Investment Risks

Exposure to negative movements in the market, such as price drops, can impact an investment's ability to achieve targeted performance or fully recover the invested amount. We mitigate market risks by closely monitoring economic conditions, regularly reading reports on various aspects of the Australian economy and considering general market conditions during due diligence.

Fluctuations in interest rates can adversely affect an investment's value. Rising interest rates may impact the profitability of a project during its construction phase. We monitor the cash rate set by the RBA and the interest rates of project-exposed lenders for potential changes.

All funds invested in an opportunity are dedicated to the specific project, making each project illiquid until its exit strategy is realized. Investors cannot withdraw their investment until the end of the investment term.

Consider an investment only if you don't anticipate needing access to your capital during the specified term.

Each investment is tied to a specific property development project, and investors have no direct control over the development process or capital utilization within that project.

Changes in government policies and regulations may negatively impact an investment's operations. While future policy changes are unpredictable, we manage this risk by closely monitoring and responding to potential regulatory and policy changes.

Unforeseen environmental, archaeological, and ethnographic conditions may impact project progress and costs, potentially reducing returns. We mitigate this risk by evaluating the development site and obtaining an independent report from a land surveyor to assess development suitability.

Various construction risks include builder insolvency, higher-than-expected construction costs, and inadequate liquidity for funding. We address these by securing guaranteed maximum price contracts from reputable builders, ensuring standard construction techniques, monitoring loan drawdowns, appointing independent quantity surveyors or construction cost managers, and incorporating contingency amounts in construction budgets.

Difficulty in obtaining necessary government or regulatory approvals and permits can increase costs and cause delays. Mitigation involves due diligence with experts experienced in the relevant approval authority, and in contingencies, the Trustee may liquidate the development site if permits cannot be obtained.

Contractors and third parties may become insolvent or default, leading to delays or impacting project viability. We mitigate this risk by selecting financially stable contractors with a proven track record, backed by Director guarantees, and ensuring appropriate insurance policies are in place.

The primary exit strategy is the sale of developed properties, but difficulties in selling or achieving anticipated prices may arise. If properties remain unsold for more than six months after title registration, the Trustee may implement a secondary exit strategy, such as repurchasing investors' Units or refinancing the development to generate liquidity for investor payouts.