Brookfield Asset Management has begun to sound out Australian institutional investors about a debut multi-billion-dollar core office fund.
Industry sources say it will be seeded with AUD1.4bn (€897m) of assets currently held on Brookfield’s balance sheet.
Potential investors have received documentation and are holding meetings with Brookfield.
A Brookfield spokesperson declined to comment on any fund that had not been launched.
The market has known of plans to launch the open-ended trust for at least a year, but Brookfield has only begun handing out documentation and hosting investor meetings in recent weeks.
“We received documents from Brookfield about four weeks ago,” one potential investor told IPE Real Assets, saying he was bound by confidentiality to remain anonymous.
The investor, who has since met with the Brookfield team, said Brookfield intends to seed the fund with some of its high-profile office projects.
These include a 50% stake in Wynyard Place, a project in Sydney expected to have an end value of around AUD1.8bn.
Others assets include Brookfield’s stake in the new AUD800m National Australia Bank headquarters, due to be completed in Melbourne in 2021, two other office towers in Sydney, and an office tower in Perth.
Over the years, Brookfield has built up a portfolio valued at more than AUD9bn, said the source, adding that he was “surprised” by the size of the portfolio.
“I had no idea that Brookfield had such a big exposure to Australia,” he said.
It is understood that Brookfield will commit AUD145m to the vehicle, which will target returns of 8-11%.
One source said that, as a global asset manager, Brookfield will most likely source its capital from overseas.
“It certainly is marketing the trust to its much bigger international client base,” the source said.
Industry sources say Brookfield could face competition in capital raising because of heightened activity in the market in Australia. It is understood that AMP Capital is also discussing the launch of a billion-dollar office fund.
ISPT, an asset manager owned by industry superannuation funds, is also believed to be looking to raise capital for a single-asset vehicle to enable it to hold its share of Westpac Place, which it recently purchased for AUD722m from Blackstone.