This content is part of a paid partnership with AGEM Property Group.
The pros and cons of term deposits, residential real estate and shares tend to be well understood amongst investors, but many people, including doctors, have not considered commercial property as an investment option, writes AGEM Property Group’s Managing Director, Adrian Fiore.
With total returns of circa 10% plus per annum and the ability to generate stable passive income, it’s an investment landscape that’s hard to look past.
But many people have not considered commercial property as an investment option and, more specifically, commercial property syndicates.
Founded in 2012, AGEM Property Group has launched 38 unlisted commercial property funds and syndicates, with our current passive income fund portfolio delivering an average internal rate of return (IRR) of 14.5% in the form of both passive income and capital growth.
The property syndicate format means that individuals can access larger scale properties and spread capital across various assets and sectors, thereby diversifying their portfolio, managing risk and potentially enhancing returns.
The focus on achieving long-term growth, while also delivering passive income for investors, is grounded in family values. Our priority is to be able to make time for the things that matter and it’s a value that’s shared by our investors.
Many of our investors are thinking not just about returns, but about freedom – how they spend their time, protect their future, and maintain their quality of life.
They’re looking for ways to grow their wealth and generate cash without taking on excessive risk. Our properties allow them to do that by providing dependable returns year after year.
What’s on offer for doctors
We have a hands-on, full lifecycle asset management approach that has enabled us to deliver stable, long-term returns through strategic investments irrespective of market conditions.
The formula for success is characterised by the acquisition or development of properties in locations poised for growth, paired with secured long-term leases with tenants in high demand, non-discretionary sectors such as medical, allied health and childcare, which provides stability for the portfolio.
Some of our recent funds include Hillarys Plaza, Iluka Plaza and our Canning Vale Local Services Fund, which all include a tenant mix of childcare, medical and allied health services.
AGEM holds 44% ownership across the portfolio, ensuring alignment of interests and fostering a genuine partnership with our co-investors. We know all our investors personally – it’s important to us that we have a community of investors whose interests are genuinely aligned.
When our investments perform well, we all share the success.
Opportunity to invest
As the Reserve Bank of Australia delivered its second interest rate cut this year, confidence in commercial property investment is gaining momentum, particularly among those seeking stable, income-generating assets in an otherwise volatile global landscape.
The move is seen by many as a potential turning point for the sector, following a period of subdued growth marked by inflation-driven rate hikes. For those looking to reposition capital, a unique window of opportunity is opening.
During previous rate-cutting cycles, Australia’s commercial property market saw a sharp uptick in both income and asset values. We believe the current market cycle offers an opportunity to get ahead of that curve.
The income generated through commercial property investment, with assets quite often supported by leverage, is closely tied to interest rates.
As borrowing costs fall, the potential for income and capital uplift increases. At the same time, falling interest rates also signal lower returns from traditional safe havens like term deposits.
As these become less appealing, investor appetite for alternative income-generating assets increases, creating greater competition and, in turn, upward pressure on property values.
In Perth, demand for quality commercial property remains strong. Therefore, even a modest shift in rental yields can significantly lift asset valuations, which makes now an excellent time to enter or deepen investment in the sector.
With geopolitical instability and economic uncertainty shaping global markets, the tangible nature of commercial property offers a level of stability that is increasingly attractive to investors.
The coming months represent a rare window for investors to act before the broader market adjusts to interest rate cuts. In response to current market conditions, we’re launching an investment structure tailored to facilitate the acquisition of compelling assets.
Our Core Services Opportunity Fund will enable co-investors to join us in the earlier stages of acquisitions and participate as part of the foundation capital pool – subsequently having Right of First Refusal when due diligence and acquisition is complete.
To learn more about our commercial property investment funds, visit agem.com.au
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