Investing in property funds: WINIM's boutique approach to funds management
Residential property ownership has been the cornerstone of The Australian Dream since the term was first coined in the 1950s and 60s.
Back then however the median house price in Sydney was around $10,000. Now the median is just over $1 million, CoreLogic data suggests.
That's priced many out of the Sydney housing market. Most banks nowadays require a 20 per cent deposit. The buyers that don’t have $200,000 or more will require another upfront fee, Lenders Mortgage Insurance (LMI).
Some prospective buyers are finding other ways to invest in bricks and mortar, one of Australia's strongest performing asset classes over the last century.
The diversified property group WINIM, who have a longstanding reputation of delivering boutique residential projects on Sydney's North Shore, introduced property funds management to their development business in 2015 Now, with a track record of over 21 investment funds and over $850 million under management, it's a key part of their business.
Essentially, rather than the traditional property investment route of purchasing a property and owning the asset, a property fund allows a qualified person to invest into a fund. That money is pooled with other investors and used to fund a specific project, either residential or commercial, or repositioning of established assets. The average investment term is around three years. WINIM Funds Management manages the asset, and investors are updated quarterly with the performance. Investors are offered considerable visibility of the asset they’re invested in. In the case of a new development, investors are provided opportunities to walk the sites as the projects near completion.
Todd Kuiters, WINIM's Investment Director, says unlike investing in other assets such as stocks, shares, or even listed property funds, an unlisted investment fund provides investors with the ability to invest directly in property markets and assets that they see value in.
WINIM's Tierra development in Willoughby
"Investors have flexibility to invest in the property sector and choose from funds that deliver ongoing dividend payments through assets such as mixed-use development or commercial assets, or higher return single capital repayment at completion of the development, such as residential buy to sell projects,” Kuiters told Urban.
Kuiters says, on top of the inherit investment return benefits, a lot of investors appreciate the ability to have a single asset that they feel connected to and can see the progress of, through design development all the way through to construction and completion.
"The benefit of investing in an unlisted property fund like WINIM’s is that it gives an investor exposure to asset classes that were typically out of reach of non-institutional investors," Kuiters says.
"Additionally, with the average price of Sydney homes over $1m, having a minimum of $100k investment means you can invest in premium real estate markets with a much smaller outlay of funds."
WINIM’s development funds are currently focused on both premium residential development as well as hotel and mixed-use developments on the East Coast of Australia.
"We are constantly analysing different micro markets in key blue-ribbon suburbs with solid property fundamentals including low supply of premium developments," Kuiters says.
"We focus on low to medium density products that meet specific purchasers' demand and designs that speak to local heritage architecture for long term appeal.”
WINIM's The Lawson Terraces Naremburn. Image supplied
Seasoned investor Matt B, who is now onto his fifth investment at WINIM, has been investing in property funds for about 15 years, and has both personal property investments and investments in a number of funds.
Matt says WINIM's experience in the sector and ability to identify a strong investment has seen him come back and buy into numerous funds.
"WINIM has created a niche specialising in boutique high end residential projects," Matt says, something which isn’t common in funds.
“They are good at selecting sites, as well as understanding and forecasting macro/micro economic factors at play."
Frank K, another seasoned funds investor, recently invested in a WINIM fund for the first time.
Frank, who generally prefers smaller more boutique funds rather than the larger funds, says he did extensive due diligence on WINIM and its Directors.
"The personal investment, reputation and credentials of the Directors is important to me, particularly when I am looking at boutique funds such as WINIM and I do my research prior to investing," Frank says.
"For me, the team at WINIM had the track record that I was looking for.”
WINIM is looking to deliver five to seven new premium diversified opportunities to their investors in agreed strategic locations each year.
To find out more information on WINIM's Funds Management, click here.
