Investment firm Mercer Alternatives has committed $100 million to a Dexus property fund targeting value-add, development and credit opportunities in Australia.  

Mercer, which has US$380 billion under management, will become a cornerstone investor in the Dexus Real Estate Partnership 1 (DREP1) fund. 

The new commitment takes the fund’s total equity capital commitments to about $265 million. 

“This investment strengthens DREP1’s investment capacity, enabling the Fund to advance its strategy of providing wholesale investors with an enhanced return via exposure to investments in property repositioning, development and credit opportunities,” said Deborah Coakley, Executive General Manager, Funds Management at Dexus.  

“In addition to leveraging Dexus’s integrated platform, we have strengthened our in-house capability with a specialist team of investment professionals with expertise in driving enhanced returns from opportunistic investing.” 

The new commitment comes after the fund secured its first three investments last November.  

The investments included an office development in the Melbourne suburb of Richmond; an industrial development in the Sydney suburb of Chester Hill via a co-investment with Dexus; and a $70 million senior construction finance facility via a co-investment with Solido Capital. 

The Richmond acquisition was a circa 1,500 sqm development site with plans to develop a 10,000 sqm A-grade office building.  

The Chester Hill purchase was a 3.8-hectare infill land parcel, allowing the company to develop a circa 20,000 sqm small unit industrial estate.  

The senior finance facility was provided for the construction of a permit-approved mixed-use development project in the Melbourne suburb of Elsternwick.  

Dexus said the fund was the first in a series of closed-ended opportunity funds targeting investments in value-add, development and credit opportunities. 

In other Dexus news, the company sold its interests in two offices in Sydney’s CBD and Parramatta totalling $555m last month, as well as a grade-B office in North Sydney for $152.4 million. 

In November, Dexus disposed of a Sydney CBD office to Charter Hall’s prime office fund for $385 million, while the Dexus Industria REIT bought a warehouse in the Brisbane suburb of Narangba for $44.5 million.