Property funds are taking market volatility in their stride with about $375 million of capital to be raised in Australia and South Africa to buy the suburban office buildings that are now in favour.
Overnight, it was revealed that the SA-listed Investec Australia Property Fund would raise $120m as it funds the purchase of a $65.5m office tower in Brisbane’s Ann Street.
It will issue 111.9 million new units in ratio of 83.08 rights for every 100 units in a move that will leave it positioned to buy more suburban buildings.
The Investec Bank-run fund is emerging as one of the new breed of funds targeting office assets across major cities.
The biggest local contender, GPT’s listed business park spin-off, the GPT Metro Office Fund, will seek to raise $255m in a September 30 bookbuild to be run by investment bank UBS.
Small capitalisation A-REITs tend to outperform when markets shift and falls have mainly been in financial and resource stocks. The float’s retail brokers, Morgans and NAB Equities, are also seeing strong demand and may drive oversubscription of the issue.
Big-name tenants Lion Nathan and Samsung are helping to draw investors and the listed GPT vehicle’s capacity to raise further equity may allow it to outmuscle unlisted rivals.
Growth could see it win more institutional support, which would see it grow and lift earnings in the same way Fife Capital’s listed industrial property fund has done.
Elsewhere, shell company IM Medical has flagged a delay of plans by ADX Management to set up and list a major data centre trust, the Australian Data Exchange Trust.
The trust has an exclusivity agreement to buy Fairfax Media’s former printing facilities at Tullamarine, in Melbourne, for $26m and convert them into a major data centre.
The agreement has been extended but the trust, which is also to include a Brisbane property, seems to be on track as an anchor tenant has been secured for Tullamarine.