MPG Funds Management has announced it acquired four regional investments for $53.25 million on a blended 6.25 per cent yield.
The properties include Townsville’s City Point Government Office, which we reported in June is costing $26m, and the Sarina Village Shopping Centre, near Mackay, which we covered yesterday is setting it back $13m.
The Melbourne based manager has additionally picked up a state government backed Bendigo office, 71 Bridge Street (pictured, top), for $7.55m.
A Centrelink at Ballina, for which it is paying $6.7m, is the other asset.
Ballina, Bendigo assets
On 1951 square metres, 71 Bridge St was purpose-built for the occupier in 2015, which was when it last sold for $7.31m.
The two storey complex contains 1252 sqm of area and 30 car parks.
Based on the annual rent, the deal reflects a 5.66pc yield.
The property is near the recently completed $630m Bendigo Hospital.
With options the government can stay until 2035.
The Ballina asset was marketed by Leiba Commercial’s Marc Leiba (story continues below).
Assets earmarked for regional focused trust
The Ballina, Bendigo and Townsville assets will be held by the three year old MPG Regional Cities Property Trust which owns substantial social infrastructure product on Australia’s eastern seaboard.
The fund now manages investments worth $165m.
MPG will this month launch a $15m capital raising exercise for wholesale and retail investors wanting to invest (the trust is promising a 7.05pc annual return).
“The trust’s essential service properties have proven to be indispensable during the COVID-19 pandemic, with the trend of a decentralised work-from-home environment allowing many to flock to regional centres and enjoy a great lifestyle with lower cost of living benefits” MPG director Brett Gorman said.
“With over 88pc of the trust’s current income secured by government tenants and the attractive tax-advantaged cash yield compared to current cash rates on offer, the trust has been particularly well received by investors and financial advisers,” he added.
“The properties have been carefully selected for their defensive income streams and potential for capital gain while targeting locations that promise strong infrastructure and population growth,” according to the executive.
“MPG will continue to grow the portfolio by targeting government-tenanted commercial properties valued up to $20m…which we believe are often overlooked by the larger institutional investors and are out of reach for most individual property investors”.
The Sarina asset will be retained by the Retail Brands Property Trust.
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