Gold Coast’s tops for Peak Equities
THE Gold Coast is emerging as a key focus for Melbournebased property syndicate Peak Equities as it quietly builds a portfolio outside of the southern capitals.
The investment group was licensed three years ago and in the past 18 months has bought five properties – two on the Gold Coast.
They include 69 Laver Drive, Robina, for $7.6 million and Bartercard House, at 121 Scarborough St, Southport, for $11.6 million.
Peak Equities director Tom Borsky said it looks for assets with a prime location, which can be purchased at good value with a secure income stream and the prospect for capital growth.
“That is increasingly difficult in this market,” he said.
“Our response has been to go away from the Melbourne and Sydney markets. We cannot find value in those markets at this time.”
Mr Borsky said the fundamental factor driving its decision-making is population growth, citing the recent purchase at Robina as an example.
“In 20 to 25 years Robina and Varsity Lakes will be unrecognisable.
“We see exceptional value there. Our view is there is a long way to go forward in that area.”
Mr Borsky said the Laver Drive purchase was smaller than its average acquisition, however, it “ticked all the boxes”.
The two-level building at Laver Drive has three tenancies and a weighted average lease expiry of five-and-a-half years.
Mr Borsky said long leases are important so the asset can ride out any troughs in the seven-year market cycle.
He said the property also offers a 3774sq m site, which is important as the business branches out into other areas including development.
“We bought Laver Drive because it is a development opportunity so when the time is right we’ll be looking to developers to see if we can work with them on that asset,” he said.
Mr Borsky said the company’s annual return for investors is more than 16 per cent.
He said it is able to maintain the high rate by a careful acquisition strategy and by running a tight ship. Peak Equities has a team of four plus two consultants, which Mr Borsky said, put little pressure on the business to increase its activity.
“Two to three a year is the maximum we are looking for,” he said.
Mr Borsky said while he has concerns on the possibility of rising interest rates and other issues, he foresees continued strength in the marketplace, particularly on the Gold Coast.