Remara launches its Equity-based Real Estate Fund
Sydney-based Remara has launched a new way for Australian investors to invest confidently in property development with an Equity-based Real Estate fund.
The seven-year-old alternative asset management firm is staking success on Australia’s unabating demand for property development investment while giving family office, institutional, SMSFs and individuals a way to minimise the risk in capital access, planning decisions, migration and building supply chain costs of heavy development for groups that may have previously been direct developers.
McVeigh says it’s a perfect time to go to market with a dedicated, diversified equity property development model.
“Our model enables investors to keep investing in what they know and feel secure with, without the higher risk profile of a highly concentrated investment into a single asset.”
“The challenges around interest rates, planning delays, immigration, international student caps and cost pressures of development has led to a national housing shortage, creating the perfect timing for capital investment into the sector,” he said.
“Our fund gives people the security of investing in what they know and want, which is property, without the substantial and concentrated capital costs and the exposure to interest rate uncertainty, planning, and they will likely meet the projected development return of 20 per cent, given the housing shortages across the country.”
McVeigh has mirrored the new fund on Remara’s fast-growing credit business, which manages more than $1.6Bn in Australian-based credit assets.
“Remara’s credit strategy is built on diversification with a large pool of loans, reducing the reliance on one obligor and turning the outcome into a highly measurable statistical outcome. Our real estate strategy mirrors this with smaller projects and less risk per project while maintaining headline project and fund returns.”
Remara’s existing credit platform, which has exposure to Real Estate loans, provides a strong network of proven counterparties that will be part of the new fund.
McVeigh says, “We have established a network of property developers with a strong track record of successful projects. Remara partners with them at accretive project entry points, providing them greater access to capital to grow their business and project pipeline.”
He adds that the developer partners will work across residential, commercial, and mixed-use areas and predicts that the return of international tourism and the growth into regional coastal cities will likely see the inclusion of regional development.
McVeigh notes that investors in some Real Estate funds have struggled with redemptions and reduced demand, yet is bullish that the Remara model isn’t comparing itself to other players in the market and the diversified pool of smaller projects will alleviate the majority of investor concerns around liquidity.
“We are not comparing ourselves to existing Funds in the market because it’s an entirely new model for real estate investing in Australia,” he said.
Research undertaken by Remara indicates that investors are looking for growth investment opportunities that can perform well in markets of higher interest rates. The proprietary research shows investors have found it challenging to deal with equities, the volatility experienced, and the seemingly limited out performance of most managers in the market.
Private Equity has also struggled, with limited exits and valuations dropping, and most REITs are showing negative returns.
“We have developed the Fund and Investment strategy to outperform on a growth basis over a long horizon in a market that is exceptionally well known, but hard to access for investors.”
McVeigh points out that many Australians want to undertake development; however, the complexity of regulation and significant capital needs, in addition to the overall risk, leads many to stay on the sidelines or invest in vanilla investment properties.
“Our model is reducing the barriers of entry to invest into property development and re-positioning by allowing investors large or small the opportunity to invest in a diverse pool of assets – if property development is your knowledge base, or you have always geared your assets towards it, but can’t take on the development risk yourself, we can.”
Managing Partner Andrew McVeigh founded Remara after a long property career, including time as CFO of Brookfield Property Group across Asia-Pacific; he also served on the CFO Roundtable for the Property Council of Australia.
Remara’s Real Estate Fund launched in August 2024. The Group currently has over AUD$1.6Bn under management and is currently opening a Luxembourg-based fund, allowing global investors the ability to participate in their credit and real estate strategies.
