Deliver SDA accommodation where it is needed
Our focus for investing in SDA accommodation will be focusing in metropolitan areas, as we consider it to be the area with the highest demand. By doing so, we anticipate a reduction in the risk of vacancies, resulting in an increase in the overall value of the SDA property portfolio.
Build an investment grade SDA Property portfolio
Our objective is to provide SDA properties that yield a gross rental return of 10-12% p.a., employing two primary strategies:
- Develop SDA properties in conjunction with standard residential developments, which lowers the cost of land allocated to the SDA property components.
- Collaborate with architects and builders to ensure that the construction quality and design result in reduced downstream maintenance.
Leverage Institutional pricing asymmetry
The market for institutional property investment typically involves the purchase and sale of properties that generate income, with a focus on what is commonly referred to as “cap rates” – the ratio of rental income to purchase price. Our forecast is that the cap rate will typically be below 10%, which, if achieved, has the potential to yield favourable capital gains for investors.
Recycle Investment to multiply SDA property delivery
Following the sale of the SDA portfolio, any net profits will be distributed to investors, and the capital will be reinvested in building another SDA property portfolio, which will then also be sold. This will increase the number of much-needed SDA properties that can be delivered with each investment.