For many investors, making their first investment into a commercial property syndicate comes with many questions. The following outlines how Scope structure their investments and what you as an investor need to consider.
For every new property acquired by Scope, a new Unit Trust is established, with Scope Property Group Pty Ltd as the trustee. This provides investors with a clear independent ownership structure specific to the property which retains the tax benefits of a trust structure.
Limited Liability Debt
When Scope acquire properties, the syndicate will typically borrow between 50% and 65% of the purchase price of the property using Non-Recourse debt funding. This type of funding has no recourse back to investors. The extent of the Investors financial exposure and liability is limited to the value of the equity they invest into each syndicate.
Yield & Capital Return
One of the many benefits of investing into commercial property is that the income yield achieved is generally far superior to residential property. Scope aim to acquire high yielding properties that provide strong income streams to investors.
Furthermore, Scope aim to maximize the Capital Growth opportunities of their syndicates by acquiring quality properties in sought after locations, and adding value where ever possible for the benefit of investors.
Each Scope property syndicate generally has an intended life of approximately seven (7) to ten (10) years. This sees most Scope Investors having a long term, passive investment approach, that match a Scope investment.
To overcome liquidity issues investors can sell their units during the life of the syndicate, and where capital growth and cash flow allows, portions of initial capital invested may be returned to unit-holders throughout the life of the syndicate.
Investing in commercial property is a rewarding experience but does come with risks that need to be considered before investing. Scope endeavors to clearly detail and highlight risks associated with investing in their property assets in the Information Memorandum (IM) issued by Scope for each of its syndicates. Scope strongly encourages all investors to do their own investigations and seek independent advice where appropriate prior to investing in any investment.
Seek Professional Advice
The advice and information offered by Scope is General advice in accordance with sec 766B (4) of the Corporations Act. An investor’s individual personal profile is not considered by Scope in providing advice or information. Individuals should seek Professional Independent advice prior to investing in any investment.