Private equity real estate firm SilkRoad Property Partners (SilkRoad) today announced the first close of its Core-plus real estate fund, at US$144 million including top-up commitments. This is the first Core-plus commingled fund for the Singapore-headquartered firm, expanding from its existing Value-add product suite comprising of SilkRoad Asia Value Partners (SAVP) and SilkRoad Asia Value Partners II (SAVP II), which closed end of 2020 with aggregate commitments that exceeded target. In another first for SilkRoad, this is an open-ended fund with redemption features. SilkRoad aims to grow the fund over time to US$1 billion in GAV.
The Core-plus fund targets pandemic resilient sectors such as Logistics & Industrial, Multi-family & Senior Living, Service & Convenience retail, and High Growth real estate (led by IT and life sciences), in Singapore, Hong Kong, Japan and at a later stage, China, for a long-term return target of 8-10% per annum, on 50% leverage.
SilkRoad believes that these sectors enjoy long-term structural tailwinds that have been amplified by the pandemic, and have also insulated them from the pandemic. Within SilkRoad’s existing portfolios that are dominated by these asset classes, both portfolio NOI and valuations grew over 2020 and 2021 despite the disruptions of Covid-19. The firm has also been able to divest four assets over these two years at prices that exceeded underwriting, extending its long track record of all profitable divestments.
The newly launched fund is already on track to close on three seed assets, all Logistics & Industrial properties in Hong Kong, which on top of the long-term structural play, is also a medium-term market rebound play.
Peter Wittendorp, CEO of SilkRoad Property Partners, said, “This is a high conviction strategy, based on our own operating experience in these markets and asset classes. We look to leverage our sourcing and asset management capabilities honed from years of successfully investing the SAVP series to create value. We are grateful to the investors who also believe in this strategy and have placed their faith in us to launch the fund.”
SilkRoad is advised by Rivier Global Capital Advisors and Dechert LLC, with Ocorian as the main service provider for the fund.