15.06.2022

    Ryan Nguyen: Looking past the dust and hair

    Looking past the dust and hair
    By Ryan Nguyen, Senior Transactions Analyst, Quintessential Equity

    As a senior transactions analyst at Quintessential Equity (QE), I’m part of the team that looks at buying opportunities and decides whether they suit our QE mandate.

    What’s the key to choosing a building to invest in? Buying at a competitive price is always a good start, of course, but that’s not the only key ingredient. 

    Patience is a virtue

    The key to our investment strategy is patience. A lot of people get nervous when they see the market getting hot, and don’t want to be left out. They feel like they need to follow the crowd and buy something.

    At QE, we don’t want to rush our investments, and we don’t make acquisitions for practice. We won’t go out and spend the money just because investors give it to us and tell us to spend. We don’t buy until we find something truly exceptional.

    We always look for the upsides for our investors. With our patient and conservative approach, although we offer an on-paper guidance of 8% Net IRR, we often have the opportunities to outperform our assumptions. 

    431 King William Street, Adelaide

    Problem or opportunity?

    Along with patience, we are very good at dealing with problems. And yes, old buildings do usually come with problems.

    However, as long as we believe the asset has strong fundamentals, we enjoy the challenge of tackling those problems. A lot of people want a clean, shiny building – a 101 Collins Street – where they receive stable income every month and don’t really have to do anything.

    We’re not that type of buyer. We look for buildings with strong bones but carry problems that our expertise can fix, which often allow us to buy them below replacement cost, regenerate them and leave them better than we found them.

    Appearances can be deceiving. Some buyers see something with a bit of hair on it and it scares them off. QE has the expertise to tell whether there are some entrapped values in a building beneath the dust, hair and rough edges.

    3 Richardson Place, North Ryde

    Why good bones?

    A well-engineered office building often has generic engineering design with good natural light, good ceiling height, flexible floor plates, within walking distance of some forms of public transport and is surrounded by good amenities.

    That strong foundation, coupled with buying below replacement cost, gives us a strong competitive advantage to attract and retain tenants. In the end, the combination of our engineering, capital raising and property expertise at QE has allowed us to buy the right properties, unlock their entrapped values and produce the best outcome for our investors.

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