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.
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).
Our first property financing deal was a c 150 apartment project, called VIDA, located at the riverfront in Brisbane’s Westend by Pointcorp, with a gross completed value of $100m approx. Bank West provided the first ranking senior debt, and we sat pari-pasu with Maxcap as a mezzanine loan, ranking in priority behind the bank with a second mortgage security and with Thakral Capital Australia subordinated to us as equity. After we had run a lengthy and detailed due diligence process, our capital was called in about the third quarter of 2013 and repaid in full by the end of November 2016, with a 21% IRR (-annual internal rate of return).
Despite the fact that sentiment has improved in the residential media and commentary space it looks like we may have a way to go before actual material improvement is seen overall. MP Funds Management invests in all property sectors (commercial – retail- mixed-use), not just the residential debt (and or equity) space. The reason I am so fascinated with the residential sector is that I think the sentiment surrounding the residential space is ultimately what governs sentiment for the larger segment of the population who own our c. 10million residential dwellings. which is a fairly accurate indicator of the overall economy and investor sentiment.
When I started MP Group about 9 years ago, I knew I wanted to create a funds management business. The company started off as an advisory business with the MP Report as a way to market ourselves – we also used it for research purposes. Up until this point I had been in the commercial industrial and residential agency and development space since I was 19. I had years of property experience across all sectors and as a result had developed a strong understanding of our how property behaves.
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