- Westbridge Funds Management sells South Hedland apartment complex for more than double 2021 acquisition cost
- Active repositioning and energy efficiency upgrades delivered annualised distributions of approximately 11.7 per cent over the hold period and a total internal rate of return of over 31% per annum
- Whole-of-asset sale to Singapore’s Centurion Corporation preferred for earlier capital realisation.
Westbridge Funds Management is wrapping up its Pilbara focused investment fund with the $29 million sale of a 77-apartment residential complex in South Hedland to Singapore’s Centurion Corporation.
The apartment complex, located at 10 Forrest Circle, was acquired during COVID in late 2021 for $12.5 million as the sole asset in Westbridge’s Pilbara Fund 2.0. The second Pilbara fund was established to target undervalued properties in the region set to benefit from the strong mining sector.
The transaction represents a gross capital uplift of $16 million on the initial acquisition cost, reflecting the changing conditions in the Pilbara residential market since 2021.
Constructed in 2014, the property comprises a mix of one, two, and three-bedroom apartments across five levels. The property was actively repositioned and upgraded by the Westbridge Developments team following the acquisition, including significant energy efficiency improvements, while new leasing initiatives were implemented.
Westbridge Head of Developments Phil Anderson said those upgrades delivered improved net income, reduced operating costs and enhanced the property’s appeal to institutional investors.
“When we entered the Pilbara market our strategy was focused on acquiring quality residential stock at scale in a supply constrained market to generate strong income returns for our investors throughout the hold period while providing the flexibility to make the right exit decision when conditions aligned,” Mr Anderson said.
“The combination of the operational improvements we made to the asset with the market conditions we’re seeing now, made this transaction a compelling opportunity to deliver a strong 30% internal rate of return result for our investors.”
Over the life of the fund the asset delivered strong operational performance, with its rental income providing annualised distributions of approximately 11.7 per cent, including a 14.8 per cent annual distribution in FY2025. Westbridge Chairman Damian Collins said divesting the property via selling each individual unit or all in one line was considered, with the entire property sale preferred due to earlier capital realisation and reduced execution risk.
“The decision to sell came down to disciplined capital management,” Mr Collins said. “With a strong uplift already achieved from our active asset management program, we felt it was the right moment to crystallise those returns for our investors.
“Locking in an outcome like this, at this price, in just over four-and-a-half years from purchase, is exactly the kind of result the fund was designed to deliver.”
“The asset is well positioned for the purchaser. It provides a strong rental income and sits in a market where supply is low, and replacement cost is high” Mr Collins said.
