Examples of current/past deals include;
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
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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