Quintessential Equity arrives in Lane Cove
Boutique property syndicator Quintessential Equity has made its single biggest acquisition yet of an existing property, taking control of an office complex in Sydney’s north-west through a $115 million deal with ASX-listed Goodman.
The acquisition of the office complex at 3 Richardson Place in North Ryde was struck on a 6.7 per cent passing yield. The buildings are 99 per cent leased. Fully let, the yield would rise to 6.75 per cent.
It is the second purchase to be made by Quintessential Equity’s $300 million blind fund, following the acquisition of a much smaller industrial property in Brisbane.
Overlooking Lane Cove River, the office estate comprises two six-storey buildings with a combined gross lettable area of 17,187 sq m.
For executive chairman Shane Quinn, the bushy Lane Cove surrounds provide one point of difference to appeal to tenants. Even more so, though, are the large floorplates.
“There’s entrapped value. It’s been purchased below replacement cost. In the current market that’s pretty hard to find,” Mr Quinn told The Australian Financial Review.
“What we really love about it is it is giving us a competitive advantage to win the race for those corporate tenants that want large floor plates.”
Existing tenants include the Council of the City of Ryde and software developer Pronto Software.
The complex is about 15 kilometres from the Sydney CBD, with access to rail and road networks. The expected completion of the Sydney Metro City and Southwest lines in 2024 are another big factor in favour of the asset, as big companies and their employees embrace a post-COVID-19 decentralisation theme.
Mr Quinn called the new metro a “game changer” given the relatively low cost of rents in North Ryde compared to the CBD.
With the new metro installed, the journey between North Ryde and the city centre will be around 20 minutes.
“We are very keen to look for other stock in North Ryde, for the simple reason that we think that infrastructure will be a boon for that location,” Mr Quinn said.
The property was brokered by Colliers International’s Jon Chomley and Sophie Tieman.
“North Ryde is expanding quickly as a commercial hub,” Mr Chomley said.
“Retaining its low vacancy rate of under 4 per cent throughout the pandemic, Quintessential Equity’s decision to invest in the area is impeccably timed and well considered.”
The North Ryde deal leaves the Quintessential Equity fund with about $100 million in purchasing power. A week ago the fund manager locked in its biggest development project yet, a $400 million office building at the heart of a high-tech innovation precinct emerging from the former Royal Adelaide Hospital site.
