Rural property investment crowdfunder joins ASX

DomaCom’s unusual fractional investment model gained significant attention during the past year after the company made an eleventh hour attempt to join the initial sale process for S. Kidman and Company’s outback pastoral estate late in 2015.

The managed investment scheme (MIS) group was previously involved in buying commercial real estate and residential apartment investments on behalf of small investors whose funds were raised via crowdfunding campaigns.

After bowing out of the Kidman race last month it has re-set its rural property sights on buying smaller, but still sizeable, rural properties in Queensland and Victoria, with the view to leasing the land back to the farming operators.

It has lately raised about 32 per cent of the bookbuild required to purchase of a majority stake in cattle station “Pajingo”, near Charters Towers in North Queensland.

DomaCom’s Kidman foray proved it could rally small shareholders together to give ordinary Australians a chance to take ownership of the iconic 10.1 million hectare pastoral business and its 185,000-strong beef herd.

However, while its Kidman estate ambitions received strong public pledges of financial support worth about $80m, most investors held back contributing to the fund waiting to see if any big superannuation group would chip in.

Chief executive officer, Arthur Naoumidis, said the company had raised $7.33m from more than 500 new investors for its initial public offering on the ASX, giving it a total shareholder base of more than 700.

“We have completed 24 bookbuilds for properties in Victoria, NSW, Queensland, South Australia and Western Australia, with another 59 bookbuilds in the pipeline,” he said.

“In addition to these bookbuilds we have launched public crowdfunding campaigns for The Block apartments and (the 32,000ha) `Pajingo’.”

He said The DomaCom Fund was now on the approved product list of 41 Australian Financial Service Licensees spanning more than 1200 independent financial advisers.

Mr Naoumidis said controlled asset allocation to real property was a reality in Australia and overseas, and being structured as a registered MIS brought the asset class within the financial planners’ purview, potentially increasing the advisors’ client reach, their sphere of influence and funds under management revenue.

DomaCom Australia was expecting to have its DomaCom Fund made available on one of the largest self managed superannuation fund (SMSF) channels and was well advanced towards being included in a retail superannuation offer.

“We have been working on other fractional model product ideas that will continue to give advisers the products that meet the needs of their business and clients,” Mr Naoumidis said.

The DomaCom Fund enables investors to select properties in which they would like to invest.

Via a bookbuild process, investors can commit as much as they wish towards the eventual purchase of a property in partnership with other like-minded contributors.

Perpetual Corporate Trust is the custodian for the fund, holding the title for each property on behalf of DomaCom’s investors.