Brisbane based Stronghold Investment Services has launched its first bid to enter the Melbourne commercial property market this week, opening a trust for the purchase of two buildings in the Monash Employment Precinct.
The specialist Business Park Fund Manager currently has over $150million in assets under management or joint management in eight high-return property trusts.
Head of Property and Advisory Steve de Nys said the foray into Melbourne was a considered approach and leveraged their local relationships with agents and investors in Melbourne.
“We have a very engaged database of investors who have been waiting for us to secure the right opportunity in Melbourne and I personally have an extensive network of contacts in the commercial and industrial property sector as a former agent for global property groups Savills and JLL.”
Mr de Nys said there was a strong argument for rental growth in the suburban business park sector in Melbourne and competition was limited with the supply of new stock driven by demand and relatively limited speculative supply. All of which made an investment in this market very attractive.
“According to the Victorian Planning Authority, from 2015 to 2050, Melbourne’s population is forecast to increase from 4.5 million to 7.9 million The state government in Victoria has also recognised the need for a polycentric planning approach and is actively promoting suburban centres for health, employment and education.
“The property we have secured is in a central position within the Monash Employment Cluster (MEC). The MEC has Melbourne’s largest concentration of jobs outside the CBD and the Victorian Government has plans to double the number of jobs within the cluster.
“The asset has quality tenants and affordable net passing rents of $217-$238/m2 offering the potential for rental growth. We are forecasting an average cash return of 8.3% per annum for the first three years.”
The Mulgrave Property Trust No.11 continues the Stronghold philosophy of investing in suburban business parks in growth corridors. The group currently has five properties under management or joint management within Brisbane Technology Park, one at Northlakes and two at BTP Westlink Green in Darra, earning shareholders between 8.5% and 11% cash returns annually.
The company also jointly manages a property in Sydney, with an asset in Austlink Business Park in Belrose, returning 11% per annum.
The group created three new trusts in 2016 and fully subscribed its eighth trust in February this year. Mr de Nys said in addition to Melbourne, Stronghold was actively seeking another two to three opportunities along the Eastern Seaboard by the end of 2017.
“We are a relatively new company in the market, (our first trust offer was in 2013) but we have already developed an excellent reputation for delivering on our promises and have carved out a niche for uncovering quality assets and investment opportunities in the business park sector.
“We focus on business precincts that offer exceptional access and relatively high ratios of cost effective car parking. In our experience, these qualities are highly sought after by car dependent businesses that require efficient access to and from a regional network.”
Mr de Nys said Stronghold were firm believers in and advocates of the suburban economy. He is a founding director of The Suburban Alliance which is a lobby group advocating for better planning, funding and infrastructure in the suburbs.
“85% of all metropolitan jobs are based in the suburbs and 90% of all residents live outside the 5klm ring of our CBDs (Elliott, 2015). As congestion increases we believe demand for work places closer to where people live will increase significantly,” he said.
Register your interest for our new Melbourne trust. http://strongholdpropertytrusts.com.au/
For an interview or further information please contact Steve de Nys
sdenys@strongholdinvest.com.au
www.strongholdinvest.com.au
www.suburbanalliance.com.au
Ph: 07 3368 9028
Mobile: 0413 515 808