AMP Capital’s Global Direct Property Fund (GDPF) has taken advantage of the select investment opportunities in the US property market, offloading a multifamily development land parcel in Tampa, Florida for US$11.5 million. The site was acquired for US$2.5 million in February 2013, delivering a 58.1 per cent per annum total return over the holding period.
The fund’s US core-plus property investment strategy focuses on acquiring middle-market assets (around $25-65 million) that AMP Capital has identified as unique situations or there is the opportunity to optimise value with assets able to benefit from more active management from AMP Capital’s local team. The fund has a 10-year investment track record delivering on this strategy.
Located at the southern end of the Tampa CBD on prestigious Harbour Island, the multifamily development land parcel is zoned for 340 high-rise residential units.
GDPF purchased both the land parcel and the adjacent class A office building from two different vendors after identifying the tie up of these two distinctly different assets could unlock value when owned together.
To this end, AMP Capital subsequently sold the multifamily development land parcel to a US residential developer together with rights to use up to 560 excess parking spaces from the adjacent office building, to be connected via a sky-bridge to be built by the residential developer.
The fund has retained the class A office building adjacent to the land parcel, which has benefited from an aggressive leasing program coupled with a strong cyclical recovery in the Tampa office market.
AMP Capital Fund Manager Tim Fallet said that investors had benefited from a disciplined delivery of the strategy.
“This has been an outstanding result for our investors and follows the sale of the Boston office building in September 2015. I am pleased we were able to deliver upon our strategy to both unlock value in the office building and improve the development opportunity for the land parcel without taking undue risk,” Mr Fallet said.
“This transaction once again demonstrates the fund’s entrepreneurial and disciplined approach with a focus on acquiring real estate at a compelling entry price, aggressive business plan execution and strategic marketing to buyers. Over the last five years the fund’s US portfolio has delivered a return of 19.8 per cent per annum.
“We continue to see a strong pipeline of attractive core-plus investment opportunities in select submarkets and sectors across the US where we will look to deploy this capital,” Mr Fallet concluded.
The Fund will commence a capital raising initiative over the coming months enabling investors access to this strategy that has delivered such strong outcomes over the last decade.
This article has been prepared to provide general information and does not constitute 'financial advice' for the purposes of the Financial Advisors Act 2008 (Act). An individual investor should, before making any investment decisions, consider the information available in the relevant Product Disclosure Statement and seek professional advice. While every care has been taken in the preparation of this document, AMP Capital Investors (New Zealand) Limited and the AMP Group (together, 'AMP') make no guarantee that the information supplied is accurate, complete or timely and do not make any warranties or representations in respect of results gained from its use. The information is not intended to infer that current or past returns are indicative of future returns. The views expressed are those of the author and do not necessarily reflect those of AMP. These views are subject to change depending on market conditions and other factors.