DomaCom has reached an agreement with a property developer to help launch a residential community land project in regional Victoria.
The deal with Akuna Lifestyle Estates will involve a $6 million capital raising comprising $1.65 million to acquire the land and $4.35 million for development planning, approvals and construction of the civil works, and common facilities including a clubhouse, sports centre, pool and bowling green, according to a statement.
DomaCom said it will use its fractional property investment platform to offer an attractive yield to investors for acquisition and development of the land.
In addition, it is targeting a 15 per cent annualised return on the completed project with an estimated ongoing rental income of 8 per cent per annum.
DomaCom chief executive Arthur Naoumidis said projects with a social conscience are important to many investors.
“This project signals the start of our potential to provide a funding model for affordable housing across Australia whilst giving investors new investment opportunities with good yields and capital growth in socially responsible projects,” Mr Naoumidis said.
“Crowdfunding enables this to happen across a number of investments with only a small asset allocation to each so investors can feel good about their investment without going over the top.”
Akuna founding director Graeme Jacobs said that, under the proposal, it will develop the land and then sell the homes with 49-year leases at an average price of $265,000 per house.
“This Cobram housing community will give investors the opportunity to secure high yielding returns from the development profit and land-rental activities in an exciting project that will deliver a real social objective – giving retirees affordable housing,” Mr Jacobs said.
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