This article is from the Australian Property Journal archive
MACQUARIE Bank's Real Estate Group will continue its push into global real estate markets with a greater focus on the U.S property market in 2007.
Macquarie Real Estate Group boss Stephen Girdis said yesterday that the group’s continued strong performance from global real estate markets during 2007 would create a range of real estate investment opportunities.
Girdis believes that while investors would benefit from an array of new investment funds and structures.
However, he warned investors should carefully assess a fund manager’s capability and the underlying risk behind their real estate exposure.
“We anticipate another year of opportunity within the sector but also challenges, particularly as various property managers strive to balance the growth rewards of new markets with the increased complexity of offshore activity,” Girdis added.
The group’s current assets under management exceed A$23 billion and include more than 700 properties across a global portfolio of seven listed and 18 unlisted property funds.
The Macquarie Real Estate team now includes almost 500 staff across 21 locations in 10 countries – an expansion of 19% over the past 12 months. Last year Macquarie Real Estate Capital opened a new office in London, and continued to expand its capabilities within the Chicago, Seoul, Tokyo and Hong Kong offices.
Macquarie’s aim is to provide investors with high risk adjusted returns. Macquarie managed listed property trusts have provided average risk-adjusted returns of 19.2% for the ten years to 31 December 2006, outperforming all major global REIT indices for that period.
Co-head of Macquarie Real Estate Capital Simon Jones said that much of last year was spent enhancing the global platform and building relationships to effectively compete for the best real estate opportunities around the world.
“This year we are focused on executing our plan to invest in new markets and offering innovative, niche products that will set a new benchmark in Australia for global real estate investing.”
He said global investment gives investors greater diversification in underlying real estate portfolios and provides Macquarie Real Estate Capital with the opportunity to capture higher returns for investors in growth markets.
“For example, Macquarie Office Trust’s recently announced acquisitions in Berlin and Milan have provided the opportunity to capture upside in rental income and capital values as those markets move into upswing,” Jones added.
Macquarie Real Estate Capital was able to secure these opportunities, via off-market transactions by leveraging the global Macquarie network.
“We also continue to focus on the domestic and US markets, which have underpinned the trusts’ competitive performance over the past decade,” Jones added.
“We are currently taking advantage of buoyant market conditions to realise investment profits, reinvesting proceeds into higher growth opportunities such as developments and acquisitions in new markets.”
In addition to listed property trusts, Macquarie Real Estate Capital’s direct property business is now positioned to provide investors large and small with access to some of the most exciting wholesale direct property opportunities around the world.
In late 2006 the unlisted Macquarie Direct Property Fund – which has proved popular with financial planners and self managed super fund investors – committed funds to three wholesale funds with investments across China, Hong Kong and Europe.
The move makes Macquarie Direct Property Fund one of the first vehicles to provide Australian retail investors with efficient, liquid access to offshore direct property. These investments aim to further diversify the Fund’s portfolio and provide a regular cash flow to investors with the potential for strong capital growth. The Fund recently reported a total one-year return of 29% to 31 December 2006, outperforming its benchmark by 9%.
Investments by super funds are also providing retail investors with access to global property through investment in wholesale funds. In November 2006, five Australian super funds invested significant funds into the new MGP Japan Core Plus Fund – a wholesale fund which invests in residential and office properties in major Japanese cities. This opportunity was established by Macquarie Global Property Advisors – a private equity real estate fund advisory company that is part of the global Macquarie Real Estate network.
Also last year, Macquarie Goodman Asia – a joint venture between Macquarie Bank and Macquarie Goodman – set up the Macquarie Goodman Hong Kong Wholesale Fund to invest in industrial property in Hong Kong with an initial portfolio of more than A$850 million. This was followed by the securitisation of A$650 million of retail malls in China. This exciting initiative has further expanded Macquarie Real Estate Capital’s funds management platform in Asia.
With 42 staff, Asia is expected to provide the largest growth in assets under management for Macquarie Real Estate Capital over the coming year.
The weight of institutional funds being directed into unlisted global real estate funds will continue to drive the establishment of further Macquarie Real Estate Capital managed wholesale funds both in Asia and elsewhere around the world.
“Our investors benefit from access to the Macquarie global network and strong relationships with leading real estate managers through our joint venture partnerships,” Girdis believes.
Girdis concluded that Macquarie Real Estate see continued favourable market conditions for global real estate and with this, exciting opportunities for the Macquarie Real Estate Group.
Australian Property Journal
