Attraction of Aussie commercial property highlighted by Investec fund success
Australian commercial property is proving popular with South African investors, with the Investec Australia Property Fund (IAPF) closing its capital raising rights issue last week.
The fund, which has been listed on the Johannesburg Stock Exchange since October 2013, raised $120 million from existing investors during the rights issue.
IAPF chief executive, Graeme Katz, said the demand from investors highlighted the demand for Australian commercial assets.
"We are extremely pleased with the reception from investors following the rights issue, particularly given the volatility of global markets in recent weeks," he said.
"In spite of the broader macroeconomic uncertainty that continues to play out, investors clearly believe in the investment philosophy of the fund, and in the value presented by the Australian commercial property market in general".
The funds raised through the recent rights issue have been earmarked for the completion of the IAPF's acquisition of a Brisbane office tower and to pay down debt so the fund will be ungeared.
Last week the fund announced the acquisition of an industrial property in Berrinba, on the outskirts of Brisbane.
"This acquisition fits firmly within the fund's existing asset base of high-quality metropolitan office and industrial properties with good quality tenants," Katz said.
"In addition, the acquisition-yield of 8.34 per cent locks in an attractive positive spread over our funding costs of 4.7 per cent.
"The rights issue results in the fund being ungeared, which will allow us to further expand the portfolio in the near future without having to secure additional funding in advance.
"Being able to move quickly to secure investment opportunities as they arise will put the fund at a strong competitive advantage."
AUTHOR
Nicholas O'Donoghue
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