Looking outward: property investment in 2020 and beyond by Shane Quinn, Executive Chairman
21st December 2020
It’s hard to believe that 2020 is almost at a close, after what has been a truly extraordinary year for us all.
I’m really proud that despite all the changes and uncertainty of this year, we’ve been able to not only maintain but build on our track record – driving excellent results for our tenants, investors and ecosystem partners through an ongoing culture of trust and transparency.
Over the past 12 months, we’ve had great success in terms of both leasing and sales, including our first acquisition as part of Master Fund 2, an industrial asset in Adelaide.
After completing extensive refurbishment works at both 8 St Georges Terrace, Perth and 431 King William St, Adelaide, we’ve been able to secure a number of new tenants at both office buildings. The expansion of the Port Adelaide Distribution Centre (PADC) has also enabled us to secure two new high-profile tenants.
In Geelong, construction works are now underway at the development of the new Geelong Civic Precinct and construction is tracking ahead of schedule at the new GMHBA headquarters.
As a result of this activity, we’ve been able to maintain a weighted average Internal Rate of Return (IRR) of 23.8% for our investors, increasing the Total Return to 102.4% – significantly higher than the industry average and up more than 6% from last year.
We believe a key driver of these results is our ‘love the tenant’ philosophy and the hands-on approach of our team, who always strive to provide an exceptional tenant experience.
We have remained as committed as ever to working alongside our tenants to understand their changing needs and provide tailored, flexible solutions. The result is an industry-leading tenant retention rate of 92.4% during what has been one of the most challenging years in the leasing market.
Across our assets, we have provided approximately $250,000 in rent relief to assist tenants through this time. For us, we see this as an important investment, with the cost significantly offset by the value of developing deeper, long-term relationships.
We’re immensely proud of our track record. It shows that our business model, which places trust, relationships and transparency at its core, has stood the test of time. As a result, we are able to offer our investors ongoing value in the form of consistently strong, long-lasting returns.
Looking forward and looking outward, we continue to see great opportunity in markets that have been overlooked and assets that have been mispriced and mismanaged. In the wake of COVID-19, we’ll be paying close attention to suburban offices as well as industrial.
We will continue to stick to our buying fundamentals to seek out opportunities with untapped value. Given the rapid uptake of new technologies and automated warehousing, we believe that disruption in the industrial sector is inevitable, which could significantly shift the value of current A-grade assets. With this in mind, we will be focusing on land-rich, over improvements-rich assets, to ensure strong and stable investor returns.
Although it may look a little different, we are confident that office is here to stay. With the strength of our Master Fund 2 behind us, QE is in an excellent position to take advantage of market opportunities as they arise.
While the longer term consequences of the pandemic are difficult to predict, we believe that our strict buying conditions combined with our team’s expertise in re-engineering and improving assets will continue to be incredibly valued.
Thank you to all our investors, tenants and ecosystem partners for their ongoing support during this year. We look forward to another great year together in 2021 – hopefully with more opportunities to connect face-to-face!
Shane Quinn, Executive ChairmanBack to all articles