Sydney-based investment management firm KSI Investments has launched what it claims is the first landbanking fund aimed at SMSF members.
“Investing in landbanking, that is, acquiring land, rezoning and subdividing, has been traditionally limited to wealthy investors and property developers. However, KSI Investments has opened up this sector to retail investors via this Australian first, with a minimum of $2000 investment under a retail managed fund structure,” KSI chief executive Robin Luo said.
The Sydney Landbanking KSI Investment Fund is looking to take advantage of the housing requirements associated with the city’s new airport at Badgerys Creek.
To that end, the fund has acquired 11.55 acres of land five kilometres away from the new airport that will provide between 110 and 140 houses once the zone has been rezoned. This rezoning process is expected to occur over the next five to seven years.
The property was purchased for $162 per square metre, with KSI anticipating it will sell for $1669 per square metre once the rezoning has taken place. The anticipated selling price represents a 1000 per cent gross investment gain and has been based on comparable sales in the south-west region.
The purchase agreement includes an option for the acquisition of two additional adjoining farms, with the settlement to occur within the next six months.
Perpetual is the custodian for the fund and units can be purchased through the registry services of DomaCom. According to KSI, the structure means SMSF members will be able to have liquidity before the post-rezoning land sale occurs due to the fact they can trade units freely immediately.
“It’s never been easier to purchase a piece of land – you can buy units in the land using your phone,” Luo said.
Investors in the fund will be charged a fee of 2 per cent for annual management and an additional 20 per cent performance fee once the land has been sold.
The offering is also looking to attract non-SMSF inflows from private investors, companies and trusts.
“The Sydney Landbanking KSI Investment Fund is the first of several planned by KSI Investments,” Luo revealed.
“We wish to share our expertise in the property industry and bring unique opportunities to everyday investors who have not been able to access investments such as landbanking in the past.”