Trust buys CBD building

Two-storey occupied by bank

A Cairns city building that’s been home to the Commonwealth Bank since its construction in 1991 has sld for a seven figure sum.

Brisbane-based property fund manager Natgen has increased its Queensland office portfolio with the successful acquisition of the Lake St building for $5.25m.

Acquired for Natgen Investment Trust QC24 after being on the market for six weeks, the two-storey CBD office and retail building is home to the sole Cairns branch of the Commonwealth Bank along with smaller office tenancies on the upper level.

Natgen managing director and responsible manager Steven Goakes said the company would actively manage the trust for an anticipated five to six years.

“Natgen’s acquisition strategy for this trust is to buy office assets in prime locations in regional cities of Queensland,” he said. “Our income trust investors want long-term income returns and capital growth prospects, and we think that 76 Lake St offers both. We are happy to keep CBRE Cairns as the manager of the building and work with them to implement our planned building enhancements.”

Post-pandemic, Mr Goakes said Queensland continued to benefit from ongoing population growth, together with the attraction of lifestyle destinations within coastal areas such as Cairns.

He said the exodus of workers from metropolitan city centres was not a trend in the wake of Covid at smaller regional centres as workers in the big cities look to alternative work settings to avoid an often lengthy commute to work.

“Travel time to regional office localities is far less than (metro city) locations,” he said.

“Despite modern work habits, the office remains the main workplace for many workers and is far from obsolete.”

The most regionalised state in the nation, Queensland has important business centres stretched along the coast, from the Gold Coast in the south to Cairns in the Far North, according to Natgen.

The Commonwealth Bank building was sold by Hyatt Property (Cairns) Pty Ltd after being acquired from Mineral Resources Lihir Pty Ltd for $4.2m in 2020.

Peter Carruthers

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Brisbane fund manager expands Queensland office portfolio amid strong investor demand

Brisbane-based fund manager Natgen has expanded its Queensland office portfolio, acquiring $14.25 million worth of properties in Cairns and the Gold Coast.

The expansion comes in response to strong demand from sophisticated investors for a property-backed fund targeting initial monthly distributions of 9.02% per annum.

Natgen Managing Director Steven Goakes said: “We were attracted to these assets as they fit with our strategy of regional office assets in prime locations, with desirable economic fundamentals.”

The newly acquired properties include:

• A two-storey CBD office and retail building in Cairns, purchased for $5.25 million
• A three-storey commercial office building in Helensvale on the Gold Coast, acquired for $9 million

Goakes noted that office markets in both Cairns and the Gold Coast are experiencing historically low vacancy rates, boosting growth prospects for the properties.

“Office stock in strong regional locations has shown greater resilience during the post-COVID period,” Goakes said.

He added: “Whilst much has been made of the resetting of capital city CBD office assets worldwide due to a purported long-term mass exodus of workforces to alternative work settings, regional offices do not suffer from the same negatives.”

The fund, Natgen Investment Trust QC24, closed oversubscribed with investors contributing $9.45 million in capital.

Natgen plans to actively manage the trust for an anticipated five to six years, targeting a tax-advantaged distribution of 9.02% in the first year, rising to 9.16% in the second year, paid monthly.

The company manages a portfolio of investment and development assets across Queensland, New South Wales and Western Australia, supported by sophisticated and wholesale investors.

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Office portfolio expands

Brisbane property fund manager Natgen has expanded its Queensland office portfolio to Cairns and the Gold Coast following the settlement of $14.25m worth of buildings for its latest property trust.

The Natgen Investment Trust QC24 paid $5.25m for the two-storey Common- wealth Bank anchored CBD office and retail building at 76 Lake St, Cairns, in a deal struck by CBRE’s Danny Betros. According to CoreLogic the property last changed hands four years ago for $4.2m.

The trust also settled on the $9m purchase of the three-storey multi-tenanted office building, Alder Place, at 116 Signato Dr, Helensvale, after a campaign by CBRE’s Jack Morrison, Adelaide O’Brien and John Nucifora.

The nine-year-old building was owned and occupied by Gold Coast construction and development company Alder.

Natgen will actively manage the trust for an anticipated five to six years, targeting a distribution of 9.02 per cent in the first year of operation, rising to 9.16 per cent in year two, paid monthly.

“Natgen’s acquisition strategy for this trust is to buy office assets in prime locations in regional cities of Queensland,” said Natgen managing director Steven Goakes.

“Office stock in strong regional locations has shown greater resilience during the post-Covid period.

“While much has been made of the resetting of capital city CBD office assets world- wide due to a purported long- term mass exodus of workforces to alternative work settings, regional offices do not suffer from the same negatives.”

The Cairns building has been home to the Commonwealth Bank’s regional flag-ship branch since its construction in 1991, with a total land area of 1012sqm, total tenancy area of 1421sqm and weighted average lease expiry of three years.

Alder Place has a total tenancy area of 1478sq m, total land area of 2000sq m and a weighted average lease expiry of 5.63 years.

Mr Goakes said both properties were in localities with high long-term population and economic growth, high traffic areas and a diversity of tenancies.

Chris Herde,  Journalist

ALDER HQ’S $9M DEAL

Gold Coast-born construction and development company Alder has sold its Helensvale headquarters to a fund’s manager in a $9m million deal.

The 116 Siganto Drive property, built nine years ago, was bought by the Natgen group and is being put into a property trust.

The buy has been funded by an offer to investors of returns of 9.02 per cent, paid monthly, an offer that closed oversubscribed.

The fully let property is netting $668,165 a year, putting the buy on a 7.4 per cent yield.

The three-storey office building named Alder Place, which fronts the M1 motorway, will remain the Alder headquarters for at least 13 years.

The private group in 2015 won Master Builders’ regional, state and national awards for the design and construction of the building.

Alder, set up more than 20 years ago, has in excess of 100 staff and has delivered more than300 projects spanning the health, education, commercial and community sectors in Queensland and NSW.

The group has land holdings of 170ha throughout Queensland.

Alder managing director Greg Alder said Alder Place was the company’s flagship corporate HQand its sale allowed the company to satisfy its future growth plans.

“Alder created this award-winning building to ensure maximum connectivity to the M1 in both directions and to expose our brand and craftsmanship to a high number of daily commuters,” he said.

“We have chosen to sell the asset as it is one we no longer want to retain within our investment portfolio – it locks up capital for growth.”

The building is one of two being put into a Natgen trust – the other is a two-level office and retail property in Cairns.

Natgen managing-director Mr Goakes said the ability to acquire the Alder building below new replacement value underpinned the long-term value and growth potential.

“Building costs have risen precipitously in the last couple of years, which means we are able to buy good quality office buildings for significantly less than they would cost to replace,” he said.

“When we are looking for new assets for our investment trusts we seek unique opportunities in areas where we see long-term value.

“Vacancy rates are historically low on the Gold Coast, which is pushing rents up over time, and in today’s environment, where it’s not easy or cost effective to build any new spaces, we are looking down the barrel of tight vacancy levels for some time.”

QUENTIN TOD,  Journalist

Queensland investment company National & General Group buys Collie Central shopping centre for $10 million

Collie’s biggest shopping complex has new owners after being bought by a Brisbane-based group for an eight-figure sum.

The Collie Central shopping centre was put on the market last year and has now found a new owner in the National & General Group after it bought the centre for $10 million.

Natgen managing director Steven Goakes said the company would be sticking to the basics in its operation.

“This is our fifth shopping centre in our portfolio so we’re getting a level of expertise in how to run them to ensure that customers are happy, and thus tenants are happy,” he said.

“Our customers are the shop owners and their customers are the shoppers so we make sure that we do with our properties whatever makes the shoppers happy.

“They might sound like silly little things but making sure the line markings in the carparks are up to scratch, making sure that the place is clean and tidy and bright and well lit, the signage is good, all these sorts of things.

“They sound like common sense, but it’s not always common practice.”

This is Natgen’s first investment venture away from the Eastern States, with the company owning trusts with properties in Queensland and New South Wales.

The company said the shopping complex — which includes a Woolworths and a Terry White Chemmart — had an average weighted lease expiry of four and a half years and a total tenancy area of 4500sqm.

Mr Goakes said Collie’s energy transition made it an attractive investment.

“The energy transition is something that I think is generally beneficial to an area, not everyone sees it that way, but we certainly see that,” he said.

“When I actually looked at Collie and the location’s attributes of that particular area of energy transition, it’s really so central to the South West Interconnected System, it’s the obvious place for things to happen.

“When you look at how much government money is going into that process of transition, it’s like watering a garden, it always produces in multiples of what they put in.

“With the amount of money that we’re seeing going into that area it’s certain the benefits will be much greater than the risks, and that’s what we’re looking for.”

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Natgen in WA venture

Property fund manager Natgen has expanded into WA by acquiring shopping centre Collie Central for $10m for its unlisted property trust fund, Natgen Investment Trust CO24.

The complex, about 170km south of Perth, is anchored by Woolworths and major tenants include Terry White Chemmart, Liquorland, OPSM, and a WA government office.

The centre has a weighted average lease expiry of 4.5 years and a total tenancy area of 4500sq m.

The trust raised $6.5m in equity from wholesale investors, which was combined with a $5m debt facility to fund the acquisition.

It offered a distribution of 8.5 per cent per annum over a five to six-year term, with potential for further income generation and long-term capital growth.

source: The Australian, 9th May 2024, page 9

Fund buys up on the Gold Coast

Fund manager Natgen has expanded its Gold Coast warehouse development pipeline, buying two developments in the city’s northern suburbs.

They paid $2.95m for a 4500sq m vacant two-lot site at 8-10 Naves Drive, Coomera.

The property will go into the Natgen Development Trust CM23 and when built will comprise a commercial showroom/warehouse facility. It will offer more than 18 tenancies ranging in size from 100sq m to 220sq m.

Dave Kertesz and Jacob Zhou from Crew Commercial struck the deal. It follows Natgen’s earlier investment via the Natgen Development Trust OR23 of a 3162sq m site at 23 Tillyroen Rd, Ormeau Hills, for $2.1m. Natgen plans to develop a mini-warehouse storage facility comprising 24 strata-titled units.

Natgen managing director Steven Goakes said the projects offered an attractive opportunity for investors.

“They have strong long- term locational advantages due to their proximity to increasing traffic areas, high population growth and the shortage of suitable warehouse and storage units needed for small business operators and residents,” he said.

Storage project ‘ideally located’

Brisbane property fund manager Natgen has increased its investments in the fast-growing Gold Coast self-storage market.

Natgen paid $5.5m for the 8084sq m site at 8 Ellis Way, Upper Coomera, for its latest property trust.

The development of a $32.8m high-specification, state-of-the-art self-storage building and surrounding facilities at the site includes more than 7000sq m of self- storage units incorporating an office/retail space, parking, security and landscaping.

Significantly, the site fronts the M1 Motorway and is part of the Coomera Springs Enterprise Park.

The trust will construct and operate the facility for a six to seven-year period following completion, and investors will contribute $10m.

Crew Commercial’s Dave Kertesz and Colliers’ Daniel Coburn and Jacob Griffin struck the deal on behalf of Gold Coast developers LatSod Pty Ltd, who own the total 3.12ha site. The acquisition follows Natgen’s recent investment in Gold Coast self- storage at Molendinar via the Natgen Development Trust ML23, with total assessed completed value of $22.9m and investors contributing $8m.

Natgen managing director Steven Goakes said the latest self-storage acquisition offered a significant opportunity for investors.

“The self-storage site at Upper Coomera is ideally located at the epicentre of a large demand area,” he said.

Natgen settles $4.5M land acquisition at Molendinar

• The land is set to become a self-storage facility.
• SEQ accounts for over a third of the nation’s upcoming self-storage stock.
• Demand remains elevated, driven by lifestyle changes and challenging rental conditions

Brisbane-based property fund manager, Natgen, has settled a $4.5 million land acquisition that is set to become a high-specification, state-of-the-art self-storage building.

Based in the expanding central Gold Coast area, Natgen Development Trust ML23 comprises the future self-storage building and surrounding facilities at 2 Industrial Avenue, Molendinar. It is also situated adjacent to a major arterial road – the Southport – Nerang Road.

The facility will feature over 5,250 square metres of self-storage units, incorporating an office/retail space, parking, security and landscaping.

Natgen Development Trust ML23 will construct and operate the self-storage facility for a five to seven-year period following completion, with a total assessed completed value of $22.9 million and investors contributing $8 million.

The acquisition follows the success of Natgen’s previous investment in Gold Coast self-storage at Upper Coomera, with last year’s $10 million Natgen Development Trust UC22 closing fully subscribed.

Demand for self-storage high

The self-storage sector has seen a growing level of interest, with the past twelve months seeing $132 million in sales for the sector, according to data from Ray White Commercial.

One of the drivers for demand includes the housing crisis, with experts noting the challenges of securing a rental have fueled the need for prolonged storage.

The South-East Queensland (SEQ) self-storage construction pipeline is also the strongest in the country, with Ray White finding the region accounts for 36% of the nation’s upcoming stock.

Natgen Managing Director & Responsible Manager, Steven Goakes said the SEQ self-storage market offered an attractive opportunity for investors.

“Self-storage is a growth industry in Australia due to the rise of e-commerce, shrinking living spaces and sustained population growth, particularly in South-East Queensland,” Goakes said.

“The Molendinar facility’s central Gold Coast location and the strong demand factors have given us confidence in the facility’s long-term performance and our ability to maximise returns for our investors, with this type of asset also acting as a hedge against inflation.”

The Gold Coast is expected to hit one million residents by 2041, with other drivers of local sector strength including the upcoming 2032 Olympics.

According to the Urbis Self-Storage Index, self-storage occupancy rates have risen to 94.4% in outer Brisbane as of December 2021.

Revenues for the self-storage sector have surged to $1.5 billion, with annual growth of 4.4% from 2022 to 2027; the lack of feasible substitutes further supports the industry’s performance, according to IBISWorld. This has led to strong market valuations and capitalisation rates for high quality self-storage facilities, with the industry attracting increasing investor interest.

“Natgen has a strong focus on well considered, risk-managed investments that offer regular monthly income, an inflation hedge, low volatility and growth potential,” Goakes added.

“This latest acquisition provides further diversification for our investors and we look forward to completing this exciting development.”

Natgen in $4.5m purchase

Brisbane property fund manager Natgen has bought a Gold Coast self-storage site for $4.5m for its latest property trust. The fund manager’s Natgen Development Trust ML23, will develop a high specification, state-of-the-art self-storage building and facility at 2 Industrial Ave, Molendinar. On a 4,520 sq m site, the building will house more than 5,250 sq m of self-storage units, with an office/retail space, parking, security and landscaping. The acquisition follows its previous investment in Gold Coast self-storage at Upper Coomera, with last year’s $10m Natgen Development Trust UC22 closing fully subscribed.