The dominant theme in the Australian economy in 2024 has been cost of living pressures catalysed by the precipitous interest rate increases during 2023.
Perhaps the other dominant theme has been the imminent expectation of interest rates reducing very soon after the top rate was reached. This expectation, perhaps based on early commentary of easing from foreign central banks, failed to take into account that foreign rates peaked substantially higher than Australian rates.
In any event, for much of the year it has been clear that interest rate relief would be slower and shallower than initially predicted. It is this eventuality that Natgen has been planning for in the operation of all Natgen Investment Trusts.
After not acquiring a single asset for a Natgen Investment Trust during 2023 (due to interest rate uncertainty), we finally found value returning to the market in 2024.
We commenced the year following our acquisitions theme of ‘Region Convenience Retailing’ with the purchase of a Woolworths – anchored shopping centre in Collie, WA.
Our second acquisition embodied our ‘non-CBD office’ theme, with a trust combining office assets in Cairns and the Gold Coast. These purchases were made at well below replacement value, given the precipitous rise in construction costs experienced in the post-Covid recovery period.
During a short hiatus in the middle of the year, we busied ourselves researching a new area of focus for us – specialist assets, including medical.
This research and understanding came to fruition with the purchase of the Icon Cancer Clinic for Natgen Investment Trust SP24. (We will continue to follow this theme into 2025 and beyond, where value can be isolated.)
Natgen Investment Trust SP24
Location: Southport, Gold Coast, QLD
Investment Status: FULLY SUBSCRIBED
Purchase Date: September 2024
Purchase Price: $9.65M
Return: 8% per annum (Paid Monthly)
Fund Term: 5-6 Years
Tenant: Specialty Medical
Location: 116 Siganto Drive Helensvale, QLD & 76 Lake Street, Cairns QLD
Investment Status: FULLY SUBSCRIBED
Purchase Date: May 2024
Purchase Price: $14.25M
Return: 9.02% per annum (Paid Monthly)
Fund Term: 5-6 Years
Tenants: Diverse tenancy profile of national and local tenants. Tenants include Commonwealth Bank of Australia and Alder Group.
Natgen Investment Trust CO24
Location: Johnstone Street, Collie, WA
Investment Status: FULLY SUBSCRIBED
Purchase Date: February 2024
Purchase Price: $10M
Return: 8.5% per annum (Paid Monthly)
Fund Term: 5-6 Years
Tenants: Woolworths supermarket and 8 specialty tenants
Natgen Investment Trust YB24
Location: Wongawallan Road, Yarrabilba, QLD
Investment Status: FULLY SUBSCRIBED
Purchase Date: August 2024
Completed Value: $10.137M
Return: 25.42% Targeted Development Return
Fund Term: 18 months
Tenants: Strata Titled
After making a number of very significant expert appointments this year, I am very much looking forward to 2025. The Natgen team is stronger than ever before and our strategic direction and mission is clear.
Our focus on serving the investment needs of ours unitholders is sharp and clear. In order to do this, we manage relationships with a number of important and often interconnected stakeholder groups, including the tenants in Natgen properties, financiers, local authorities, our builders and consultants and many others.
Care and consideration of the Natgen team is also vital in achieving our mission – a fact which is not lost on us.
This graph plots the forecasts of the big four Australian banks for interest rate easing from the end of November 2024, through 2025 and 2026
Source: Natgen
With this as the background, we expect to continue to acquisitions activity along our established acquisitions themes, being:
- Regional convenience retailing;
- Non-CBD office;
- Value-add industrial; and
- Specialist assets, including medical.
We expect the first manifestation of our 2025 program to be released in January 2025.
If you have made it this far through this rather long and rambling treatise, I would like to take this opportunity to thank you for your interest and support for Natgen. As I mentioned at our recent Christmas function, the Natgen company is, in essence, a community. Each and every member of that community, be they at the centre or at the periphery, contributes to the whole.
I look forward to further communicating with you during 2025 to update you on our progress and future initiatives.
Merry Christmas and a Happy New Year to all.
Steven Goakes
Managing Director
Natgen provides clients with well-considered, carefully measured commercial investment opportunities, accompanied by professional advice from our experienced leaders.
If you’d like to be notified of future investment opportunities, request an Investor Information Pack or contact us directly at invest@natgen.com.au
