Dexus launches new fund in its opportunity fund series

Dexus launches new fund in its opportunity fund series

Following the success of Dexus’s first dedicated opportunity fund, Dexus Real Estate Partnership 1 (DREP1), Dexus today announces the launch of DREP2.

DREP2 is the second in a series of closed-ended opportunity funds that seek to provide wholesale investors with an enhanced return through exposure to investments in property repositioning, development, special situations and credit opportunities.

DREP Fund Manager Jason Howes said: “In a competitive landscape, we have leveraged the Dexus platform to identify and successfully deliver nine transactions across the spectrum of real estate investments for DREP1.”

DREP1 continues to assess a strong pipeline of opportunities and also announces today residential acquisitions in Melbourne including:

• 41 recently completed apartments in stage 1 of a development in the Melbourne CBD
• 79 apartments in a recently completed unit development in Central Melbourne, subject to FIRB approval

“We continue to see attractive entry points in the residential market, which presents further opportunity for the fund in a capital constrained investment environment,” Jason said.

DREP1 has adopted a disciplined and rigorous deal assessment process, with only 4% of potential opportunities moving to execution. The fund has deployed capital across credit (38%), repositioning (27%), development (23%) and special situations (12%).

DREP1 closed in December 2022, with the fund’s investment capacity at circa $1 billion, including gearing. DREP1 is on track to deliver the target net equity IRR of circa 15%¹.

“Responding to market conditions and continued demand for opportunity-style investments, we expect DREP2 will attract substantial investor interest from domestic and international investors, particularly from high-net-worth investors and family offices looking for enhanced returns from Australian real estate investments,” Jason said.

DREP2 is expected to be substantially larger than DREP1, with the first capital close expected in H1 CY2024.

Footnotes:

1. The Target IRR is not a guarantee, forecast or prediction. There can be no assurance that the Fund will meet the Target IRR. IRR is presented on a “net” basis and reflects Management Fees, Performance Fees, Fund expenses, taxes and duties borne by the Fund (disregarding any rebates). For the purposes of this calculation, cash flows will be grossed up for any withholding tax and will be increased by the face value of any franking credits or foreign income tax offsets received by the Investor, and Investors will be deemed to have received a distribution of any such amounts.