Australian property syndicator Trilogy Funds Management is ramping up its push into the New Zealand market, appointing Colliers International to market its latest Australian syndicate to New Zealand investors.
The move is part of a trend of Australian fund managers showing increasing interest in the New Zealand syndication market with Trilogy and fellow Australian syndicator Centuria both promoting their Australian syndicates to New Zealand investors and ASX-listed Cromwell Property Group recently acquiring a 50% stake in Oyster Group, which is one of this country's largest syndicators.
Tim Lichtenstein, who is heading up Colliers syndication arm in this country, said we are likely to see more Australian syndicates being offered in this country.
Trilogy's latest syndication is a Melbourne office building marketed as the Ravenhall Office Trust.
The minimum investment in Ravenhall is A$20,000 and it is forecast to pay cash distributions of 8% a year, (pre-tax) paid monthly, so could appeal to investors looking for an income stream who want to diversify with some exposure to the Australian commercial property market but aren't keen on the listed options.
One of the key differences between Australian and New Zealand property syndicates is that Australian syndicates tend to offer a little more certainty about the likely term of the investment, probably because of the different tax treatments of capital gains between the two countries.
Ravenhall's product disclosure statement states that the syndicate is intended to operate for five years, at which point the property would be sold and the syndicate wound up.
However Trilogy could sell the building prior to that if an attractive offer was received, or extend the term of the investment at its discretion to seven years.
The term could also be extended to 10 years if approved by a special resolution of investors.
So investors in Ravenhall should be prepared to be locked in for 5-10 years.
Key Investment Features:
Ravenhall Office Trust will acquire a modern office building located at 271-279 Robinsons Rd in the Orbis Business Park at Ravenhall about 18km north west of Melboune's CBD.
Property valuation (by JLL) A$8.95 million.
Purchase price A$8.95 million.
Amount to be raised from from investors A$5,752,704 (minimum investment A$20,000).
Debt funding A$4,385,500.
Loan to valuation ratio 49%.
Net tangible asset backing A92 cents per A$1 invested.
Net rental income A$783,049 p.a.
Net yield 8.7%.
Forecast cash distributions 8% p.a. paid monthly.
Read our beginner's guide to property syndicates here.
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6 Comments
Ostrich. Greg clearly points out in the key features that is a forcast return. I'm not sure what point you are trying to make but anyone with even an iota of common sense would understand this and your posts read very much like you are trying to troll him. Take a deep breath and gather your thoughts and then actually post what you think is wrong.
You have so much to say but so little worth saying. The exchange rate risk you refer to is the risk that the New Zealand dollar will appreciate against the Australian, which would reduce the capital value of the Australian asset and the return it provides when these are converted back to New Zealand dollars. But lately the New Zealand dollar has been heading in the opposite direction. It has been declining in value against the Australian dollar. If that trend continues it will increase the value of the Australian asset and the returns it pays to NZ investors when these are converted back to NZ dollars. I would expect readers on this website who would consider investing overseas to understand how that works and to be able to make the appropriate judgement call. If they are not comfortable with the risk then they should stay in their home patch. By the way, I think you meant to say that whether you have common sense is a moot point, although I wish it was a mute one.
If you read the key features everything is listed in AUD terms so of course there is going to be currency risk as there is with any investment outside of NZ. Of course forcasts assume the current status quo, they are not magic crystal balls. I'm still not getting what your point is?
And actually I have no intention of investing in this. I am generally a value investor and at that NTA I would not get involved.
Is PGG Wrightson potentially looking at legal action by farmers? http://www.stuff.co.nz/business/farming/dairy/10517220/Unhappy-swede-li…
I have heard that MyFarm is looking to seek recompense from PGG for the losses they have suffered as a result of this. With the lower payout and potential/real production/capital losses from the swede issue they may struggle to meet their return for investors on some of their farms.
Investors also need to be aware of the potential for this sort of thing when investing in farms.
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