Australian industrial property focused investment manager Propertylink has launched its second investment fund and has set a fundraising target of A$300 million (€191 million; $215 million).
The Sydney-based firm has already secured a cornerstone investment from Cleveland-based advisory and investment firm The Townsend Group for the vehicle, which is called The Propertylink Australian Industrial Partnership (PAIP) II. Propertylink said further investors have been lined up also.
Via PAIP II, the firm is aiming to buy industrial property that benefits from long leases as well as assets with shorter duration tenancy where a value-add strategy can be adopted.
The vehicle is the successor to PAIP I, which attracted $160 million of initial equity in 2014, including from Wall Street bank Goldman Sachs and London property company Grosvenor. The fund has since amassed 36 assets that are valued today at about A$700 million.
Assets are already being lined up for PAIP II, including 2 Costello Place in Seven Hills, Sydney, which is being acquired for A$14.87 million from the DEXUS Wholesale Property Fund, a large, open-ended property fund managed by Sydney-based DEXUS Property Group.
Stuart Dawes, chief operating officer and head of investment management said: “PAIP II is targeting a mixture of longer lease assets together with short weighted average lease expiry properties to build a portfolio where value can be added from active lease management and capital investment.”
“We’ve delivered strong double-digit returns from this strategy and are forecasting the same for PAIP II.”
Furthering the point, he said: “By building a diversified portfolio, together with an inexpensive cost of debt, Propertylink can achieve double digit distribution yields from the fund. This is consistent with Propertylink’s approach to investment vehicles, where the majority of the target investment return is delivered through regular distributions.”
On the fund’s first investment in 2 Costello Place, Peter McDonald, executive director and head of property, said: “This property provides a great seed asset for PAIP II, importantly starting with Australia’s strongest industrial market of Sydney. The asset provides a good mix of short term income with the ability to generate strong upside in returns over the medium term.”
Propertylink today has more than $2 billion in assets under management in markets including Sydney, Melbourne, Brisbane and Perth.