Sydney, Dec 5, 2007 AEST (ABN Newswire) - Pelorus Property Group Limited (ASX: PPI) is to launch a $60 million wholesale opportunistic fund under an offer to be jointly arranged with Grant Samuel. The fund will be open to sophisticated and professional investors. The fund's mandate will be to generate absolute property returns with a focus on development opportunities and difficult or distressed real estate in Australia and New Zealand.
Approximately 50% of the proposed fund's capital is already allocated. The fund's seed investment will be a 25% stake in the Bakehouse Quarter Fund (BQF) that is currently held on Pelorus's balance sheet. BQF controls Pelorus's $200 million Bakehouse Quarter development at North Strathfield in Sydney. The balance of the Bakehouse Quarter Fund is tightly held by a syndicate of sophisticated investors and Pelorus directors.
"The fund's investment in the Bakehouse Quarter is a substantial first transaction. Going forward the fund will seek opportunities, like the Bakehouse Quarter, to which Pelorus management can apply their skills to add value," said Grant Samuel Property Director, Christian McKelvey.
The Bakehouse Quarter is an urban business precinct located on the site of the former Arnott's biscuit factory. The project currently comprises 35,000 sqm of new and refurbished commercial office and retail premises. Planning is underway for the next stage of the project comprising an additional 20,000 sqm of commercial and retail space, an all suites hotel, business centre, tavern and an array of restaurants. The site is expected to grow to over 100,000 sqm in the coming years.
The Bakehouse Quarter houses the regional head office of Arnott's Biscuits, NRMA Motoring and Frucor as well a many smaller tenants. Servicing the existing office tenants and the surrounding suburbs are WT Serviced Offices, two ABC childcare centres, Lollipops Playland, Aldi, Harris Farm Markets and a range of medical facilities. Macquarie Leisure Trust Group's bowling division, AMF Bowling, recently opened Australia's largest bowling centre on the site.
In addition, to development opportunities the fund will seek to take positions in distressed assets. Over the past 15 years Pelorus's property services subsidiary Wynn Tresidder
Management has established a track record in distressed or difficult assets. It has been involved in many turnaround stories including Neeta City Shopping Centre for ESSS, Randwick Village Shopping Centre for GE Capital and the Government of Nauru, two Venture Store property assets and Lakehaven Shopping Centre for UK super fund PSIT. "We are finding that more and more potential deals are crossing our desks," said Pelorus's Managing Director Stuart Brown. "The fear and uncertainty in current financial markets may take time to feed through locally, however, we are confident that when it does, opportunities that suit our skill set will arise for this fund."
The group has been structuring seed capital property investment structures for high net worth individuals since it began operations in the early 1990's. Recently Pelorus structured the purchase of a 9,500 sqm failed bulky goods centre in the Sydney suburb of Villawood with a sophisticated offer that was heavily over subscribed. The group is currently repositioning the centre and has already finalised leases with the Wiggles for a children's play land and AMF for a bowling and entertainment complex. A gymnasium has also been secured taking the total commitments to over 75% of the net lettable area.
Last week Pelorus announced that it would take a 40% interest in the entity purchasing a $NZ45 million retail precinct known as Trentham City in the outer Wellington suburb of Upper Hut. The mall has recently been completed but has significant vacancies and Pelorus has been brought in to facilitate its recovery.
Contact
Stuart Brown
Managing Director
Pelorus Property Group Limited
Phone: +612 9033 8611
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