Examples of current/past deals include;
Realside 45 Pirie Street
Adelaide
INVESTMENT CHARACTERISTICS
- Property: 45 Pirie Street, Adelaide SA
- Building Size: 19,923 sqm NLA
- Acquisition Date: 31 May 2023
- Purchase Price: $76,500,000
- Target IRR: 17% over 3 years
Investment Thesis:
- Acquired the property at a discounted purchase price, reflecting the current vacancy and allowing for delivery of our 3-year repositioning strategy.
- Comprehensive upgrade program aimed at elevating the building to an A+ Grade standard, positioning 45 Pirie Street well to meet tenant demand for flight to quality.
- Capital works budget of $17m allocated to upgrading End of Trip facilities, Façade extension, Lobby enhancements, upgraded destination control lifts and on floor works.
Realside 108 St Georges Terrace Fund
108 St Georges Terrace, Perth
INVESTMENT CHARACTERISTICS
- Property: 108 St Georges Terrace, Perth, WA 6000
- Building Size: 38,332 sqm NLA
- Purchase Price: $339,750,000
- Rate per sqm: $8,863 sqm
- Target IRR: 11.7% over 5 years
- Forecast Distributions: 7.9%pa averaged over 5 years
- Liquidity: 5 yearly
The Realside 108 St Georges Terrace Fund is an unlisted property trust that has acquired a 33% stake in a landmark, 38,332 sqm A+ office building in the epicentre of the Perth CBD. Lendlease’s Real Estate Partners No.4 Fund (REP 4) has acquired the balance with Realside performing the asset management function.
The Fund strategy is to:
- Take advantage of short term market mispricing to acquire the Property at a highly attractive price relative to recent comparables.
- Deliver income growth via both execution of a number of capital light internal enhancements designed to further elevate the building and proactive management of the existing and prospective tenant base.
- Capitalise on the strong outlook for the Perth CBD office market.
Investors are forecast to receive average annual cash distributions of 7.9% per annum and an 11.7% IRR over 5 years.
51 levels, Realside 108 St Georges Terrace Fund the Property is an iconic Perth office tower with most floors benefitting from sweeping views over the Swan River and the wider Perth metropolitan area. The striking office tower is complemented by the three-storey, 1897-built, heritage listed Palace hotel, which provides offices, café, restaurants and multiple conference facilities. The Property is of superior quality and future-proofed following a $110m whole of building refurbishment over the last 10 years, with an unrivalled location offering access to key transport and amenity. It has a high quality, diversified tenant base, and remains at the forefront of the flight to quality trend in the Perth office market, with impressive tenant retention metrics and substantial recent leasing momentum.
Realside Adelaide Office Fund
Adelaide
INVESTMENT CHARACTERISTICS
Acquisition Date: March 2020
Acquisition Price: $100m
Target IRR: 11.5%
NLA: 39,108sqm
INVESTMENT THESIS
- 4 refurbished A-grade office buildings located in the Adelaide CBD and fringe
- Diverse range of quality tenants, including the State Government of South Australia
- Staggered expiry profile across multiple tenants and locations, WALE 5.7 years
- Joint ownership with a local developer/manager combining active asset management expertise with active development and refurbishment capabilities
- Strong SA economy
- High distribution return to investors > 8% pa
The Quadrant
Perth
INVESTMENT CHARACTERISTICS
Acquisition Date: July 2017
Acquisition Price: $175m
Target IRR: 12%
NLA: 23,309sqm
INVESTMENT THESIS
- Deal sourced off market and acquired for an investment mandate with Singaporean sovereign wealth fund, GIC.
- Acquired with vacancy c.40%. Fully leased within 12 months
- Tenant flight to quality was picked up late in the cycle by the broader market. Quadrant was positioned well at Settlement to be the next building to lease up after the Premium buildings in Perth, given its excellent location on Elizabeth Quay and the substantial refurbishment program completed by the previous Owner.
Senior Construction Loan
INVESTMENT CHARACTERISTICS
Term: 1.5yrs
Asset Value: $14.4m
Yield: Capitalising coupon, repaid on exit
LVR: 53% p.a.
INVESTMENT THESIS
- Approved childcare centre project with an agreement for lease and business acquisition agreement with an ASX listed operator.
- Construction to be partly funded by the future lessee on a subordinated basis providing strong alignment for take-out.
- Predictable contracted income and low LVR supported a refinance by big-4 bank post-completion.
- Registered 1st mortgage with clearly defined controls and step-in rights to complete construction and fulfill lease.
Mezzanine Loan
INVESTMENT CHARACTERISTICS
Term: 1.5yrs
Asset Value: $92m
Yield: Capitalising coupon, repaid on exit
LVR: 70%
Security: Registered 2nd Mortgage
INVESTMENT THESIS
- Value-priced 244 unit development in a mature suburb of the ACT with access to new transport hub.
- ~130% presale cover from ACT-based buyers and no competing stock.
- Registered 2nd mortgage with subordination rights behind big-4 bank.
- Clear controls and step-in rights to sell units and deal with senior lender.
- Material cash equity invested from a strong sponsor with long track record
Residual Stock Loan
INVESTMENT CHARACTERISTICS
Term: 2yrs
Asset Value: $24m
Yield: Capitalising coupon, repaid on exit
LVR: 62%
Security: Registered 2nd Mortgage
INVESTMENT THESIS
- Completed retirement village purchased at circa 40% discount to valuation.
- Sponsor acquiring the asset was managing it on behalf of a receiver, building a strong pipeline of sales prior to acquisition.
- Ability to quantify the risk of selling the units below list price and recoup capital and earn, meaning the downside risk significantly mitigated.
- Clear controls and step-in rights to sell units and deal with senior lender.
Listed Equity Trade
INVESTMENT CHARACTERISTICS
Term: 2.5yrs
Asset Value: $35m (implied)
Yield: 10% p.a. (on cost)
Exit Price: $51.75m
LVR: 33%
INVESTMENT THESIS
- Two A-grade office assets remaining in a thinly traded NSX listed fund.
- Access to the growing Newcastle CBD.
- Strong tenant mix of Government and large corporates.
- Counter-cyclical purchase at an 8.6% cap rate (NTA).
- Purchased 19% stake via block trade at 15% discount to NTA.
- Clear path to exit communicated by manager.
Asset Finance
INVESTMENT CHARACTERISTICS
Term: 3yrs
Asset Value: $30m
Forecast Yield: Quarterly coupon, CPI adjusted
LVR: 67%
INVESTMENT THESIS
- Senior secured all assets charge over privately owned consumer goods retailer and finance provider.
- Volume based business spreading risk across >17,000 asset-backed loans with 18-24 months durations.
- Track record of strong debtor management and internally built credit assessment software supporting sustainable arrears metrics.
- Material surplus cash flow if loan book was put into wind-down.
Agriculture and Water
Rights Equity Strategy
INVESTMENT CHARACTERISTICS
Term: 10yrs
Asset Value: $25m
Forecast Yield: 5%p.a
LVR: Unlevered
INVESTMENT THESIS
- Purchasing dairy farmland and water rights during a structural downturn, converting to organic cropping land for long-term capital growth.
- Target Portfolio: 6,000ha Land & 160,000ML Water.
- Strategy to redevelop farmland to generate yield from high-value cropping rotations and water trading, proven through the manager’s existing fund.
- Financial feasibility supported by in place seasonal crop off-take agreements.
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Alex Hone
Director
- Alex Hone has more than 20 years investment experience having worked
- Alex Hone has more than 20 years investment experience having worked
- Alex Hone has more than 20 years investment experience having worked