While unlisted property funds copped a hammering in the wake of the GFC, they now seem to be making a bit of a comeback. These funds tend to be for a single property, come with a plan to improve the property, and importantly, have a defined exit strategy.
The market is being pitched at higher net worth SMSFs and investors, who can afford to lock away the money for the six to eight years it will take before the fund is liquidated. As the funds are geared, tax advantaged yields of around 8% to 9% per annum are forecast, which, in this yield-hungry world, makes them seen pretty attractive.
Active managers in this area include Cromwell Property Group, GDI Property Group and Centuria Property Funds. In this road test, we take a look at a fund that is just about to come to market – Centuria’s fund for 10 Spring Street, Sydney.