When an investor invests into one of our Land Acquisition offers, they are investing into a Unit Trust that has been created specifically for that development. Each investor in the trust receives units proportional to the amount of capital they invest ($1,000 equals one unit). A unit is a piece of property that entitles the unit holder to a specified portion of the income and capital of the Trust (as specified in the Trust Deed). The trustee then uses the funds within the trust to undertake the development on behalf of the unit holders.
For Construction Funding offers, the same applies, except it is a private company with Shares instead of Units.
Expected returns vary per Offer based on our feasibility studies. Generally, our Land Acquisition offers target returns of approximately 30% over the Development duration. The exact return to Investors varies depending on the performance of the Development. This option is for investors seeking to gain the best returns possible.
We also offer a fixed option via our Construction Funding offers which provide investors a static return of 15% per annum. This option is perfect for clients who value security and peace of mind.
For investors and projects within Australia, we generally accept any investment over $250,000. The minimum amount may be adjusted at Management’s discretion. Each investor in a project adds an administrative overhead. Restricting the total number of investors in a project reduces administrative work and costs which results in better returns to investors.
No. You are investing capital into a Unit Trust and you receive returns proportional to the amount of money you invested. The land used for the development is owned by the Unit Trust and the completed properties are sold to purchasers. You do not receive ownership of any of the properties constructed by the Development unless you choose to a buy a property as a separate transaction.
For Land Acquisition offers: Yes. Each Development has its own Unit Trust, and your capital is put into the Unit Trust. Monies from one Development are not used in other Developments. You may invest in multiple Developments depending on the amount of capital you have to invest and our current availability.
In Construction Funding offers, your capital is diversified across multiple different Developments via loans.
Yes. SMSFs can be used to invest in Unit Trusts, and most of our Developments are structured as Unit Trusts. To ensure that your SMSF investment is compliant with ATO regulations, we recommend engaging the services of licensed professionals to assist if you have not already done so.
You will receive monthly updates specific to your investment via email. We also have a invitation only Facebook Group for active investors only, where you can receive updates on all our developments with photos, videos, upcoming events and project launches.
Our investor community is a diverse group of Australian and international investors united by their need for a reliable investment model that provides them financial freedom and flexibility. At the start of 2019, our Investor community consists of over two hundred active investors.
The largest protection offered to investors by our Unit Trust structure is that an investor’s capital is secured against the land that is purchased by the Unit Trust. The Unit Trust owns the land, and the unit holders are entitled to a portion of the trust’s assets based on the number of Units they hold. Another protection is that a trustee owes a duty of care to unit holders and beneficiaries within the Unit Trust and the unit deed mandates that the trustee acts in the best interests of the unit holders and beneficiaries at all times. If a trustee fails to do so, they can be held personally liable with civil and criminal penalties depending on the severity of the their actions.
Pre-sales are certainly helpful and we endeavour to sell properties as soon as possible, but they are usually not essential to obtain the funding required to complete the development. The funds we raise from Investors are used to settle the land purchase. Funding for construction is obtained via a loan from a bank or other lender. Obtaining a construction loan is usually straightforward due to the amount of equity that already exists in the Development by the time we need to obtain the construction loan. Alternatively, we can obtain funding via our Construction Funding offers.
All investments have an element of risk; for property development one of these risks is the possibility of the project being delayed. We cannot fully alleviate the possibility of a Development running over schedule as some factors (such as Council approval and construction) are outside of our direct control. However, this is where our experience and strategies for risk mitigation come into play. Our practical experience from managing sixteen Developments has taught us realistic timeframes for each stage of the development as well as likely obstacles that may arise. Outside of our own experience, we also utilise the services of trusted external experts such as town planners and construction managers to assist where required and provide realistic timeframes. We also provide our Investors with regular updates on the progress of all Developments via email and a private Facebook group. From our Zenith project onwards, in the event that a Development runs over the expected investment term, we will provide investors with additional returns at a rate of 2% per quarter for the extended duration.
We can never be certain that a Development will be profitable; all investments have an element of risk. However, before proceeding with any development we conduct a thorough feasibility study to ensure that the site meets our criteria and standards. We also obtain an independent valuation from CBRE during the design phase based on comparable property sales to ensure that our expected sales prices and subsequent calculations are realistic. We also add a contingency into the budget, typically 5% but varying based on the level of risk involved in the Development, to ensure that the Development will be completed.
Unlike a traditional buy-and-hold property investment strategy, our ability to achieve a profit as a Developer is not inherently tied to market performance; as long as the combined sales price of the developed properties is higher than the cost to build them, we still achieve a profit. There are a variety of factors other than final sales price that also influence how much profit a particular development will generate, such as the purchase price of the land, construction costs, and loan interest. This allows us to achieve a profit from the lucrative property market without being completely dependent on the performance of the market.
Current data on our historical performance is available on our Historical Performance page.
Lion Property Group has only existed since May 2018 but our team have been managing Developments since 2015, formerly operating as Investments Squared Pty Ltd. In early 2018, the three Directors of Lion Property Group became equal owners of Investments Squared Pty Ltd. In May 2018 Lion Property Group was incorporated, and Investments Squared Pty Ltd, along with all of its assets, became a subsidiary of the newly founded Lion Property Group Pty Ltd. The acquisition of Investments Squared provided Lion Property Group with over 130 active investors, close to AU$30 million in managed funds, thirteen active Developments, and a gross realisation value of AU$130 million. From May 2018 to December 2018 we completed one Development and launched two more, bringing the total at the end of 2018 to two completed Developments and fourteen active Developments.
We do, it’s just at a later stage of the project. Each of our development projects go through at least two phases of funding. The first phase occurs at the beginning of the project to fund land acquisition. The second occurs approximately half-way through the project to fund construction.
To understand our funding process you first need to understand how banks and lenders provide loans. Lenders require a certain amount of capital to be present in order to satisfy the loan-to-value ratio in their lending criteria. The reason that we don’t use our own operating capital is that by doing so we would restrict the total number of projects that we can simultaneously undertake, so instead we opt to obtain this capital from investors. This strategy allows us to offer more opportunities across a wider range of projects.
Another key thing to understand is that a property development project only generates a profit at the end, once the properties are sold. In order to mitigate this, the construction loans that we access take advantage of capitalised interest, which means that the interest is paid as a lump sum at the end of the term, rather than in regular instalments.
With these factors in mind, the most efficient and cost-effective way to fund a development project is to use investor capital to fund site acquisition and a construction loan from a lender to fund construction. This funding strategy means that we only have to pay back the loan and investor capital at the end of the project, when there is suitable liquidity within the project to do so.
Our offers are genuine and we have a proven track record. Our latest Development to complete is called The Precedent. Here’s a playlist of videos showcasing the completed properties and our investor’s thoughts and experiences.
The companies of Lion Property Group are registered with the Australian Securities & Investments Commission (ASIC) to ensure we are acting in accordance with Australian Law. Please note, in the past other companies have operated under the same name. Our organisation, nor any of its employees, are in any way affiliated with previous entities operating under the same name. Our ABN is 625 889 367 and our ACN is 13 625 889 367, which can be used to differentiate us from previous entities.
View our property development info pack to kickstart your property development journey. All the information you need about Lion, our models, and our expert team, in one convenient place, so you can make an educated decision.