A new industrial property investment fund, underpinned by three premium assets in fast-growing Auckland locations, will provide investors with regular monthly returns at better-than-deposit rates.
The Jasper Industrial Income Plus Fund is a private commercial real estate fund that invests directly in a portfolio of industrial properties.
It targets assets in high-growth areas, with resilient tenants and long-term leases, to deliver regular passive income and capital appreciation over time.
The fund has been established by proptech company Jasper, which aims to democratise commercial real estate through a technology-led approach to investment.
Investors are forecast to receive a pre-tax cash return of 6 per cent per annum, with distributions to be paid monthly.
The fund will initially be seeded by three industrial properties in the sought-after Auckland industrial precincts of Hobsonville, Papakura and Mangere.
The fully occupied portfolio has a weighted average lease term of 5.5 years. Fixed rental growth will protect the fund’s long-term cashflow and provide a natural hedge against inflation.
Jasper has exclusively appointed Colliers International’s Syndications team to market units in the fund to investors.
The minimum investment is $25,000, with further units available in multiples of $5,000 thereafter.
Charlie Oscroft, Syndications Director at Colliers, says the fund provides exposure to the sought-after industrial sector at an affordable price point.
“Industrial continues to outperform all other commercial property asset classes, with limited supply and historically low vacancy rates fuelling intense competition among buyers.
“This has priced out many entry level investors, who are unable to compete with deep-pocketed institutional buyers.
“The Jasper Industrial Income Plus Fund provides an opportunity to invest in this highly competitive sector for minimal outlay.
“The fund offers strong income potential at a time when record low interest rates have put pressure on investment returns.
“Deposits and bonds have been trending down over the last 10 years, making it been hard to earn low-risk passive income on savings. Jasper’s new fund offers reliable monthly income starting from 6 per cent per annum.
“All of this adds up to an exceptional long-term passive investment that will appeal to a wide range of investors.”
The portfolio comprises multiple buildings, tenants and locations, providing instant diversification from one investment. The initial three properties are:
- 42 Westpoint Drive, Hobsonville. This newly built warehouse is well located in a booming area of Auckland’s northwest that is poised for significant population growth, with more than 10,000 new homes planned for the suburb. Constructed in 2019, the property comprises a 2,518sq m building on a 3,993sq m freehold site with 29 car parks. Its primary tenant is Futura Trailers, which has more than 50 years of experience making premium trailers.
- 63 Tidal Road, Mangere. This strategically located warehouse, constructed in 1995, benefits from a long-term lease to NZX-listed Scott Technologies, which is 50 per cent owned by the world’s second-largest food company, JBS Group. It comprises a 2,485sq m building on a 6,488sq m freehold site. Six years remain on the current lease, with fixed rental growth.
- 67-69 Hunua Road, Papakura. This newly refurbished industrial property is well located in an urban growth zone and is occupied by three tenants, including strong national brand Thomson ITM. The asset comprises six industrial buildings with a net lettable area of 3,950sq m, complemented by a substantial yard on a 13,145sq m site. The property is well located to serve the future needs of the Drury/Papakura area, which is among the key hubs of Auckland’s fast-growing southern fringe.
Mat Harvie, Jasper’s Head of Investor Relations, says these properties provide a solid foundation for the fund’s future growth.
“The Jasper Industrial Income Plus Fund has been set up as a long-term investment vehicle. We will continually look for opportunities to grow the portfolio through additional acquisitions, to diversify risk, enhance the reliability of cash distributions and improve investor liquidity.
“We will also use interest rate swaps and other hedging instruments to grow returns or reduce the overall portfolio risk.
“Once the fund achieves a gross asset value of more than $100 million, Jasper intends to offer a distribution re-investment plan so investors can take advantage of compounding growth and build wealth over time.”
The fund has been established as a portfolio investment entity (PIE), which benefits investors by capping the top tax rate at 28 per cent.
Investors will also benefit from the liquidity offered by Jasper’s proprietary trading platform, which will allow them to sell units on the secondary market in the future.
Jasper's leadership team has extensive commercial property experience, including more than 1,000 commercial property transactions totalling some $25 billion. The team invests in each transaction alongside investors, aligning incentives between all parties.
Kris Ongley, Associate Director at Colliers, says Auckland's industrial property market continues to outperform other asset classes.
“Covid-19 has accelerated the adoption of e-commerce, driving an increase in demand for industrial and warehouse space. The supply of industrial property to the market remains limited, and vacancy rates across Auckland are at historically low levels.
“Industrial yields have been trending downwards since 2009, driven by an improving occupier market and a weight of capital targeting the sector. This yield compression is expected to continue in the short-to-medium term in line with further reductions in the official cash rate.“All of this makes it an ideal time to invest in industrial property. With a low barrier to entry, monthly returns and handsfree management, the Jasper Industrial Income Plus Fund is the ideal vehicle to grow your wealth.”