With 2018 now well underway, the PE Capital Team continues to make good progress with it's funds and properties being developed. Here’s what we we’ve been up to and what you should be seeing going into the next quarter.
PE Capital reached several key milestones in the quarter:
- Our Y Fund has now evolved into the Monthly Yield Fund (MYF) taking on board a few additional features as result of feedback from our investors.
- Our P3 Fund has also changed into the Commercial Property Income Fund (or CPIF)
- We have partnered with Beacon Financial Planning and are now on board with the Premium Platform.
- We will be involved with SMSF Expo in late April
- We are well advanced on construction on our Amstel site. See attached link for progress updates.
- In addition, we expect to begin construction on two more projects and have settled on all of our other sites
Feedback from clients has shown that there was a retail demand or our funds, so as a result we have transitioned our licensees to Endeavour Securities (Australia) Ltd, our custodian to AET and altered both the names and features of these products.
The P3 Fund has been changed to the Commercial Property Income Fund (CPIF) with a few key changes including it now being available to retail investors (previously only available to wholesale investors) , the minimum amount being reduced to $20,000 (down from $50,000) and the likely introduction of monthly income (currently 6 monthly). For further information regarding the CPIF then please refer to our website for a summary page and PDS.
Likewise the Y Fund has also changed and is now called the Monthly Yield Fund (MYF). In terms of features the MYF remains similar (ie $5,000 minimum, 5% plus return) except we have slightly altered the portfolio mix percentages and incorporated monthly income as the fund name suggests.
The development of stage 1 at Amstel continues to be on track and is expected to be completed early June 2018. See our website for regular updates and the latest photos.
The forward program includes commencing construction on Thompsons Rd Cranbourne North and Woods Road Truganina in the second quarter 2018 and both are due for stage 1 completion in the fourth quarter 2018.
As documented in the previous newsletter, Development Applications were lodged on 4 projects, with expectation of approvals in mid 2018.
Our signature project at Springvale is still on track for rezoning at Dandenong Council on the 29th January, with encouraging levels of support from all stakeholders. We are a number of months ahead of schedule and look forward to bringing this exciting project to fruition.
Economic & Market Update
Keeping an eye on the financial press not a lot has changed however we see the following in Australia at least for the next quarter:
- Yields remain low with many economic analysts predicting no official RBA cash rate movement for 2018. It seems that the RBA is concerned that a rate rise could exacerbate a property bubble and inflation rates and wage expectations remain subdued. The RBA rate continues to stay static with many economic forecasters shifting out expectations around the next rate rise to be in early 2019.
- Residential property prices in all states except Victoria are starting to slow, however the feel is that is more a correction (i.e. a price hold rather that a bubble burst).
- Commercial property which is PE Capital's area of expertise continues to stay strong with low yields seen in auctioned mixed use commercial property prices. Please note that low yields mean that soaring prices have been paid at auction for mixed use property assets, therefore reducing the yield/ return (which is fixed over a period) received by the new owner.