Newmark Capital wants to make its mark with ex-Australian Unity Fund

Newmark Capital boss Chris Langford backs defensive property to stand the test of time and says now is the time to hunt for retail and office plays.

Newmark Capital’s joint managing directors Chris Langford (left) and Simon T. Morris (right).

Former AFL football legend turned property funds manager Chris Langford sees plenty of opportunity to expand in retail assets and even office property via a fund that his company has just bought out of the Australian Unity stable.

Mr Langford’s Newmark Capital, which he runs with Simon T. Morris, has bought the management of the Property Income Fund, a well-known vehicle that invests in both listed stocks and direct property, and he plans to take advantage of improving conditions to grow the unlisted trust.

While the property funds industry has come under pressure, as many existing funds have had to deal with liquidity events by selling off properties, he believes that the environment is now good for purchasing, both in Newmark’s traditional area of shopping centres and also for well-located office buildings.

The fund includes a mix of listed Australian real estate investment trusts, direct property, and unlisted property. It had a portfolio worth about $240m at the end of March, with listed stocks making up about $93m, direct property about $78m and unlisted property accounting for around $51m, with cash holdings making up the remainder.

It held stakes in assets ranging from student and disability accommodation to shopping centres and healthcare assets. On the listed side it was invested in retail, healthcare real estate and office stocks, as well as essential services.

The direct portfolio includes assets in South Australia, Victoria, Queensland and NSW and is weighted to the office and industrial sectors, with some healthcare and social infrastructure holdings.

Mr Langford said the fund had a focus on reliable, recurring income-based investments and it could grow.

“There are some very good opportunities after the dislocation and difficult conditions with the market in the last couple of years,” he said. “We will look to grow it and find more good investments that deliver that stable, recurring income.”

Mr Langford said the firm liked retail, especially centres weighted towards non-discretionary categories, as people “are still spending, and inflation is supporting sales growth”. The firm focuses on everyday shopping centres like large format complexes.

“There’s some very good retailers out there who are performing well, so we’d like to support the stronger tenants,” he said.

While offices have suffered value drops, they are now stabilising. “We think there are interesting opportunities in office markets,” he said. “There’s a very big disparity, but we think there are also a lot of myths about offices at the moment that are incorrect and misleading. So we think there are some very interesting opportunities going to emerge in offices. We think there are some strong investment opportunities that we’re looking at right now,” Mr Langford said.

The trust also owns industrial properties and will look to expand with properties that produce reliable income.

Originally published as Newmark Capital wants to make its mark with ex-Australian Unity Fund