Valad Property Group is looking to raise $200 million for a new open-ended wholesale investment fund.
The Valad Core Plus Fund will have three seed assets worth in excess of $95 million, including a B-grade office building on 575 Bourke Street in Melbourne and a B-grade office building on 132 Arthur Street, North Sydney.
575 Bourke Street has a net lettable area of 15,997 sqm over 18 floors, comprising 3 retail tenancies, 15 levels of B-grade office space and parking for 82 cars. The building is tenanted by Dibbs Abbott Stillman, Equity Trustees Ltd and the Victorian Minister of Finance.
132 Arthur Street has NLA of approximately 7,900 sqm spread over 13 levels of commercial office space with parking for 70 cars and is currently tenanted by LG, Energetics and Ebsco International.
In addition, the fund will also have an industrial facility at Tuggerah on the New South Wales Central Coast.
The property has a purpose built 12,015 sqm industrial warehouse facility including 24% office / production space and on-grade parking for 135 cars and is 100% pre-leased to Belkin Limited.
The fund has set a target of total returns on equity investment of 11-13% per annum.
Valad’s fund management and capital services chief executive Paul Notaras said the new fund represents a unique investment opportunity for wholesale and institutional clients.
“This new fund platform has been specifically designed to meet the wholesale investor market and we already have strong interest from our existing investor base.
“It is an exciting opportunity for investors to participate in the returns that Valad can create from active ‘value-added’ management of property assets,” he added.
Notaras said the Valad Core Plus Fund has been granted access to Valad Property Group’s proven acquisition pipeline and asset identification skills.
Valad already has a wholesale fund in the market with its ICA Property Development Fund series having raised and invested over $250 million of equity in projects worth in excess of $750 million since 2001.
Valad Core Plus Fund’s fund manager Giles Stapleton said the Valad Core Plus Fund has a well-defined investment strategy focusing on existing value-add and core commercial, industrial and retail property predominately on the eastern seaboard, with tenancy income in place.
“By capitalising on Valad’s skills at identifying and exploiting commercial real estate opportunities, we intend to grow the fund’s gross assets over time through this first offer and subsequent offers.
“Investors will be granted a first right of refusal to participate in future capital raisings for the fund,” he added.
Valad Property Group is expected contribute an investment of 15% up to $40 million into the fund.
By Adam Parsons
