WA-based commercial property funds management company, Mair Property Funds, has closed out the second of its flagship diversified property trusts following the settlement of two assets in Mulgrave (Victoria) and West Perth (Western Australia).
The properties, which were both acquired in off-market transactions, were secured for $13.9 million and $10.6 million respectively to take the total asset base of MPF Diversified Fund No.2 to its target of circa $60 million across eight properties.
This marks the company's largest fund to date, taking the total funds under management across their portfolio to $280 million.
Managing Director of Mair Property Funds, David Ellwood, said the diversity and quality of the new assets strengthens the fund manager's response to growing investor demand for a diversified product.
"Our strategy in developing this fund was to target a diverse spread of high-quality assets and tenancies across different industries, locations and sectors to leverage high-performing markets while also eliminating risk exposure to a single market or sector."
"We have certainly noted a growing demand for products that offer diversity in terms of tenancy mix and industry exposure, with an increasing number of investors realising the benefits and security this strategy offers, and this has been further reinforced through the popularity of this fund" he said.
Mr Ellwood said the strategy has proved particularly important during the COVID-19 pandemic.
"Whilst a number of the assets in this fund were purchased during 2019, the diversity and sound commercial nature of the tenants has added good resilience during the COVID-19 pandemic, with the large majority operating as normal," he said.
The office property at 6-8 Compark Circuit in Mulgrave marks the fund's first acquisition in Victoria, taking the spread of assets in MPF Diversified Fund No.2 to four Australian States, including Western Australia, Queensland and South Australia.
The premises are tenanted by multi-national medical equipment supplier, Device Technologies, who recently signed a five-year lease to tenant the ground floor of the property.
Mr Ellwood said the tenant adds to an already strong base of national, multi-national and ASX-listed businesses.
"Importantly, the tenant provides the trust with exposure to an emerging office sector and growing medical equipment supply industry, which again aligns with the fund's targeting strategy and adds greater long-term value to the portfolio," he said.
Mr Ellwood said the quality of tenancy also played an important role in the acquisition of the trust's final asset, located at 1162 Hay Street in West Perth.
"The existing tenant, EBM insurance brokers, selected this office accommodation based on strong underlying criteria in its specification and proximity to the city. Having already undertaken a significant fitout in 2015 at their own cost, we see strong potential to build on these initial renovations by the tenant to further future-proof the property and enhance its long-term appeal."
"Overall, we are excited by the growth potential that these assets and the trust as a whole offers our investors, and are extremely pleased to close out the fund with such a strategically diverse portfolio at a strong WALE of 4.5 years," he said.
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