MAB looks at property syndicates

Newlycreated MAB Funds Management (MABFM) will offer future property syndicates directly to financial planners, says director Nick Gray.

The first syndicate, a Melbourne CBD property, was offered to retail investors through UBS Warburg.

“It is our intention to create a distribution network, although this will take time as we are not known in the funds management area,” Gray says.

MAB is better known as a Victorian property developer and is active in building residential and commercial developments.

Gray says the company plans to raise a further $75 million in the next 12 months, in addition to the $7.82 million it raised to buy the CBD property. The total cost of the property was $15 million.

The fund management arm of MAB is looking at buying a further two properties worth $45 million — one industrial and one CBD office building — for more syndicates due to be launched in the next couple of months.

“The aim is to provide total funds under management of $150 million by the end of 2004, rising to $500 million by the end of 2007,” Gray says.

“In the immediate future, MABFM will focus on syndicates offering individual properties with a value up to about $50 million and then progress into the institutional market with larger offerings.”

The first syndicate, the MAB Bourke St Trust, is offering an initial yield of nine per cent, rising to 11 per cent in 2008 when the property is expected to be sold.