New Opportunities & Growth Await In 2025
Time never stands still and 2024 has certainly raced by. Classic Collectives had a busy start to the year, launching a new $14 million fund and buying a Mitre 10 distribution centre in Hamilton
The year will end with us making the final settlement on our highly successful $29 million medical fund. This fund comprises two healthcare facilities, the second of which is tenanted by Bay Radiology and will settle the week before Christmas.
Falling interest rates will have a positive impact on all our Collectives and improve investor yields in 2025. We are looking closely at our funding arrangements and hedging strategies and will be looking to reduce our interest costs and negotiate lower rates with the banks we deal with. We will keep our investors updated.
What’s coming next?
In our November update, you may recall we described the economic cycle using the analogy of a clock face – with the market peak representing 12 o’clock. Right now we’re sitting at 5 o’clock in the falling interest rate phase.
With the OCR expected to continue falling in 2025, now is the time to strike in terms of opportunity. Purchasing good quality assets now before everyone else jumps into the market is a smart idea as we continue heading towards a ‘neutral’ OCR rate (predicted to sit around 3%).
To that end, we are currently doing due diligence on two industrial properties located in established regional centres. Both have long lease terms and a mix of national and international tenants. This ticks several boxes of what we look for when investing in a premium asset. Tenants who are resilient, reliable and can offer a steady income stream in all economic conditions will typically provide good growth potential.
We may need to act quickly in the New Year to secure these properties if the due diligence stacks up. So we encourage potential investors to get in touch with us now if you are keen to consider these opportunities.
Thanks and best wishes
Overall 2024 has been a successful year, although not without its challenges. We appreciate the faith you put in our team and we will continue working hard to unearth high-quality investment opportunities for you.
We wish you all the best for the holiday season ahead. Merry Christmas! Enjoy time with your loved ones and hopefully some long hot days at the beach.
Till next year, take care.
E: Owen.cooney@classiccollectives.co.nz
Ph: 027 222 6932
