Pro-Invest reaches A$250m second close – exclusive

The Sydney-based boutique private equity real estate investment firm has increased the target size of its hospitality fund to A$300 million.  

Pro-Invest Group, a Sydney-based boutique private equity real estate investment firm, has reached a A$250 million (€162.4 million; $176 million) second close on its maiden Australia and New Zealand-focused private equity real estate fund for hospitality investments.

Pro-Invest declined to comment on the fundraising. However, PERE has learned that the firm reached the closing for the Australia Hospitality Opportunity (AHO) fund in December last year. Investors to have committed capital via the vehicle include North American institutional investors, and Asian, European and Middle Eastern family offices.

AHO was launched in November 2014 with a A$250 million fundraising target. Following the second closing, the firm has decided to increase the target size to A$300 million, with plans of wrapping up fundraising by February.

AHO will have a fund life of five years, and its capital will be deployed in the development of Holiday Inn Express hotels, a 3-star business hotel segment, across Australia and New Zealand.

The firm has identified a pipeline of projects into which the capital would be deployed, of which four sites have already been acquired. The most recent acquisition was that of a 18,341.7 square foot development site in Melbourne’s Southbank entertainment precinct in November last year. The firm is targeting to develop around 10 hotels via the capital raised by AHO. The first of these hotels in Sydney is expected to open by the end of March.

A weakening Australian dollar led by the commodities slump has benefited the country's tourism industry, in turn leading to an increase in overseas investments in its hospitality sector. A number of large single-asset transactions have taken place in the last two years, including the landmark acquisition of Sheraton on the Park by the Chinese insurer Sunshine Insurance for A$463 million.

Pro-Invest was founded in 2010 and has offices in Australia, Europe and the Middle East.