Australia’s Arrow Capital Partners has secured commitments from a US private equity firm – believed to be Cerberus Capital Management – and private family offices for a new Australasia industrial property investment fund.
The manager’s Australasia Strategic Industrial Real Estate Fund (SIRE), which seeks a A$1bn (€609m) fundraise, is a follow-up to the SIRE European fund launched last year as a joint venture between Arrow Capital and Cerberus Capital.
Martyn McCarthy managing partner, Arrow Capital, told IPE Real Assets that the investor base of the Australasian fund was similar to that of the European fund.
McCarthy declined to name its US partner, saying only that “it is one of the leading US private equity investors”.
McCarthy said the new fund was poised to deploy capital in Australia and New Zealand. He expected it to make its first acquisitions before the end of this year.
Arrow Capital was currently negotiating on three acquisitions, totalling more than A$100m.
McCarthy said SIRE was not looking for core assets with seven-10–year leases because that segment of the market was highly-competitive in today’s market.
Instead, he said, the fund would be prepared to acquire vacant properties and buildings with expiring or short leases. It would also be happy to buy buildings with multiple tenants.
He said the strategy was to create value by acquiring and aggregating single assets ranging from A$5m to A$50m.
Asked if SIRE was a close-ended fund, he said the investors had agreed to be flexible on the duration of the fund.
The fund would have a gearing level of more than 50% and aimed to have a portfolio valued at around A$1bn over time.
It would move in the footsteps of the €2bn SIRE Europe fund. To date, it had acquired some €400m worth of industrial and logistics assets in Spain, the Netherlands, the UK and Germany, McCarthy said.
Arrow Capital has also worked closely with another US investor, Starwood Capital, in Australia on equity and debt investments.
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