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The legal structure of our projects involves several different companies which serve different functions. There is a Special Purpose Vehicle (SPV) company which owns the development site, and there is a separate company which holds investor capital. The SPV company is typically named [Project Address] Pty Ltd while the capital-holding company is typically named [Property Address] Capital Pty Ltd.

When an investor invests in the project, they receive shares in the capital-holding company, usually at a rate of one share per $1,000.

The capital-holding company then provides the capital to the SPV via a secured loan agreement, with the loaned amount being secured against the assets of the SPV, which is the development site. The interest repayments that the SPV makes on the loaned capital is what comprises the investors’ returns.

This structure means that investor capital is collectively secured against the development site via a secured loan agreement. In the event of a project failure or insolvency, the capital-holding company (which represents the investors) can seize the assets of the SPV (the development site) to recoup their loaned capital. If the worst-case happens, investors can sell the site to get their capital back, or take another course of action, depending on what the shareholders vote to do. However, depending on the nature of the secured loan agreement between the capital-holding company and the SPV, investors are not guaranteed to be in a first lien position. The amount of interest charged, and thus the return to investors, reflects the lien position of the loan.

The SPV company also enters into a Management Agreement with Lion Property Group to oversee the project as Project Managers. As the Project Manager, Lion Property Group is responsible for completing the development on behalf of the Company and the investors. This involves, but is not limited to:

• overseeing all administrative tasks required to complete the project;
• appointing and collaborating with town planners, architects, land surveyors, and engineers to complete development plans;
• submitting the plans to Council and obtaining all relevant approvals as required by the jurisdiction of the development site;
• representing the investors at civil tribunals relating to the project, if required;
• obtaining financing from a lender to fund construction;
• selling the developed properties in-house, or appointing a realtor to assist with sales.

This investment structure is utilised because it ensures that investors are protected, but grants us the ability to undertake the development in a timely and efficient manner in line with investor expectations.

Investor capital is secured against the development site via a secured loan agreement. See “What is the legal structure of these investments?” for a further explanation.

The returns for each project vary. Investors should consult the Information Memorandum for each project, or their Investment Agreement, for an explanation of what rate of return is being offered.

The distribution schedule varies for each project. Investors should consult the Information Memorandum for each project, or their Investment Agreement, for an explanation of when returns will be distributed.

Generally speaking, distributions are paid on the first day of each calendar month (it may take a few extra days for the funds to arrive in your account). Distributions are made one month in arrears, so for example, your return for March will be paid on the 1st of May.

The nature of property development means that investor capital is illiquid throughout the duration of the project. As a result, investor capital can only be repaid after the developed properties have been sold.

Near the end of the project, investors will be contacted by our Legal team to initiate the buy-back of Shares in the project. This buy-back is what facilitates the return of investment capital.

The Legal Team will email investors a Deed of Release, Profit and Loss Statement, and Balance Sheet via Docusign. The Deed of Release must be completed by the investor, and then countersigned by the Directors before the buy-back can be completed.

Within 5-10 business days of the Deed of Release being countersigned, the investor’s original capital will be released. Once the payment is made, the Accounts team will email the investor the investment principal remittance advice and Tax Distribution Statement for the relevant financial year(s).

If an investor is entitled to Profit Share as per the terms of their Investment Agreement, any Profit Share will be distributed upon the conclusion of the project, after the developed properties have been sold and an Accounts Reconciliation process has been completed.

The Profit Share that will be distributed to an investor is calculated using the following formula:

Profit Share Exposure is a variable which changes depending on the amount of capital invested, with higher investments generally resulting in a larger multiplier and thus a larger share of the profits.

Investors should consult the Information Memorandum for each project, or their Investment Agreement, for an explanation of what amount of Profit Share they are entitled to, if any.

No. It is not possible for investors to withdraw their capital prior to the sale of the developed properties. See “When and how is capital repaid?” for a further explanation.

In the event that the developed properties do not sell within a reasonable timeframe, the Company may approach lenders to refinance the project and create the necessary liquidity to pay back investor capital. However, this is contingent on many factors and is not guaranteed, so investors should not rely upon the possibility of an alternative exit strategy.

We attempt to mitigate the risks of a builder bankruptcy by:

• ensuring a guaranteed maximum price building contract from reputable and established builders who have experience in the type of proposed construction to be executed between the builder and borrower;
• bulk-buying materials in advance to protect against shortages and price inflation;
• ensuring that the projects are employing standard construction techniques and that adequate building insurance cover is in place;
• monitoring all construction loan draw-downs to ensure that there are always sufficient funds remaining to complete the projects. An independent quantity surveyor or construction cost manager may be appointed prior to the commencement of the projects to facilitate this.
• requiring the developer to include a contingency factor on total construction costs in the debt funding required for each project.

In the event that a builder does go bankrupt, we will appoint a different builder to complete the works. This is undesirable and will delay the project, but it is not an insurmountable obstacle.

The minimum investment amount for each project varies. Investors should consult the Information Memorandum for each project, for an explanation of the minimum investment amount to participate in the project, or the minimum amount to be entitled to Profit Share.

No. You are investing capital to fund a property development project in exchange for a return on your investment. You do not receive ownership of any properties unless you choose to buy a property as a separate transaction. 

Yes. Each project is an independent entity and is unrelated to any other projects currently being managed by Lion Property Group. An investor may invest in multiple investment opportunities depending on our current availability.

Yes. 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.

Project updates are distributed via email every quarter. The project updates provide investors with an understanding of what is happening on the project, any milestones we have achieved, and any difficulties we are facing. 

The project will move through a series of milestones and each of these milestones  are explained and we demonstrate progress by providing a percentage on how far through each milestone we are. 

In addition to receiving these Project Updates, investors can find the documents on the Lion Investor Portal. 

Quarterly updates will continue throughout the duration of the project up until the construction is completed. Post-Construction we will communicate with investors monthly until the project is completed and returns and capital are paid. 

Generally, our offers are available to any person aged 18 years or older residing in Australia.

However, it is the responsibility of each investor to ensure that their investment into a project is permitted in their jurisdiction. Viewing an Information Memorandum does not constitute an invitation to apply for an interest in the project unless, in the relevant jurisdiction, such an invitation could lawfully be made to that recipient or an application could lawfully be made.

We do. The raising of capital from investors is undertaken alongside loans from banks and/or private lenders. Property development is expensive and requires significant investment from across the capital stack via equity and debt to fund the project throughout its entire lifespan.

Investor returns are factored into the Project’s feasibility study and directly related to the required capital for the duration of the project.  A provision of the capital raised is apportioned in advance to facilitate the monthly distribution to investors until the project has sold and liquidity restored.

In almost all instances construction funding is underpinned by the issuance of guarantees by Lion Property Group or its Directors. As such, when a project experiences delays and deviations greater than the available contingency, Lion Property Group will carry the debt till the project completes and is sold to restore liquidity.