11/10/2005 - 22:00

Access West makes $10m syndicate play

11/10/2005 - 22:00

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Having moved out of residential property development in favour of commercial property syndication 18 months ago, Access West is currently completing its sixth commercial syndicate.

Access West makes $10m syndicate play

Having moved out of residential property development in favour of commercial property syndication 18 months ago, Access West is currently completing its sixth commercial syndicate.

The company has raised $10 million to buy three commercial properties in Perth, bringing the total value of assets under management to $20 million.

The syndicate bought 100 Murray Street for $5.6 million from overseas interests (and will spend  $1 million upgrading the 3,700 square metre building), and two medical suites in Yokine, offering a 10 per cent annual return.

Access west director Paul McKenzie said the company was established in 2002 as a development company, but cost escalations in the industry made it too difficult to provide security for investors.

“The company was established in January 2002 in response to the needs of investors wanting to participate in the property market,” he said.

“It had the added benefit of leveraging off the experience and skills of its directors and consultants in the property and business environments and access to larger scale projects at a lower entry cost.

“At the end of the day, investors want security, and due to increased costs in the area of residential development, about 18 months ago we moved into commercial property.

“Our business model is expanding at the moment and we have just acquired a real estate licence, so will be expanding that part of the business.

“In the next six months we are looking to set up a responsible entity to help expand the business, and we are ideally targeting to have between $50 million and $80 million under management in the next few years.”

Mr McKenzie said the aim was to eventually merge assets into a trust, but he was not sure whether it would be a listed vehicle or not.

The syndication of commercial property is an area of significant growth in the property sector, according to Mr McKenzie, providing smaller investors with access to a market that otherwise requires substantial capital.

And with the current strength of the commercial market in WA, rents will be going up between 20 and 40 per cent in the next few years, according to Mr McKenzie.

Mr McKenzie also said there was a serious shortage of commercial property available for sale.

“It’s about knowing the agents and being able to get stock before it hits the market,” he said.

“We look for any sort of commercial property with good tenants in place, and if we can value add and get rental rates up, then that is great.”

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