November 19, 2020- Investment firm Real Asset Management has begun sounding out potential investors for a $500 million Essential Services REIT that will hold a portfolio of east Coast neighbourhood shopping centres and medical-related assets.
The new trust, which could float in the second quarter of 2021, will pool assets acquired by the fund manager over the past four years. They are now held in two separate funds backed by high net worth investors and small institutions.
All have been acquired for their defensive qualities – resilient income streams, high occupancy rates, reliable trading profiles and rising capital values.
These characteristics came to the fore during the pandemic when “essential services” assets such as supermarket-anchored neighbourhood malls, medical centres and logistics facilities remained open and trading while offices, hotels and discretionary retail assets were forced to temporarily close, resulting in losses of income and valuation falls.
RAM CEO Scott Kelly told The Australian Financial Review COVID-19 had accelerated the demand from investors for “good quality, defensive assets” such as the ones carefully acquired by the fund manager.
“Investors are looking for stable returns and income streams that grow above inflation,” Mr Kelly said.