DomaCom positions for gearing product suite


Arthur Naoumidis

Fractional property investment company DomaCom (ASX:DCL) is in the final stages of implementing the required legal infrastructure to create a mechanism by which the Company’s sub-funds can hold debt.

The move is a direct response to feedback from investors and will facilitate the creation of a range of exciting new products, enabling DomaCom to create growth outcomes by leveraging residential property.

To facilitate this [transition] the Company has selected Melbourne Securities Corporation Limited (MSC) as the new Trustee/Responsible Entity for the DomaCom Fund (ARSN 167 020 626).

A meeting of unitholders in the DomaCom Fund will be convened to seek approval for the appointment of MSC.  Perpetual, the current RE for the DomaCom Fund, will continue to act as Custodian.

DomaCom CEO, Arthur Naoumidis said: “We believe that this will be a key driver of future growth given the strong preference from advisers and investors to incorporate debt when investing in property, particularly given the tax efficiencies of doing so.

“The vast majority of property investors use leverage to improve the growth returns from their investment and we expect this development will substantially grow the current portfolio of properties from the current 47 which have been purchased with full equity,” he said.

The decision to move to MSC, a specialist in Fintech and experienced trustee for property investment and debt funds, will enable the company to have debt within property sub-funds – something which has not been possible for the past 2 years.

Additionally, DomaCom will be able to offer investors the ability to invest in sub-funds that will lend the capital to the property sub-funds with the investors receiving 5.06% with the security of a first registered mortgage and a low LVR of less than 50%.

Perpetual Trust Services Limited will retire as RE at a vote of unit holders to be held towards the end of October 2017.

DomaCom expect to roll out the lending option by the end of calendar 2017 for the DomaCom subfunds.

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