There has been a marked increase in activity in Western Australia’s historically under-represented listed property trust sector during the past 12 months, thanks in no small part to the activities of a growing local player.
There has been a marked increase in activity in Western Australia’s historically under-represented listed property trust sector during the past 12 months, thanks in no small part to the activities of a growing local player.
The Aspen Group is the state’s second largest listed property trust after Multiplex. During the past year, Aspen has doubled its investment property portfolio, expanding its assets to be 50 per cent outside WA, and created three new funds management arms.
With a market capitalisation of $160 million and total assets under management of about $360 million, Aspen is continuing to grow in the competitive LPT sector, which began in 1971 with the listing of General Property Trust (GPT).
Typically, the major players dominate the LPT sector, with five stocks (Westfield, Stockland, GPT, Macquarie Goodman Group and Centro Properties Group) comprising around half the market value of LPTs on the Australian Stock Exchange.
And while Aspen is still a far cry from the LPT giants, managing director Angelo Del Borrello has ambitious plans for the group, which returned a $7.45 million profit this year, up 84 per cent from the previous year.
Apart from Multiplex, WA’s only other notable LPT, the $38 million Westralia Property Trust, has struggled during the past year, recording a $5.6 million loss with several assets down valued.
Mr Del Borrello said that, while it bought investment properties to keep within the group, Aspen also put together different kinds of investment vehicles with property assets for its four funds management entities.
One of those is the Aspen Parks fund, which this month completed a $40 million capital raising to acquire four caravan parks, bringing the total number of parks in the Aspen Parks fund to 13, valued at $85 million.
Evolving out of the Parks Fund, Aspen has also recently created two Aspen Living Villages funds for parks in Karratha, and Tuncurry on the NSW coast.
Mr Del Borrello said the village funds aimed to create villages of homeowners in transportable accommodation in park sites.
“Affordable housing is going to be a real problem going forward, and there are a lot of permanent residents in these parks,” he told WA Business News. “In Karratha there is a need for housing for workers in the area and Aspen is funding the creation of 70 homes, whereas in Tuncurry there will be more retirement type of housing and 100 homes will be built through syndication.”
The Aspen diversified fund was started in March this year and owns $80 million of commercial property. Mr Borrello said Aspen Group wanted to expand the fund to $250 million within four years.
Last month the fund paid $31 million for an office building in North Sydney.
Aspen aimed to purchase assets in a counter-cyclical way, Mr Del Borrello said, with the group undertaking most of its WA-based buying two years ago before the WA commercial property market attracted the interest of investors from the eastern states.
“We are trying to be counter cyclical and we see some good opportunities in Sydney right now,” he said.
There may even be a move into the residential subdivision sector in the future.
Septimus Roe Square Building, Elders Woolstores, and the Alcoa office building are among Aspen’s WA investment properties.
A $4 million upgrade to the foyer of Septimus Roe Square is scheduled to begin early next year, with the creation of 500 square metres of retail space around the ground floor of the building.
