In this Livewire Fund in Focus interview, Metrics Managing Partner Andrew Lockhart discusses how Metrics’ new Real Estate Multi-Strategy Fund (ASX:MRE) provides investors with access to commercial real estate investments. 

It’s no secret that Australians have a love affair with property. According to the Australian Bureau of Statistics, one in five Australians (21%) own a residential property outside of their primary residence (i.e. investment properties or holiday homes), while 4% own four or more properties.

The great Australian dream has been quite lucrative over the long term. According to CoreLogic, over the last 30 years, Australian house prices have grown 6.4%, on average, per annum. I would hazard a guess that this growth would be far higher in our major cities, like Sydney.

Previously out of investors’ reach, however, is the major development opportunities in commercial real estate (CRE). Given that Australia needs 1.2 million new homes by 2029 to keep up with population growth, there are a lot of residential development opportunities now on offer.

This is where the Metrics Real Estate Multi-Strategy Fund (Fund) comes in.

The Fund provides investors the opportunity to obtain broad exposure to CRE investments. It targets a total return of 10-12% p.a. (net of management fees and expenses) through the economic cycle (Total Target Return).¹

The Fund is a stapled structure consisting of the Metrics Real Estate Multi-Strategy Passive Trust ARSN 679 413 293 (Passive Trust) and the Metrics Real Estate Multi-Strategy Active Trust ARSN 679 413 695 (Active Trust) proposed to be jointly quoted on the ASX as stapled securities. The ASX ticker code is MRE.

“We’re providing investors with access to private development transactions with some of Australia’s largest and most successful private property development groups,” Metrics Credit Partners’ Managing Partner Andrew Lockhart says.

“The areas that we see as being particularly attractive have really been in residential property development. The demand for housing – residential high-density apartments and residential land subdivisions – that’s a significant part of our investment activity. Equally, we’ve seen opportunities… in large-scale industrial property development transactions.”

In this Fund in Focus, Lockhart takes investors through the opportunity the team is seeing in commercial real estate debt and equity today, his differentiated outlook on rates and what this means for the Fund, as well as the income distributions and returns investors can expect from the Fund.

Timecodes:

• 0:00 – Intro
• 0:27 – What sets Metrics Credit Partners apart from its peers
• 1:04 – Why commercial real estate debt and equity
• 3:04 – Where the Fund invests
• 5:22 – Interest rate outlook and impact on returns
• 6:38 – Return and income profile of the Fund
• 8:11 – How does this work (i.e. private assets in a publicly listed vehicle)
• 10:30 – Risks investors should be aware of
• 11:57 – How investors can access this opportunity