Mackay Market Heats Up with $6.6m CBD Acquisition
Australian property investment group Quanta Investment Funds has expanded its portfolio with the acquisition of a fully-occupied office building in the heart of Mackay’s CBD.
The 9 Tennyson Street asset was purchased for $6.625 million, and comes hot on the heels of the group’s August 2024 purchase of an industrial asset at 91 Connors Road in Paget, Mackay.
The 1,778 sqm double-storey premium office building is fully-leased and boasts a 5-star NABERS energy rating – a unique offering as one of Mackay CBD’s only premises that meets the minimum Government requirements for new leases.
An impressive 93 per cent of the asset’s income is underpinned by Queensland State Government and Caterpillar Inc, a Fortune 500 company listed on the New York Stock Exchange (NYSE). The remaining ground floor space is occupied by civil engineering firm Pentacon.
Quanta Investment Funds CEO Stacey Jones said the acquisition provided both security of income and peace of mind to investors in an uncertain market.
“This is a highly defensive investment for our portfolio, offering our investors a WALE of 4.70 years with significant potential for rental income growth through the upcoming re-lease of the space,” Jones said.
“With rents under existing lease agreements as much as 34 per cent below current market rates, we’re well positioned to capitalise on this opportunity and further improve the property’s net income position, with substantial value uplift opportunities.
“Its desirability is further underpinned by recent $2 million upgrades, including modern refurbishments specifically suited to the long-term operational requirements of the State Government tenant.
“Between the 5-star NABERS energy rating and recent refurbishments, we have every assurance this standout asset will continue to attract high-quality tenants and deliver sustainable, long-term returns to our investors,” she said.
The acquisition price reflects a 30 per cent discount to replacement cost and highlights Quanta’s strategic focus on counter-cyclical investments.
“In the current market, where construction costs are soaring and capital values remain constrained, acquiring a property at below replacement cost offers a clear cost-effciency advantage,” Jones said
“The national offce market is showing positive momentum, and we are forecasting further improvements in demand and rental growth as we move into FY25.”
The deal underscores Quanta’s continued commitment to securing high-quality assets that deliver stable, long-term returns for investors.