Fund Raising

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<p>Brisbane-based fund manager Cromwell Property Group are set to purse over $1 billion worth of strategic growth opportunities across Australia and Europe.</p>
<p>Cromwell have announced an underwritten $375 million institutional placement at a fixed issue price of $1.15 per new security.</p>
<p>They have identified a number of strategic growth opportunities across both its indirect and direct property investment segments.</p>
<p>The opportunities will be funded with proceeds from the equity raising, recycling of existing capital and introduction of new capital partners.</p>
<p>The proceeds, along with recycled capital from asset sales, will provide funding for over $1 billion of value-add development opportunities across Cromwell’s existing Australian Core+ and Active real estate portfolio.</p>
<p>Cromwell CEO Paul Weightman said: "Cromwell continues to identify value enhancing investment opportunities across both its Indirect and Direct Property Investments that will deliver significant medium term growth in enterprise value for Cromwell and realise significant capital returns for securityholders.</p>
<p>"The Equity Raising will provide certainty of funding to pursue these opportunities, strengthen the balance sheet and allow for growth in distributions.”</p>
<p>“Cromwell has identified over $0.5 billion of high quality Australian core office opportunities and over $0.5 billion of office and retail opportunities in Europe which are ideally suited to our ‘Invest to Manage’ strategy.</p>
<p>"The warehousing of these opportunities will allow us to seed new funds, co-invest alongside our global capital partners and accelerate growth of assets under management (AUM).”</p>
<p>“Finally, Cromwell will also look to use the proceeds from the Equity Raising along with recycled capital from asset sales and sell down of new funds to deliver over $1.0 billion of accretive value add development opportunities across the existing Australian balance sheet portfolio.”</p>
<p>Cromwell have reaffirmed the FY19 guidance of operating profit of no less than 8.00 cps and distributions of 7.25 cps2.</p>
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<div class="column">The guidance for FY20 operating profit is expected to be great, a guide of 8.1 – 8.3 cps and distributions of not less than 7.5 cps3</div>
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jrobinson-rf4aSBido9

Cromwell Property Group identify $1 billion worth of growth opportunities

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<p>Listed property manager Charter Hall Group’s Direct Property business has launched a second automotive retail property trust, seeking to raise $48 million in equity to acquire an $82 million property portfolio.</p>
<p>The portfolio will have a 13-year weighted average lease expiry (WALE) and the trust has acquired four properties in Sydney, Melbourne, Brisbane and Perth, said a media release.</p>
<p>The opening date for the equity raise offer is Tuesday, 16 May 2016 and is limited to $48 million.</p>
<p>The Charter Hall Direct Automotive Trust No. 2 (DAT2) follows the success of the first such trust, DAT1, in raising equity. DAT1 was launched in August 2015 and closed to new investment within six weeks of settlement of the property transaction on September 30, 2015. The assets have all been 100% leased by vehicle retailer Automotive Holdings Group (ASX:AHG) on long-term leases, whilst equity commitments are expected from retail, high net worth and self managed superannuation fund investors.</p>
<p>DAT2 would comprise a portfolio of established and new automotive dealerships, 100% leased to AHG and expects to offer stable earnings. The Trust will have an initial distribution of 7.25% for years one and two and the prospect of capital growth over the six-year initial period of the trust.</p>
<p>Charter Hall’s head of Direct Property, Nick Kelly said the DAT series was an example of the group’s success in with new funds that deliver strong returns to investors. </p>
<p>“Our Direct Property business continues to deliver market leading returns for our retail investors and I am pleased with the consistent delivery of targeted income distribution yields. The DAT2 targeted distribution yield of 7.25% is expected to be appealing in this low interest rate, low inflation environment."</p>
<p>The DAT2 portfolio will be targeting an initial gearing of 49.9% and comprises the following properties and dealerships operated under AHG leases:</p>
<p><img src="/images/2016/05/17/Screen%20Shot%202016-05-17%20at%202.18.57%20PM.png" alt="" width="757" height="161"></p>
<p>“We continue to see high levels of interest in direct property from SMSF trustees who, in a low yield environment, are seeking investments which provide for a strong income yield, high quality assets, and potential for capital value growth, low volatility and regular returns," Direct Property fund manager Steven Bennett said.</p>
<p>Charter Hall's Direct Property's funds hold five of the top 10 ranked positions in the Property Council/IPD Unlisted Core Retail Property Fund Index for the 12 months to January 2016.</p>
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jonathanchancellor-7SQnKwU6yx

Charter Hall launches second automotive retail property trust, expects to raise $48 million

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<p><span>Real estate investment management firm Qualitas has announced the successful first close of its Opportunity Fund, raising capital from institutional and high-net-worth (HNW) investors, to sit alongside its co-investment.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>The investment vehicle, which is funded by offshore and domestic investors, has a target size of $200 million. It will provide equity and mezzanine debt for high-quality commercial, retail and residential projects identified by Qualitas’ experienced investment team.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>Andrew Schwartz, Group Managing Director and Chief Investment Officer at Qualitas, said the fund allows investors to benefit from the unique dynamics of the Australian property sector.</span></p>
<p><span>“Australian real estate markets, particularly in the private capital space, tend to be localised and relationship-based. Well-established, local investment firms can therefore achieve superior risk-adjusted returns thanks to their access to information and on-the-ground knowledge.”</span><span style="line-height: 1.3em;"> </span></p>
<p><span>“In the private, mid-market real estate sector where Qualitas specialises, we tend to have a first-mover advantage on profitable deals, thanks to our strong relationships. We can generate value by seizing opportunities early,” Mr Schwartz said.</span></p>
<p><span>Qualitas’ fund will focus on quality investment and development opportunities in the mid-market segment.</span><span style="line-height: 1.3em;"> </span></p>
<p><span>“Australian core real estate has reverted to the prices and momentum seen in the pre-GFC period, and is heavily dominated by large-scale institutional and public capital. However, those sources have yet to turn their attention to the value-add and development spaces, and this is where we see significant opportunity for value creation by private capital investing.”</span><span style="line-height: 1.3em;"><br></span></p>
<p><span>“The big banks’ focus on capital requirements has led to a contraction in lending for property development, opening up the market to alternative capital providers who provide ‘gap funding’. However, the banks are highly selective - and not just about the projects they will finance, but the third party capital partners they’ll work with. In this environment, Qualitas is ideally positioned as an experienced, credible provider of debt and equity. That’s been a big drawcard for the banks we work with, and now, the investors in our Opportunity Fund,” Mr Schwartz said.</span></p>
<p><span>“A combination of a continuing low interest rate environment, lower currency, positive market dynamics and good governance make Australia attractive to overseas investors. However, they want local knowledge too. Many global investment managers adopt a ‘fly in fly out’ approach, so they don’t have the same access to deal flow or opportunistic investments. This is one of the reasons we had a strong response from investors."</span></p>
<p>"We believe development site values have peaked, which will create  opportunities for prudent  developers who have previously been priced out of the market due to the heavy weight of capital particularly from overseas investor groups .</p>
<p>"We are seeing cost input assumptions adversely affecting values such as lower availability of bank debt, higher costs of capital and increased construction costs, which can only be offset by lower site values.</p>
<p>"We are selective about the risk profile of our investments and more cautious at this point of the cycle.</p>
<p>"We would avoid open equity risk in a market like this, because there are better, de-risked alternatives available offering premium returns."</p>
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