Australian real estate manager Corval is seeking to raise A$200m ( €112m) for its second logistics fund.
The latest Urban Infill Logistics fund follows the first fund, which raised a similar amount and has the same strategy of identifying properties in urban metropolitan locations.
Michael Hua, Corval’s senior fund manager, told IPE Real Assets: “The demand for big warehouses has slowed down because a wave of supply and development has caught up.
“The reason we like the urban infill sub-sector is because it is downside protected. The underlying land value will always make up a majority of our acquisition price. And we’re buying the property where there is less competition which bodes well for rental growth. Land is constrained and we’re not worried about potential supply pipeline because of minimal land availability for developers.”
Hua said the fund had already received commitment for A$50m which would be deployed on three assets, currently under due diligence. The final close of the fund is expected to be at the end of the year.
Apart from logistics, Hua said the firm had been monitoring the office market closely. “When you saw what happened to the office market post-COVID, we were lucky to be a net seller of office in the lead up to COVID.”
Hua said Corval had since returned to the sector and was in the process of settling on the purchase of seven office buildings in the Brisbane Technology Park from a Dexus industrial fund for A$115m.
He said the assets would be housed in a single-asset, close-ended 5–7-year vehicle. “We were planning for a final close at the end of this month, but having received demand for more than A$100m – far exceeding our target of A$70-$75m – the capital raising is now closed.
“These are income-producing assets and where there is vacancy we will refurbish and reposition the buildings. Under our value-add strategy, we will also look at sell the buildings individually if this will produce a better return to our investors.”
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