Standard Life’s Select Property Fund makes a brazillion profit
Standard Life Investments, the global fund manager and one of the largest real estate investors in Europe, has announced that its Select Property Fund has sold the Alana II Building in São Paulo, Brazil for £11.60 million.
The multi-let office property has been purchased by a Brazilian wealth management family. The Select Property Fund has achieved a GBP capital profit on investment of +41.4% over the 2.5 years it has held the building.
Acquired in October 2009 the 13 storey office building was Select Property's first Brazilian office acquisition. Following purchase a substantial refurbishment was undertaken leading to the building becoming fully let in August 2011 to high quality tenants. Throughout the Fund's ownership, the average rental rate in the building has increased by 79%.
Commenting on the sale, Andrew Jackson, Fund Manager, Select Property Fund, Standard Life Investments, said:
"Our strategy three years ago was to capitalise on the strong occupier demand for the Berrini district of São Paulo and also to improve the building's profile through refurbishment. I am delighted that with the assistance of our business partner Eccelera, we have been able to deliver on this strategy and produce strong returns for our investors.
"Real estate's yield characteristics continue to be attractive to investors.
Globally, we favour core prime locations and see the best resilience in better-quality assets in supply-constrained markets. In terms of direct real estate, we continue to look for opportunities in regions that can provide a mix of high income and strong capital growth. Within continental Europe, we favour the high-yielding logistics markets, whereas in Asia Pacific we prefer office markets with constrained supply, such as Perth, Australia. In the Americas, we favour cyclical office markets where demand-supply dynamics increase both capital growth and rental uplift potential."
The first of its kind in the marketplace, the Select Property Fund offers both institutional and retail investors in the UK access to global property markets. The £554 million fund accesses commercial property markets via direct investment, unquoted specialist property products and stock exchange listed property vehicles globally. Over the 3 years to end February 2012 the Standard Life Investments Select Property Fund has delivered an aggregate return of +44.8% to investors.