Powered by MOMENTUM MEDIA
subscribe to our newsletter

La Trobe provides $50m debt facility to DomaCom

Fractional investment platform provider DomaCom has announced securing a $50 million credit facility from La Trobe Financial.

DomaCom revealed in a disclosure to the Australian Securities Exchange that La Trobe Financial has provided a $50 million credit facility that will allow property investors to acquire $100 million of residential, commercial and industrial leveraged property through DomaCom’s fractional property investment fund (DomaCom Fund).

The company had last year obtained a lending line to the tune of $100 million from a consortium of institutional private lenders.

The new facility will provide up to 60 per cent leverage for investors and self-managed super funds (SMSFs) at 5.99 per cent p.a., the company reported.

DomaCom believes it is now well-positioned to “almost triple” funds under management growth to $150 million through leveraged property investment.

Advertisement
Advertisement

The company’s CEO, Arthur Naoumidis, said in a statement: “We’re delighted to have the final piece of the jigsaw in place for DomaCom. We have bought over 50 properties to date where almost all are without debt, and we are excited to be able to offer advisers ready access to competitive SMSF lending.

“The availability of this initial $50 million debt facility has cleared the remaining obstacle for DomaCom. After many patient years, we are now well placed to take our platform to financial advisers and the SMSF sector, with available debt and legal certainty.”

La Trobe’s chief investment officer, Chris Andrews, said: “We are happy to partner with DomaCom to assist borrowers obtain that much needed SMSF finance for property investment purposes. With more than one million Australians having turned to taking more control of their own super, the growth of the SMSF sector continues.”

According to Mr Andrews, SMSF assets grew by $319.7 billion or 55 per cent in the five years to the end of December 2018 to $726.46 billion in assets under management.

As such, he said he expects the SMSF sector – which comprises more than 587,000 funds – to continue playing an important role in asset allocation debates in the retirement industry, as the majority of SMSFs are formed by self-employed business people.

PROMOTED CONTENT


“They have a bias towards asset classes with low volatility and assets that have longer term (10-plus year) investment horizons, and to this end, property is eminently recognisable and understandable for SMSF investors,” Mr Andrews said.

“Currently, there is only $42.85 billion of limited recourse borrowings (5.9 per cent of total SMSF assets).”

The announcement follows a wave of withdrawals from the residential SMSF market in recent months by lenders such as CBA, NAB, Westpac, AMP, and Macquarie.

It also follows the release of the Council of Financial Regulators’ and the Australian Taxation Office’s report on SMSF lending, which concluded that limited recourse borrowing arrangements (LRBAs) held by SMSFs are “unlikely to pose systemic risks”.

The federal government, as such, said it would not make any changes to LRBAs held by SMSFs. However, the opposition party committed to banning SMSF LRBAs if elected, a move that the Financial System Inquiry recommended in 2014.

[Related: Thinktank enters residential SMSF market as banks exit]

La Trobe provides $50m debt facility to DomaCom
mortgagebusiness

Reporter

If you have any news, ideas or enquiries for Mortgage Business - please contact This email address is being protected from spambots. You need JavaScript enabled to view it.

Latest News

The competition watchdog is set to make good on its recommendations for improving the mortgage process, and will also be announcing enforcem...

The major bank has announced cuts to fixed home loan rates of up to 55 bps, while forecasting house price growth of around 10 per cent this ...

Nearly half of all global banks want to become digital ecosystems in the wake of open banking, with incumbent banks set to benefit the most ...

FROM THE WEB

Join a group of highly informed brokers.

Broker Pulse, a community-driven knowledge base of lender performance Reveal exactly which lenders are making life easiest for brokers and their clients by taking this monthly survey and joining a group of highly informed brokers who leverage these insights every month.

JOIN NOW
podcast

LATEST PODCAST: BOQ’s acquisition of ME Bank

Do you expect to see strong uptake of the HomeBuilder scheme?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.