Harmony Stones Corner

Building type/sector: Office

Investor return:
6.0% per annum distribution

444 Logan Road

The old saying ‘location, location, location’ could not be truer for Harmony Property Investments’ latest acquisition at 444 Logan Road, Stones Corner.

Located just five kilometres from the Brisbane CBD, the two-storey office building is in Stones Corner, a vibrant and trendy inner-southern suburb of the City of Brisbane.

“Over the past few years, the suburb of Stones Corner has been going through a transformation,” said Cain Gurney, National Acquisition Manager at Harmony Property Investments, offered exclusively through MRS Property.

“It’s in an emerging location, with quite a lot of residential redevelopment and other investment in the area.

“There have been a number of larger apartment buildings under construction, together with trendy cafés and restaurants located within the Stones Corner Village Retail precinct which has been revitalised as a result.”

About 444 Logan Road, Stones Corner

Built in the mid 1980s and fully refurbished in 2019, 444 Logan Road is located on 1952sqm of land with basement parking for 38 cars. The building is home to four new tenants, secured with a WALE of 5.3 years.

Accountants and financial advisors Hoffman Kelly occupy the first floor with a 7.5-year lease term, while the ground floor is home to three tenants — allied health providers Better Rehab and Minds & Hearts, and disability employment services provider, APM.

In addition to the location, the building, which is Harmony Property Investments’ ninth acquisition in the Queensland market, proved an attractive investment due to the fact that it was fully leased and had undergone substantial refurbishment.

“Stones Corner was a recently fully-leased investment, with a variety of tenants who wanted to be in that location,” said Cain.

“Two of the ground floor tenants are aligned with hospitals located nearby, and brand new fit-outs provide tenants with high-quality amenities,” he said.

The acquisition of Stones Corner will form part of a larger fund, ‘Harmony Stones Corner’, with an expected overall fund value of between $25 to $35 million.

“This building will be the seed asset for our second diversified fund,” said Cain.

“We are anticipating that the fund itself will deliver a return to investors of 6% per annum, but the investment will earn around 8%.”

The Harmony Investment approach

As with all properties acquired by Harmony Property Investments, extensive research, analysis and due diligence was undertaken prior to purchase, to ensure the building met core investment criteria.

“Our experienced acquisition team spent a lot of time analysing the location, and gaining an understanding of what we were buying,” said Cain.

“We take our role as custodians of our investors funds very seriously.

“As with every opportunity, we asked the same question of every person around the table — would you invest your own money in this property?”

Recognising the importance of tenants and agents

This rigorous research and planning, combined with strong relationships with stakeholders, has meant current and potential Harmony Property Investments properties have weathered the turbulent market conditions of 2020-21 exceptionally well.

“Over the past year, we’ve really focused on gaining a deeper understanding of our tenant’s businesses and drilling down into how they’ve dealt with the challenges that COVID-19 has presented,” said Carol Olsen, National Portfolio Manager at Harmony Property Investments.

“We have really open communication with our tenants, and we know that if we can get the tenants through, we’ll be fine.

“At the end of the day, buying real estate is about the tenants because without them, there’s no income. So far, we haven’t lost a tenant through the COVID-19 pandemic.

“There are always opportunities to buy good quality property, but in times like these you just have to search harder.

“Our Acquisition Team has built good relationships with core groups of agents, and as a result, 70 per cent of our properties have been purchased off market.

“Agents have confidence in us as a purchaser that we will conclude the deal, and that we’ll do what we say we’ll do.

“We pride ourselves on the fact that we have a strong reputation and when we enter into due diligence, we conclude it,” she said.

To complete the Harmony Stones Corner fund, Harmony Property Investments is looking to purchase a second property, either another commercial property, or an industrial or retail property, worth $5 million to $20 million.

Harmony Property Investments, exclusive to MRS Property, has provided its clients with independent commercial property investments since 2003. Learn more about our investment approach here, or contact us to discuss investment opportunities today.

444 Logan Road, Stones Corner, QLD

Building/Sector Type: Office

Acquisition Date: June 2021
Purchase Price: $13.9 million