Dixon Advisory launches first Australian property fund

Financial planners Dixon Advisory have raised $161 million for a new commercial property fund that will invest in small-to-medium-sized office, retail and industrial property.

The Australian Property Opportunities Fund closed oversubscribed with the firm, as responsible entity, raising more than $60 million above the initial maximum offer size from investors, many of whom would be its self-managed super fund clients.

With a consolidated gearing level of up to 50%, the fund will have around $300 million to invest in commercial property on Australia’s eastern seaboard.

Assets with attractive risk-adjusted income profile and with the potential for capital growth will be targeted.

It will not use the funds to invest in more risky new developments.

Dixon Advisory intends to invest the money in a diversified portfolio of assets over the next 12 to 24 months, taking advantage of historically low interest rates.

“With the spread between commercial property yields and cash rates rising to 10-year highs, we believe this is an attractive time for investors to generate stable rental income, and potentially longer-term capital gains, through an investment in commercial property,” said Alex MacLachlan, chairman of the fund’s responsible entity.

“The successful capital raising now puts the fund in an excellent position to engage with vendors of small-to-medium-sized assets that meet our investment criteria.”

Sydney-based corporate advisory business Fort Street Real Estate Capital will provide investment management and asset management services to the fund.

Dixon Advisory is also the manager of the ASX-listed US Masters Residential Property Fund, the first Australian listed entity with the primary strategy of investing in the US residential property market.