This article is from the Australian Property Journal archive
RETAIL investor Region Group and Singapore’s sovereign wealth fund GIC are plotting a sequel to their $750 million Metro Fund, as local and offshore investors continue to partner up and share the risk in Australian real estate mandates.
Region Group, formerly SCA Property Group, which owns Coles and Woolworths-anchored neighbourhood and sub-regional centres, announced on the ASX it had reached an in principle implementation agreement with GIC to establish Metro Fund 2.
Like the initial fund, launched in 2022, Region Group will hold a 20% equity interest in the fund, with GIC holding the remaining 80%. Region Group will act as manager of the fund, with the terms and size being “broadly consistent” with the existing metro convenience-retail focused fund.
Region Group said it expects that establishment of the new fund will take place before the end of August.
“No assurance can be given that the agreement will give rise to a transaction,” it said.
In the retail sector, joint venture fund management deals are increasingly becoming popular. This week Westfield malls landlord Scentre and investment bank Barrenjoey secured their second asset, with the $167.3 million acquisition of a 50% stake in Westfield West Lakes in Adelaide, hot on the heels of their purchase of a half-stake in Westfield Tea Tree Plaza, also in the city of churches, for $308 million.
The Tea Tree purchase was the JV’s foray into funds management.
Offshore investors have been making their presence felt in major partnership deals. Also this week, Japanese giant Mitsubishi Estate Asia teamed up with ESR Australia on a 12.1-hectare industrial development site in Melbourne’s south-east suburb of Pakenham, where they will deliver a 70,000 sqm industrial estate.
That follows Elanor Investors Group and American global asset manager PGIM buying a 19-hectare site in Melbourne’s Mulgrave, where they will build a 113,000 sqm logistics estate.
In one of the biggest deals in Australia’s commercial real estate sector in 2024, another Japanese player, Mitsui Fudosan acquired a 66% stake in Mirvac’s $2 billion Sydney CBD development at 55 Pitt Street.
