Media Centre > RAM builds out property portfolio to $439m

RAM builds out property portfolio to $439m

This article originally appeared in CityWire.

The $3.6bn fund manager with 15+ strategies has added a high-quality office tower to its unlisted property fund, increasing the fund’s value by almost 50%.

Real Asset Management (RAM), the Australian-owned asset manager specialising in real estate, credit and private equity markets, has acquired a modern 23-storey A-grade office tower in Brisbane CBD for $141.1 million, increasing the value of its RAM Diversified Property Fund from $297.9m to $439m.

The fund aims to provide investors with a stable quarterly income stream with the potential for capital growth. The fund aims to deliver a total return (after fees) of 8-10% p.a. The one-year to 30 September return is 3.75% compared with -21.48% for its benchmark S&P/ASX 200 A-Reit TR.

The asset will become the fifth in the unlisted property fund, which has a weighted average lease expiry (WALE) of 4.9 years and an occupancy rate of 100%. The other four properties are three office buildings across Brisbane, Sydney and Canberra, and a medical precinct in Perth.

RAM head of real estate, Matthew Strotton, said: ‘This attractive deal is accretive to fund WACR [weighted average capitalisation rate]. It increases exposure to the high growth Brisbane market, is in a desirable CBD location and provides access to strong contracted rent growth as well as potential value-add opportunities.

‘We are at a point in the cycle where taking a position in pre-existing, well-let assets with long-term contracted income is very attractive.’

The new-generation office tower was sourced off-market on what RAM describes as attractive terms including a passing yield of 7.03%. The building has a 4.15-year WALE, comprises a 16,301 sqm net lettable area and is 100% leased to top tenants, including the Federal government and one of Australia’s leading superannuation groups – Brighter Super – which was created in 2021 by the merger of Energy Super and LGIA Super.

RAM was attracted to the Queensland asset as the state ‘has a strong economic outlook and leads the charge in Australia’s economic recovery with nation-leading jobs growth and interstate migration fuelling historically high levels of population growth’.

RAM anticipates settlement to occur by the end of 2022 subject to FIRB approval.

“Our Investment Philosophy is built around keeping the investment process simple and transparent and ensuring our clients are at the centre of everything we do.”

Scott Wehl
Founder & Group CEO