As the curtains draw to a close on another successful year for the Quadrant team and our investors, it seems an appropriate time to reflect on the playbook that was 2021. Globally and domestically, it was thought that we had seen the worst of the pandemic in 2020, however, 2021 was determined not to be lost in the history books. Neither will it be for Quadrant Investments, for all the right reasons, delivering one of our biggest years to date in growing our asset portfolio and delivering returns to investors.
While the fear of an outbreak of COVID-19 continued to loom in Western Australia, thankfully we were largely spared the difficulties of our counterparts in the eastern states. Quadrant’s Trusts have expanded and thrived, built on the incredible relationships forged between ourselves, our investors and our tenants, as we maintain commitment to our Core Principles.
With one eye on Western Australia’s reopening to the rest of the world in early February, we are continuing to take added precautions, with a strong focus on having significant liquidity coverage for any future eventualities, such as movement restrictions or shutdowns. This places our Trusts in a strong position and we have great optimism for bigger and better things in 2022.
We’d like to share a handful of our highlights for 2021 with you below.
The Quadrant Portfolio Grows
We’ve had a significant year with our hard-working team launching our new QI Diversified Income Trust No 1, which is targeting to purchase multiple assets to a target fund size of $40,000,000 once closed. In 2021, the team concluded nearly $18,000,000 in transactions, with another asset under contract and due to settle in early 2022, which will take us to 70% of our target size.
During the course of this year, the team reviewed over 160 opportunities both on and off-market worth in excess of $2.5 billion. Of the assets reviewed, approximately 40 made the grade against our Core Principles, with offers made on a handful of those assets.
We haven’t been afraid to hold the line and stick to our acquisition principles, while many of our contemporaries have over-stretched into unsustainable territory. This highlights our aligned interests with investors as we, the QI directors, are investors first and foremost in all of our funds.
Our Core Principles, and our participation in our funds as investors, has been pivotal in our success and seen Quadrant grow our portfolio to over 30,000sqm of built area, closing in on over 80,000sqm of land and total funds under management to $80 million in just over three years.
Joondalup Office Concept
QI has been working with MJA Studios, our appointed architect for 4 Reid Promenade, Joondalup, to complete concept planning for a new A-grade quality boutique office development. Our current concept has a flexible design that could comprise a total NLA of between 1,200sqm – 2,400sqm, and our initial discussions with the City of Joondalup have drawn a positive response.
We plan to complete some soft marketing in the first half of 2022 to tenant representatives and leasing agents to further assess the market depth and demand for office space in Joondalup.
This property sits within our QI Value Add Income Trust No 1 and was acquired in late 2019. The fund is currently delivering an 8.0% p.a. distribution with payments being made monthly to investors.
Via negotiation with the tenant during our acquisition, we were able to not only secure a new 15-year lease but also a claw-back provision to excise the undeveloped land area to facilitate future development.
QI Diversified Income Trust No 1 – Open for Investment
Our multi-property diversified fund has reopened to investors for its third round of equity raising after securing a new industrial asset.
The fund is seeking to raise $5,800,000 to complete the acquisition of a new asset, a large multi-tenanted industrial property which Quadrant Investments was fortunate enough to secure in an off-market transaction.
The industrial property market in Perth has been performing strongly with predictions of rent growth thanks to increased demand for space across all locations within the Perth industrial market and Australian industrial markets more broadly. Market experts, such as CBRE, have thrown further weight to expectations of strong rent growth, forecasting new supply in 2021 and 2022 to be well below 10-year average construction levels.
The new acquisition will take the combined value of the Trust’s portfolio of assets to $28.15 million or around 70% of the fund’s total target size. The Trust will continue to target additional quality commercial property assets to provide strong investment income and capital growth returns to investors.
The fund continues to forecast distributions for the 2022 and 2023 financial years in line with its 7.0% p.a. target distribution rate.
We envisage the opportunity to invest will be highly sought after, particularly given the quality of the latest acquisition and with the flexibility of final funds not being required until early February 2022. As such, we encourage you to contact either Alex or Phil directly to review the Information Memorandum and reserve your allocation.
Applications are now open to invest and will close once fully subscribed.
You can download the brochure here.
We are certain we were not alone in our expectations that this coming festive season would see many families reunited to spend some long-awaited time together. While these expectations may not have transpired into reality, we sincerely hope that you are able to share the holiday joy with those closest to you. We remain positive that 2022 will see us living with the “new normal,” where barriers are broken down and our plans are no longer impeded. We are even more positive that 2022 will see Quadrant continue on its impressive growth trajectory, and we are excited to have you along for the journey.
Phil, Alex and the QI team wish you a safe, relaxing and restful break, ready to welcome all the possibilities of 2022!