Westpac to offer first Aussie residential REIT
Westpac Funds Management has galvanised its aim to establish the first Australian residential real estate investment trust (REIT) by securing the seed asset for the product via the purchase of $100 million worth of residential property from the Defence Housing Authority (DHA).
“Residential REITs are a well developed asset class in the US and we believe that such an offer will be well received by Australian investors. In Australia, this investment class has only been available through direct investment,” Westpac Specialised Capital Group general manager Sean McElduff said.
After the sale, the DHA will enter into long-term leases for the properties to allow it to satisfy the housing needs of the members of the Australian Defence Forces with families.
The arrangement will see DHA manage the properties to ensure a high standard of maintenance. The organisation currently has around 17,000 residential properties under its control across the country making it one of the most experienced managers in this property class in Australia.
“DHA is our foundation partner. We will now actively seek other assets to build this portfolio as we prepare this unique offer to the market, which is expected to be finalised by the end of 2006,” McElduff said.
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