There is no doubt that the COVID-19 pandemic sent shockwaves through the West Australian economy. In March 2020, businesses were forced to close their doors, without having any certainty of a time when they would open again. Over the Easter long-weekend, visits to retail and recreation precincts plummeted to 80% below the usual level of activity.
As a result, our property market begun to suffer. The people of Perth were afraid to make investment commitments when suddenly the harsh reality of the unpredictability of the future had come smashing into our quiet, isolated city. To some extent, especially as we peer sympathetically at our neighbours in Victoria, that fear and uncertainty still remains. The concerns regarding the possibility of a renewed spread of the virus have weighed heavily on investor decisions.
In such a climate, I believe it is the responsibility of businesses, especially those that manage long-term investments, to give their clients a sense of security. Ultimately, the only way to do so, is to continue to produce positive results, and provide returns. This is undoubtedly difficult within such an unprecedented period. Therefore, the only way to move forward, to not only survive, but to continue to grow, is to innovate. Our Responsible Investment Model over time that will deliver better operational outcomes, stronger financial performance and ultimately, higher shareholder returns.
We have effectively reengineered the process of property investment, in a way that mitigates risks for our clients.
Before beginning to raise any capital, our strategy is to secure tenants to pre-lease at least 50% of the property. The average length of the lease for commercial tenants is 10 years. We also become shareholders in our projects, therefore, we have just as much skin in the game as our investors. Therefore, the investors are becoming a part of our team, they can be sure that we desire financial success and exemplary returns, to exactly the same degree that our investors do. We find that this is a comforting factor to our investors, as they picture how hard we would work to have their large investment succeed, and can then be certain that we are meeting those exact expectations. We become investing partners with you.
I strongly believe that Quality comes from personalisation. We have tapped into this truism, in a way that no other investment fund in Western Australia has yet managed to, and ultimately, we are now reaping the reward for our clients. Even amongst the chaos of a global pandemic, we are still seeing excellent returns, and this fact speaks for itself, in terms of the success of our reengineered approach to property investment.
For more information on Agem Property Group and our investment and tenancy opportunities, please visit our website https://agem.com.au/