05/03/2008 - 22:00

EG sticks to the plan

05/03/2008 - 22:00

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Having compiled a portfolio of prime Western Australian properties during the past four years, Sydney-based boutique funds manager EG Funds Management is poised to ramp up its activity in the west with a number of developments in the pipeline.

Having compiled a portfolio of prime Western Australian properties during the past four years, Sydney-based boutique funds manager EG Funds Management is poised to ramp up its activity in the west with a number of developments in the pipeline.

EG’s buying spree has secured it the Woolstores Shopping Centre and Toyota site in Fremantle, the Northbridge Centre (former Perth Megamart) in Northbridge, Lathlain’s Red Castle Motel Inn, and Bunbury’s Welcome Inn, among others.

Perth-based associate director Steven Piotrowski said EG’s portfolio was weighted with WA assets, because its strategy to buy property near infrastructure projects was a good fit with the state government’s Network City planning initiative.

The private investment and advisory group, founded by ING Property Group director Michael Easson in 2000, manages five property trusts worth more than $750 million, with assets across Australia.

Mr Piotrowski said while some sectors of Perth’s property market were overheated, the company was “cashed up” and still very acquisitive in WA.

Its fifth property fund, The Yield + Infrastructure Property Fund, has $500 million to invest over the next two to three years. 

“There was a lot of growth in commercial prices before Christmas and it remains to be seen whether transactions in 2008 will achieve those unsustainably low yields; we still believe Perth commercial properties present a solid investment,” he said.

“There is also that caution in the market over debt levels, but we remain very acquisitive. We haven’t experienced the problems of other funds due to the higher costs of debt, and will continue to have conservative gearing levels going forward.”

Mr Piotrowski said there was plenty of development potential along the new Perth to Mandurah Rail line and EG was looking for more transport-oriented development sites.

He also revealed the group was considering a mixed-use development for the 6,000 square metre Fremantle Toyota Site on Queen Victoria Street, and was in preliminary discussions with the City of Fremantle concerning the council’s East End Planning and Urban Design Study.

Other sites being considered for future development, possibly in joint venture, include the Red Castle Motor Inn, land adjacent to the Burswood Dome, and Bunbury’s 51-unit Welcome Inn.

The 11,194sqm Welcome Inn site, bought in March last year for $10 million, has a development application in place for a five-storey complex of 120 short-stay and residential units overlooking the beach.

While the Northbridge Centre on Beaufort Street presents a lucrative development opportunity close to the train station, EG’s strategy for the 9,597sqm site involves collecting an 8 per cent yield for the next few years ahead of a possible redevelopment.

Aside from WA, Mr Piotrowski said EG was also looking at launching a new fund in the UK in joint venture with an institutional investor.

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