Stronghold launches open-ended fund

Commercial property fund manager Stronghold has launched its first open-ended property fund.

The Stronghold Precincts Property Fund will combine the firm's existing strategy for investing in suburban office precincts - which since 2013 has seen it acquire around $200 million in commercial property assets across 10 closed-ended trusts - with an open-ended structure it hopes will spur investment from a broader group of investors.

The firm said the open-ended structure would allow for a series of benefits to investors, including liquidity in the event circumstances change. Additionally, Stronghold said it could enhance the portfolio effect by housing all of the fund's commercial property within one structure, pointing out management could "mix-and-match" tenants according to their requirements.

As a result, the firm is claiming additional flexibility which it believes gives it a "sustainable advantage" by retaining tenants "over longer periods without the need to give up rental income in favour of longer lease periods."

Stronghold head of funds management Bruce Anderson was confident about the continued performance of suburban commercial office space.

"Stronghold has delivered average cash returns of 8.5% across its 10 closed-ended trusts in 2019, and together with the aligned Graystone Group which provides commercial property development and project management services, we remain convinced that economic fundamentals, government policy and social dynamics will continue to underpin the growth and popularity of suburban commercial office space," Anderson said.

He added the move to an open-ended structure was evolutionary for the firm.

"It is a natural evolution for Stronghold to offer an open-ended fund, allowing financial advisers and a broader group of wholesale investors the opportunity to participate in cash returns from an exceptional portfolio of commercial property assets," he said.

Read more: Stronghold Precincts Property FundBruce AndersonGraystone Group
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