Browse all categories | Subscribe My Account | Logout
Browse all categories
< Back

Closing: 52,000sqm CBD office asset investment

Value Hunting / Markets

Australia

Aug 09 2019

Add to Favorites

Share this Article:

MP Funds Management 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. MP Funds Management will originate its own investments as well as co-invest with other Managers on a deal-by-deal basis, where that investment is in line with the MP Funds Management investment philosophies which include:

>>Defendable assets with strong equity and downside risk protection

>>Outstanding underlying property fundamentals

>>Strong Manager fee alignment with investor equity protection and performance

>>Represent an outstanding risk-adjusted return

>>Risk mispriced in favour of the investor 

Where MP Funds Management co-invests with another Manager, MP Funds Management Investors benefit from additional layers of diligence in both upfront initial due diligence, prior to making the investment as well as additional rigour in regular reporting diligence. 

MP Funds Management is delighted to be co-investing in the acquisition of a 52,000 sqm institutional-grade CBD office asset. The asset offers an investment opportunity that combines a strategic and highly sought-after CBD location opposite a major central train station, the limited downside (below replacement costs) and strong cashflows with 80% of the nett lettable area underwritten by a diversified mix of Federal and State Government covenants provide strong downside protection. 

>>The acquisition price represents excellent value at just over $8000 per sqm, which is significantly below replacement cost  

>>Senior debt is locked in for the period of the investment at c. 3% interest rate, the building metrics exceed the debt covenants during the forecast investment term

>>An offshore pension fund is taking $120m of the required $240m equity

>>The asset is 98% rented which enables strong cash flow to investors from day 1 in excess of 7.5% and up to over 10% during the investment term

>>Total forecast returns are in the mid to high teens, inclusive of the capital gain on sale of the asset

>>The value strategy and business case for the asset includes minimal repositioning and capital works risk

>>Timeline: MP Funds Management is finalising its capital position this week and finalising due diligence with the drawdown of funds towards the end of September.

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.  

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).

 

·     Want to invest with us? Register for Golden Goose Capital HERE

·     Subscribe to the MP Report HERE

·     Find out more about co-investing with MP Funds Management Here.

·     Visit MP Funds Management HERE.

 

 

Disclaimer

The information on this website is for general information purposes only. It is not intended as legal, financial or investment advice and should not be construed or relied on as such. Before making any commitment of a legal or financial nature you should seek advice from a qualified and registered legal practitioner or financial or investment adviser. No material contained within this website should be construed or relied upon as providing recommendations in relation to any legal or financial product. MP Report Australia, MP Funds Management, MP Group International, Golden Goose Capital (together MP Group or the Information Providers) do not purport to contain all the information that may be required to evaluate any potential transaction or investment. The Reader and its advisors should conduct their own independent review, investigations and analysis of any Opportunity mentioned and of the information contained, or referred to, in this document including the merits and risks involved. Information Providers have not had regard to the investment objectives, financial situation and particular needs of the Reader. The Reader should make its own investigation and assessment of the Investment, verify to its own satisfaction the accuracy, reliability and completeness of the information in this Information memorandum and obtain independent and specific advice from appropriate experts. The estimates and projections contained on this website involve significant elements of subjective judgment and analysis, which may or may not be correct. There are usually differences between forecast and actual results because events and actual circumstances frequently do not occur as forecast and these differences may be material. The Reader and its respective advisors should make their own independent review of the material assumptions, calculations and accounting policies upon which the accompanying estimates and projections are based. To the fullest extent permitted by law, the Information Providers disclaim and exclude all liability for any loss or damage suffered or incurred by any person as a result of: 1. Their reliance on the information contained in this information; 2. Any errors in or omissions from this information.

SOURCE:

img

You may also like...


Load More

bannerImage
bannerImage

Login into your MP Report account

Forgot my password

Sign up to the MP Report

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 >