The Australian Fuel Fund (AFF) will become a sub-fund of the DomaCom Fund. The AFF will afford retail investors an opportunity to invest in a sub-fund that intends to acquire sites for the purposes of the Australian Fuel Funds strategy.
The vision and strategy of the Australian Fuel Fund is to maximise investor returns through building asset ownership in an industry that is anchored by top tier fuel companies as tenants and to build scale both within and across the retail fuel market including capacity for electric and Hydrogen fuel outlets.
Accumulating a strong portfolio that will mature to achieve the targeted returns, the Fund is set to acquire its first property on the Western Highway in regional Victoria: –
Location: Stawell, Victoria
Tenant: United Petroleum
Annual Rent: $455K p.a. with annual 3% CPI
Term: 15 Years with 4×5 year options
The Fund anticipates a targeted return on equity of 8% p.a. including 6% distributions p.a. to Unit Holders. The management team will also assess secured sites for potential Value Adding opportunities, which will ultimately increase the portfolio’s value. Further, the Fund’s management team considers that the existing 7,100 plus network of retail fuel sites within Australia has been relatively untapped by well-structured private equity firms, and the current timing within the cycle opens up a great opportunity to execute the Fund’s strategy.
The AFF will seek major fuel tenants who typically enter into long term lease agreements up to 30 years. These global and national companies will underpin the strength and opportunity of the strategy. There are currently an estimated 7,100 retail fuel sites across Australia.
The primary focus of the Australian Fuel Fund is to build a portfolio of passive income producing assets in this sector. There may be select opportunities to expand or value add to existing assets in the future which may increase yield and returns for investors with additional tenancies.
The DomaCom Fund is an investment vehicle managed by DomaCom and is an ASIC registered managed investment scheme which issues units in the sub-fund that holds the property.
The issuer of this product is Melbourne Securities Corporation Limited AFSL No 428289. DomaCom Limited holds an Australian Financial Service License (No.444365) and as the Manager is responsible for all due diligence. All properties are professionally managed to ensure maximum tenancy at all times.
If you are interested in the Australian Fuel Fund you can join this 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). For a copy of the current PDS, please click here or call your financial adviser.
Once 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 the specific property which will contain all information required for you to make a decision. You are not bound to proceed with your bid amount in the Australian Fuel Fund until you accept the offer contained in the SPDS (which will include the specific details for the property).
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 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 – 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. It is important to note that if investors are successful in acquiring the property a 15 year lease will be put in place with United Petroleum, which is a company with a strong brand name in this sector of the market.
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
- Once off syndication fee 1%
- Cash held in your Cash Account 0.22% p.a.
- Property Sub-Fund 0.66% p.a. of the Gross Asset value of your investment
- The Acquisition fee of 3.3% will be paid to CBSM Pty Ltd as the sub Investment Manager of the Sub-Fund
- The performance fee above 8% p.a. 50% will be paid to CBSM Pty Ltd to be calculated at the end of the 5 year term, the other 50% paid to investors
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|
|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|