Invesco is providing AUD150m (€101m) in senior debt to a high-rise residential project in Australia.
The financing of Skytower, currently under development in Brisbane, is being made on behalf of one of Invesco’s regional opportunity funds, according to industry sources.
According to a source, Invesco has three opportunity funds, two of which are being wound down and one that raised US$100m in a first close at the end of last year.
The source said: “It is a regional opportunity fund looking at certain key markets and looking to achieve returns in the high teens.”
The source added that such opportunity funds can take a “non-traditional” approach in selecting assets, observing that “they can be involved in any point in the capital stack – from preferential equity to mezzanine to debt.”
Another source said Invesco has preferential equity in a residential project in Melbourne. The project is now finished and Invesco has been paid out.
Industry sources said the Invesco approach is to look at sectors and themes, including ageing populations, healthcare, student housing and residential.
“Really, at the end of the day it is an assessment by the fund manager whether the real estate risks are properly compensated by the returns,” one source told IPE Real Estate.
The 90-storey Skytower is being developed by Billbergia, an Australian developer, with AMP Capital as a partner.
IPE Real Estate understands that it is AMP Capital’s first deal with Invesco.
The debt has reportedly been provided with an interest rate between 15% and 20%.
In 2011, AMP Capital announced that its Select Property Portfolio No 3 Fund (SPP3), had provided funding to Billbergia for the purchase of the Skytower site.
AMP Capital has an existing relationship with Billbergia in a large waterfront residential development at Wentworth Point, in Sydney’s inner west.
Invesco and AMP Capital did not comment.