Property and Real Estate
HLG Property and Asset Management(HPAM), is the group’s dedicated asset management, real estate division that focuses on identifying real estate opportunities in Australia.
The HLG Australia Asset management team manages all our investments and employs a focused and systematic investment process, creating value through rigorous analysis and selection of prospective investment, proactive portfolio monitoring, and management, and carefully identified exit strategies.
HLG Property and Asset Management(HPAM) provides buyers advisory services(BAS), real estate services(RES) and conducts efficient real estate operations (REO) which allows us to optimize the performance and returns of our assets, as well as the service we price to our customers with consistent reporting standards and process.
Our real estate investment strategy allows us to invest across the capital structure in either equity or debt instruments based on our relative value investment approach.
We aim to manage and directly invests in high-quality Australian residential, office, and industrial properties, retail, sports and entertainment facilities and actively manage both residential and commercial and healthcare properties across Australia on behalf of third-party capital partners.
Strategy
HLG Australia Property’s core strategy is to identify price dislocations and value-add opportunities in high-quality real estate across Australia by utilizing its industry expertise and direct network. We target investments that are designed to satisfy two specific, risk-mitigated strategies: Wealth Preservation and Capital Growth.
All investments have individually tailored business plans and are acquired into separate, newly formed tax-efficient Special Purpose Vehicles (SPVs), of which co-investors own direct units and from which receive annual or semi-annual income distributions. Value is created and/or enhanced by the application of tried and tested asset management initiatives and rationale, best suited to each investment and its relevant macro/micro market circumstances.
Each step of the investment process, from entry to exit, is managed by HLG Property and Asset Management(HPAM), which is the group’s dedicated asset management, real estate division that focuses on identifying real estate opportunities in Australia. Co-investors are provided with a full suite of reporting documentation.
Investment Rationale:
At HLG Australia, we believe that there exist attractive opportunities to capitalise on the non-linear progression of the Australian real estate market, where proven strategies can be employed to build high performing, risk mitigated property portfolios over the medium term.
As the property market continues in its “cycle” towards maturation, several factors are conspiring to create dislocations between current pricing and the fundamental intrinsic value of excellent quality properties across Australia.
These factors include:
- Shortage of debt finance. The majority of commercial banks servicing Australia are significantly motivated by two key initiatives, namely being the rebalancing of property loan books underpinned by legacy assets, and the accumulation of cash reserves to satisfy increased thin capitalisation ratio requirements by Basel III Capital Reforms. This has severely curtailed their lending appetite in a number of market sectors and geographies and will intensify over the next two financial years.
- Excess of competition in the core. The “herd mentality” of many traditional/large property buyers (institutions and sovereign wealth funds) has focused their attention purely on the most prime locations and assets of Australia. This has led to an excess of buyers for assets of prime sites, which in turn is affecting pricing in these markets, and has created buying opportunities in supplementary markets.
- Increase in seller motivation. The above factors and their knock-on effects have increased the instances of distress experienced and opportune sales by a number of property owners, resulting in an increased need for liquidity, and hence property disposals, the urgency of which subsequently directly affect product price.
Investing With HLG Australia
Our local presence and knowledge of the market allow us to focus our underwriting on the underlying Property and respond to transaction needs.
Client Relationship:
We have built strong, lasting relationships with investors, operating partners, and other participants in the Property and real estate sector. This allows us to grow with them and also quickly asses new situations requiring debt or equity solutions.
Advantages
Responsiveness and Creativity:
We deliver a clear, quick, and thoughtful response. We are a full-service provider offering experienced investment and asset management teams with the ability to think outside traditional management and investing parameters in structuring customized solutions when needed.
Risk-Adjusted Return Investing. We assess and price risk based on our local knowledge of the underlying financial assets.
Fully Underwritten Transaction. We seek to underwrite our transactions sufficiently and also partner with co-investors, as appropriate.
