An explanation of the Arrowstone approach to Precinct Investment is best understood by point of difference to the manner in which most large property investment funds operate.

Most funds seek to manage their investment risk by acquiring a spread of properties either geographically or by market sector or both. Many promote the diversified nature of their assets as the primary attribute of their fund.

When investments are regionally spread it is normal to outsource property management to real estate agencies in each geographic region. When investments are spread by market sector it becomes necessary to engage property managers each with specialist knowledge in that sector, for example, in Retail, Office or Industrial particularly if investments are specialised or complex.

These property managers are invariably marked on their efficiency and portfolio performance in terms of lease expiry profile and rental returns, but seldom on astute acquisition, property added value, tenancy relationships or divestment timing. Generally, the treatment of tenants by property managers is appalling.

To be fair, managing a diversified property portfolio is very demanding and requires market knowledge and on the ground connections to read important trends. It is understandable, therefore, that most Property Funds only deliver, at best, average returns unless they are fortunate with property cycles.

As a point of difference Arrowstone has evolved a very simple approach to property investment that consistently achieves above average, long term investment performance.

• Commercial and Industrial property Precincts with potential have been identified and key properties acquired at a time in the property cycle that represents good buying.

•  In each Precinct we have a hands on Director, who over time, develops a deep understanding of the surrounding environment, engages with the business community and forms positive business relationships with our tenants and potential new tenants.

• A master plan identifying the highest and best use of the Precinct is prepared and where appropriate adjoining properties are acquired to extend the streetscape, add amenity to the business environment and generally add value to all of the properties in the Precinct.

• A point invariably arrives when the level of Arrowstone investment in a particular precinct, particularly if the precinct performs well, becomes beyond the financial capacity of the Group. Arrowstone at this point will bring in investment partners rather than sell out, retaining market knowledge, continuing to expand investment in the Precinct and controlling the management of the growing portfolio.

• Knowledge is power and understanding our market, our tenants and their requirements, is a very simple formula to take much of the risk out of property investment and secure long-term above average performance returns.

• So, rather than diversifying, Arrowstone specialises in Precincts and our regular investment partners choose their own level of participation in each respective precincts and can therefore efficiently manage their own portfolio exposure across the various market segments.