Stride Property announces new joint venture with J.P. Morgan
5 September 2019 – Stride Property Group (Stride) has today announced the establishment of Industre Property, a new industrial property joint venture with a group of international institutional investors, through a special purpose vehicle, advised by J.P. Morgan Asset Management (together, JPMAM).
JPMAM will commit $185 million to establish Industre Property and fuel near-term growth initiatives. Stride will contribute 12 of its industrial properties, which will be managed by Stride Investment Management Limited (SIML), and will retain an initial holding of approximately 70 percent.
The move aligns with Stride’s strategy to establish a group of property investment management products in specific sectors to stimulate growth in its investment management business. Industre Property will be SIML’s fourth managed portfolio and third product, which includes Investore Property Limited and Diversified NZ Property Trust.
Stride CEO Philip Littlewood says Industre Property will be Stride’s sector-specific investment management product for the industrial property sector in New Zealand, largely in the Auckland market.
“Our vision is to grow a significant portfolio of high-quality industrial properties and we see a great future in this space. Initially, Industre Property will have funding capacity for an additional $190 million of acquisitions and developments over the short term, potentially taking the industrial portfolio’s initial value to approximately $550 million,” says Mr Littlewood.
He also indicated that more deals were in the works, saying: “The establishment of Industre Property aligns with Stride Property Group’s vision to grow its investment management business through growth in its existing and new products. This industrial partnership is our newest investment product. After completing this deal, Stride’s Loan to Value ratio will be one of the lowest in the market at around 24%. We plan to use our funding capacity to support our investment products, and to grow our office portfolio in the near term to build up our direct investment in that sector.”
Mr Littlewood also signalled Stride’s long-term commitment to holding a large investment in the industrial property sector, saying: “Due to Stride’s committed industrial property developments currently underway, Stride will continue to hold at least a quarter of its investment portfolio in industrial property.”
He also noted that the partnership with JPMAM is a testament to Stride’s proven ability to grow its portfolio in the industrial property sector.
“The establishment of Industre Property shows JPMAM’s confidence in Stride’s assets, and our team’s ability to continue to grow our portfolio in the industrial sector, which has increased by $145 million since April 2018.”
J.P. Morgan Global Alternatives is the alternative investment arm of JPMAM. David Chen, J.P. Morgan Global Alternatives’ Chief Investment Officer for Real Estate Asia Pacific, says: “We’re excited to form this long-term industrial partnership with Stride, an established, NZX-listed, fully integrated diversified property group. Industre Property is well-positioned to capitalise on New Zealand’s structural supply shortage of industrial property given current and future tenant demand levels.”
J.P. Morgan Global Alternatives was established 50 years ago and today comprises USD70 billion of real estate under management globally, over 300 investment professionals, 18 offices, and has completed average annual acquisition activity of USD5 billion over the past five years.