Campaign Details

Description

What is a strategy campaign?

It is an indicative campaign where a specific property asset has yet to be identified or confirmed by a signed contract of sale.

It simply means that DomaCom, or its agents, are working to identify a suitable property, or have one or more properties of interest under investigation.

All properties are subject to a strict due diligence process, which examines the contract of sale and the inclusions therein.  The process includes a property inspection and an independent formal valuation.

DomaCom are working with agents in rural property and regenerative and sustainable farming to locate a suitable investment.

Rural farmland as an asset class

Rural farmland is often regarded as a defensive asset and may have a place in portfolios where diversification is prudent, or where it is desirable to hold an investment that is environmentally and socially responsible.

Rural farmland offers a reasonable rental return more often with a long-term tenant in place, who may have a vested interest as an investor in the land they work.  Acquisitions may be a straight sale and rental or a sale and leaseback with the vendor becoming a tenant with equity.

DomaCom seek properties that can more easily be acquired, usually in the $1m – $5m range.

Returns

Rental returns may be in the 3%-4% range with indicative growth in a range 6% or greater.

For more information relating to rural farmland and growth rates please refer to the Rural Bank Farmland Values Report

 

Next step

If you are interested in the Rural Farmland 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 Statement (SPDS) outlining the specific offer to invest in a specific property. The SPDS will contain all information required for you to make a decision. You are not bound to proceed with your bid amount in the Rural Farmland Strategy Campaign until you accept the offer contained in the SPDS.

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.

Apply Now Investor Login

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 Product Disclosure Statement for Fees and Other Costs

Management Fees for managing your investment

    • Cash held in your Cash Account 0.22% p.a.
    • Syndication fee 1% of the Gross Asset value of your investment.
    • Property Sub-Fund 0.66% 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.

Campaign Costs

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.

Campaign Costs Estimates
Contract review and title search $500-$1000+GST
Building inspection and pest report $500-$1500+GST
Property valuation report $500-$5,000+GST

Acquisition costs

The following costs will be incurred, whether or not the property is purchased.

Acquisition costs Estimates
Legal costs (if contracts require further amendments $2,000-$2,500+GST

Settlement costs

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

Target Market Determinations