Arcana selling maiden Mackay asset

Buildings cover 29 per cent of the 3.1 hectare Paget block (outlined).

EXCLUSIVE

Arcana Capital is selling its maiden Mackay investment after eight years.

Arcana recently bought a suburban Adelaide office (outlined).

The off-market deal for 91 Connors Road, Paget, with another Brisbane asset manager, Quanta Investment Funds, is worth $16.7 million.

The buyer is now calling on wholesale investors; it is earmarked for a single asset closed ended fund – the Quanta Connors Road Industrial Trust – set to run seven years.

Arcana, directed by ex-premier Campbell Newman, paid $9.7m – a 9.22 per cent yield.

The United Group Limited-backed heavy duty engineering facility was the then one year old fund manager’s third asset.

The others were in Townsville (on returns of 9.33pc and 14.25pc).

Nowadays the group is an active national investor – two weeks ago securing a federal government backed suburban Adelaide office for $8.5m – an 8.37pc yield.

Quanta Connors Road Industrial Trust

Servicing the coal mining, electricity, coal seam gas/liquefied natural gas and rail sectors, the Paget asset contains two warehouses with a total 8881 square metres covering 29pc of the 3.1 hectare block (story continues below).

UGL has less than five years left on its lease.

UGL, a subsidiary of Germany’s biggest construction company, HOCHTIEF, the occupier, has 4.7 years left on its 15 year lease agreement.

According to Quanta, rent could be increased significantly after that.

To sweeten the deal, Arcana is also tipping in $1.5m for upgrades to existing improvements.

“The investment provides built-in capital and income growth resulting from current passing rent being approximately 20pc below market rates,” the buyer is telling prospective wholesale investors.

“Additionally, there is significant potential for development upside with a low site cover…and tenant demand for additional lettable area to be built on surplus land,” it added.

Quanta is forecasting a year one 7.5pc distribution rising to 9.75pc per annum.

The five year average should circle 8.25pc.

Subscribe to our newsletter at the bottom of this page.

Share or Recommend article

Marc Pallisco

A former property analyst and print journalist, Marc is the publisher of realestatesource.com.au.