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Property fund manager Primewest has proposed a fresh initial public offering (IPO) worth almost three times as much as its own $100 million IPO in November.
The Perth-based company founded by John Bond, Jim Litis and David Schwartz (pictured left to right) has been a transactional powerhouse over the past three months, and appears emboldened by healthy investor appetite for its projects.
A new real estate investment trust called Primewest Commercial REIT is on the cards with an expected market capitalisation of $288 million, backed by four office buildings worth $285 million that are currently held in single-asset funds managed by the company.
If everything goes to plan the offer will be made in March with Primewest holding a 15 per cent initial interest. The group plans to pay all related establishment costs and fees from its own cash reserves.
"The Primewest Commercial REIT will offer new and existing investors an opportunity to invest in a diversified investment grade portfolio of office assets located within the Perth CBD and broader Brisbane area," says executive chairman John Bond.
"The initial portfolio is concentrated in Perth which has significant potential upside and represents compelling value to equivalent assets across Australia. Primwest is an experienced funds manager that has an excellent track record in these markets.
"The fund will continue Primewest's tradition of acquiring assets that provide strong cash distributions and potential for solid capital growth for investors. We are excited about the growth potential of the fund and look forward to progressing the transaction."
The company had $4.66 million in cash and $16.6 million in net liabilities at the end of FY19.
Since then it has grown assets under management (AUM) by $163 million including through the purchase of a shopping centre in Coffs Harbour, and industrial property in South Australia and two offices in Western Australia.
The group also freed up some liquidity by selling a heritage Brisbane CBD building to the University of Queensland.
"Primewest strives to be closely aligned with its investors across all its funds," says Primewest managing director David Schwartz.
"Consistent with this philosophy, Primewest intends to make a $43 million cornerstone investment in Primewest Commercial REIT and bear the costs of the offer.
"This will allow new investors to acquire securities in the Fund at its NTA per security whilst existing fund investors' NTA will not be impacted."
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