DomaCom is launching one of Australia’s first crowdfunding campaigns to secure multiple sites to develop a solar farm to service the energy needs of its nearby industries and communities, as well as feeding excess power into the National Electricity Network.
As the Australian population grows older, ‘dirty’ energy production facilities powered by non-renewable coal are shut down, Australia needs to shift to cleaner, renewable energy sources. Solar power fits the bill perfectly and investors will get rewarded through a combination of:
- An agreed rental of 12 % capitalised whilst initial connection and planning permits are applied for and then 7.5% p.a. thereafter and for the initial array of solar panels infrastructure.
- An expected uplift in the capital value of the land due to the improved commercial value of the land with permits in place
- 7.5% p.a. plus tax credit estimated at 125%.
The identified location for this initial site has site-specific engineering report qualified high annual sunshine and electricity generation output. The identified land is adjacent to an existing sub-station and connection options from the relevant State Electrical Authority have now been received.
This project is initially aiming to raise a total of AU$2.0 million to purchase the sites, finalise due diligence and acquire the necessary permissions.
An excellent attribute of solar power is that unlike virtually any other form of power generation, revenue can be generated from the installation of the very first panels. The whole solar farm does not have to be built in order for returns to investors to commence as the development is modular.
In order to maximise revenue, the farm proposes to install state of the art motorised sun tracking which will tilt panels more optimally to the sun throughout the day which can generate up to 40% more solar energy per day. In addition, the farm will be looking to install battery technology to help maximise revenue opportunity by storing energy when electricity demand and prices are low and selling into the grid when prices are higher (evenings and very hot days).
The end size of the farm is expected to be up to 100MW, sufficient to power up to 39,000 homes (based on average house usage of 16kw per day).
Indicative ‘shovel ready’ (prior to EPC – Engineering Procurement Construction) site valuation estimated range is $50,000 to $100,000 per Mega Watt granted. Application submission is for 100 MW PV generation thus providing site valuation range between $ 5 Million and $ 10 Million.
If you would like to invest in the Solar Farm project, you can join this crowdfunding campaign by completing the application and lodging your investment funds through this General Advice page. Please ensure that you first read the DomaCom Fund’s Product Disclosure Statement (PDS) or call our financial adviser on 1300 365 930.
When you have lodged your bid and the campaign is filled, you will also receive a Supplementary Product Disclosure Statement (SPDS) outlining the specific offer to invest in the Solar Farm project which will contain all the information required for you to make a decision. You are not bound to proceed with your bid amount for this Solar Farm project crowdfunding campaign until you accept the offer contained in the SPDS (which will include the specific details for the properties).
If you are new to DomaCom, click on the Apply button to begin your application. If you are an existing DomaCom Fund investor, you can login to access your account and all the other public crowdfunding campaigns by clicking the Investor Login button.
Risks for Property Sub-Funds
Refer to Section 7 of the Risk section of the PDS for an explanation of the risks involved in an investment in the DomaCom Fund and the general risks associated with property markets.
Specific risks of this investment:
• Property not acquired – If there is insufficient investor interest the property will not be acquired however Investors with an Active Bid will all be proportionately liable for the Campaign Costs. A list of approximate campaign costs is set out below.
• Value changes – The value of an Investor’s investment will go up and down in accordance with the value of the Underlying Property. There is no guarantee that the value of the investment will increase, and it may in fact decline in value.
• No guarantee – Returns are not guaranteed, and Investors may lose some or all of their capital. The nature of this investment is to expect an appreciation in the value of the units, with little to no income to be paid to investors during the term of the investment. There is no guarantee that this expectation will be fulfilled.
•Past performance – While this area in which the underlying property is based has experienced capital growth in the land value in the past, this is no indication it will increase in value in the future.
• Liquidity risk – An Investor cannot withdraw from the Sub-Fund until the Sub-Fund is terminated, and the Underlying Property is sold. DomaCom does intend to offer a facility through which Investors can seek to sell their Units to another party, however there is no guarantee of this.
• Damage or loss – There are a range of events that can damage the Underlying Property including acts of God (fire, flood, earth quake and other natural disasters) through to accidents, negligence, and failures of maintenance. While insurances will be in place it may not cover or may not fully cover such losses.
• Insufficient income – The costs associated with Underlying Property may exceed its income, however if there is a shortfall Investors will be given an opportunity to subscribe for additional Units in the Sub-Fund to meet those expenses pro rata to their Unit holding in the Sub-Fund. Investors who don’t subscribe for further units will have their investment in the Sub-Fund diluted.
• Vacancy risk – a property manager will be appointed to manager the property and secure tenants to tenant the property and derive income from the underlying property. If tenants are not secured there is a risk that the property will not generate the income that has been budgeted for. If this were to occur the investors may be required to raise further funds to offset the expenses of running the property.
• Unexpected property event – The risk that the Underlying Property may be negatively impacted due to a property specific event, for example, a change could occur to local zoning rules, development of competing and other events that were not anticipated at the time of acquisition.
• Economic risk – There is a risk that the general economic conditions in Australia may change in relation to interest rates, employment rate and economic growth that could in turn have an impact on the Property market and specifically the value of the Underlying Property.
Fees and Costs
Refer to section 13 of the PDS for Fees and Other Costs
The Management Fees for managing your investment
- Cash held in your Cash Account 0.22% p.a.
- Property Sub-Fund 0.88% p.a. of the Gross Asset value of your investment
- Loan Sub-Fund 0.44% p.a. of the Gross Asset value of your investment
Set out in the table below is illustration of the campaign costs that are likely to be incurred. An Investor who participates in a Campaign and has had an Active Bid which fails to result in the formation of a Sub-Fund will be liable (in a proportion that is equal to the amount of their bid divided by the sum of all Active Bids at the time the Campaign costs were incurred) for the Campaign costs incurred by DomaCom. The investors will be only liable for Campaign costs and Acquisition costs that are set out below if the Sub-Fund was not created, as these costs have been incurred prior to the acquisition of the property.
The settlement costs set out below are only incurred and payable if the Sub-Fund is created and the property acquired.
If the Sub-Fund is established, these costs will be deducted from the Sub-Fund and only those investors that accept the SPDS will incur the on boarding costs – Campaign, Acquisition and Settlement costs.
The costs below are an example of the campaign costs, the actual costs may differ and will be set out in the SPDS.
|Contract review and title search||$500-$1000+GST|
|Building inspection and pest report||$500-$1500+GST|
|Property valuation report||$500-$5,000+GST|
The following costs will be incurred, whether or not the property is purchased.
|Legal costs (if contracts require further amendments||$2,000-$2,500+GST|
Below is an estimate of the following Settlement costs if the purchase is successful and a Sub-Fund is created. These costs will only be incurred if the Property is purchased and will be paid from the capital raised on the acceptance of the SPDS.
|Estimated Settlement Costs||Estimates|
|Conveyancing costs||$1000 – $2,500+GST|
|Stamp Duty||Varies based on state and Property Value|