Propertylink is opening an Australian industrial property fund targeting AUD700m (€441m) in assets, with a cornerstone investment from Townsend Group.

The investment manager is looking to raise AUD300m in equity for its Australian Industrial Partnership II fund.

Propertylink said it was “well progressed” with a number of other investors ready to enter the fund. 

Its Australian Industrial Partnership I fund, which opened early last year, was backed by Goldman Sachs and The Grosvenor Group.

The fund has 36 assets worth around AUD700m.

Stuart Dawes, COO and head of investment management, said the second fund was targeting a mixture of longer-lease assets, together with short weighted average lease expiry properties, to build a portfolio where “value can be added from active lease management and capital investment”.

Dawes added: “We’ve delivered strong double-digit returns from this strategy and are forecasting the same for PAIP II.

By building a diversified portfolio, together with an inexpensive cost of debt, Propertylink can achieve double-digit distribution yields from the fund.”

Propertylink is buying 2 Costello Place, Seven Hills in Sydney from DEXUS Wholesale Property Fund for AUD14.87m as a seed asset.

Moelis and Fosun Group have previously partnered with Propertylink in other deals in the Australian industrial market.