Primewest to launch IPO for new office fund

Primewest is spinning out five of its office assets into a new publicly listed fund, with the new trust’s portfolio valued at around $285 million.

The ASX-listed funds manager announced to the market late yesterday that it was planning to establish and list the Primewest Commercial REIT, transferring five buildings that are currently held in single-asset funds.

Primewest chairman David Schwartz told Business News that three of the assets were located in Perth, with two in Brisbane.

Buildings set to be transferred into the fund comprise 251 and 267 St Georges Terrace, 226 Adelaide Terrace, Super Retail Group's Brisbane headquarters in Strathpine, and 130 Commercial Road, also in Brisbane.

“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,” Primewest chairman John Bond said in an ASX statement.

“The initial portfolio is concentrated in Perth which has significant potential upside and represents compelling value to equivalent assets across Australia.”

Primewest will hold a 15 per cent stake in the fund, and make a cornerstone investment of $43 million.

A product disclosure statement is expected to be lodged with the Australian Securities and Investments Commission in March, followed by a share offering.

Moelis Australia Advisory is acting as lead manager, while Hamilton Locke is providing legal advice.

The establishment of the new listed fund follows Primewest earlier this week completing development of a new distribution centre for Toll Group in Queensland’s Sunshine Coast.

The property was part of Primewest’s Industrial Income Trust No3, which acquired two assets midway through last year collectively worth $30 million.

Since July 1, Primewest has grown its assets under management by $163 million.