Q3 UPDATE 2024
Wizel & Pearl River Property Group (WPPRG)
Prepared by: Mark Wizel & Lewis Tong
Introduction:
Thank you very much for your continued interest in the evolution of the property group which we established in mid-2020. The first near 6 months of 2024 have not been without challenge, a volatile leasing market and continued uncertainty on the true underlying position of capital values is holding back activity within the wider commercial property market in Victoria. We are finding that well leased properties under $5,000,000 remain of appeal to smaller private investors and we expect an uptick in supply of vacant commercial properties come to market for potential acquisition due to how quickly holding costs and outgoings have increased namely being driven by taxes imposed by the Victorian State Government.
Summary of Current Operations:
• 50 Commercial Properties Purchased Since Mid-2020
• 45 Existing Buildings / 5 Smaller Scale Retail Development Sites
• 11 Team Members
• 4 Melbourne Based Private Family Backers
• $85.5m Equity Raised
• Successful Establishment and Management of 2 Active Funds being the Monash Commercial Property Investment Fund and Proxima Investment Fund.
Business Operations Update:
Existing Business Lines:
Advise Transact:
Advise Transact continues to be well sought after by a range of commercial property owners. The primary role of Advise Transact is working alongside owners of commercial properties who wish to potentially divest assets. Throughout 2023 we handled 31 assignments for private individuals, families, charities, non-for-profits, religious and corporates and YTD 2024 our offering has been a popular choice again with around $600m of divestments currently under transaction management.
Monash Commercial Property Investment Fund & Proxima Investment Fund:
2024 has seen a much slower start to the year than 2023, we have purchased 6 properties YTD and divested 4. We have found that the supply of good quality opportunities matched with our required pricing have been scarce however believe this volume will pick up as the year unfolds.
Mark Wizel & Lewis Tong
Market Lane Developments:
Market Lane Developments continued to progress planning permits and agreements for lease on existing development sites owned. It was decided in 2023 by the Directors to divest these properties post June 30th which has been successfully completed as at the time of writing this update.
2024 New Fund Established:
Further to our last update, WPPRG have worked through the establishment of a Joint Venture Asset Management Vehicle with existing family office backer (Mai Capital). Collectively we have reached agreement on the partnership and have recently gained endorsement to operate our platform out of Singapore.
The platform will focus purely on value investing in the commercial property sector with a primary goal to acquire assets on Australia’s Eastern Seaboard. The intention of the newly established platform will be to identify opportunities between $15m and $50m within the traditional Shopping Centre, Large Format Retail and Suburban Commercial Office sectors.
Internal Forecast of the balance of 2024 Commercial Property Landscape:
The Directors are of the view that conditions similar to the first half of 2024 is likely to be the pattern for the remainder of the 2024 year. It is anticipated that there will be an increased supply of secondary assets available for sale. Valuations will continue to be written down however in the mainstream it is not expected that valuations will continue to slide as they have over the past 18 months.
WPPRG Focus:
We do not expect to slow down in any significant way from the purchase and divestment of assets. We currently have in excess of $80m (equity) for deployment across our various funds, and via several standalone single investor backed mandates currently in place to JV the acquisition of new commercial property assets.
WPPRG had its busiest month of buying commercial properties in YTD 2024 in May, we purchased 4 properties all were consistent with the core nature of the type of properties we have been buying since starting the business just over 3.5 years ago.
Closing Comments:
We would like to wish all of our partners be it people whom we have purchased properties from, leased properties to, managed capital for and their respective families all the very best for the remainder of 2024. We look forward to working with you closely and should you have any queries in relation to a property that you think might be of interest to us, a tenant looking to expand, or an investor wanting to discuss how Wizel & Pearl River Property Group can best manage their capital we would love to hear from you.