Multiplex to set up $640m office fund
The time is right for Multiplex Group, which intends to establish a new fund comprised of prime central business district office assets after watching the sector for more than a decade.
The proposed fund, Multiplex Acumen Prime Property Fund (MAPPF), will be listed on the Australian Stock Exchange with a portfolio of office investments that have gross assets valued at $640 million.
Multiplex Capital managing director Ian O’Toole said the company had been waiting 12 years to launch the fund, citing a limited supply and strong economic as factors contributing to its decision.
“This is an exciting opportunity for the group and follows on from the successful Multiplex New Zealand Property Fund,” he said.
“It is a clear demonstration of the unique position the group enjoys in accessing new product through the strong pipeline in the group’s development business, with the majority of the fund’s proposed portfolio having been, or currently being, developed by Multiplex.”
Key features of the fund include an initial forecast distribution yield of approximately 7.75 per cent, 100 per cent tax-advantaged distributions for two years, weighted average lease duration of 10.3 years and 97 per cent occupancy, with vacancy subject to an income guarantee.
The fund’s portfolio will include 100 per cent of the new American Express building on Sydney’s King Street Wharf, 50 per cent of the Ernst & Young Centre at Sydney’s World Square, 20 per cent of the Melbourne-based Southern Cross, 100 per cent of Melbourne’s Defence Plaza and a portfolio of listed property trust securities.
On completion of the proposed capital raising, the net proceeds received by Multiplex Property Trust will allow it to reduce existing borrowings, which it claims will result in greater balance sheet flexibility.
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