April 2016

PIR Research Report

We’re pleased to announce that the DomaCom Fund has received an A+ rating from Property Investment Research (PIR), Australia’s leading provider of property funds research and analysis.

Broadly, the A+ rating states that PIR believes this is a suitable product that has met the aggregate requirements of their review process across a number of key evaluation criteria, and has an acceptable risk/return trade-off that should generate risk adjusted returns in line with stated investment objectives.

DomaCom CEO, Arthur Naoumidis said, “I’m very pleased with our A+ rating from PIR. Our Fund is still relatively new, so this rating is timely and will put us in a better position to achieve further market penetration. That our unique crowdfunding solution and secondary market liquidity facility addresses investors’ property asset allocation needs is clearly prevalent. We’ll use this rating as a base to continually improve our platform and deliver product enhancements to broaden the market in the very near future.”

Commenting on his firm’s research of the DomaCom Fund, Dinesh Pillutla, Managing Director of PIR said, “We have a sound framework for rating investment product offerings in Australia, and our review process gives consideration to a broad number of qualitative and quantitative factors. The DomaCom platform is an innovative solution to the age old problem of investing in real estate, which is its high upfront cost. The fractional model gives investors the ability to diversify and control their investment in direct property, with or without borrowing”.

“The DomaCom Fund has earned its stripes for the A+ rating and we look forward to seeing its acceptance in the market and further development in the coming years”, he said.

To obtain a copy of our PIR report and/or other research reports we have available, visit https://domacom.com.au/the-domacom-fund/research-reports/

Atchison Report

Atchison Consultants have released a report on property asset allocation that shows a rolling 20 year return on residential property in three different risk categories; moderate, balanced and growth*.

The report supports property as an inclusive strategy for moderate, balanced and growth portfolio types providing evidence that residential property can enhance the return in each portfolio category over the longer term.

Growth_Portfolio

For a growth portfolio a 20% asset allocation could increase the portfolio by 9.6%.

Balanced_Portfolio

For a balanced portfolio a 15% asset allocation could increase the portfolio by 6.7%.

And for a more conservative or moderate portfolio a 10% asset allocation to residential property could increase the portfolio return by 3.7%. Moderate_Portfolio

It is likely that the relatively low volatility of residential property provides a stable anchor to these portfolio types.

*Source: Atchison Consultants, Portfolio Return Commentary – Residential Property, November 2015

Residential portfolio models by Empower Wealth

With the DomaCom Fund, you can remove the concentration risk that single property investment presents by securing an asset allocation across a diversified portfolio of residential properties that suits your client’s circumstances and risk profile.

With as little as $2,500, you can direct your client’s funds into an interest bearing Cash account that, after a 14-day cooling off period, can be applied to the purchase of one or more residential properties as and when they are identified by our professional property advisers.

The models in brief:

  • Income Portfolio – the Income Portfolio will target properties in popular areas for renters to ensure solid yields and low vacancy. These properties are likely to be in major cities and close to valued amenities such as schools, shopping centres and public transport.

IncomeModelPortfolioGraph

  • Growth Portfolio – The Growth Portfolio will target properties that display the opportunity for higher than average growth. These properties are likely to be in areas which have not yet seen large price increases but are close to more popular areas which have boomed in recent years. The Growth Portfolio may also include borrowings of approximately 30% of the purchase price. This means that less capital needs to be raised from investors, but each investor will have a proportional share of the debt.

GrowthModelPortfolioGraph

The model provider: Empower Wealth

Empower Wealth selects properties for a range of income and growth portfolio models. Empower Wealth’s founder and CEO, Ben Kingsley will build investment portfolios, based on strategies for income, growth or a combination, and select investment grade properties to suit.

Ben is an experienced and qualified property investment advisor with a wealth of industry knowledge and experience and a proven track record in creating enhanced wealth outcomes based on independent, property research and strategies. He is also Chair of the Property Investment Professionals Association and was voted Property Investment Adviser of the Year in 2014 and 2015 by readers of Your Investment Property Magazine.

Empower Wealth focuses primarily on established residential properties in pockets that deliver good growth prospects or, sound yield on an investment.

For more information on our residential portfolio models, visit https://domacom.com.au/residential-portfolio-models/

Residential portfolio models by Spring Financial Group

spring_fg_realty_master_rgb_logoSpring FG Realty Pty Ltd has partnered with us to offer multi-property residential portfolios through the DomaCom Fund.

The portfolios take advantage of DomaCom’s new multi-property bookbuild functionality, offering a direct property solution with immediate diversification across multiple properties, developers and locations.

The multi-property portfolios prepared by Spring FG Realty are based on:

  • Minimum of $10,000 investment amount – gives the investor exposure to up to five (5) properties in different geographic locations.
  • Minimum of $25,000 investment amount – gives the investor exposure to up to ten (10) properties in different geographic locations.
  • Minimum of $100,000 or more investment amount – provides exposure to up to 15 properties in different geographic locations.

Each of the developers, developments and individual properties in the assembled portfolios has passed Spring FG Realty’s stringent due diligence processes to facilitate not only inclusion in the DomaCom platform, but investment by Spring Financial Group’s direct investing clients.

In accordance with the DomaCom Fund’s processes, all properties will be independently valued by a leading valuation house. All properties include window furnishings, depreciation schedules, third-party quality inspections on settlement and first tenant and/or rental guarantee periods of a minimum of 42 days and up to 90 days providing investors further peace-of-mind.

The model portfolios offered in the first release of portfolios designed by Spring FG Realty comprise a total of, in excess of $25 million of high-quality inner-city Melbourne and Brisbane residential assets developed by Australia’s leading public and private company developers.

Each of the projects is under development/construction with various expected completion dates over the next 12 to 18 months.

The models available are:

Growth Cities Portfolio

  • Market/s: Melbourne and Brisbane
  • Number of properties: Total of 10, consisting of 5 x 1-bed and 5 x 2-bed apartments
  • Portfolio Value: $4,840,500 (excluding stamp duty)
  • Forecast gross rental yield: 4.5% pa
  • Forecast annual capital growth over 10-year cycle: 4.2% pa
  • Suggested investment size: $25,000 to $500,000

Spring FG’s Growth Cities Portfolio consists of ten (10) luxurious apartments across nine landmark projects by the leading Melbourne and Brisbane developers Devine Limited, BPM Group, Metro Property Group and Blue Earth Group.

The portfolio has been assembled with investors with a minimum of $25,000 and up to $500,000 to invest in mind.

Melbourne City Portfolio

  • Market/s: Melbourne
  • Number of properties: Total 5, consisting of 4 x 1-bed and 1 x 2-bed apartments
  • Portfolio Value: $2,296,500 (excluding stamp duty)
  • Forecast gross rental yield: 4.5% pa
  • Forecast annual capital growth over 10-year cycle: 4.2% pa
  • Suggested investment size: $10,000 to $100,000

Spring FG’s Melbourne City Portfolio consists of five (5) luxurious apartments across four landmark projects by leading Melbourne developers BPM Group and Blue Earth Group.

The portfolio has been assembled with investors with a minimum of $10,000 and up to $100,000 to invest in mind.

Brisbane City Portfolio

  • Market/s: Brisbane
  • Number of properties: Total 5, consisting of 4 x 1-bed and 1 x 2-bed apartments
  • Portfolio Value: $2,296,500 (excluding stamp duty)
  • Suggested investment size: $10,000 to $100,000
  • Forecast gross rental yield: 4.5% pa
  • Forecast annual capital growth over 10-year cycle: 4.2% pa

Spring FG’s Melbourne City Portfolio consists of five (5) luxurious apartments across four landmark projects by leading Melbourne developers BPM Group and Blue Earth Group.

The portfolio has been assembled with investors with a minimum of $10,000 and up to $100,000 to invest in mind.

About Spring FG Realty

Spring FG Realty Pty Ltd is a wholly-owned subsidiary of ASX-listed diversified financial group Spring FG Limited (ASX: SFL) and part of the Spring Financial Group.

It holds corporate real estate licences in New South Wales (1708663), Queensland (3510266), Victoria (074746L) and ACT (18401881). Its role in the Spring Financial Group is to research and identify residential property solutions for inclusion in portfolios of Spring Financial Group clients.

Spring FG Realty applies stringent due diligence processes to ensure each property passes high standards in quality and fit their clients’ overall portfolio requirements.

Spring Financial Group clients hold residential property investments exceeding $500M in value.

Please visit our Residential Portfolio Models by Spring FG  page for more information.

Pajingo Cattle Station

We have now created a public crowdfunding campaign for the Pajingo Cattle Station, near Charters Towers, in far North Queensland.

Pajingo Station, a 32,000 hectare property, has been in the Black family since 1898.rural-opportunities

  • Price: $12 million
  • Estimated yield: 3.75% – 4%, adjusted with CPI annually

Charters Towers Region

It has been claimed that Charters Towers is the centre of the largest cattle district in the state of Queensland. Its cattle district comprises the area lying between the coastal and dividing ranges and between the Clark and Belyando Rivers.

The town of Charters Towers is approximately 130km inland (south-west) from Townsville on the Flinders Highway.

Please visit our Pajingo Cattle Station page for more information.

Coming soon for public crowdfunding campaign – Mywurlie/Queel Aggregation

We are currently in discussions to create a public crowdfunding campaign for Mywurlie/Queel Aggregation in Midwestern Highway, Gunbar NSW. Mywurlie/Queel Aggregation is a diverse grazing, dryland farming and irrigation property located in the tightly held Gunbar area, between Griffith and Hay, NSW. Descendants of the Porter family have farmed here since 1881.

The property lends itself to a wide range of agricultural enterprises through the ability to irrigate up to 1,000 ha already developed. The property has fifteen kms of Mirrool Creek frontage which is the only major catchment between the Lachlan and Murrumbidgee rivers, enjoying beneficial flood-out and water harvesting from the same. Bitumen road access via Wongalea Road to homestead.

The property is ideally located 60 kms from Hay and 110 kms from Griffith. Weekly livestock markets are located at Griffith and Wagga Wagga. Many feedlots are also close by for marketing of livestock. Grain silos are located at Goolgowi and Hay. A daily air service is operating from Griffith to Sydney. A school bus from Gunbar to Goolgowi is in operation.

It is widely known locally that Mywurlie is one of the best fattening and grazing properties in the western Riverina. The diverse range of soil types lends itself to utilise rainfall in any month of the year. A holistic grazing strategy has been adopted for the past 25 years allowing a wide range of native plant species creating enormous carrying capacity.

It is widely known locally that Mywurlie is one of the best fattening and grazing properties in the western Riverina. The diverse range of soil types lends itself to utilise rainfall in any month of the year. A holistic grazing strategy has been adopted for the past 25 years allowing a wide range of native plant species creating enormous carrying capacity.

Price range: $8 – $8.8 million

Yield: Approx. 4% – 6% p.a from existing owner via a lease back arrangement

More information on Mywurlie will become available very soon on our website under the Public Crowdfunding Campaigns section.

Linton Estate

DomaCom has begun a campaign to crowdfund the Linton Estate in Ballan, Victoria’s first purpose-designed residential homes for the LGBTI (lesbian, gay, bisexual, transgender and intersex) community.Linton

Linton Estate was founded by Peter Dickson, who has long had a vision for building a residential village for the LGBTI and “straight friendly” community.

The project is now offered through DomaCom, as the only ASIC-registered fractional property investment platform in Australia, to join in the development by fractionalising it on its platform.

  • Stage 1 – Land Acquisition. This project has already been met with significant support with bids reaching 70% of the target for Stage 1 – land acquisition of $650,000.
  • Stage 2 – Rezoning & civil works. Stage 2 will raise a further $1.8 million to complete rezoning and civil works for the estate.
  • Stage 3 – Develop and build. Stage 3 is the build and development of boutique townhouses. The entire projects is expected to be finished in two years at a total cost of more than $30 million.

Linton_SubdivisionPlanning

For more information on the Linton Estate public crowdfunding campaign, visit https://domacom.com.au/linton-estate/

Woolworths, Orange NSW

For illustrative purposes, Woolworths in Orange, NSW is an example of a commercial property that you could look to crowdfund in the DomaCom Fund.   Inclusive of a long term lease to Woolworths Ltd until 2034, this immaculately presented property offers a rare opportunity for astute investors to purchase a freestanding Woolworths supermarket with a rare net lease, ensuring the Lessee pays for all statutory and operating outgoing expenses.

A diverse range of industries including healthcare, mining, agriculture, retail and education results in attractive demographics with 15.9% of Households earning a high income compared with 11.3% average for regional New South Wales, and with an unemployment rate of only 4.4% it is sitting well below the Regional NSW rate of 6.1% (Source: ABS 2011 census).

Woolies_2Located a short distance from Orange Train Station, 100 metres from the Mitchell Highway and surrounded by an expansive on-grade council car park, the property provides a high level of connectivity to the local community and ease of access for patrons.

  • Price range: $15 – $17 million
  • Net income: Approximately $1,098,360

For more information on this Woolworths (Orange, NSW) public crowdfunding campaign, visit https://domacom.com.au/woolworths-orange-nsw/

Student accommodation popularity on the rise

Several DomaCom private bookbuilds have been completed on student accommodation in Melbourne, yielding a higher than average net income for investors in the 6%- 8% range.

In the last week, we’ve learnt that Blue Sky Private Real Estate will form a $1 billion student accommodation joint venture with leading global investment firm Goldman Sachs.

According to their media coverage, the partnership aims to build a portfolio of 5000 to 10,000 quality, purpose built and well located student accommodation across Australia and New Zealand over the next few years. It has been reported this is a sector which has been heavily undersupplied relative to other global student markets including the US and UK.

Education remains one of Australia’s leading exports, an industry that’s worth in excess of $18 billion* per annum and growing. With our close proximity to Asia and the rapid expansion of the Asian middle class wanting their children to be educated in Australia, we anticipate investor appetite for this type of property will continue to rise.

Whilst the greatest concern by many for student accommodation is the limited scope for capital growth, it may be the right type of investment if you are heading into retirement and want an income well above bank interest.

As always, investment strategies need to take into account your current stage of life as well goals for the future. If you are interested in exploring student accommodation as an investment consideration for your clients, please contact our Sales Team at sales@domacom.com.au

*As at 2014-2015. Source Austrade – Australia Benchmark Report 2016.

Kidman Station update

Some of you may be concerned that DomaCom does not appear to be making much progress in launching a bid for Kidman Station, but we can assure you a lot of work has been going on behind the scenes and we are still most definitely in the hunt.

There has been a lot of talk in the media in relation to foreign ownership and the lack of participation by our superannuation funds to invest in our agricultural assets, which DomaCom and our associates have been vigorously fanning, and to good effect.

DomaCom has also featured quite a bit in both the mainstream media and the trade media that filters out to the financial industry. Visit our In the Media section for details.

So where are we at?

There is currently a Senate Inquiry into foreign ownership to which DomaCom has made a submission.  S.Kidman & Company are referenced in this inquiry, which means  the Foreign Investment Review Board (FIRB) is unlikely to make a determination on the sale to overseas interests until the inquiry report is released. This is due out on 8th April, and gives us additional time to rally further support.

  • We have received around 4,500 expressions of interest to the tune of $67m. The land component we think will be in the vicinity of $150m.
  • The operating cattle business is valued at around $200m and we are in advanced discussions with a consortium to fund the purchase of the business in a separate transaction to the land. This group has allocated more funds than are required and we are hoping the surplus will go towards the land.

So we are in a reasonably good position, potentially only $30m – $40m short on the property side. And as soon as we can make a positive announcement on the business, we are confident that many others will join the campaign to secure our bid.

In the media

Here are some of our latest media coverages, but for the full list, please visit In the Media section of our website.

 

DISCLAIMER: DomaCom Australia Ltd ACN 153 951 770 is the holder of an Australian Financial Services Licence (AFSL) 444365 and is authorised to provide general financial product advice, to deal in certain financial products and to make a market in units in sub funds of the DomaCom Fund ARSN 167 020 626. Whilst DomaCom has taken all reasonable care to produce the information in this material, it does not make any representations in respect of, or warrant the accuracy, timeliness or completeness of any of the information. The information provided in this material is general information only. It does not constitute financial, tax or legal advice or a forecast. This information has been prepared without taking into account your personal objectives, financial situation or personal needs. Before acting on the information or deciding whether to acquire or hold a financial product, you should consider its appropriateness. It is recommended before making any investment decision, that you seek independent financial advice and read the relevant Product Disclosure Statement (PDS) and any Supplementary Product Disclosure Statement (SPDS) available on the DomaCom Ltd website, www.domacom.com.au , or by phoning 1300 365 930.