July 20107 – DomaCom is pleased to announce that we have commenced the following regional public crowdfunding campaigns that may be of interest to your clients. Akuna, Cobram VIC Akuna is developing a portfolio of resort-style residential communities in regional Victoria for the over 55’s, commencing with a ‘greenfield’ site in Cobram on the Murray River.

July 2017

DomaCom is pleased to announce that we have commenced the following regional public crowdfunding campaigns that may be of interest to your clients.

Akuna, Cobram  VIC

Akuna is developing a portfolio of resort-style residential communities in regional Victoria for the over 55’s, commencing with a ‘greenfield’ site in Cobram on the Murray River.

Akuna, Cobram VIC

Through the DomaCom Fund, Akuna is offering investors the opportunity to purchase units in a sub-fund that will acquire ownership of the land component for the development of its Cobram community estate, with the aim to provide investors an attractive return from both the development and the ongoing land-rental agreement.

Investment highlights

Please note that returns are estimates only and cannot be considered as a guarantee of investment performance.

Minimum investment $2,500
The land The Akuna site comprises of 8.2 hectares, with an approved development plan issued by the Shire of Moira for 148 home sites and community facilities including clubhouse, sports centre, pool and bowling green
Target crowdfunding raise AU$6 million:

  • $1.65 million for the land component (including GST and Stamp duty)
  • $4.35 million for development planning, approvals & construction
Estimated return on investment Building Phase: During this time it is expected that investors in the Akuna sub-fund of the DomaCom Fund may not receive any income distributions, and the return will be primarily by way of expected increases in the unit price of the investment holdings.  Unit prices will be reviewed regularly through the building phase by periodic re-valuation.

Completion Phase: Upon completion and full occupancy, the investors in the Akuna sub-fund of the DomaCom Fund will receive a monthly net rental return. It is estimated that after all expenses the rental income will equate to approximately 8% p.a. on the completed capital value.

Investment term There are no withdrawal rights from a sub-fund until it is terminated, however the DomaCom Fund provides a liquidity solution. This solution has not previously been available to the property sector.

  • You can sell some or all of your units in a sub-fund through the DomaCom Fund’s liquidity facility provided there is a buyer for your units; or
  • The Fund’s Constitution also provides that a sub-fund can be terminated at any time by a vote of unit holders that hold at least 75% of all units on issue and/or after 5 years with a 50% unit holder vote.

Please refer to the DomaCom Fund Product Disclosure Statement (PDS) for more information.

Affordable retirement accommodation via Residential Land-Lease Community (RLLC) living separates the ownership of the land from ownership of the house, freeing up capital for the homeowner whilst providing the land owner with secure ongoing rental income from the land.

IMPORTANT to note is that RLLC projects do not come under the Retirement Villages Act and therefore housing properties sold in this project will not be subject to the fees recently outlined in several media reports. Akuna will have no entry or exit fees for residents.

Lifestyle community living is driven strongly by an ageing population prepared to downsize and relocate to achieve an affordable lifestyle. Akuna will develop and lease the land, construct and sell houses and manage the community.

If you are interested in this project as an investment for your clients, please visit the Akuna page on our website.

 

Utilitas bioHub

The second opportunity that may be of interest to your clients is the Utilitas bioHub project in Casino, NSW turning organic waste into fuel to generate electricity.

Utilitas bioHub

This is a great example of technology that works to benefit rural communities. With a population of over 10,000 people, Casino is the regional hub of a large cattle industry. The sheer size of biomass from agricultural and food processing industries in this region makes it an ideal place to build a bioHub.

Utilitas will engineer the plant following a successful acquisition of the site. Backed by multi-year energy purchase contracts with local industry, Utilitas will also be the operating tenant of the bioHub once completed.

Investment highlights

Please note that returns below are estimates only and cannot be considered as a guarantee of investment performance.

Minimum investment $2,500
The investment DomaCom, via the DomaCom Fund, and Utilitas, a bioHub developer, is launching Australia’s first crowdfunding campaign to acquire a site in Casino, northern NSW and develop a bioHub to service the energy needs of its nearby industries and communities.

The bioHub will be leased to the operating business run by Utilitas, and an ongoing income stream, via leasing fee, will be paid to the investors in the DomaCom Casino bioHub sub-fund.  Investors in this sub-fund are holding an interest in the land and the plant, and are not investing in the operating business

Target crowdfunding raise AU$4.3 million
Estimated return on investment Targeting a 20% uplift for the project during the 12-18 month development with ongoing gross rent of 8% p.a. with an annual increase of the greater of CPI or 3%.
Investment term There are no withdrawal rights from a sub-fund until it is terminated, however the DomaCom Fund provides a liquidity solution. This solution has not previously been available to the property sector.

  • You can sell some or all of your units in a sub-fund through the DomaCom Fund’s liquidity facility provided there is a buyer for your units; or
  • The Fund’s Constitution also provides that a sub-fund can be terminated at any time by a vote of unit holders that hold at least 75% of all units on issue and/or after 5 years with a 50% unit holder vote.

Please refer to the DomaCom Fund Product Disclosure Statement (PDS) for more information.

If you are interested in this project as an investment for your clients, please visit Utilitas Biohub page on our website for more information. 

 

The Feddy in Deni

A businessman with property and agricultural interests in the New South Wales (NSW) Riverina and northern Victoria purchased the Federal Hotel, Deniliquin in late 2015 (known as ‘the Feddy’ to many locals) following an 8-year closure.

The Feddy in Deni

Together with a media and entertainment company, Omecca, a plan has been prepared to renovate the property to become a focal part of Deniliquin offering food and beverage services, luxurious cinema seats, and bed & breakfast style accommodation.

The cost to acquire the Feddy, refurbish and reopen it as an entertainment complex is expected to be approximately $1.5 million. DomaCom has already secured 27% funding at this stage, hence, the target amount to raise is $1.1 million. It is targeted that on completion of the refurbishment that the improved value of the Feddy and entertainment complex will provide investors in the DomaCom Fund sub-fund with capital growth in the vicinity of 15-20%, and an estimated ongoing net rental income of 7% p.a.

The DomaCom crowdfunding model can be employed in regional areas to refurbish disused properties such as the Feddy to enhance amenities in the community, add to the town’s business and commerce, employment opportunities, and encourage population growth.

If this project is of interest to your clients, please visit the Feddy page on our website for more information.

 

Investors access DomaCom via Hub24

DomaCom continues to expand our presence on platforms with our first transactions on HUB24 in early July. The addition of HUB24 is further validation that our fractional investment model is gaining wider acceptance and a place in portfolio construction that can fit into any investment structure. It also demonstrates the flexibility that platform and non-platform investors can invest in the same asset. DomaCom look forward to further platform integration announcements.

 

Diversifying through multi-property portfolios

Engaging with property model managers, DomaCom can offer your clients exposure to a range of multi-property portfolios based on investment strategies such as income, capital growth or a combination of both. These can include residential and commercial properties.

The following are examples of multi-property portfolios in the DomaCom platform that have been set up by two separate advisory groups.

Example of 2-property portfolio currently in the DomaCom platform

Total investment amount: $1,000,000

Investment objective: An advisory firm with a group of early retiree investors wanted to create a portfolio of properties to achieve a steady income stream greater than the bank’s term deposit rates, coupled with a growth component.
The adviser in conjunction with property specialists searched for growth areas in VIC, NSW and QLD where tenants would be easy to find.

Properties & locations: They settled on the following two properties in two very different geographic areas:

Coomera house, QLD Richmond apartment

  1. 1-bed, 1-bath, apartment in a cosmopolitan Melbourne-inner-city suburb of Richmond, VIC; and
  2. 4-bed, 2-bath, 2-car house in a growth suburb of Coomera in the Gold Coast region, QLD.

Example of 4-property portfolio currently in the DomaCom platform

Total investment amount: $1,350,000

Investment objective: An advisory firm wanted to provide a diversified property exposure for their clients who were previously unable to allocate funds to direct property within a prudent asset allocation in their portfolios.

In conjunction with property specialists, the adviser identified 4 properties in outer suburbs of metropolitan areas in QLD, VIC, TAS and SA with reasonable growth and good rental that met their criteria.

Raceview house, QLD Warragul House Vic

  1. 3-bed, 2-bath, 2-car house in regional town of Warragul, VIC;
  2. 3-bed, 2-bath, 1-car house in Munno Para West, an outer northern suburb of Adelaide, SA;
  3. 3-bed, 2-bath, 1-car house in Risdon Vale, an outer northern suburb of Hobart, TAS; and
  4. 2-bed, 2-bath, 1-car house in Raceview, a suburb of Ipswich in QLD.

In ‘grouping’ properties together your clients can allocate their funds in a single campaign and the platform will split their funds equally across the portfolio of properties, which may be 2, 3 or more properties depending on the type of property and price.

The benefit of investing in this way is that all your clients’ eggs are not in one basket, so they may see some areas performing better than others and they will have multiple tenants across the portfolio, hence, minimizing tenancy risk as they will not all be vacant at any one time.

It’s also interesting to note that close to 40% of investor accounts in the DomaCom platform are Self-Managed Super Funds (SMSFs), indicating that the DomaCom fractional model is an ideal vehicle to provide an asset allocation to real property without over-weighting the portfolio.

 

DomaCom seeks Federal Court determination

We recently announced that DomaCom Australia Limited has supported an action in the Federal Court for a declaration that the DomaCom Fund sub-funds are not inhouse assets or related trusts for the purposes of the SIS (Superannuation Industry Supervision) Act.

Such a ruling would confirm that SMSFs can invest in property sub-funds where the tenant of the underlying property is a related party of the SMSF.

The ability to use superannuation to help people into a home is clearly a topical issue in Australia, and it is our belief that the DomaCom Fund can play a key role in solving this issue whilst still protecting the assets of the SMSF.

The unique arm’s length structure of the DomaCom Fund protects the SMSF assets whilst generating commercial rates of income and capital return that the underlying residential property delivers.

Residential property can be used as an anchor asset class for the superannuation portfolios of Gen X/Y investors, which can then expand to other asset classes later in life.

Stay tuned for progress and outcome of this Federal Court determination.

 

DomaCom brings administration in house

Following the initial start-up period, DomaCom has decided to bring funds administration services previously performed by FundBPO Pty. Ltd. (ABN 81 118 902 891 AFSL 303253) in house effective 1 July 2017.  We thank FundBPO for their services and support to date.

 

2017 DomaCom Tax Statements

We have commenced preparations for the end of 2017 financial year in order to issue your clients with Tax Statements for each sub-fund by the end of September 2017.

Please let your clients know that they will receive a notification email closer to this date that will ask them to log in to the DomaCom platform to download their Tax Statements.  In the meantime, if you have any questions about our statements, please contact our Client Service team via email, clientservices@domacom.com.au

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.

 

General Advice Warning

This information is general advice only and does not constitute personal financial advice. The information has been prepared without taking into account your personal objectives, financial situation or needs. Accordingly, before acting on the information provided you must consider the appropriateness of the information, in the light of your own objectives, financial situation or needs. If you wish to acquire a financial product within the DomaCom Fund offering, you should first obtain a copy of, read and consider, the PDS before making any decision. A copy of that PDS is available at https://domacom.com.au/the-domacom-fund/product-disclosure-statement/ or by calling your financial adviser.

Disclaimer

The material in this newsletter has been prepared by DomaCom Australia Ltd ACN 153 951 770 the holder of an Australian Financial Services Licence No. 444365. The information given is in summary form and DomaCom does not warrant the accuracy, currency or completeness of any information contained in the presentation. Forward looking statements may be contained in this newsletter, including but not limited to statements regarding DomaCom’s belief or expectations in respect of its business, market conditions, results of financial operations and risk strategies. DomaCom has taken due care in preparing this information, however actual results, performance or events to differ materially from those expressed or implied. DomaCom undertakes no obligation to update any forward-looking statements to reflect events or circumstances after the date of this presentation, subject to disclosure requirements applicable to DomaCom. Past performance is not a reliable indication of future performance. Any potential investors or investors are warned not to place reliance on such statements but to proceed to make an investment decision based on their own independent research and independent advice. The material in this document, is general information only and is not intended and should not be considered as constituting advice, a recommendation or an offer or solicitation to investors, or potential investors, in relation to purchasing or acquiring any securities or other financial products and does not take into account your personal investment objectives, financial situation or needs. If you are considering making an investment and before acting upon any information in this newsletter, you should 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 and you should consider the suitability of this investment, having regard to your personal investment objectives, financial situation or needs. You should also seek independent financial advice.