Two office assets to close out MPF Diversified Fund No.2

Mair Property Funds has launched our final raising for MPF Diversified Fund No. 2 after securing two high-quality office assets under contract in Victoria and Western Australia.

The assets, which were both acquired by our team in off-market transactions, further strengthen the fund’s strategy by adding diversity and growth potential to the portfolio, taking the total asset base to its final target of $60.56 million.

The first property, which was secured by our team for a total of $13.9 million, is a modern office building located in the popular Monash Precinct around 20km south-east of Melbourne’s CBD, and marks the fund’s first acquisition in Victoria.

We have been monitoring this market for some time, with population growth and infrastructure spending expected to support the ongoing strength of the Victorian economy.

Melbourne’s office market has also enjoyed a particularly strong performance in recent times, recording a CBD office vacancy rate of 3.2% in the six months to January 2020 (Property Council of Australia) – the lowest of all capital city markets.

Combined with the asset’s excellent location in a robust and continually evolving precinct, we expect these conditions should hold key benefits for the acquisition, with limited supply and rising rents in the CBD expected to drive higher demand for suburban offices and support rent growth in the centrally located South-East.

Multi-national medical equipment supplier, Device Technologies, occupy the ground floor of the asset having recently signed a five-year lease.

MPF has put in place a general program to uplift the asset’s presentation together with a strategic leasing program, and expect to see substantial value uplift once the leasing of the upper level is concluded.

The fund’s final asset on Hay Street in West Perth has been secured to further boost the revenue for the trust and take advantage of the recovering West Perth office market.

Strategically located on the corner of Hay and Havelock St, the A-grade property is leased to a high-profile tenant in leading insurance broking company, EBM Insurance Brokers, who bring even further diversification of industry to the fund and offer a yield of 7.22% on passing income.

With the site remaining significantly underdeveloped, Mair Property Funds sees potential to build on initial renovations to the property conducted in 2015 to further enhance its value and maximise its long-term appeal to the existing and future tenants.

We are excited by the growth potential and strong rental income that these assets offer our investors, and are looking forward to implementing our leasing and management strategy to enhance the portfolio’s performance.

Both purchases are expected to settle in April 2020, closing out the fund with a well-balanced diversified property portfolio of eight assets spanning across four Australian states.

We are currently receiving high volumes of interest for this raising. If you would like to find out more about the opportunity to invest in this fund, please contact Brad Dunn at bdunn@mair.com.au, or visit our website to request a synopsis.

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