Primewest hits $100m US expansion

Primewest hits $100m US expansion

4 October 2019

Property fund manager Primewest has expanded its holdings in the US ahead of a planned float on the ASX, valuing its operations at about $300m.

The company, headed by a trio of directors John Bond, Jim Litis and David Schwartz, is planning to list on the ASX after raising up to $100m. The group said it was targeting acquisitions and that there was strong interest in the float.

This week the company finalised the purchase of a $13 million office building in San Diego – the Sky Park Centre. The four level, boutique office building has almost 4,000 square metres of lettable area.

The acquisition follows the purchase of the Broadway Plaza shopping centre, in Chula Vista, 10 kilometres south of downtown San Diego, last year.

Both the Sky Park Centre and Broadway Plaza will deliver a pre-US tax, internal rate of return of approximately 10% and a pre-US tax cash return on equity of 7%.

Primewest director David Schwartz said reaching the $100 million mark was a significant milestone for Primewest and its US-based partner Protea Properties.

He said the US investment trust formed by the partnership was expected to have assets under management of close to $250 million in the next 12 months, with several potential investments in the pipeline.

“Primewest and Protea have worked closely together over the last two years to identify suitable investment opportunities and we are now entering an active acquisition phase,” Mr Schwartz said.

“As in Australia we are mainly focused on office, industrial and large format retail assets, with major multi national and national tenants.

“The US economy is experiencing strong economic growth and we see significant opportunities to acquire assets well below replacement cost that can deliver rental and capital growth opportunities.

“It is provides us with the opportunity to lock-in long term, fixed debt.”

In addition to its US expansion Primewest is also getting close to finalising the equity raising for the Australian public listing of its management operations.

The company is aiming to raise between $75-100 million to fund growth and targeted acquisitions and there has been a strong interest in the float.

Primewest manages one of Australia’s most successful property fund operations, with more than $3.8 billion in assets.