Singapore's Keppel to launch Australia retail investment fund
Keppel Capital, the asset management arm of Singapore-based Keppel Corporation, has partnered with Australia-listed property developer Vicinity Centres to launch an investment fund targeting assets in Australia’s retail sector.
Keppel and Vicinity will initially hold an equity stake of 10% each in the new fund, which is expected to close by early next year, according to a release. The fund's target size has not been announced, but it will be seeded with a portfolio of assets worth A$1 billion ($739 million) currently owned by Vicinity.
The partners aim to acquire a diversified portfolio of retail assets with stable yields and potential long-term capital growth, underpinned by high occupancy rates and a diversified tenant base, and incorporating a range of lease expiries. Vicinity, which currently manages A$26 billion in retail assets across 81 shopping centers in Australia, will provide property management and development services.
"Keppel Capital has been actively pursuing opportunities with best-in-class partners to grow into new markets and asset classes," said Keppel CEO Christina Tan. "The proposed fund will allow us to connect our investors to a select diversified portfolio of Australian retail assets that generate stable cashflow with growth potential."
Keppel has launched several investment vehicles focused on a range of strategies in recent years, most recently an education-focused fund launched last month alongside Singapore-based preschool operator MindChamps with a target of S$200 million ($147 million). The fund will invest in preschool and early learning real estate assets in the Asia Pacific region.
The firm also manages the Alpha Data Centre Fund (ADCF), a PE fund focused on data center investments, which launched in 2016 alongside the property-focused vehicle Alpha Asia Micro Trends III. ADCF received a commitment of $500 million last year from the Canada Pension Plan Investment Board that is expected to bring the total fund size to $1 billion upon closing, while the property vehicle reported a first close of $280 million last year on a target of $1 billion.
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