Altis Property Partners, the Australia-focused real estate investment manager launched by ex-Valad Property Group executives, is preparing for the launch of a second opportunity fund.
The firm told PERE it is targeting between A$150 million (€114 million; $154 million) and A$250 million for a sequel effort to its Altis Real Estate Equity Partnership, which closed in April this year on A$107.1 million.
The second fund is expected to come to market in the first quarter of 2012. It is to be operated similarly to the first fund in that Altis is targeting investments in Australia’s non-core property markets, where it has determined that the competitive landscape is thin on the ground, as is available financing for such real estate.
“There is more selling by institutions of Australia’s non-core assets than anyone buying them,” said Paul Notoras, one of the founding principals of Altis, which was launched in 2008.
Altis is able to approach investors, expected to be both domestic and international institutional investors, as it has surpassed the 75 percent mark in terms of deployed capital from the first fund. Indeed, this week, the firm announced it had invested A$86.75 million in the acquisition of a 35,538 square metre industrial park in Sydney, from Orchard Funds Management.
The sale price for the 22 industrial unit park reflected a passing yield of approximately 9.2 percent and more than 10 percent on a fully leased basis. The asset previously was bought by Orchard for A$111 million in 2007, reflecting an equivalent yield of 6.25 percent. Altis expects to be able to tighten the yield via various “active management strategies,” Shaun Hannah, another of the firm’s founding principals said in the announcement.
The second Altis fund is expected to offer investors with attractive co-investment options and, through a short investment window of two years, is also expected to be quick at deploying its resources. Notoras said: “We tend to have two-year investment periods but we really want to be invested in 12 months.”
“The world changes quickly and we don’t think it’s fair to investors to have a longer horizon,” he added.
Jones Lang LaSalle is serving as the placement agent for the fund’s international capital raising efforts.
To read more about Altis’ plans, see this month’s PERE magazine.