Property investment and management group Aspen last week secured the biggest deal in its five-year history, taking its funds under management to more than $1 billion.
Property investment and management group Aspen last week secured the biggest deal in its five-year history, taking its funds under management to more than $1 billion.
Aspen has nearly doubled in size each year since it was founded in 2002, and posted a 248 per cent net profit increase in 2005-06 on the previous year of $34.5 million.
Former stock broker and Aspen managing director Angelo Del Borrello said the company he and Gavin Hawkins established remained disciplined and was keeping its feet firmly planted.
Last week's $239 million acquisition of Caversham Property Developments Pty Ltd from Futuris Corporation has allowed Aspen to create a diversified property development fund with 18 projects across three states, ranging from residential land to retirement villages and commercial office developments.
Mr Del Borrello told WA Business News the group had the capacity to do deals of this size, but it was a question of finding the right ones and buying at the right levels.
“We’re not in any hurry to do them for the headlines, we’re more interested in making sure the returns are there,” he said.
“With the relationships Caversham has developed over the past 15 years, I’m sure there will be other opportunities that will come up that may allow us to roll out a series of development funds, where they can co-invest with us.”
Having Perth connections certainly helped facilitate the deal. Aspen was approached by Perth-based Caversham managing director Peter Hall with an opportunity to view the company first, after Futuris indicated it wanted out of property.
Aspen also had a previous relationship with Futuris when both part-owned the Champion Drive Shopping Centre in Armadale.
While the ink dries on the deal, 14 key Caversham staff will move to Aspen’s Adelaide Terrace office, taking its Perth staff to 40, and leaving seven in Sydney, five in Adelaide and one in Melbourne.
Mr Del Borrello said prior to launching Aspen in February 2002, he and Mr Hawkins had looked at various property players, both unlisted and listed, to come up with a business model that made sense by limiting risk and allowing the group to share the spoils.
He said the company tended to be more counter-cyclical in its approach to investments, rather than following the herd.
“We fell into it, more than we had planned for it. We got a lot of support by buying the first three properties, in that the vendors took a lot of equity which gave us a kick start,” he said.
The group has since built a substantial property portfolio across Australia, with around 40 per cent of its assets located in WA.
Aspen’s commercial office assets, including Septimus Roe Square in Perth, now make up 58 per cent of its total portfolio and have contributed gains of almost $30 million, before tax, after recent revaluations.
Aspen’s $100 million parks portfolio of 14 holiday parks is also weighted to WA, with eight parks across the state including Coogee Beach and Woodman Point Holiday parks, Monkey Mia Dolphin Resort in Shark Bay, and Cooke Point Holiday Park in Port Hedland.
The group is currently expanding the capacity of its Balmoral and Pilbara Holiday Parks in Karratha, with an additional 62 new park homes at Balmoral and 16 park homes in the Pilbara.
“We buy them on the basis of the business valuations, with a view to running them as a business long term,” Mr Del Borrello said.
“If we maintain the returns this way, then we’re more than happy to keep running them forever and a day. Ultimately, the land will only go up in value,”
Another successful move for the group was its acquisition of the Dunsborough Lakes estate for $93.7 million in January 2006, thereby taking on a 13-year subdivision project of over 1,400 residential lots.
Mr Del Borrello said there was a lot of money still coming into the WA market and he believed the WA market would remain a very attractive proposition into the future.
“We’ll look at everything here, but there’s a lot of Sydney money coming across and buying at levels which perhaps the locals wouldn’t buy at. If anything, we see our opportunities on the east coast going forward.”
