Sydney-based Propertylink Group has formed an AUD200m (€127m) partnership with an unnamed investor to invest in urban renewal opportunities.
Stuart Dawes, Propertylink’s CEO, told IPE Real Assets that, as it acquires more assets, the new partnership will step up investment.
Dawes announced the formation of the partnership during an analysts’ briefing today to announce Propertylink’s results for the 2017-18 financial year.
Dawes declined to disclose the identity of the investor, except to say it was an “existing” capital partner.
Propertylink’s capital partners currently include Goldman Sachs, Partners Group, The Townsend Group, Grosvenor, Fosun and Norincukin Bank.
Dawes said that, as Australia’s population continues to grow, people generally are seeking to live in urban areas and are happy with smaller dwellings.
“Most investment strategies have a five-to-seven-year lifespan, which does not suit projects targetting a structural shift like urbanisation,” he told IPE Real Assets.
“We are ready to deploy capital when we find the right assets which lend themselves to densification. We will invest a couple of hundred million initially.”
Dawes added that a core logistics and industrial fund was also on the drawing board. “We have a strong pipeline of projects under way, and we will announce the launch when the timing is right,” he said.
The group’s latest partnership, the Propertylink Australian Commercial Trust, which was formed last December with Swiss investment manager Partners Group, will continue to deploy its AUD350m of equity.
The partnership focuses on value-added office investment and has an initial investment target of AUD500m. It has already acquired an asset in North Sydney for AUD130m.
Dawes said Propertylink had maintained strong performance across its investment management platform, delivering total average returns of 25% since its inception in 2009.
Dawes spoke of the continuing strength of the Australian property market, which delivered a valuation uplift of AUD97m to Propertylink’s portfolio over the past year.
Both the pan-Asian ESR Group and an Australian company, Centuria Capital Group, are courting Propertylink, which currently manages AUD973m worth of assets.
When asked about ESR’s intentions, Dawes said: “ESR is still a shareholder and, as with all shareholders, we continue to have a dialogue with them.”
Centuria Industrial REIT sold down its stake in Propertylink this week, leaving its parent company, Centuria Capital Group, holding just under 10%.