- Perth-based property funds manager, Quadrant Investments, has formed its new fund on the back of a Midland property acquisition
- The QI Diversified Income Trust No 1 has acquired its first property, a two-level office building in the Midland CBD, after its first round of equity raising was oversubscribed late last month
- On the back of the purchase at 2 Keane Street, Midland, the trust has forecasted an offering starting return to investors of seven per cent p/a, paid monthly
- Once fully invested, after future rounds of equity raising, the trust aims to achieve a combined value of up to $40 million
- The property, which is occupied as a key regional head office for WA Police detectives, was purchased for $7,250,000 through a campaign managed by Savills associate director Barney Dear
Perth-based property funds manager, Quadrant Investments, has formed its new fund on the back of a Midland property acquisition.
The QI Diversified Income Trust No 1 has acquired its first property, a two-level office building in the Midland CBD, after its first round of equity raising was oversubscribed late last month.
On the back of the purchase at 2 Keane Street, Midland, the trust has forecasted an offering starting return to investors of seven per cent per annum, paid monthly.
Once fully invested, after future rounds of equity raising, the trust aims to achieve a combined value of up to $40 million.
The property, which is occupied as a key regional head office for WA Police detectives, was purchased for $7.25 million through a campaign managed by Savills associate director Barney Dear.
According to Dear, the property was fiercely contested and heavily sought after due to its long-term lease to the “AA+” rated WA State Government.
Dear said the building enjoyed over 115 enquiries during the marketing process and the final selling price reflected an initial yield of 5.78 per cent and a reversionary yield of 6.25 per cent on market rent.
Quadrant Investment managing director Phil Fogliani said the acquisition provided the perfect foundation asset for the newly formed trust.
“The first acquisition provides this trust with a stable income from a reliable tenant in the WA State Government until July 2028, a highly prized attribute in the current landscape which has seen periods of uncertainty and continuing low returns below current inflation from bank term deposits,” Fogliani said.
According to Fogliani, the asset will also deliver the trust a significant tax-deferred component to its distribution income owing to its attractive depreciation benefits.
“Our assessment of the economic rent required to justify the construction of a new building of comparable quality in the Midland city centre, including matching its exceptional 1 per 41 square metre car parking ratio, is significantly higher than the current passing rent, which will not only improve the prospect for rent growth upside but also in retaining the existing tenant,” he added.
Mr Fogliani said with the equity raising oversubscribed, they were looking forward to acquiring the next asset for the diversified trust.
The purchase and creation of the QI Diversified Income Trust No. 1 expands Quadrant Investments’ portfolio of assets under management, which now totals nearly $60 million.