QUBE Property Group records its highest level of capital raising activity in 27-year history
QUBE Property Group has registered its most active period of capital raising for the 12 months to September 2022, marking the strongest period in the company’s 27-year history.
The capital raised in this 12-month period has funded the development and acquisition of six key assets, allowing the group to continue with its diversification strategy and sure up its long-term residential land pipeline, with the addition of leased investments adding to the group’s existing funds under management.
The group raised more than $60 million in investor equity during the 12 months to September 2022, with the sought-after WA-based acquisitions spanning the industrial, residential and commercial sectors.
QUBE Director Geoff Davieson said the funds raised during the 12-month period to September supported the acquisition of six assets across the broader Perth metropolitan and outer metropolitan area, and eclipsed the company’s previous high watermark achieved during the 2013/2014 financial year.
Among the assets identified and acquired in that 12 months were a large format retail asset on Bannister Road Canning Vale, land subdivisions in both Wanneroo and Hammond Park and a further leased industrial investment in the Canning Vale industrial precinct.
Mr Davieson said the range and spread of properties acquired across multiple asset classes illustrated the diversity of QUBE’s expertise and offering.
“Our reputation in the property sector in WA and as fund managers is strong and that is built on 27 years of hard work, relationship building and experience,” he said.
“Our investors trust us, and they trust us to deliver a good product, and a good return.
“As co-investors with them in every project we deliver, our investors also take comfort that our interests are always aligned with their best interests.”
Mr Davieson said in a capital market sense, demand for industrial assets was at its strongest level in decades while industrial vacancy rates were at historical lows, pushing effective rents higher and encouraging developers to bring on additional stock, both pre-committed and speculative.
He said the recovery of WA’s office market is well underway, particularly for good quality, well located assets. With the worst of COVID and work-from-home well behind us, Perth CBD and fringe office occupancy is on the rise and utilisation rates are encouragingly among the highest in the nation.
“We believe the residential market in Perth is set for generally healthy demand for some years ahead buoyed by WA’s attractive employment market which is set to drive population growth back to its historical, pre-COVID norms.
Mr Davieson said QUBE investors remained predominantly WA businesses, high net worth individuals and family offices, with their investor base remaining relatively consistent and tightly held.
“We typically get a handful of first-time investors coming on board as each new project is offered to the market and we generally find that they have come to us as a result of positive word of mouth and thanks to the development of strong ongoing relationships we have with our existing investor pool, many of whom have been with us for decades.”
“In line with the equity raised during this period, we’ve also been in a fortunate position where we’ve had to cut off registrations of interest for assets in hours rather than days or weeks, which is a great position to be in.”
He said while QUBE had considered asset acquisitions beyond WA borders pre pandemic – a move which was put on hold due to the inability to travel and view potential assess firsthand – they remained primarily WA focused for now but wouldn’t rule out looking beyond WA borders if the right opportunity arose.
“The east coast market became overheated in the last few years and didn’t represent what we see as good value for our investors. One of the key drivers of the ongoing success and stability of the WA market at this time remains its relative affordability and modest gains off the back of a prolonged period of relatively subdued growth in comparison to that experienced in Melbourne, Sydney and Brisbane markets.
“If we did come across an asset outside WA that we believed delivered value to our investor base then we would certainly look at that, but for the time being we are primarily focused on WA assets.”
Mr Davieson said recent interest rate rises and projections of a few more to come had only marginally impacted investors’ appetite for property.
“Our investment opportunities rarely have a timeframe of less than four years so in terms of our investment horizon, we are looking well beyond the present interest rate tightening cycle. On balance our experience is interest rate rises don’t seem to have dampened investor appetite for the assets we are chasing.
“Most of our investors are well diversified across property, equities and cash and as a result continue to seek the property exposure and access to key assets that we are able to offer.”
In terms of the short to medium term outlook for investors he said the public and private sector in Australia had weathered the COVID era relatively well, with the mining sector in WA continuing to perform strongly despite growing global instability.
“The employment options, job security and lifestyle attractions make WA a relatively safe haven in uncertain times and I think that will continue for some years to come and will be reflected in the performance of our property market.
“There are certainly global issues playing out now that are set to cause further economic pain that Australia will not be immune to, however the outlook for the Perth and WA property market more broadly appears to be in relatively good shape for the next five years at least.”