Investa Property Group has raised $150 million for its $300 million wholesale fund, the Investa Enhanced Fund.
IPG’s group executive of unlisted funds Bill Ground said interest in IEF from wholesale investors has been extremely strong.
“As disclosed to investors during the offer, Investa had originally intended to retain 30% of IEF.
“However given the level of demand for IEF, Investa has agreed to scale back its holding to approximately 17% to accommodate additional subscriptions from wholesale investors,” he added.
IEF will have gearing of up to 50%, allowing the fund to buy assets up to the value of $300 million.
IEF’s initial portfolio comprises $80 million worth of properties including the Your Home Centre, a retail showroom at Castle Hill in New South Wales and interests in four of Investa’s land subdivision projects, the Sippy Downs and Bellflower in southeast Queensland; Henley Brook in Perth and Paramount Industrial Estate in Melbourne.
Meanwhile, contracts have also been exchanged on an office building at 160 Ann Street, Brisbane, which IPG traded in a deal with Precision Group.
The deal involves the sale of Precision Group’s Macarthur Central Shopping Centre in the heart of Brisbane’s CBD for $119.5 million in exchange for IPG’s 160 Ann Street for $66.5 million and $53 million in cash.
The Ann Street property will provide a major repositioning opportunity and increase IEF’s total assets to approximately $150 million.
Grounds said the strategy for the fund is to blend investments across a range of property sectors and risk exposures harnessing the in-house skills of Investa in asset repositioning and land subdivision, to target a total return over the 10 year life of the fund of at least 12% per annum.
The IEF raising brings Investa Unlisted Funds wholesale capital raisings for FY06 to over $350 million.
With the launch of IEF, Investa’s Unlisted Funds business has increased to over $1.5 billion funds under management, and includes eight retail funds and three wholesale funds.
By Adam Parsons
