Pamfleet Group, the Hong Kong and Singapore-focused private equity real estate firm, has brought its capital raising for its debut commingled fund, Pamfleet Real Estate Fund (PREF), to $207.3 million after holding a second closing, PERE has learned.
Pamfleet, which spent the majority of the last decade investing on a deal by deal basis with various partners, has also completed the fund’s first investment, acquiring an office on Hong Kong island.
Pamfleet launched the fund at the end of 2009 and, at the turn of the year, held a first closing of $126.3 million. The second closing of $81 million brings the total to $207.3 million, with a third and final closing expected in or around September this year. The firm’s ultimate capital raising target for the fund is $350 million.
PERE understands that the fund now has commitments from seven LPs including pension funds, insurance companies and fund of funds. The minimum commitment size to the fund is $10 million although the average is thought to be about $30 million.
Pamfleet declined to comment on the capital raising when approached, but revealed the fund had acquired a ‘Grade C’ office building on Hong Kong island, investing $25 million in equity. The building, comprising 47,000 square feet of office space is fully leased at rents of between HK$16 and HK$20 per square foot. It was purchased from a locally-listed real estate company.
The fund’s investment manager, Pamfleet’s chief executive Andrew Moore said the fund planned to double the rental value of the property through active asset management and repositioning and hold for long term investment. Pointing to increasing rental levels in the Hong Kong office market, he said rents being paid at the prime end, tipping HK$150 a square foot in some instances, would have positive ramifications for secondary office buildings in the city.
He said: “The rental arbitrage for the sort of buildings we are going to buy versus the sort of buildings we can create is at an all time high. According to Savills, for example, Central Grade A rents are trading at an all-time premium. That will have a ripple effect on rental values lower down the scale.”
“We certainly hope to double the rents on this building, not through market growth, but our ability to reposition it.”