Quay makes first office purchase in five years

10 June 2021
| By Laura Dew |
image
image
expand image

Quay Global Real Estate has made its first entry back into the office market in five years, as it is optimistic that offices are coming back following the pandemic. 

The firm bought office buildings in Manhattan and said it did not foresee companies moving to a permanent work from home arrangement. Many banking and technology firms such as Goldman Sachs, Facebook and Google had already stated they would have staff returning to offices later this year. 

“We didn’t own any offices for five years but they were so cheap during COVID-19,” Chris Bedingfield, Quay principal and portfolio manager said. 

“We have cities for a reason, people may work from home but firms will still need an office space. To not give staff a desk or only have hot desking is creating a false narrative.  

“In Manhattan, offices are dirt cheap. We like to buy offices below the cost of building and prior to COVID-19, they were trading above the cost of building. COVID-19 has now given us the opportunity and we think there is still upside there.” 

He said it was “crazy” for firms to expect staff to work in offices outside of the CBD which was a trend during the pandemic. 

“I think it is crazy. There is a reason that CBDs exist and that is to maximise the catchment of employment pool,” he said. 

“Infrastructure is geared towards the CBD and businesses deliberately set up here to have that catchment of labour. 

“People don’t have the time or the money to be travelling out to business parks. We think the CBD is coming back, we are optimistic and the prices reflect that.” 

Meanwhile, he criticised managers who were capitalising on the COVID-19 reopening trend as he felt they should take a more targeted approach. 

“There is a big re-opening theme mostly being driven by equity managers who are using a scattergun approach,” he said. 

“People are only looking at the theme and not the fundamentals. There has been a torrent of capital going into reopening stocks and no one is taking a surgical look, they are just buying everything within that theme.” 

The  Quay Global Real Estate fund returned 20% over one year to 31 May, 2021, according to FE Analytics, versus returns of 16.7% by the global property sector within the Australian Core Strategies universe. 

It was the winner of Money Management’s Fund Manager of the Year Award for Global Property Securities last month. 

Performance of Quay Global Real Estate versus global property sector over one year to 31 May 2021 

Read more about:

AUTHOR

Recommended for you

sub-bgsidebar subscription

Never miss the latest news and developments in wealth management industry

MARKET INSIGHTS

GG

So shareholders lose a dividend plus have seen the erosion of value. Qantas decides to clawback remuneration from Alan ...

2 months 1 week ago
Denise Baker

This is why I left my last position. There was no interest in giving the client quality time, it was all about bumping ...

2 months 2 weeks ago
gonski

So the Hayne Royal Commission has left us with this. What a sad day for the financial planning industry. Clearly most ...

2 months 2 weeks ago

A Sydney-based financial adviser has been banned from providing financial services in the interest of consumer protection after failing to act on conduct concerns. ...

3 weeks 6 days ago

Insignia Financial has made four appointments, including three who have joined from TAL, to lead strategy and innovation in its retirement solutions for the MLC brand....

1 day 4 hours ago

ASIC has cancelled the AFSL of a $250 million Sydney fund manager, one of two AFSL cancellations announced by the corporate regulator....

3 weeks 4 days ago