Newmark Capital, a leading Australian real estate investment and asset management firm, has finalized the acquisition of the Unity Property Fund (UPF) from Australian Unity in a landmark deal valued at approximately €145 million. The transaction marks one of the largest open-ended property fund deals in recent years and underscores the growing trend of consolidation in Australia’s real estate investment sector.
Deal Overview
The Unity Property Fund, launched by Australian Unity over 18 years ago, has established itself as a major open-ended unlisted property trust focused on income-generating commercial real estate. At the time of the sale, the fund included a diversified portfolio of 15 assets across major cities on Australia’s east coast, such as Melbourne, Brisbane, and Sydney.
The fund’s assets comprise:
- Prime and secondary office buildings
- Retail complexes and neighborhood shopping centers
- Industrial and logistics facilities
- Government-leased infrastructure assets
The total gross asset value (GAV) of the portfolio is estimated at €340 million, with Newmark acquiring an equity interest representing approximately 42.6% of the fund structure.
Strategic Rationale
For Newmark Capital
This acquisition is a strategic expansion for Newmark, aimed at growing its exposure to stable, income-producing institutional assets. CEO Chris Langford commented:
“The Unity Property Fund presents a well-established, diversified portfolio with high-quality assets. We see strong synergies with our existing holdings and solid opportunities for long-term growth.”
Newmark currently manages assets worth more than €2.5 billion, including major holdings in Melbourne, Adelaide, and Perth. With the inclusion of UPF, the company strengthens its position in the open-ended fund segment and expands its offering to institutional investors.
For Australian Unity
The sale aligns with Australian Unity’s updated strategy to refocus on social infrastructure, including health care, seniors housing, and community wellbeing projects. Proceeds from the sale will be directed toward developing new initiatives in the aged care and health services sectors.
Australian Unity retains a minority interest in the fund and will continue to be involved in the operational management during a defined transition period.
Market Context
The acquisition was completed amid a complex macroeconomic backdrop marked by rising interest rates, persistent inflation, and evolving demand across asset classes. Despite these headwinds, UPF’s portfolio has proven resilient, with occupancy rates above 95% and long-term leases held by government agencies and major retail tenants.
The fund’s estimated net operating income (NOI) is around €12.8 million annually, delivering an expected yield of 5.6% to 6.1%, which remains attractive in the current rate environment.
Portfolio Breakdown
Unity Property Fund’s portfolio demonstrates a high degree of sectoral and geographical diversification:
- 40% – Office properties in CBD locations, particularly Melbourne and Brisbane
- 30% – Retail assets, including suburban and neighborhood centers
- 20% – Logistics and warehousing in transport-adjacent zones
- 10% – Government and educational buildings
Some of the key properties in the portfolio include:
- Fitzroy Tower (Melbourne): a government-leased office building
- Everton Plaza (Brisbane): a retail complex with over 35 tenants
- Westline Logistics Hub (Western Sydney): a fully leased class A distribution center
Growth Prospects and Synergies
Both Newmark and Australian Unity see this transaction as a foundation for future expansion, particularly through:
- Enhancing operational performance
- Increasing net yield via active asset management
- Attracting further institutional capital
- Exploring the conversion of the fund into a listed REIT under Newmark’s stewardship
The existing fund management team will be retained, while Newmark plans to integrate advanced analytics and asset tracking technologies to optimize performance.
Trends in Open-Ended Property Funds
This acquisition highlights a broader trend in the Australian property market: the consolidation of unlisted property funds. According to CoreLogic, the number of open-ended real estate funds in Australia has dropped by 12% over the past 18 months, driven by regulatory shifts, investor demands for transparency, and the rise of large-scale institutional players.
Funds focused on stable income-producing assets—particularly in office, retail, and logistics—are increasingly favored by superannuation funds, insurers, and private banks seeking low-risk real estate exposure.
Analyst Reactions
Analysts from Macquarie and UBS have labeled the deal as “well-timed and strategically sound,” noting:
- Strong asset alignment with Newmark’s portfolio
- Consistent cash flow and attractive yield
- Risk mitigation through broad sector diversification
- Potential valuation uplift if the fund is publicly listed
However, they also caution that successful integration will require tight operational controls and ongoing capital reinvestment, especially for properties earmarked for value-add upgrades.
Conclusion
Newmark’s acquisition of Unity Property Fund for €145 million is a defining move that reinforces its presence in Australia’s institutional property market. The deal provides immediate access to a robust, income-producing portfolio and lays the groundwork for future fund development, potentially as a publicly traded REIT.
With both parties aligned in their strategic goals—Newmark in expanding its fund management platform and Australian Unity in refocusing on health and social infrastructure—this transaction exemplifies a mutually beneficial shift in real estate capital flows amid a dynamic economic environment.
