ARA Asset Management has closed on its acquisition of a 19.5 percent stake in Australia’s Cromwell Property, boosting the Singapore-based company’s assets under management to S$77.2 billion ($57.7 billion).
The Singaporean asset manager implemented the deal by purchasing 86.5 million stapled securities issued by Cromwell at A$1.05 per unit from Redefine Properties, a South Africa-based REIT. ARA’s deal for the A$405.9 million ($317 million) stake in the ASX-listed property investment firm was first announced in March.
“Today, beyond the REITs and private funds directly managed by ARA, our multi-platform, multi-product global funds management platform extends to 21 listed and unlisted REITs and more than 70 private funds managed by the Group and its Associates,” said John Lim, CEO of the ARA Group in a statement. “Looking ahead, ARA will continue to pursue robust growth both organically and through new strategic initiatives, including M&A and joint ventures.”
After this latest acquisition, ARA plans to offer new investment products and tap new capital relationships in Japan, Australia and Europe, the company said. Cromwell operates in Australia and New Zealand as well as some ten countries in Europe. The property firm’s portfolio includes Qantas’ global headquarters in Sydney and totals some A$11.2 billion ($8.7 million) in assets under management.
ARA Boosts Overseas Portfolio
The move comes as the firm ramps up its offshore portfolio, while expanding its presence beyond Asia Pacific and into new asset classes following its privatisation in April 2017. Last June, ARA teamed up with Straits Real Estate to purchase the office building 320 Pitt Street in downtown Sydney from local investment firm Propertylink for A$275 million ($207.3 million).
The following month, ARA-managed Suntec REIT bought a 50 percent stake in a downtown Melbourne office project from Australian property group Mirvac for A$417 million ($328 million). ARA’s deals in Australia followed the acquisition of a 20.94 percent stake in Japanese real estate asset manager Kenedix in June 2017.
The Singapore asset manager is also raising its profile in China, forming a joint venture with with China’s AVIC Trust that will develop RMB-based fund products, including private equity and mezzanine debt funds. The newly-established fund will also explore opportunities in the quasi-REITs market and other potential REIT initiatives in China, ARA said.
Funds Manager Ventures into Europe, Toll Roads
The company also strives to evolve beyond property funds to become a global manager of real asset funds, having set up an infrastructure division in April with plans to launch its first infrastructure fund in the third quarter of this year. The pan-Asian vehicle targetting assets from airports to toll roads aims to raise $1 billion.
Further west, ARA launched a new European platform in March under the leadership of real estate veteran Mark Ebbinghaus. Based in London, Ebbinghaus is tasked with driving the firm’s business growth in Europe and pursuing investment opportunities in the role of Senior Advisor of ARA Europe Desk.
ARA, the manager of Fortune REIT, was privatised in April 2017 by a consortium led by John Lim together with US private equity firm Warburg Pincus, CK Asset Holdings, China’s AVIC Trust and The Straits Trading Company.