Australian investment fund snaps up 19 properties in US state of New Jersey

Australian investment fund snaps up 19 properties in US state of New Jersey
Australian investment fund snaps up 19 properties in US state of New Jersey

Dixon Advisory’s US Masters Residential Property fund has bought 19 properties in New Jersey for a combined price of about US$3.8 million (A$3.54 million).

The fund listed on the National Stock Exchange on June 29 and has been trading at $1.61 a share following a listing price of $1.60.

Managing director Allan Dixon tells Property Observer the properties have net yields around 11%, well above the fund’s 8% target yield.

The average purchase price is $200,000, with cheapest property costing $125,000 and the most expensive in the low $300,000 range.

The purchases are expected to be settled on July 10.

“They are all two family duplexes. Some are side by side, others are one floor above, one floor below,” Dixon explains.

The free-standing properties are non-strata, requiring purchase of all sub-divided units.

The fund is currently negotiating on a further 27 properties in New Jersey.

It has close to $70 million worth of investor capital at its disposal to invest in residential properties in areas within commuting distance of Manhattan, in New York.

Dixon says the fund will look to make further purchases in the New Jersey area as it looks to take advantage of property management economies of scale.

Dixon says favourable tenancy rules as well as the “good gentrification potential” are some of the reasons that attracted the fund to the New Jersey market.

“We looked at Boston, Washington, Baltimore, but kept coming back to New York. It has the best metrics: strong employment growth over the last year, it is a service-based economy and is looking very robust.”

Dixon Advisory has set up an office in New York, run by local property experts, to undertake due diligence on potential property purchases.

The fund’s managing director Alex MacLachlan hails from New Jersey.

Larry Schlesinger

Larry Schlesinger

Larry Schlesinger was a property writer at Property Observer

Comments

Be the first one to comment on this article
What would you like to say about this project?