11/09/2007 - 22:00

Babcock & Brown banks on development

11/09/2007 - 22:00


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Global investment bank Babcock & Brown Ltd has established a Perth office following several major infrastructure and property investments in Western Australia.

The bank has taken part of a floor of the AMP Building at 140 St Georges Terrace with the aim of securing more real estate and infrastructure opportunities.

Hoping to build substantially on its WA property portfolio, which includes the $1.3 billion Capital Square apartment towers project, state manager of the Babcock & Brown Real Estate division, Michael Kark, said the bank was keen to sign some high-value contracts across all sectors.

He said WA was becoming a more important growth area for the division, which has net assets under management worth $9.7 billion across more than 20 countries worldwide.

Mr Kark told WA Business News Babcock & Brown Real Estate was focused on providing principal investment, investment management and advisory services, preferring to undertake joint venture developments as pure financiers.

“We get in when clients want to achieve a certain financial outcome using debt, equity or credit enhancement,’’ he said.  ‘‘We’re totally flexible with what our clients want to achieve using our balance sheet.”

Developer Saville Australia took up the offer this year, announcing a $1.3 billion joint venture with Babcock & Brown Real Estate to build Capital Square, which will comprise three towers of 1,000 apartments on the former Emu Brewery Site.

Mr Kark said projects such as Capital Square were rare in the CBD, but the strong outlook for the residential apartment market meant it would continue to look for other opportunities in the sector.

Given the stellar performance of Perth’s commercial office market, Mr Kark said the joint venture partners had not ruled out converting the second of the proposed towers into office space.

“Perth’s commercial market is very strong. Vacancy levels are low, yields down and values up; we’re always evaluating alternatives for Capital Square,” he said.

Besides its Real Estate division, Mr Kark said the bank was also intent on growing its Babcock & Brown Communities Group Ltd fund, which secured its first asset in May with a $180 million deal to buy the retirement village portfolio of WA-based Fini Villages, together with Primelife Corporation Ltd.


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