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Centuria Bass First Mortgage Fund No. 9 (CBFM9 or the Fund) is a new, unlisted wholesale investment trust raising up to $21.3m to provide a secured land bridge loan facility to UPG 201 Pty Ltd and UPG 256 Pty Ltd (the Borrowers) for 14.37 hectares of englobo land located at Officer, Vic. The Secured Property is 50km south east of Melbourne’s CBD between Berwick and Pakenham and is approved for the development of 270 residential land lots. It has a superior location, being within walking distance to retail amenities, transport and schools. Upon Loan Facility maturity, the Borrowers will most likely refinance into a construction loan or another bridge loan and use the proceeds to repay the Fund.
10.25%
Forecast IRR net of all fees and costs before tax1
65.0%
LVR
12
month term2
Monthly
income1
Property and location
Officer is a suburb within the Casey-Cardinia Shire which is the only region designated for urban expansion in the east of Melbourne. Officer has a population of just over 19.0k and is expected to grow to 30.5k by 2041 (60.5% increase)5, driven by local rezoning from non-urban land to urban growth zones.
The Secured Property, Lots 1, 4 & 5 and 87 Starling Road, Officer Vic 3809, is located approximately 50km south east of Melbourne’s CBD, within the approved and gazetted Officer Precinct Structure Plan (PSP). This site is comprised of 14.37 hectares (12.91 hectares of developable land) with a total ‘as-is’ value of $32.7m (excl. GST) and holds planning approval for 270 residential land lots across 5 stages.
The Secured Property is close to major transport nodes, schools, retail shopping centres and recreation reserves. Furthermore, the Officer PSP also includes the development of a business and commercial major activity centre (approximately 200m away from the Secured Property), schools (public and private) and recreational facilities.
Current data suggests a competitive market in Melbourne’s east with low availability of suburban development projects relative to Melbourne’s west, which reinforces the attractiveness of the suburb. The environment, infrastructure access and relatively affordable housing have acted as significant drivers for population growth in recent years and is expected to continue into the foreseeable future.
Transaction summary
| Facility type | Land bridge facility |
|---|---|
| Secured property | Lots 1, 4 & 5, and 87 Starling Road, Officer Vic 3809 |
| Total raise amount | Up to $21.3m |
| Valuation | $32.7m ‘as-is’3 |
| LVR | LVR of 65% based on ‘as-is’ valuation on the Secured Property |
| Investor return | Forecast 10.25% IRR (net of fees and costs)1 |
| Term | 12 months2 |
| Security |
|
| Target financial close | 21 June 20244 |
Why invest?
Our series of Centuria Bass first mortgage funds have a track record of delivering strong performance outcomes for investors, and are designed to provide attractive monthly income, downside protection and inflation-hedging benefits.
About the Sponsor
The Borrowers, UPG 201 Pty Ltd and UPG 256 are private development companies controlled by the parent entity, Universal Property Group Pty Ltd (trading as Bathla) and the Sponsor.
Bathla is a family-owned business, being in operation for over 25 years, with a presence across metropolitan and regional NSW, South Australia and Victoria. The group has completed multiple large-scale developments across various states. This includes 22,000 apartments designed and built across 58 suburbs, multiple standalone houses, and various commercial and retail precincts.
The group has over $5 billion in projects in the pipeline and continues to deliver homes across Australia. While the Loan Facility is not a construction loan, Bathla have completed over 70 subdivision projects in the past, indicating strong expertise and capability to complete the project, if required.
Timeline
| ITEM | DUE6 |
|---|---|
| Offer opens to application | 17 June 2024 |
| Applications close7 | 21 June 2024 |
| Application amount due8 | 100% payable upon application |
| Allotment date | 28 June 2024 |
| First expected monthly distribution paid9 | 10 August 2024 |
Exit strategy
The most likely exit strategy for the Fund is that the Borrowers will refinance the facility into a construction loan or another bridge loan. Proceeds from the refinance will be used to repay the Fund at maturity. Alternatively, the Borrowers can sell the property to another developer and use the proceeds to repay the Fund at maturity.
This is an exclusive limited offering available to wholesale investors only for up to $21.3m.
The stated information provided is subject to final offer documents provided.
Disclaimer
This document has been prepared by Centuria Bass Financial Services Ltd ACN 617 409 588 AFSL 499339 (“Trustee”), the trustee of the Centuria Bass First Mortgage Fund No. 9 (“Fund”) and Bass Securities Pty Ltd ACN 624 793 102 (“Manager”), the Manager of the Fund to provide general information relating to the Fund. The Manager is a corporate authorised representative of the Trustee. Units in the Fund are only available for subscription by wholesale clients within the meaning of section 761G of the Corporations Act 2001 (Cth) (“Wholesale Client”). By receiving this document, you represent that you are a Wholesale Client. This document is not provided to any person located in a jurisdiction where its provision or dissemination would be unlawful. This document provides a high-level summary of information relating to the Fund only and should be considered in conjunction with, the Information Memorandum and other constituent documents of the Fund. You should not treat the contents of this document as advice relating to legal, taxation or investment matters. In preparing this document, the Trustee and Manager have not considered your objectives, financial position or needs. Before making any decision, we recommend you consult a qualified financial professional to take into account your particular investment objectives, financial situation and needs. Every effort has been made to ensure that the information provided is accurate. Information can change without notice and the Trustee and Manager do not give any warranty as to the accuracy, reliability or completeness of information within this document. To the maximum extent permitted by law, the Trustee, the Manager and their respective officers, employees and agents exclude and disclaim all liability for any losses, damages or costs incurred by you as a result of any investment on the basis of this document, including for the inaccuracy or incompleteness of any statements (including forward-looking statements), opinions or information in this document. This document is not an offer for, and should not be taken to constitute, an offer to invest in the Fund. There are risks in investing in the Fund, which includes the risk that part or all of your investment may be lost. The information contained in this document is confidential and is provided for the exclusive use of the recipient to whom this copy has been issued and may not be copied or distributed except to the recipient’s professional advisers (who must be informed of its confidentiality).
1. Forecast investor IRR of 10.25% (net of fees and costs before tax). This is a target return only and not to be considered a guaranteed return or frequency of distributions to investors.
2. Loan term expected to be 12 months. However, the term of the Fund may be extended or reduced.
3. ‘As-is’ net GST valuation. Charter Keck Cramer valuation report – Lots 1, 4 & 5 and 87 Starling Road, Officer Vic 3809, 12 February 2024.
4. The Fund timetable dates are estimates and subject to change.
5. Forecast.id.com.au – Officer Precinct.
6. The Fund timetable dates are estimates and subject to change.
7. Applications will be accepted in accordance with Centuria’s Capital Raising Allocation Procedure. The offer will close to applications once the Fund is fully subscribed and applications may be subject to scale back and or rejected at the Trustee’s absolute discretion if the Fund is oversubscribed. Refunds will be made to investors for any application monies not accepted or subject to scale back.
8. If interest earned on application monies that are refunded is not returned, no interest is paid/retained by the Trustee.
9. The Trustee intends to pay monthly distributions and will be subject to the terms set out in the IM. Distributions may be sourced from other Centuria Bass related parties and entities.
Centuria Bass Property Debt – Podcast series
Investing in debt funds can provide investors with the potential for regular interest income returns. Learn more about debt funds in the CRED sector and current trends for this investment technique in our two part podcast series, hosted by our very own Izzy Chilcott, Associate Director – Investor Relations.
The information discussed is of a general nature and is not investment advice. All opinions expressed and are the opinions of Yehuda Gottlieb, Partner at Centuria BASS, as of July 2022.