Centuria Bass First Mortgage Fund No.1

Fund Closed – Fully Subscribed

Centuria Bass First Mortgage Fund No.1 is a new unlisted wholesale investment trust raising up to $30m which will be used to fund a senior secured mortgage over a well-located site that forms part of a future subdivision project.

The senior secured mortgage will assist the Borrower to fund the acquisition and holding costs for the next stages in the 1,013 lot approved residential subdivision project. The Borrower has recently undertaken a similar 222 lot staged development in nearby Millfield Rise.

Centuria Bass Credit has agreed to provide a senior secured bridge loan facility to assist the Borrower’s acquisition of the security properties.

Property and location

The security properties are located adjacent to the existing Bellbird village, approximately 4km from the centre of Cessnock. Cessnock sits within the broader Sydney basin commuter belt and is located 150km from the Sydney CBD, 38km from Newcastle and 50km from the Central Coast. Cessnock benefits from direct rail connections to Newcastle, the Central Coast and Sydney.

Transaction summary**

Facility typeFirst Mortgage Land Acquisition Bridging Facility
Security propertyAbbotsford Street, Bellbird NSW 2325
Raise amountUp to $30,000,000
Valuation$121,030,000 (‘As-Is’)
SecurityFirst ranking mortgage over Security Property, General Security Agreement (GSA) over Borrowing Entity and Personal Guarantee from Director
LVRInitial LVR of 48%, increasing to a maximum of 55%
Investor return9% IRR (net of fees and costs before tax)
Interest paymentsMonthly in arrears
Term18 months
Opening date1 August 2022

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* The fund is modelled to provide a 9% p.a. internal rate of return net of all fees and costs. We aim to pay 100% of modelled return as a monthly distribution, subject to the assumptions and risks set out in the Information Memorandum.
** Indicative only. Subject to amendment by Centuria Bass Credit.

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.

About the borrower

About the borrower

The borrower is a private developer with extensive experience in the Hunter region, currently undertaking a 222 lot staged development in nearby Millfield Rise and has commenced works on the Eastern precinct of the greater Mount View Grange Masterplan. The borrower will provide a personal guarantee for the facility and has a net asset position of ~$37.3m.

About the manager

About the manager

Centuria Bass were founded in 2016 with a focus on mid-market real estate credit. Organic growth has led to a c.$690m committed loan book with $1bn+ pipeline. They are a highly experienced team with institutional grade capabilities, knowledge and networks. The JV formed with Centuria in April 2021, has enabled Centuria’s expansion into unlisted property debt markets.

Track record

From inception, a pristine record of returning investor capital and achieving the targeted IRR through varied market condition.

  • Proven historic track record with 81 investments made at an average LVR of 62.8% with no non-accrual loans.
  • Track record of generating a historical consolidated IRR to investors of 10.4% since inception^.
  • Outsized returns to investors through tactical deal selection, extensive due diligence and active asset management.
  • Post-COVID opportunity providing strong pipeline across property credit facilities.

Clear and simple strategy

Aims to provide wholesale investors with stable income returns with capital protection by investing in a diversified pool of property credit  transactions secured by real estate.

^Past performance is not indicative of future performance. Track record is at April 2022 for all CBC debt syndicates since inception in 2016

Key investment risks

Key investment risks

Location and property marketLocal property market falls in value / concentration risk
Local over supplyExcess stock levels leading to failure to sell
Sponsor/security enforcement riskSponsors unable to repay the loan
Interest rate/valuation riskInaccurate valuations of the Properties in a rising interest rate / inflationary environment

Please refer to the Information Memorandum for more information around the key investment risks.

Disclaimer

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. 1 (“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 advisors (who must be informed of its confidentiality).

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