Investment Performance Despite Market Pressure
As billionaire investor Sam Zell famously said, "We buy deals, we don't buy markets." This value-driven approach was exemplified by the Stirling Property Funds (Stirling) acquisition of the Stirling Junction Fair Asset, a regional neighbourhood shopping centre held in a single-asset unlisted fund, with equity syndicated to wholesale investors. Some key factors MP Funds Management (MPFM) saw as beneficial in driving the investment were:
Negative retail property market sentiment at the time meant a reduced competitive buyer pool.
Stirling subordinated their return on Stirling invested equity via B-class shares, MPFM viewed this as a compelling structural advantage for external investors.
Strong underlying property fundamentals at the Asset level.
Relatively conservative debt gearing and compelling cash distributions, with a total forecast internal rate of return (IRR) of approximately 15.7% per annum at the time of acquisition.*
Defensible income stream, revenues for the centre increased over the COVID lockdown period vs previous period.
By becoming an MP Report Premium member, you can access our detailed deal analysis and case study for the Stirling Junction Fair Fund as well as valuable insights and data points to help you make informed investment decisions.
Note: MPFM did not invest in the Stirling Junction Fair transaction, however we continue to be supportive to the Asset and Fund.
LATEST FROM THE PROPERTY INVESTMENT PODCAST
Join CEO of Stirling Property Funds Limited (Stirling), Matthew Hyder, and former Head of Property at M&G Asia Pacific, Scott Girard, now the Stirling Head of Property, as they discuss investment risk and value in their portfolio. Stirling is a boutique real estate funds manager with $203 million in assets under management. The Stirling portfolio offers a weighted IRR of 15% per annum and a portfolio cash yield of 6.5% per annum.** Join the discussion on our Property Investment Podcast.
MP FUNDS MANAGEMENT DEAL ANALYSIS: STIRLING JUNCTION FAIR.
Stirling Junction Fair, Shopping Centre Fund, is a single-asset fund which owns a regional neighbourhood shopping centre. The asset spans approximately 7,226 square metres (sqm) of net lettable area on a site area of approximately 11,250 sqm. With an initial forecast annual internal rate of return of 15%+ (Note: Actual investment performance may differ from forecast returns.), Stirling Junction Fair presents an exciting case study.
If you want to gain an edge in the commercial property sector, I invite you to apply for an MP Report Premium membership (Note: MP Report Premium membership is only available to wholesale clients).
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* Actual investment performance may differ materially from forecast returns.
** Please note that past performance is not a reliable indicator of future performance.
This communication is not intended to serve as investment advice or an investment recommendation. The content does not take into account your financial objectives, situation or needs. You should do your own research an, if appropriate, obtain independent advice from a suitably licensed professional before making investment decisions.