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Closed to investment
Centuria Bass First Mortgage Fund No.6 is a new unlisted wholesale investment trust raising up to $23.9 million to provide a senior secured bridging loan facility over a future residential development site located at 23 Castlebar Street, Kangaroo Point, Queensland (secured property).
By using a floating rate of return (BBSY+6.27% p.a.) any movement to the underlying BBSY rate will be passed onto investors.4
Quicklinks
10.5%
forecast modelled IRR net of all fees and costs1
Monthly
income
15 month
term2
100%
first mortgage
facility
Property and location
The Fund will provide bridging finance to the Borrower while they undertake further development approvals and early contractor works.
The Secured Property is located in the prestigious Kangaroo Point, a well-established and tightly-held suburb located 3 km from the Brisbane CBD. It is located on the Brisbane River, above the flood zone, in close proximity to various retail amenities, public transport and entertainment hubs.
Development approval has already been obtained by the Borrower to develop the site into a 15-storey residential building with 37 apartments, two river homes and three river terrace homes. This includes approval to develop the Heritage Listed ‘Shafston House’ located on the site into a luxury property.
About the Borrower
The Borrower, Burgundy Group Property Development Pty Limited, was established in 2018 and specialises in trading DA approved residential sites in Queensland.
Transaction summary
| Facility type | First mortgage bridging facility |
|---|---|
| Security property | 23 Castlebar Street, Kangaroo Point Qld |
| Raise amount | Up to $23,900,000 |
| Valuation | $50,000,000 (‘as-is’ June 2023) |
| Status | Closed to investment |
| LVR | Initial LVR of 47.8% up to a maximum of 62.5%3 |
| Target investor return | 10.5% p.a. forecast modelled IRR (BBSY+6.27%) – net of fees and costs before tax.1 |
| Interest payments | Monthly in arrears |
| Term | 15 months2 |
| Opening date | 9 October 2023 (investment amounts payable upon application) |
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.
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
| Market | Market uncertainty impacting the underlying value of the property. |
|---|---|
| Borrower/Sponsor | Borrower unable to repay the loan. |
| Flooding | The subject site experiencing flooding. |
| Heritage | Heritage restrictions on site. |
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. 6 (“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).
1. The fund is modelled to return a 10.5% internal rate of return net of all fees and costs. CBF6 aims to pay 100% of modelled return as a monthly distribution, subject to the assumptions and risks set out in the IM. Returns and distributions are all referred to on a pre-tax basis and are taxable in the hands of the investor. Investors should seek their own professional advice as to the financial, taxation and other implications of investing in the Fund.
2. Loan term is expected to be 15 months.
3. Further loan advances are allowable to the Borrower under the loan facility, however these do not form part of CBFM6 and will be funded by separate Centuria Bass Facilities.
4. The actual Net IRR will depend on the actual level of market interest rates over the term. If interest rates rise more rapidly or by more than currently expected by markets, the returns for the Fund may be higher. Similarly, if interest rates rise more slowly or by less than is currently expected by markets, Fund returns may be lower.
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.