AMP Capital Investors has sold 75 per cent of a luxury residential apartment asset, named The Residence, and expects all apartments to be sold by June 2012.
The building is part of AMP Capital's Select Property Portfolio 3, but will come out of the fund after the last apartments are sold.
"We've sold 85 per cent by number and that is about 75 per cent by revenue," AMP Capital head of opportunity funds Dale Phillips said yesterday.
"We are chipping away towards having it fully sold out."
AMP Capital still owns two retail areas in the building.
The development of the luxury apartment building at Sydney's Hyde Park started in 2007, initially as a joint venture between AMP Capital and real estate funds management group Galileo.
But the global financial crisis (GFC) made it difficult to obtain further debt financing on the deal and AMP Capital brought in Cbus Property, a fully-owned subsidiary of the building and construction industry super fund Cbus, as a financer through a preferred equity arrangement.
"The project was held up by nine months. There literally weren't any banks lending in 2008, so it took a long time to just get financing in place," Phillips said.
The return on the asset will be strong considering the economic environment, but is likely to be somewhat below the original target.
"For a building like this you set out to get over 20 per cent on your money. We haven't quite got there on this because of the GFC," Phillips said.
The Select Property Portfolio 3 fund was established in November 2007 and focuses on higher return and higher risk property opportunities in the Australasian property market.
It aims to capture an internal rate of return of 17 per cent before fees, tax and fund expenses over its seven-year term.
The fund is a close-ended unlisted wholesale trust and is currently closed to new investors.
It has raised over $190 million in equity.
