Wednesday, May 1, 2013

Investment Overview - US Masters Residential Property Fund

Investment Overview - US Masters Residential Property FundInvestment Overview The US Masters Residential Property Fund ( Fund ) was established to provide investors with a unique opportunity to gain exposure to a diversified, high quality portfolio of US-based residential property assets, providing attractive rental yields and potential for long-term capital growth. Key Benefits of the Offer Direct exposure to US The severe downturn in the US residential property market has created an historic opportunity to acquire high residential property at quality US residential property at attractive valuations. The Fund is the only Australian listed property trust with a an attractive point in primary strategy of investing directly in US residential property to take advantage of current market conditions and the cycle to benefit from a potential US

housing recovery. At 31 October 2012, the Fund had successfully secured a US$165.4 million portfolio of properties comprising High quality portfolio 430 freestanding houses and 15 multi-dwelling apartment complexes through two joint ventures. The of property investments Responsible Entity believes these properties have been acquired at highly attractive valuations. The Fund has an initial investment focus on the New York metropolitan area, which is the largest metropolitan Focus on the New York area in the US by population and economic output. The Fund is focusing on residential properties in Hudson metropolitan area County, New Jersey and more recently, Brooklyn and Harlem, New York. The Fund’s target markets are consistently ranked among the best places to live in the US for those seeking an urban lifestyle. High quality team The Fund has built a vertically integrated operating business with 38 full-time real estate professionals to with fully scalable provide a full suite of property investment functions. The Fund has also developed an in-house proprietary operations, processes database and systems to combine local level expertise with quantitative assessment of opportunities. The and proprietary Fund’s processes, technology and infrastructure are fully scalable and can be rapidly expanded to manage technology over 1,000 properties with very few additional resources. The Fund has developed an in-house construction capability to take advantage of inherent market mispricing Significant scope to of properties that require refurbishment, which typically sell for a sizeable discount even after accounting for enhance value through construction and refurbishment costs. This allows the Fund to acquire properties at highly attractive valuations, refurbishments add value and typically achieve scale benefits. Strong Despite declining terms of trade, falling interest rates and continued pressure on large parts of the Australian Australian dollar economy due to the high exchange rate, the A$ continues to trade at relative highs against the US$. The Fund seeks to take advantage of favourable financing terms and record low financing rates in the US by Attractive capital targeting a conservative consolidated gearing level of up to 50% that will enhance returns to investors while structure maintaining risk at low levels. Residential property can provide important portfolio asset allocation benefits by offering portfolio diversification given Inflation hedge and its low correlation with other widely invested assets. Additionally, rent is a significant component of the consumer uncorrelated asset price index (CPI) and provides investors and their portfolios with inflation hedging benefits. Simplified tax treatment Investors...

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