Stronghold launches open-ended fund

By Stronghold

October 22 2019
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Promoted by Stronghold

Commercial Property fund manager Stronghold has launched its first open-ended property fund.

The Stronghold Precincts Property Fund (SPPF) will combine the firm’s existing strategy for investing in suburban office precincts – which since 2013 has seen it acquire around $200 million in commercial property assets across 10 year closed-ended trusts – with an open-ended structure it hopes will spur investment from a broader group of investors.

The new open-ended structure of the SPPF should provide a significant advantage with initial investments now being accepted from $25,000.

The firm said the open-ended structure would allow for a series of benefits to investors, including liquidity in the event circumstances change. Additionally, Stronghold said it could enhance the portfolio effect by hosing all of the fund’s commercial property within one structure, pointing out management could “mix-and-match” tenants according to their requirements.

As a result, the firm is claiming additional flexibility which it believes gives it a “sustainable advantage: by retaining tenants “over longer periods without the need to give up rental income in favour of longer lease periods.

At launch, the fund’s portfolio would be 92% leased, with a 3.7 year weighted average lease expiry by income (WALE I) and a portfolio value of around $25 million.

Commenting on the launch of the fund, Stronghold Head of Funds Management, Bruce Anderson, said: “It is a natural evolution for Stronghold to offer an open-ended fund, allowing financial advisers and a broader group of investors the opportunity to participate in cash returns from an exceptional portfolio of commercial property assets”

“Stronghold delivered average cash returns of 8.5% across its 10 closed-ended trusts in 2019, and together with the aligned Graystone Group which provides commercial property commercial property development and project management services, we remain convinced that economic fundamentals, government policy and social dynamics will continue to underpin the growth and popularity of suburban commercial office space,” Anderson said.

He added the move to open-ended structure was evolutionary for the firm.

“It is a natural evolution for Stronghold to offer an open-ended fund, allowing financial advisers and a broader group of wholesale investors the opportunity to participate in cash returns from an exceptional portfolio of commercial property assets” he said.

https://www.strongholdinvest.com.au/sppfinvest/

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