As the name implies it will target opportunities but some points of difference compared with other similar funds already in the market are:
• it will be 50 per cent invested from the start and not just a cash box
• future investments will be assessed in New Zealand as well as Australia
• it is managed jointly by two groups with experience in property turnarounds
• joint managers will give access to a wider deal flow
Half of the fund’s capital, $30 million, will be invested initially in Pelorus’s 7.5 hectare Bakehouse Quarter development in Sydney’s inner west at North Strathfield.
Bakehouse currently comprises 35,000 sqm of new and refurbished commercial office and retail space. The opportunity for investors in the new fund is to reap returns from being part of future development of the centre which will see it grow to over 100,000 sqm in coming years.
Joint manager of the new fund with Pelorus is investment bank, Grant Samuel, which has a specialist property arm able to contribute to trans-Tasman deal flow.
The Pelorus track record over the past 15 years has involved many distressed property turnarounds, principally in shopping centres, with examples being Neeta City (Fairfield, western Sydney), Randwick Village (Sydney’s east) and Lakehaven (central coast NSW).
Two current property turnarounds in which Pelorus is involved are a bulky goods centre at Villawood (Sydney’s west) and Trentham City Shopping Centre (Upper Hutt, near Wellington, New Zealand).
At its recent Annual Meeting, Pelorus said its business model had evolved to a focus on property opportunities, using its vertically integrated services across property management, leasing, development, financial structuring and funds management to add value.