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RAM Essential Services Property Fund: Investing in Resilient Real Estate Assets

This article originally appeared in Off Plan Property Exchange.

The RAM Essential Services Property Fund (ASX: REP) is an Australian real estate investment trust (REIT) managed by Real Asset Management (RAM). With a market capitalization of $373 million, the fund focuses on high-quality Australian medical and essential retail real estate assets leased to essential services tenants.

The objective of the fund is to provide investors with stable and secure income, as well as the potential for both income and capital growth. By investing in a defensive portfolio of assets with favorable sector trends, the fund aims to benefit from the resilience of the healthcare and essential services retail sectors.

Real Asset Management is a private company that operates an alternatives investment business, including real estate private equity and fixed-interest products, as well as a non-bank home lending group called Brighten. The company manages assets under management of over $4.5 billion, with real estate accounting for approximately one-third of that.

The fund’s strategy of focusing on healthcare and essential services retail assets is beneficial in the current market conditions. The healthcare sector is essential and not heavily impacted by economic conditions, making it a stable investment. The essential services retail sector, which includes supermarkets and supporting retail and services, has also proven resilient during challenging economic times.

Matthew Strotton, Executive Director and Head of Real Estate at RAM, expressed confidence in the fund’s portfolio. He emphasized the importance of localized healthcare services and the increasing demand for such facilities within communities. Strotton compared the fund’s resilience to that of other sectors, such as commercial office, which have been affected by disruptions like remote work.

The fund’s property portfolio consists of 35 assets located mainly on the eastern seaboard of Australia, with a focus on high-growth regional locations. The healthcare and essential services retail assets make up the majority of the portfolio. RAM also operates an unlisted diversified property fund, separate accounts, and plans to launch a new opportunistic healthcare product in the near future.

Regarding capital allocation for developments, Strotton mentioned that there has been a reduction, but further details will be provided in the upcoming annual results announcement on August 28th.

Overall, the RAM Essential Services Property Fund offers investors the opportunity to invest in resilient real estate assets in the healthcare and essential services retail sectors, providing stable income and potential for growth.