Mariner launches US property trust

Mariner Financial has become the latest fund manager to launch an American property trust, the Mariner American Property Income Trust (MAPIT), which it claims will target high-yield returns, 100 per cent tax deferred.

Demand for foreign property trusts has been strong for some time now. Several other local managers, including Deutsche Asset Management, have also released US and global property trusts recently and platforms such as Skandia have increased allocations to foreign listed property.

Executive director of Mariner Property Andrew Saunders said with the superannuation pool growing in Australia, the domestic market was “running out” of available property assets, which increased the attractiveness of offshore investments.

“Australian assets are getting quite expensive by global standards. Therefore if you look offshore, you can see that assets in Europe and America offer better value even after allowing for the structures to invest offshore,” he said.

Mariner chief executive officer Bill Ireland said the MAPIT, which will be listed on the Australian Stock Exchange (ASX) later this year, will have an initial portfolio of $125 million worth of quality, high-yielding American properties.

He said properties would be accessed through an investment in 99.9 per cent of the shares in the Mariner American Property Income REIT, a US real estate investment trust managed by Mariner’s Boston-based international property team, headed by Jeff Miller and James Patterson.

Ireland said the MAPIT was targeting an initial forecast cash return of 9.02 per cent.

“This Trust will offer a reliable income stream to investors. This is achieved through a core of stable, long-term creditworthy leases that offer a low-yield risk. The growth potential for the trust comes from the quality of the retail properties,” he said.

The manager has acquired two properties for the trust so far: the Derry Meadows Shopping Centre in Derry, New Hampshire, and the Intel campus office in Parsippany, New Jersey.

Ireland expected further property deals to be announced shortly. He said the breadth and quality of properties available in the US market was “astounding compared to Australia”.

Saunders said locally there were no opportunities to invest in buildings like the Intel campus because “buildings like that simply don’t exist in Australia”.