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Real estate investment firm MGPA seals Australia office deal

24 Jan 2013

Private equity real estate investment firm MGPA has acquired the first asset for its German fund focused on Asia-Pacific, in Perth, Western Australia.

The Optima Centre is a recently constructed office building located at Herdsman Business Park in Perth and was acquired for A$105.67m ($110.6m).

The acquisition is conditional upon Foreign Investment Review Board (FIRB) approval and the buyer obtaining financing, the firm said.

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. 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 said, “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.

“ 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 €85m, 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 German regulated product.

The target equity capital of MGPA Asien Spezialfonds is €500m.

John Saunders, MGPA’s CEO – Asia said, “This first investment for the ASF meets the specific objectives of the fund due to its high distribution yield and potential for income growth. The high yield and long leases to strong covenants also protect the asset from any short term cyclical downside risk. The acquisition illustrates our ability to quickly source assets that meet specific objectives due to our expert local knowledge and on-the-ground teams.”

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