Savills Investment Management, an international real estate investment manager, has made its debut acquisitions in Australia, investing up to $68 million (AUD90 million) in a hotel company, and a retail asset.
Savills IM made the deal from its pan-Asian fund, the Savills IM Asia Pacific Fund (SIM APF), which is an open-ended, pan-Asian, core/core-plus fund investing in mature markets within the Asia Pacific region.
The acquired companies are Quest East Perth, a newly-built four-star serviced apartment hotel located within Perth’s central business district (CBD), and The Station Oxley, a shopping centre in Brisbane with a net lettable area of approximately 7,100 sqm.
The company said that these latest acquisitions complement SIM APF’s existing assets in Japan and Singapore and dovetail with the fund’s diversification approach of investing across multiple asset classes comprising office, retail, logistics, hospitality and residential.
Savills IM head of investments in Australia Lee Tredwell, said both the assets will provide the fund with secure passive cash flow with fixed increases, at above inflation level, with limited capex or leasing requirements in the short to medium term.
Savills IM purchased Quest East Perth from a local developer in December 2016. The property comprises a total of 130 rooms, a rooftop function area, in-house gymnasium and conference facilities. It was purchased with a long-term lease to leading operator Quest through to 2031.
In March 2017, Savills IM acquired The Station Oxley, serving as its first foray into Queensland real estate market.
The property has a weighted average lease expiry (WALE) of over 10 years and is anchored by Woolworths and the Queensland Government, which account for 65 per cent of the property’s income. It also boasts of 16 specialty stores.
As part of its expansion strategy, Savills IM disclosed last week the appointment of Annie Li as associate director and portfolio manager at Savills IM based in Sydney.
In her new role, Annie will help manage Savills IM’s existing investments and grow the firm’s Australian investment platform, which currently includes a number of global and regional mandates.