Arthur Naoumidis

The new year has started well for the DomaCom Fund, with the company announcing it has reached $100m in funds under management, the bulk of which has been in property acquisitions for small investors and self-managed superannuation funds.

As the Fund has grown over the past few years it has embraced a wider range of assets than just residential property where it had its genesis, now offering investment in areas previously only available to sophisticated investors.

DomaCom has given all investors access to a range of commercial property opportunities, rural farmland, renewable energy, property developments, disability and affordable housing, special opportunities in new business, mortgage lending and land banking.

Perhaps the most progressive development for the  DomaCom Fund is an investment product for Seniors Home Equity Release and a Shariah compliant housing finance solution for Australia’s Islamic community.

These new and innovative financial models demonstrate the flexibility of the platform where almost anything that passes a strict due diligence process can be syndicated for groups of investors, families and friends. Certainly in the property world everyone can get their foot on the property ladder and enjoy the growth that this asset class  delivers.

DomaCom has worked diligently to secure some unique rulings for SMSFs and seniors looking to downsize and use home equity to top up their super.

SMSFs represent a significant percentage of investors who are able to curate a portfolio of high value assets by syndicating with other investors to maintain a balanced portfolio.

DomaCom CEO Arthur Naoumidis expressed his thanks for the support of a small but growing supporter base among investors, licensees and their financial advisers for driving the fractional model forward. “It is this innovation coupled with advisers progressive thinking that has enabled us to deliver financial and investment solutions that are in the best interests of investors with specific needs”.

“There is a demonstrable benefit to fractional investing which we look forward to building on with more advisers in 2022”, he said.

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Arthur Naoumidis

DomaCom is celebrating a 3 year partnership with DFS Portfolio Solutions having added some $30m to DomaCom’s FUM through the DFS  Mortgage Fund.

The basis of the partnership was to facilitate the capture of the significant risk premium available in the private credit market during a period of historically low interest rates; and moreover, to provide diversified credit exposure without co-mingling loans, thus maintaining full control of the investment capital. This DomaCom structure has enabled DFS to achieves this, which significantly differentiates itself from other mortgage fund offerings, giving investors greater comfort and peace of mind.

CEO, Arthur Naoumidis said “We are pleased that our fractional platform helped to deliver a significant level of FUM to DFS, particularly during the past 18 months which has been difficult for many platforms. The combination of DFS superior income performance and DomaCom’s syndication platform has delivered an excellent result for investors and one that can be accessed by any DomaCom accredited adviser looking for a strong income alternative for their clients.”

DFS and DomaCom can now demonstrate 3 years of performance history, where the first mortgage fund now  covers 27 loans with an average LVR of less than 60%, generating an annualised 3 year net return of 8.01%pa.

With a defensive asset profile, the average weighting to maturity has been 13 months.

DFS Portfolio Solutions Managing Director, Stephen Romic, says the relationship and the process dealing with DomaCom has worked well for DFS and it has allowed us to generate enhanced risk-adjusted returns for our clients across their defensive holdings.

“With an expectation of continuing low interest rates and a solid track record with DomaCom we hope to attract more independent advisers to our Mortgage Fund and keep working with DomaCom. DomaCom is a unique, versatile platform that works well in the property and mortgage asset classes”.

A further indication of the strength of the relationship between DomaCom and DFS, a new fund was recently added the DFS Wholesale Enhanced Credit Fund for wholesale investors.

Both DFS and DomaCom are looking at making further inroads into the independent advice industry providing customised services for small advice practices and larger dealer groups.

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Arthur Naoumidis

Highlights

• DomaCom has been informed that AustAgri Group Limited (“AustAgri”) subsidiary Global Meat Export Pty Ltd (“GME”) has completed the acquisition of the business assets and operations of Cedar Meats Pty Ltd (“Cedar Meats business”).
• DomaCom has previously announced that it has entered into a Revenue Recognition Agreement with AustAgri relating to a conditional proposal to onboard AustAgri into a DomaCom sub-fund on the DomaCom Platform by exchanging shares in AustAgri for units in the DomaCom sub-fund (AustAgri Transaction).
• The acquisition of Cedar Meats business assets and operations by GME represents fulfilment of the first key condition under the Revenue Recognition Agreement. As a result, DomaCom has resumed its final legal and financial due diligence for the AustAgri Transaction.
• Other outstanding conditions which must be fulfilled to allow completion of the AustAgri Transaction to proceed include:
  • satisfactory completion of legal and financial due diligence by DomaCom and AustAgri
  • AustAgri shareholder approval
  • DomaCom shareholder approval, and
  • AustAgri refinancing its transaction loan facility with longer term loan facility.

No assurance can be provided that these conditions will be fulfilled. DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘the Company’) is pleased to announce that it has been advised that the Cedar Meats business assets and operations have been acquired by GME. This represents the first important step towards completion of the AustAgri Transaction.

GME management have advised DomaCom that the business will continue to trade as Cedar Meats Australia and it will be business as usual. The business will remain family operated with both Pierre and Tony Kairouz continuing to head up operations of GME and all current management and staff will remain and operations will continue as normal. Pierre and Tony Kairouz are expected to obtain a substantial ownership interest in AustAgri and is currently being negotiated.

AustAgri Transaction

As previously announced, the main commercial terms of the AustAgri Transaction include:

• a newly-established DomaCom sub-fund proposes to acquire at least 75% of the issued shares in AustAgri by entering into share/unit exchange agreements with AustAgri shareholders
• under the share/unit exchange agreements, as consideration for the acquisition of AustAgri shares by the DomaCom sub-fund, AustAgri shareholders will receive 1 unit in the DomaCom sub-fund for every 1 AustAgri share exchanged
• DomaCom Australia Limited, will receive an annual management fee of 0.88%pa of the value of the DomaCom sub-fund with a minimum annual fee of $2.6 million plus GST for a minimum period of 5 years, and
• DomaCom will issue 100,000,000 DomaCom shares to AustAgri shareholders (Revenue Recognition Shares) in recognition of the minimum $13,000,000 in contracted management fees over a 5 year period to be delivered to DomaCom for management of the DomaCom subfund.

The AustAgri Transaction remains subject to a number of conditions precedent which may or may not be fulfilled including:

• Satisfactory completion of legal and financial due diligence by DomaCom and AustAgri
• AustAgri refinancing its transaction loan facility with a longer term loan facility
• AustAgri shareholder approval, and
• DomaCom shareholder approval.

DomaCom reiterates that no assurance can be given as to if or when the AustAgri Transaction will complete.

DomaCom due diligence

As a result of the completed acquisition of the Cedar Meats business assets and operations by GME, DomaCom has resumed its final legal and financial due diligence for the prospective transfer of at least 75% of the issued shares in AustAgri to a DomaCom sub-fund.

Transaction Loan refinance

GME has entered into a loan facility which enabled it to settle on the acquisition of the Cedar Meats Business. In the meantime, formal valuations are being refreshed for the Cedar Meats business and the properties to facilitate the refinancing of the transaction loan with a longer-term loan to facilitate the next phase of its development. Whilst the property assets of Cedar Meats are used as security for the loan facilities, the property assets themselves remain held by the Kairouz family trusts until the Transaction Loan is refinanced.

AustAgri shareholder approval

As previously advised, the exchange of at least 75% of the issued shares in AustAgri for units in the proposed DomaCom sub-fund requires AustAgri shareholder approval at a meeting of AustAgri shareholders to be convened under item 7, s611 Corporations Act. In relation to the required meeting of AustAgri shareholders, DomaCom notes that:

• a statutory notice period applies in relation to any meeting materials to be prepared and sent by AustAgri to their shareholders for the purposes of the item 7, s611 approval. ASIC policy requires that an independent expert report be prepared and for it to accompany the relevant meeting materials detailing an item 7 s611 transaction, and
• ASIC policy expresses a strong preference that meeting materials for an item 7, s611 transaction are provided to ASIC for review at least two weeks prior to despatch to AustAgri shareholders.

DomaCom shareholder approval

Due to the extended delay since the 21 October 2020 EGM where DomaCom shareholders previously approved the AustAgri Transaction and the issue of the Revenue Recognition Shares, DomaCom will in due course issue a Notice of Meeting to hold a further General Meeting to seek new approvals from DomaCom shareholders.

DomaCom CEO, Arthur Naoumidis, said: “Our planned on-boarding of AustAgri onto the DomaCom Platform has been a stop-start affair since we first announced it to the market more than 12 months ago. But at last real progress has been made, with the acquisition of Cedar Meats business assets and operations by GME. This means we can now again resume final legal and financial due diligence for this company-transforming transaction. If it completes, the AustAgri Transaction will provide a significant boost to DomaCom’s revenue base and its total funds under management.

As our AustAgri due diligence process recommences, we continue in our efforts to complete the shortfall raising, a precursor to DomaCom shares resuming trading on the ASX. Over the months ahead, we look forward to updating the market on further exciting developments leveraging off our unique fractional investment platform.”

This announcement has been authorised for release to the market by Company Secretary Philip Chard.

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Arthur Naoumidis

DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘the Company’) is pleased to announce that the Company’s platform has been integrated with BGL Corporate Solutions Pty Ltd. (‘BGL’) Simple Fund 360, Australia’s leading  self-managed superannuation fund (SMSF) administration solution.

BGL has implemented a seamless data interface with DomaCom which will allow 200,000+ SMSF’s to use the DomaCom Fund. Following the integration, SMSFs’ accountants are now able to receive automated transactional data feed into their Simple Fund 360 software from the DomaCom platform.

The integration with BGL is a major milestone for DomaCom that builds upon the Australian Tax Office (‘ATO’) ruling on downsizer contributions last year. Specifically, the ATO’s Administrative Binding Advice^[1] confirms part disposal of a home for downsizer contributions. This means that a person can dispose of part of their home under DomaCom’s Senior Equity Release platform and be eligible to make a downsizer contribution.

The ability to contribute the proceeds of downsizing part of a home into superannuation was one of several measures announced in the 2017-2018 Budget to reduce pressure on housing affordability in Australia. From 1 July 2018, eligible people aged 65 or over have been able to make a downsizer contribution into their superannuation of up to A$300,000 from the proceeds of selling all or part of their home.

As downsizer contributions are not subject to the usual concessional or non-concessional contribution caps, they can still be made when a member’s balance exceeds $1.6 million. Whilst 5,000 retirees used this facility in the first year, research indicates that a large proportion of retirees would prefer to access the downsizer provisions while being able to continue living in their homes.

The ATO confirmation on part disposal now means that SMSF retirees can use DomaCom’s Senior Equity Release platform to sell a part interest in their home and make a downsizer contribution without having to move out of their home. While a residential property cannot be sold to an SMSF, a part interest of a home can be sold to DomaCom’s Senior Equity Release platform which provides cash to the member that they are legally able to contribute to their SMSF.

DomaCom CEO, Arthur Naoumidis, said: “DomaCom is excited to partner with BGL on efficiently delivering the benefits of our innovations to Australia’s self-funded retirees. The ability for retirees to support themselves by modifying their personal balance sheets and moving some of the financial resources tied up in their homes to their super funds will enable them to enjoy a better retirement. Thanks to our partnership with BGL, they will be able to do this with the knowledge that their accountants can efficiently administer their SMSF’s.”

BGL Managing Director, Ron Lesh, said: “BGL has been at the forefront of innovation in the delivery of SMSF administration solutions since 1997 and I am pleased to welcome DomaCom to the BGL family to help our clients support their self-funded retirees.”

Highlights

• DomaCom has been integrated with BGL via a data implementation
• BGL provides self-managed superannuation fund (SMSF)  administration to 60% of Australia’s 600,000 SMSF’s
• Accountants can now more efficiently administer their SMSFs and access data from DomaCom
• SMSF’s can now use DomaCom’s  Senior Equity Release platform to benefit from the Australian Tax Office’s recent ruling on downsizer contributions and top up their SMSF

———-

[1] https://www.ato.gov.au/General/ATO-advice-and-guidance/ATO-advice-products-(rulings)/Administratively-binding-advice/

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Arthur Naoumidis

Fractional investment platform provider DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘the Company’) is pleased to advise that its Senior Equity Release product is ideally suited to help Australian retirees benefit from recent Government measures introduced to improve retirement outcomes.

The Company’s Senior Release Equity Release product offers the opportunity for senior Australians to access their housing wealth through a debt-free equity release solution. The innovative product allows retirees to stay in their home and take full advantage of the Government’s Downsizer Contribution offer and live well in their retirement.

Unlike reverse mortgages which are debt-based credit products, DomaCom’s Senior Equity Release solution is an advice-based financial product that enables retirees to improve their retirement income by selling part of their home whilst retaining the right to stay in their home and avoid going into debt.

The overall task of the Government’s recently released Retirement Income Review was to help improve understanding of the retirement income system. There can now be little doubt that the Government is expected to focus support on those most in need and encourage more fortunate retirees to access the value of their home to fund their retirement.

A good example of this is the Government’s tax-free Downsizer Contribution allowance which provides a good opportunity to top up superannuation savings using the proceeds from the sale of the family home. This can be done regardless of caps and restrictions such as the work test and age limits that would otherwise apply.

The Australian Tax Office has confirmed that a partial disposal of a home can be claimed as downsizer contributions and this has been extended to DomaCom’s Senior Equity Release product. This is a significant advantage for those retirees wanting to stay in place but access their housing wealth debt-free in order to increase their retirement savings.

The Retirement Income Review panel put it well when they stated: “Although the review is not making recommendations, a large number of submissions and stakeholders recommended changes to the retirement income system.”

DomaCom believes that as the family home is likely to become an active asset, it is critical that “fit for purpose” financial products are made available to senior Australians wanting to stay in place and live well in retirement.

DomaCom Chief Executive Arthur Naoumidis said: “Although Australian retirees are amongst the world’s wealthiest, the bulk of their wealth is stored in their family home and the vast majority simply do not want to sell and move away in order to access some of that wealth. DomaCom has carefully designed its equity release product so that it is suitable for a broad range of retirement income strategies including those that take advantage of Government measures introduced to encourage retirees to access the value of their home.”

Highlights

• DomaCom’s Senior Equity Release product is ideally suited to help Australian retirees benefit from recent Government measures introduced to improve retirement outcomes
• Senior Equity Release allows retirees to stay in their home debt-free and take full advantage of the Government’s Downsizer Contribution offer and live well in their retirement
• The Australian Tax Office has confirmed that a part disposal of a home can be claimed as downsizer contributions and this has been extended to DomaCom’s Senior Equity Release product

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Arthur Naoumidis

Fractional investment platform provider DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘the Company’) is pleased to announce that it has partnered with leading Australian Community Housing Provider (CHP) BlueCHP Limited to deliver up to $250 million in affordable housing for essential workers (teachers, nurses, firefighters, police) during 2021.

DomaCom and BlueCHP are aiming to begin with an initial pilot project of $10 million.

The DomaCom Affordable  Property Accelerator (RPA) programme (formerly known as Rent-To-Own) will be used to allow investors to invest in affordable housing properties that will be managed by BlueCHP.

BlueCHP is able to access via its financier low-cost loans that will be used to deliver a 25% rental discount to essential workers. Based on 40% loan to valuation ratio this would represents a commitment of $250 million to affordable housing.

Additionally, the RPA programme uses a discount obtained from developers to deliver a price discount to investors as well as an additional leasing incentive of 5% equity to the essential workers.

DomaCom CEO Arthur Naoumidis said: ”One of the hurdles for investors in helping to deliver affordable housing is that they cannot sacrifice investment returns to deliver ethical investment outcomes. This is particularly important to superannuation funds as they are required to comply with the Sole Purpose Test when investing and are not able to accept discounted investment returns even if it is for a good social purpose. This project will both deliver attractive investment returns whilst also providing affordable housing to essential workers.”

BlueCHP CEO Charles Northcote said: “Accessing capital has been one of the major issues for community housing providers and this arrangement solves this problem by allowing private investors to complement the low-cost NHFIC loans that we have been able to access since 2018. BlueCHP has delivered over 1,700 affordable homes during the past 10 years and looks forward to being able to accelerate the delivery of additional affordable housing properties.”

Highlights

• DomaCom and BlueCHP enter into agreement to deliver $250 million in affordable housing in 2021
• BlueCHP is a Tier 1 Community Housing Provider (CHP) which will seek to access low-cost government housing loans via the National Housing Finance and Investment Corporation (NHFIC)
• The project will deliver affordable housing for essential workers with a rental price 25% lower than market rents
• The DomaCom Rental Property Accelerator product will access developer distribution discounts to deliver investor discounts and equity gifting to essential workers
• Essential worker tenants will receive 5% equity in the property they are renting over the first 5 years

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Arthur Naoumidis

Highlights

• DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘Company’) has entered into a placement agreement with FQC Fintech 2 Pty Ltd to raise approx. $2 million.
• AustAgri Group Limited (AAGL) has agreed to underwrite a further $1.6 million placement
• DomaCom has also entered into an implementation agreement relating to a proposal (subject to conditions including DomaCom shareholder approval) for a DomaCom sub-fund to acquire AAGL. If completed, the AAGL transaction is expected to increase DomaCom’s FUM by at least $300m and deliver at least $13 million in revenue over the five year term of the sub-fund.
• Completion of these transactions will accelerate DomaCom’s path to cash flow break even.

$2m Placement to FQC Fintech 2 Pty Ltd

DomaCom is pleased to announce that it has entered into a placement agreement with FQC Fintech 2 Pty Ltd, to issue 33,333,333 DomaCom ordinary shares at $0.06 per share to raise approximately $2 million. The $0.06 issue price represents a 100% premium to the 1 month low of $0.03, a 3% premium to the rolling 1-month VWAP of $0.058 and a 57% premium to the rolling 6-month VWAP of $0.038. Settlement of the placement is due to occur on or before 11th September 2020.

$1.6m Placement Underwritten by AustAgri Group

AustAgri Group has agreed to fully underwrite a further placement of 26,666,666 new DomaCom shares at $0.06 per share to raise approximately $1.6 million. Settlement of the placement is due to occur on or before 30th September 2020.

Proposed acquisition of AustAgri Group Limited

DomaCom is also pleased to announce that it has entered a conditional implementation agreement for a DomaCom sub-fund to acquire AustAgri Group Limited (AustAgri Group or AAGL).  Under this agreement (if completed), a newly-established DomaCom sub-fund (managed by DomaCom) would acquire 100% of the issued shares in AustAgri by way of a scheme of arrangement undertaken by AAGL (Scheme of Arrangement).

AustAgri is an unlisted public company with operations spanning dairy, fresh milk, milk powder and infant formula, as well as the export of livestock and chilled beef and lamb. AustAgri is currently in the process of completing the initial acquisitions of a “paddock to plate” series of businesses that range from farms, abattoirs, food processing and food distributions businesses with the initial value of the assets expected to be in the region of $300 million. If completed, it is expected that the transaction will increase DomaCom’s total Funds under Management (FUM) to approximately $373 million.

As consideration for the acquisition of AAGL by the DomaCom sub-fund, AAGL shareholders will receive 1 unit in the DomaCom sub-fund for every 1 AAGL share held.

Also as part of the proposal, DomaCom will also seek shareholder approval to issue 100 million DomaCom shares, on or before 31 December 2020, to AAGL shareholders in recognition of the minimum $13 million in revenue over five years expected to be delivered to DomaCom for management of the DomaCom sub-fund (Revenue Recognition Shares).  This represents an effective issue price of $0.13 per DomaCom share, being a 123% premium to the rolling 1-month VWAP of $0.058 and a 240% premium to the rolling 6-month VWAP of $0.038.

Implementation of this proposal is subject to the following key conditions, to be fulfilled by no later than 31 December 2020:

• Satisfactory completion of legal and financial due diligence by DomaCom and AAGL;
• AAGL shareholder approval of the Scheme of Arrangement;
• DomaCom shareholder approval for the issue of Revenue Recognition Shares and the proposed acquisition of AustAgri Group Limited by the DomaCom Fund;
• Obtaining all necessary ASX waivers, rulings or approvals.

Although the amount of time required to the fulfil these conditions is not known, it is expected the transaction will be completed by 31 October 2020.

If any of these conditions are not fulfilled, implementation of the proposal will not proceed.

On fulfilment of these conditions it is proposed that Phillip Pryor, Managing Director of AustAgri will be appointed to the Board of DomaCom Limited.

DomaCom CEO, Arthur Naoumidis, said: “The combination of the AustAgri Group transaction and $3.6 million in placements position us very well to now focus on the growth of our business. We are currently developing four products that we believe are well-suited to the post-Covid-19 environment: Rent to Own, Essential Worker, Equity Mortgage, and Senior Equity Release. The AustAgri Group transaction will alleviate funding concerns and allow us to further accelerate the launch of these products which in turn will drive further growth in FUM and revenue.”

AustAgri Managing Director, Phil Pryor, said: “AustAgri Group is very excited about the opportunity of joining the DomaCom Fund, subject to shareholder approval, and offering investors a dedicated agribusiness fund which aims to capitalise on the opportunities presented by the fast growth of middle class consumers in our region for high quality food produce. The benefits of being part of the DomaCom Fund is that it will allow us access to the capital we need to grow our business and take advantage of acquisition opportunities in agribusiness that have already been identified. We see a very strong future for AAG.”

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Arthur Naoumidis

DomaCom Limited (ASX:DCL) (‘DomaCom’ or ‘the Company’) is pleased to announce that it has received confirmation from the ATO that a part disposal of a person’s home can be made to make a downsizer contribution.

In particular, the ATO’s “Administrative Binding Advice” (ABA) confirms part disposal of a home for downsizer contributions. This means that a person can dispose of part of their home under DomaCom’s Senior Equity Release platform and be eligible to make a downsizer contribution.

The ability to contribute the proceeds of downsizing part of a home into superannuation was one of several measures announced in the 2017-2018 Budget to reduce pressure on housing affordability in Australia. From 1 July 2018, eligible people aged 65 or over have been able to make a downsizer contribution into their superannuation of up to A$300,000 from the proceeds of selling all or part of their home. Further, a downsizer contribution is not subject to the usual concessional or non-concessional contribution caps and therefore they can still be made when the member’s balance exceeds $1.6 million. Whilst 5,000 retirees used this facility in the first year, research indicates that a large proportion of retirees would prefer to access the downsizer provisions but still stay in their homes.

Prior to this ATO confirmation it was generally considered that a person had to sell or dispose their entire interest in their home to be eligible to make a downsizer contribution. However, the ATO confirmation on a part disposal now means that SMSF retirees can sell a part interest in their home and make a downsizer contribution therefore also allowing them to stay in their home with DomaCom’s Senior Equity Release. While a residential property cannot be sold to an SMSF, a part interest of a home can be sold to DomaCom’s Senior Equity Release platform which provides cash to the member that they are eligible to contribute to an SMSF, retail or industry superannuation fund.

The COVID-19 pandemic has greatly increased pressure on retirees who are seeing their retirement incomes substantially decreased due to the significant reduction in investment returns especially substantially lower interest and dividend yields.

The self-funded retiree cohort has not benefited from many recent government assistance programmes including the JobKeeper and JobSeeker, so allowing them to top up their SMSF using their own resources is one measure that can be delivered without impacting the Budget. In fact, the DomaCom Senior Equity Release should benefit the community as it can increase retirement incomes which can increase spending.

Naturally, appropriate financial and investment advice should be obtained.

DomaCom CEO, Arthur Naoumidis, said: “The ability for retirees to help themselves by modifying their personal balance sheets and moving some of their financial resources tied up in their home to their super will enable them to enjoy a better retirement. For investors, DomaCom’s Senior Equity Release delivers 3% income plus capital growth and may suit SMSF’s in accumulation mode as well as institutions seeking reliable long-term income and growth.”

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Arthur Naoumidis

Fractional investment platform provider DomaCom Limited is pleased to announce that the first property for its innovative new Rent-to-Own product has been acquired in the Melbourne suburb of Moonee Ponds.

The one-bedroom apartment in the Mason Square development was acquired for $447,000. Property manager, Rent Exchange, is currently seeking a suitable tenant.

A model like no other for investors and tenants the Rent-to-Own model spans the investment/tenant gap enabling more tenants to escape the rental cycle by participating in the equity model at no additional cost to their rent.

Rent-to-Own enables investors and tenants to leverage off DomaCom’s unique fractional investment technology, a modern form of syndication that shares ownership including income and capital growth in residential properties through a unitised managed investment scheme structure.

Tenants pay rent on a commercial basis and after costs and interest on any loans, the rent is shared between the unit holders in proportion to their investment. Any increase in capital value over time is also shared.

Whilst Rent-to-Own tenants receive 1% equity pa for a maximum of 5 years they can also acquire additional equity over time from investors to increase their share in a property as and when they can afford to do so.

Apart from the initial developer discount which has been negotiated by DomaCom with the assistance of property advisory group Third Garden, investors in this model will have tenants who are part owners. As tenants become part owner and occupiers, the Company expects that this lease incentive will lessen any tenancy risk, an important factor for investors during the Covid-19 pandemic.

DomaCom CEO, Arthur Naoumidis said: ”Rent-to-Own is a product of our time with the potential to change the outlook for people who may have thought they would be renters for life. The developer discount does not come at an additional cost to the developer as it simply shifts the distribution margin in favour of the purchasers and tenants.  On a wholesale basis, this model can put many more people into the home ownership category.”

Highlights

• First Rent-to-Own Property acquired in Melbourne
• The Rent-to-Own model is a paradigm shift in the landlord/tenant relationship
• Effective developer discount gives investors a head start on growing their investment
• Tenants receive 1% equity per annum for 5 years

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Arthur Naoumidis

The fractional investment platform provider, DomaCom, has enjoyed a growth spurt since 1 April 2020 with Funds under Management (FUM) rising 10.4% to $70.9 million.

Investments in the DFS Pooled Mortgage Sub-Fund, the Badgery’s Creek land bank project and its first Rent-to-Own property syndication have underpinned the growth.

DomaCom CEO Arthur Naoumidis said: “It is pleasing to see such significant FUM growth during this challenging time of significant market dislocation.

Our FUM growth demonstrates the robustness of DomaCom’s business model and proves that even during the COVID19 pandemic, there are still segments of the market that attract investor attention.

At the same time, we continue to develop new products to help drive future FUM growth.”

Managed by DFS Portfolio Solutions, the Pooled Mortgage Sub-Fund allows direct mortgage investments to be included in the models that DFS delivers to financial advisers across multiple platforms.

The Badgery’s Creek land bank project is DomaCom’s fourth land bank project in this area and includes both equity and debt syndications. The property to be bought is farmland that will be rented out with the long-term objective being capital appreciation due to the impact of Sydney’s second airport at Badgery’s Creek.

DomaCom’s first Rent-to-own (RTO) property syndication – a $447.000 apartment in the inner-city Melbourne suburb of Moonee Ponds – is well underway with property due diligence in progress.

The developer’s distribution margin will be split between investors and tenant. The key element of the RTO initiative is that the tenant will acquire ownership interest in the sub-fund that owns the apartment by simply paying rent and maintaining the property. 

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