A credit facility will now be available for SMSF trustees looking to invest in property via the DomaCom fractional property fund as a result of a new partnership the manager has struck with La Trobe Financial.
The arrangement has established an initial $50 million lending facility through La Trobe Financial that will allow investors to use gearing to acquire $100 million of property in the DomaCom fund.
An annual interest rate of 5.99 per cent will be charged for the borrowing facility, with investors being able to borrow up to 60 per cent of their allocation to the fund.
DomaCom estimates the new initiative will allow it to grow its funds under management to $150 million – triple its current level.
“We’re delighted to have the final piece of the jigsaw (debt) in place for DomaCom – we have bought over 50 properties to date where almost all are without debt and we are excited to be able to offer advisers ready access to competitive SMSF lending,” DomaCom chief executive Arthur Naoumidis said.
“The availability of this initial $50 million debt facility has cleared the remaining obstacle for DomaCom. After many patient years we are now well placed to take our platform to financial advisers and the SMSF sector, with available debt and legal certainty.”
Commenting on the development, La Trobe Financial chief investment officer Chris Andrews said the deal was in line with his organisation’s history over the past decade.
“As a specialist in the SMSF lending space since 2009, we are happy to partner with DomaCom to assist borrowers obtain that much-needed SMSF finance for property investment purposes,” Andrews said.
“With more than 1 million Australians having turned to taking more control of their own super, the growth of the SMSF sector continues.”
He pointed out the SMSF sector increased its assets under management by 55 per cent over the five years to December 2018 to $726.5 billion and property resonated well with trustees as it was recognisable, understandable and suited the desired time horizon of these investors.