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Closing: 52,000sqm CBD office asset investment

Value Hunting / Markets


Aug 09 2019

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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.




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