Dexus has raised more than A$300m (€184m) in the first close for its second dedicated real estate opportunity fund from new and existing investors.
The manager said the amount raised for the Dexus Real Estate Partnership 2 (DREP2) fund so far put it “on track” to raise up to A$1bn in equity.
The fund, launched in October last year, plans multiple-funding rounds, which are expected to close this year. Once completed, and with gearing, the fund expects to invest as much as A$2bn.
Dexus chief executive funds management, Deborah Coakley said: “This successful fundraising illustrates the continued investment appetite for enhanced returns.”
DREP fund manager, Jason Howes, said: “As anticipated, DREP2 has attracted substantial investor interest from domestic and international investors who believe that the current market environment offers the right set of circumstances for opportunity style investing.
“Our targets for deploying capital are up to 33% in credit opportunities, with the balance weighted toward equity repositioning and special situations strategies. We expect at least 60% of the portfolio to be in Sydney and Melbourne and will cap gearing at 55%.”
Howes said the fund would be disciplined in its investment selection, expecting to execute on just 4% of potential opportunities. DREP2 is targeting the same internal rate of return of 15% delivered by its predecessor fund, DREP1.
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