Would you like to be able to invest in a farm? DomaCom has created the Next Generation Farmers Strategy to syndicate the partial acquisition of quality agricultural properties from retiring farmers to enable the next generation (NextGen) of farmers to become co-farmers in this vital and vibrant industry. DomaCom investors will have an interest in the property which will be leased to the retiring and next generation farmer.
AFL legend Kevin Sheedy, Ambassador to the Next Generation Farmer Project
“We need to encourage the next generation to stay on the land and build a future for our country. Through crowdfunding all Australians can now invest into farming families and regional Australia’s future.
Some of the footy’s greatest players grew up kicking a Sherrin on the dairy farms, market gardens and sheep farms out the back of nowhere. I struggle to see where the next generation of farmers, and therefore, AFL players will come from if it is financially impossible to own a farm.”
Working with Cultivate Farms
Working with Cultivate Farms the DomaCom investment platform provides a way to share equity among investors and farmers to provide a seamless succession solution which will be a win-win outcome for both retiring farmers and the next generation of farming families.
Cultivate Farms will assist in helping the retiring farmers to retain partial ownership, secure the best next generation farmer, ensure the farming operation is viable and provide ongoing business governance mentoring support to the farming enterprise to ensure the farm and the regional community thrives.
By connecting next generation passionate farmers to retiring farmers this program will ensure continuity and provide support in a way that has not been available before:
|Opportunity to fractionally own the farm||Investors can participate in the fractional ownership of an agricultural property within the Next Generation Farmers Strategy which is then leased to both the retiring and aspiring farmer.|
|Attractive returns||Long term target of return of 10% p.a. comprising of approximately 6% of capital growth and up to 4% rental income – see figures from the Rural Bank Report|
|Succession planning||The NextGen project provides a succession plan for retiring farmers to transition their farm to the next generation of farmers while seeing their farm scale to a higher level of productivity.|
|A more robust process||
|Building equity for NextGen farmer||The incoming NextGen farmer is encouraged to acquire some equity which is a key desire, but usually out of reach, for many aspiring farmers across the country.|
|Facilitating a smooth transition||The retiring farmer will also retain some equity and stay farming in partnership with the NextGen farmer to ensure a smooth transition is achieved.|
Agriculture is a major export industry and part of Australia’s Five Pillar Economy is well regarded by Australians who are looking for a socially responsible investment in agricultural land with a reasonable return by way of income and capital growth.
We believe that such opportunities should provide an attractive return to investors whilst enabling young farming families to acquire a working property without having to lock equity into the land. Equity can then be used to improve the business by increasing productivity.
Using the DomaCom platform, aspiring farmers can increase their equity over time by purchasing investor units in the sub-fund that holds the property. Retiring farmers who sell and lease back the family farm will similarly not be burdened with debt or at and can use the released equity to grow the business with the NextGen farmer.
Highclere Farm, Tasmania
Our first agricultural property that is part of this Next Generation Farmers Strategy is the Scottsdale, Tasmania Farm. Please visit the Highclere Farm page for more information.
As DomaCom is the landlord for the selected farms, a property manager will be appointed to manage the property including collecting the rent and sourcing a new tenant if required. The gross rent is targeted to be around 5% which should result in an approximate income return of 4% to investors after the 0.88% management fee.
If you are interested in the Next Generation Farmers Strategy, you can join this crowdfunding campaign by completing the application and lodging your investment funds through this General Advice page. Note that you will not be committed to investing in a specific property at this stage – you will receive a formal offer to invest in a specific property once it has been identified.
Please ensure that you first read the DomaCom Fund’s Product Disclosure Statement (PDS). Download a copy of the current PDS or call your financial adviser.
Once properties have been identified, you have lodged your bid and the campaign is filled, you will receive a Supplementary Product Disclosure Statements (SPDS) outlining the specific offer to invest in specific properties which will contain all information required for you to make a decision. You are not bound to proceed with your bid amount in the Next Generation Farmers Strategy 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 below to begin your application. If you are an existing DomaCom Fund investor, you can log in to access your account and all the other public crowdfunding campaigns by clicking the Investor Login button below.
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|