning.
November analysis released by both UBS and Macquarie Bank highlight that potential buyers have become very cautious and expect prices to fall further. Both reports highlight that whilst borrowing capacity has declined, most borrowers don’t borrow at their maximum. The RBA recently showed that relatively few households would have been constrained by the tightening in lending standards over recent years.
Each of the primary property investment sectors, residential, commercial office, industrial warehouses, retail shopping centres has an investment cycle and a market cycle. Its useful to have the ability to move across sectors so that when one isn’t performing so well, others which are performing better can be capitalised on. Also, investing across sectors can build up diversification.
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 >