Investa Launches $500m Capital Raising

Office market specialist Investa looks set to take advantage of strong offshore demand for Australian property by seeking to raise $500 million through its unlisted wholesale office fund.

The unlisted fund manager, which owns 15 office assets is valued at more than $5.4 billion, plans to use the new capital to replenish the fund’s balance sheet, will launch a roadshow to finance for new acquisitions and upcoming development projects.

Investa Commercial Property Fund's (ICPF) 56 existing investors, 80 per cent of which are Australian institutions and superannuation funds, will have preemptive rights to ⁠participate in the offer and purchase new securities issued.

ICPF, which holds a development pipeline currently in excess of $1.5 billion, foresees a strong showing from international investors given Australia's appeal, with interest from potential investors from Asia, the UK, Europe and North America already on the table.

The capital raise follows ICPF closing of its 10-year liquidity offer in late 2018, with redemptions fully satisfied. The fund's redemption window for investors is only made available every 10 years.

Investa's focus is on developing new office buildings to own for the long term, with Sydney and Melbourne prime destinations with high-quality prime office space remaining the preferred option of CBD office market tenants.

“Australia continues to screen well globally as an investment destination, Investa chief investment officer Peter Menegazzo said.

“This, along with the positive positioning and outlook of the Australian office markets and ICPF’s strong investment track record are all ingredients that form a compelling investment proposition.”

“We expect that these factors will result in solid support for the capital raising, and in turn, will set a sound foundation to deliver ongoing investment performance.”

The fund recently reached practical completion on its 31-storey tower at 60 Martin Place and in 2020 will start construction on a 55,000sq m office project at 360 Queen Street in Brisbane.

ICPF has been active recently, selling its interest in 242 Exhibition St Melbourne for $830 million at a 20 per cent premium to valuation.

It also recently struck an agreement to acquire a further 50 per cent interest in a central Sydney office building, 135 King Street, from co-owners Stockland for A$335 million and a 1,000 bay cark park adjoining its 567 Collins St Melbourne building.

Last month, Investa laid the foundations to develop a new premium office tower in Melbourne by acquiring the 10-storey car park behind its 55,000sq m tower at 567 Collins Street, which it completed by CIMIC Group in 2015.

The office building, located at the fast-growing western end of Collins Street, will now likely be joined by a similar next-generation tower that would complement the scale and offering of 567 Collins Street.