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Yarmouth and Nielson form real estate investment manager

The Sydney-based financial services group and the Brisbane-based property company have teamed up to form a real estate investment management business targeting value-add and development investments in eastern Australia.

Yarmouth Group, the Sydney-based financial services business set up by ex-Lend Lease executives, and Nielson Properties, the Brisbane-based property company, has formed a joint venture real estate investment management house, PERE can reveal.

The two organizations aim to offer to high net worth families and institutional investors in Asia access to value-add and development strategies in eastern Australia via the venture, called Yarmouth Real Estate Investments (Yarmouth REI).

A first investment vehicle, to be either for a single, large investor, or a pool of investors, is in the course of being arranged for a specific investment of up to A$50 million (€34.9 million; $46.5 million) in a single asset in the region.

Looking ahead, investment vehicles are expected to be raised by the venture for a development investment pipeline extending in value to approximately A$1.2 billion although standing assets acquired via value add strategies are also expected to be acquired.

Yarmouth REI is targeting an IRR of approximately 12 percent for the value-added investments and 20 percent or more for its development investments.

The initial assets under management of Yarmouth REI are valued at about A$430 million. These assets were introduced by Nielson Properties.

Andrew McNeil, Yarmouth’s chairman, said: “Nielson and Yarmouth have been working together since 2011, and we believe that the Yarmout REI joint venture is the most effective way to grow existing assets under management using our Asian, North American and on-shore investor networks.”

Ross Nielson, founder and managing director of Neilson Properties, said: “With our current mix of Australian and overseas-based investors, our involvement in Yarmouth REI will provide a fully integrated real estate funds management platform allowing a range of investors unable to directly own commercial property to benefit from our extensive experience and capacity to unlock superior returns.”

The formation of a real estate investment management business involving Yarmouth represents the second attempt by the firm to get such an operation off the ground. The firm was formed in 2008, just as the global financial crisis was taking hold. As such, capital raising prospects for first-time fund managers were dire, prompting the firm to focus its efforts on the other strands of its operation, namely corporate and real estate advisory. Now, with capital markets once again supportive generally of private real estate investment management strategies, the firm is hoping its return will take off.