A new industrial property investment fund from proptech company Jasper has been oversubscribed with $15.2 million in new investor equity raised.
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.
Investors are forecast to receive a pre-tax cash return of 6 per cent per annum, with distributions to be paid monthly.
The fund was marketed by Jasper with Colliers International’s specialist Syndications team.
Mat Harvie, Head of Investor Relations at Jasper, says investor demand was very strong, with plenty of last-minute demand.
“We were delighted to close the fund fully subscribed. Numerous investors had initial questions about the people behind Jasper, but when we had the opportunity to have a chat with these investors, they were confident in the executive team’s property and business experience, backed by a robust investment strategy.”
Jasper is a relatively new property fund manager which aims to democratise commercial real estate through a technology-led approach to investment.
Its 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.
The Jasper Industrial Income Plus 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.
Charlie Oscroft, Syndications Director at Colliers International, says investors were attracted to the fund’s exposure to the sought-after industrial sector at an affordable price point.
“Industrial continues to outperform all other commercial property asset classes, but entry-level investors have found it hard to enter the market due to intense competition among buyers.
“Jasper’s fund provided a great opportunity for these investors to gain exposure to the industrial sector from as little as a $25,000 minimum investment.
“The fund also offered 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 hard to earn low-risk passive income on savings. Jasper’s new fund appealed to investors due to its strong, reliable monthly income.”
The fund has been set up as a long-term investment vehicle, with Jasper intending to continually look for opportunities to grow the portfolio through additional acquisitions.
This will diversify risk, enhance the reliability of cash distributions and improve investor liquidity.
Jasper 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 $100m, 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.