In successfully completing its pilot – which consists of six four-bedroom, three-bathroom homes, each accommodating two tenants with high physical support needs, the Fund has been able to meet its core objective of successfully delivering important and measurable social outcomes.
Investors can be proud that each of the 12 tenants has seen a material improvement in their accommodation arrangements and lives. Importantly these improvements have reached not just the tenants, but their families and carers as well.Strong gross yields
Over and above these vital social outcomes, the Fund has also met its forecasted returns for its Investors. At completion, each property in the pilot program is delivering an average gross yield of 14.47% pa against their all in delivered cost, and 12.07% pa against formal valuation and carrying value. This is in line with the returns targeted in the Fund’s PDS.Prudent gearing helping returns
On completion of the pilot program, the Fund’s sub-trust entered into a financing arrangement with Arch Finance which enabled the Fund to limit the number of units required to be issued to complete and settle the first round of properties which represented a significant advantage for existing unit holders.
At the time of publication of this document the Fund had $1,050,00 of total secured and interest-bearing debt (held at the Sub-trust level) representing a Gearing Ratio of 19.2% calculated as interest-bearing liabilities of $1,050,000 against Total Assets of $5,455,682. This is in line with PDS disclosures and within the Fund’s target range of maintaining gearing at or below 20% of gross assets.
The debt is incurring annulised interest expense of $50,925, against annualised EBITDA at a sub trust level of $507,000; and $344,000 at the Fund level. This represents an interest cover ratio (ICR) of 10 at a sub trust level and 6.75 at a Fund level – well within the bounds of the Fund’s ICR policy.Since inception performance
The Fund has been in operation for just under 2 years and has been able to successfully meet its return targets through a combination of unit price growth and distributions. On a volume weighted basis, the Fund has returned 8.22% pa to Investors.
The table below represents the distributions paid to date and those forecast for the remainder of 2021:
|Date paid (or due)||($)|
|July 2021 (forecast)||0.0175|
|October 2021 (forecast)||0.0175|
The forecast cash distribution of 8.25c per unit for the calendar year meets or exceeds the Fund’s initial 8.25% pa target when assessed against either the initial unit price of $1.00 (8.25% pa) or the average unit issue price of $0.98 (8.44% pa).
Closed for new investment
The Fund is currently closed for new investment. As and when new opportunities are identified a new PDS will be issued.
Spring FG Funds Management Pty Ltd is the investment manager of the Fund and is responsible for managing and administering its investments and for marketing the Fund. Its related body corporate Spring FG Realty Pty Ltd is responsible for real property asset due diligence and acquisitions and disposals; and developing and overseeing asset management plans. As a registered SDA provider, it is also responsible for enrolment and operation of Fund properties in the SDA scheme.
Spring FG Funds Management Pty Ltd Level 11, 95 Pitt Street
Sydney NSW 2000
T 02 9248 0480