APIL industrial fund sparking strong investor interest

Investors are clamoring to get on board with commercial property syndicator APIL Group’s industrial fund, attracted by the fund manager’s long history of providing strong returns.

APIL Group launched the fourth tranche of its APIL Industrial Fund No. 1 earlier this week, with the syndicate having a target size of $125 million in assets to be acquired before the end of the year.

The fund forecasts cash distributions of 7.5 per cent per annum, paid monthly, has a $50,000 minimum buy-in and is available to first time and experienced private investors, companies trusts, as well as those with Self-Managed Super Funds.

Established in 2019, the fund comprises five industrial properties in Adelaide, Perth and Brisbane, collectively worth around $70 million.

The three previous tranches were fully subscribed very quickly, with more than 200 investors participating to date.

“What we’ve done is we’ve tried to diversify properties by geographic location, as well as their uses, so they’re not all warehousing or manufacturing,” APIL managing director Peter Hughes said.

“There is a reasonable amount of diversification and we’ve tried to pick more modern facilities so that we get greater compliance with current building standards.

“And we have targeted good tenants. Once a property’s value exceeds $10 million, you’re dealing with pretty major companies anyway, so most of them are thereabouts or better.”

Tenants across the portfolio include ASX-listed Matrix Composites and Engineering, rural products supplier Australian Industrial Rural Retailers (AIRR), Revolution Roof and Marco Engineering.

APIL said the latest acquisition was a warehouse property in Adelaide tenanted by AIRR and agricultural chemicals supplier Crop Smart.

The $7.4 million sale of the 6,040 square metre warehouse, located on a 1.2 hectare site, was brokered by CBRE’s Jordan Kies and Mark Gilbride.

Mr Hughes said the acquisition supported APIL’s investment strategy, while the company would now pivot its attention to finding additional properties to fill out the fund.

“We’re looking to see whatever meets our fundamentals, which are well-located properties in a metropolitan location, with a good lease covenant and opportunities for capital growth and to continue distributing dividends to investors,” Mr Hughes said. 

“We’re looking at buying something over the next month or so.

“The next property is going to be pursued with some vigour, we’re targeting assets valued around $20 million to $30 million.” 

Mr Hughes said he hadn’t been surprised by the strong interest from investors in participating in the syndicate, with many repeat investors coming on board.

There have been a lot of initial investors come back and reinvest, or top up as we call it and the demand for this tranche is well and truly oversubscribed.

“There is quite a strong interest in getting a reasonably secure high income investment, because everyone is trying to make their dollar work a bit harder.”

The fund is one of 28 commercial property syndicates established by APIL since 2001, which have a collective value of more than $1 billion in assets managed past and present.

The average annual return across APIL’s retail sector portfolio is 9 per cent.

Click here to register your interest in participating in the APIL Industrial Fund No.1.