MGPA, the private equity real estate investment advisory company, has acquired the first asset for its German fund focused on the Asia Pacific, MGPA Asien Spezialfonds, in Perth, Western Australia.
The acquisition is conditional upon Foreign Investment Review Board (FIRB) approval and the buyer obtaining financing.
The Optima Centre is a recently constructed grade A office building located at Herdsman Business Park in Perth and was acquired for AUD105.67m.
The property has a total net lettable area of 16,116 sq m over two buildings and includes 500 car spaces. The buildings were completed in 2009 and 2010 and are currently fully let of which 83 per cent is leased to the Government of Western Australian which has an AAA rated covenant. The passing yield is in excess of 8.6 per cent and the weighted average lease expiry is approximately 12 years.
The property was purchased after an off-market competitive process from a joint venture between the developer, Alcock Brown Neaves Group, and entities managed by Macquarie Group. The MGPA Asien Spezialfonds is administered by the German investment company Universal-Investment.
Hamish MacDonald, director – Australia for MGPA, says: "This asset is particularly attractive as the first investment for the Asien Spezialfonds due to its high income yield from predominantly AAA rated covenants, long WALE, and ability to capture rental growth in one of the most exciting office markets in the region.
“The suburban markets of Perth offer a compelling alternative for tenants to the supply constrained traditional markets of the CBD and West Perth. Herdsman Business Park in particular is attracting occupiers due to its proximity to the CBD, the type of accommodation available (large efficient floor plates and significant car parking) and the rental price point. We also see investment demand for high quality assets in the best suburban markets increasing as investors seek exposure to the burgeoning West Australian economy, being driven by the resource sector, leading to an attractive supply demand dynamic and therefore rental growth potential. We believe there is a disconnect between the high investment yields available in Perth and the potential for rental growth relative to other markets in Australia.”
MGPA held the first close of MGPA Asien Spezialfonds in September 2012 with commitments of EUR85m, and this is the first acquisition for the fund. MGPA Asien Spezialfonds offers institutional investors from German-speaking countries the opportunity to invest in Asian Pacific real estate via a recognised German regulated product structure while leveraging MGPA’s extensive platform and expertise in Asia Pacific. The target equity capital of MGPA Asien Spezialfonds is EUR500m.
Universal-Investment is the capital investment company (KAG) for MGPA Asien Spezialfonds, and provides the regulated German fund structures for the Spezialfonds.