WHAT IS A PROPERTY INVESTMENT SYNDICATE?
A property investment syndicate is the collaboration of a group of like-minded investors who jointly share in ownership of a property or properties in proportion to their invested equity amount.
A Quadrant Investment syndicate utilizes a Unit Trust structure to distribute the beneficial ownership of the asset(s). By investing, you will become a unit holder in the Trust in proportion with the amount you have invested – effectively becoming a part owner of the property.
Under this arrangement, a Trustee company will hold the asset in trust for the Unit Trust removing the Unit Holders from the risks of being directly registered on title.
A syndicate can comprise a single property or multi-property Unit Trust from inception or alternatively may comprise a Trust with initial seed assets with the ability to add further properties to the syndicate in the future. The Information Memorandum for each Quadrant Investments syndicate will detail the aim of the syndicate and if it is intended to be a single or multi-property vehicle from the outset.
WHAT IS THE ROLE OF THE TRUSTEE?
The Trustee’s primary role is to ensure that the Unit Holder’s interests are being protected. The Trustee will hold the asset(s), manage the Trust, administer the bank accounts and sign the trust’s financial statements and tax returns on behalf of the Unit Holders.
The Trustee, unless otherwise stated, will generally engage Quadrant Investments to fulfill its fiduciary duties as well as carry out the Asset Management function.
The Trustee will act in accordance with any specific instructions within the Trust Deed and Constitution. The Trust Deed and Constitution will be available for review prior to investment.
WHAT ARE THE BENEFITS OF INVESTING IN A QUADRANT PROPERTY SYNDICATE?
Larger commercial properties are normally out of reach for individuals. Syndication provides the opportunity to share in the ownership. Investing in quality commercial property via a syndicated unit trust providing an opportunity to attain a diversified investment portfolio with the benefit of the income and capital growth available. All assets purchased by Quadrant Investements are subject to robust review and due diligence prior to acquisition
Investing in a Quadrant Investments syndicate also provides you with the expertise of an asset manager who will actively manage the investment, remove the time consumed and stress of ownership while maintaining and maximizing investment returns.
CAN ANYONE INVEST IN A QUADRANT INVESTMENTS SYNDICATE?
Quadrant Investments property syndicates are open to “wholesale clients” as defined under Section 761G(7) in the Corporations Act or “sophisticated investors” as defined in Section 708(8) and Section 761GA of the Corporations Act.
Generally, to be a classed as a wholesale or sophisticated investor you will need to:
- invest $500,000 or more in the Syndicate; or
- provide a certificate from a qualified accountant that states the Investor has net assets of at least $2.5 million or has a gross income for each of the last two financial years of at least $250,000, or
- be a professional investor (including the holder of an Australian financial services licence, a person who controls more than $10 million, or a person that is a listed entity or a related body corporate of a listed entity).
WHAT IS THE MINIMUM INVESTMENT IN A QUADRANT INVESTMENTS SYNDICATE?
Each Quadrant Investments syndicate will state the minimum amount that can be invested within the Information Memorandum for that particular syndicate.
Quadrant Investments in its discretion may accept applications for lower amounts – please contact us to discuss your application.
IS MY INVESTMENT PROTECTED?
Like any investment there are risks associated, some of which may be related to the property and some related to global and economic factors. While returns are not guaranteed within a syndicate, Quadrant Investments via its stringent investment criteria and strategy, attempts to mitigate risks where possible.
As a general rule, any debt funding will be secured by the purchased asset(s) on a non-recourse basis and linked to a prudent loan-to-value (LVR) ratio. By utilizing non-recourse borrowings, investors liabilities are limited to their initial investment in the syndicate.
CAN I REDEEM OR WITHDRAW MY INVESTMENT?
An investment in a syndicate is generally illiquid and should be seen as long term in nature or matching the stated investment term(s) noted for that syndicate. Quadrant Investments syndicates are unlikely to offer any withdrawal rights during the life of the unit trust.
While there is no established secondary market for investments of this nature, you may be able to sell or transfer your Units to a third party. Where possible Quadrant Investments will assist should you wish to sell and transfer your units.
CAN MY SELF MANAGED SUPERANNUATION FUND INVEST?
Complying and self-managed superannuation funds (SMSFs) may be eligible to invest in a Quadrant Investments syndicate. Please contact us to discuss your eligibility.
HOW WILL MY DISTRIBUTIONS BE PAID?
Unit Holders will generally be paid distributions monthly from surplus income collected by the Trustee after payment of property and trust expenses.
The Trustee will arrange for the collection of rental income for the asset(s). From these rental proceeds the Trustee will pay all associated costs incurred by the property and those incurred with running the syndicate. Incurred costs include but are not limited to: council rates, water rates, land tax, insurances, asset management fees, administration, accounting and audit costs, government charges and taxes (as outlined in the information memorandum).
The Trustee and Asset Manager, in the best interests of the Unit Holders, may withhold part or all of the distributions for working capital or to meet upcoming liabilities. Any reserve funds, working capital or retained surplus proceeds remain the property of the syndicate and therefore the Unit Holders. All surplus funds will be distributed to the Unit Holders upon winding up of the Unit Trust.
The Trustee will communicate with you to ensure you are aware of any changes to distributions.
WILL YOU DEVELOP PROPERTIES WITHIN YOUR SYNDICATES?
Each Quadrant Investments syndicate will identify its objective, strategy and aim within the Information Memorandum. Generally, the syndicate will either be an “income” or “development” syndicate.
The main focus of an income syndicate is the provision of stable and secure income returns with distributions paid monthly from surplus income of the established property assets owned by the Trust.
The main focus of a development syndicate will be to develop an asset for sale realisations and revenue, for example apartments, or in some instances to develop and retain for income distributions, for example a design & construct industrial asset pre-committed to a tenant. The Information Memorandum for the syndicate will state the development objective and strategy for the Trust together with forecast returns. A development syndicate will typically sell all of its development assets and be wound up on the final sale of its property assets.
As part of our overall strategy, we will seek to purchase assets where there are opportunities to add-value and may benefit from further development, refurbishment or re-positioning of the property. In these instances, Quadrant Investments will explore all options to maximize total returns for Unit Holders.
WHAT COMMUNICATION OR INFORMATION WILL I RECEIVE DURING THE TERM OF INVESTMENT?
You will be kept up to date on the activities and the status of the syndicate via an annual report summary which will include an annual tax statement shortly after the end of the financial year.
The annual report will detail activities and highlights for the year. Periodic electronic newsletters from Quadrant Investments will also provide updates and news on a range of items including existing syndicates, new investment offerings and other property market information.
You can also call one of our team to discuss your investment in the syndicate at any time.
HOW DO I INVEST IN A QUADRANT INVESTMENTS SYNDICATE?
You can either contact us directly or register your details on our website to receive information on available or upcoming opportunities as and when they arise.
Detailed information on how to make an application to participate will be contained within the Information Memorandum for each syndicate. We can assist with the application process, if required.