This article is from the Australian Property Journal archive
Westpac Funds Management has purchased $100 million worth of residential property from the Defence Housing Authority as seed assets for its residential property.
The Westpac residential property will be the first Australian residential REIT despite St George Bank announcing in February 09, that it has entered into a joint venture with Kaplan Equity to own Ascalon, a funds management business established by St George in 2000.
Ascalon holds investments in six boutique funds managers including a 37% stake in Fortuna Funds Management, which is a start up residential property trust, but currently does not hold any assets.
Westpac’s general manager of specialised capital group Sean McElduff said the properties will be leased back to the DHA under long term leases and will be used by the DHA to provide housing to families of the Defence Forces.
McElduff said the group were extremely pleased to have been selected as preferred bidder for this high quality residential portfolio and to be partnering with an entity such as the DHA.
The DHA portfolio manages approximately 17,000 residences in all states and territories of Australia.
Under the terms of the agreement with WFML, DHA will manage the properties, ensuring that each property is maintained, both internally and externally, at a standard which reflects contemporary community standards.
“We value the association with the DHA, in terms of the quality and location of their properties as well as their expertise in property management.
“DHA is our foundation partner. We will now actively seek other assets to build this portfolio as we prepare this unique offer to the market, which is expected to be finalised by the end of 2006.
“Residential REITs are a well developed asset class in the US and we believe that such an offer will be well received by Australian investors. In Australia, this investment class has only been available through direct investment.
“We feel that a residential property trust is a natural fit for Westpac given our extensive experience with this asset class,” he added.
By Adam Parsons
