KUALA LUMPUR: Star Media Group Bhd
(SMG) has committed A$35.5mil (RM99.4mil) to subscribe for units in TrustCapital Australian Office Fund No 3, marking a move to diversify its income streams.
In a filing with Bursa Malaysia last Friday, the media group said its wholly-owned subsidiary, Star Publications (Singapore) Pte Ltd, had entered into a subscription agreement with TrustCapital Advisors Investment Management Pte Ltd, the manager of the fund.
The fund is a private closed-end unit trust focused on investing in prime commercial office assets across major Australian cities, including Sydney, Melbourne, Canberra, Brisbane and Perth.
“The subscription provides the group with an alternative avenue to enhance its investment income, complementing the group’s existing placements in money market funds,” SMG said.
It added the investment grants exposure to Australia’s prime office market, which offers stable rental yields and potential capital appreciation, supported by improving market conditions and resilient demand for high-quality office assets.
The fund aims to generate attractive risk-adjusted returns, primarily from rental income, with a target internal rate of return of above 10% per annum.
It is targeting assets under management of up to A$1bil and plans to invest in three to four Grade A and Grade B+ office properties.
The fund has a lifespan of eight years, with a three-year investment period.
SMG said the investment will be funded entirely via internally generated funds, with capital to be deployed progressively through drawdown notices issued by the fund manager.
The group added the subscription is expected to enhance its net assets in the future, arising from the revenue contribution from distribution income from the fund, and will have no effect on gearing as it is fully funded by internally generated cash.
