A Sunshine Coast investment management company will today finalise the purchase of two commercial properties with the potential to increase investors’ holdings by as much as 80 percent within the next few years.
RM Capital, the investmetn arm of Rafter Myers, owned by Remi Rafter and Josh Myers, will settle on properties located at Birtinya and Maroochydore, the region’s two commercial hot spots.
Negotiations for the two office blocks – one at 20 Innovation Parkway, Birtinya; the other in Plaza Parade, within the Maroochydore city centre – were secured months ago off market.
RM Capital then offered investors an opportunity to secure a share of the properties. Applications filled quickly and the offers were rapidly oversubscribed.
20 Innovation Parkway, a high-profile three-level commercial building situated within the Sunshine Coast’s health precinct, was purchased for $12 million, about 32 percent below replacement cost. The fully tenanted building provides 2,678sqm of lettable space and 108 sealed car parking spaces.
RM Capital’s strategy is to achieve sustained rental growth – current passing income is about $975,000 – undertake minor building improvements, and consider potential further development. The company expects investors to achieve an 80 percent return over five years, at which time the property will likely be sold.
The Maroochydore property comprises a 100% interest in 5 Plaza Parade and a 75% interest in 7 Plaza Parade, a two-level commercial office building which forms part of the Plaza Links development.
Over the next few years, RM Capital intends undertake considerable building improvements, and hold the 2,978sqm land rich island site with a 60 metre height limit under the proposed new town plan.
RM Capital secured the property in August for a combined In One Line purchase price of $7,775,000.
At the time, the building contained four vacant tenancies, with another due to expire in January. But through aggressive marketing during the due diligence period, RM Capital has secured four new lease agreements, with the occupancy rate increasing from 60 percent to 91 percent.
RM Capital principal Remi Rafter said with office vacancy rates below four percent on the Sunshine Coast, the company was expecting to achieve sustained rental growth in both properties over the medium term.
“Land availability, challenges with planning approvals and construction cost pressures will limit further office supply in the foreseeable future,” he said.
