Many commercial property investors often fail to optimise their portfolios by overlooking some very basic asset management fundamentals. So what are some of the key areas that can help boost [...]
Your catalyst for growth.
Delivering superior results to property investors.
Superior returns. Capital growth.
Mair Property Funds (MPF) has been helping investors grow their wealth through commercial property investment for more than 35 years.
Mair Property Funds is a Western Australian owned company specialising in the acquisitions and management of commercial property investment though unlisted property trusts:
- Fund management
- Wholesale & retail trusts
- Commercial property investment
A good investment strategy means above-average returns, capital security and growth.
We secure superior investments using our thorough investment philosophy. We then actively manage the properties on behalf of our investors to ensure property performance and lease compliance, keeping investors informed along the way.
Mair Property Funds manages more than $183m of commercial properties, holding assets over 17 trusts and syndicates. We specialise in the acquisition, management and disposal of commercial property and the establishment and operation of unlisted property trusts.
OUR INVESTMENT CRITERIA
- Targeted asset classes, sector specific
- Strong tenants and lease security
- Key demographic locations
- Below replacement costs
- Commercial zoning
- Utilitarian building design with modern building specification
- Value-add potential (funded by property)
- Development opportunities
- Distributions paid from income
- Conservative debt gearing
- Asset value –range of $5m – $35m
- Forensic Due Diligence conducted
A diversified range of quality
Income returns across
a range of property sectors.
Investors rely on our proven approach, passion and expertise to buy strong investment properties at the right price that will deliver secure income as well as capital growth. MPF’s investment portfolio includes a healthy mix of property sectors that provide diversified income returns. High yielding industrial assets comprise 33% of the portfolio, a good mix of retail assets, with about 4% attributed to the property development sector.
Mair Property Funds manages more than $208m of commercial property on behalf of its investors, comprising 40 properties and more than 90 quality tenants. We apply a strong discipline to tenant strategy, making sure we monitor and pay attention to key industry trends and direction to ensure our tenants can support and align with both short-term requirements like rent accountability, and long-term performance objectives.
Delivering strong, leading
performance on every level.
Solid and consistent
Across all MPF syndicates and trusts, our portfolio of commercial properties has achieved an average internal rate of return of 14.2% p.a. (income plus capital growth). Excluding capital gain, current income distributions to investors across all funds under management is 11.8% on the initial investment. Average annual capital growth since June 2002 is 5.4% with a total growth of 46% of initial equity invested.
History shows we outperform
other asset classes.
Over the last 10 years, MPF has delivered strong and sustainable returns that outperform major benchmark indices. We contribute to the Investment Property Databank, which enables our performance to be clearly measured. This reveals the superior performance of our returns from commercial property when compared with other asset classes, as well as unlisted and listed property trusts and equities.
How many trusts do you currently manage?
MPF has established 17 commercial property syndicates and trusts each owning between one and four assets.
What is your average return to investors?
Since gaining our AFSL licence in 2002 Mair Property Funds has returned to investors on average across all trusts and syndicates an Internal Rate of Return of 14.2% as at year ending 30 June 2016.
Do you have experience across all sectors of commercial property?
Yes, our Senior Managers and Directors have experience in all property sectors, including Office, Retail and Industrial property as well as various specialist areas, such as medical centres.
Do you undertake property developments?
At MPF our primary focus is to purchase quality commercial properties capable of providing secure rental income for investors. In our constant search for new opportunities we do consider development opportunities but mainly on a pre-leased or fund through basis.
What is the role of the Trustee or Custodian?
The trustee’s role is to ensure investor’s interests are being protected at all times. In general terms, the trustee’s role is to separately hold all the assets, including the title deed of the property and bank accounts of the trust, on behalf of the investors.
What is the role of the Responsible Entity?
The Responsible Entity is granted all powers in respect of the Trust that could be exercised by a natural person or a body corporate as if it were the absolute and beneficial owner of the properties of the Trust (and any other assets of the Trust). The Responsible Entity may appoint an agent to hold the title to the Properties (and any other assets of the Trust) or otherwise carry out any functions of the Trust.
What is the Constitution for?
The Constitution is the document that governs the relationship between the Investors and the Responsible Entity. It regulates the rights and obligations of the Investors and the Responsible Entity and sets out the powers of the Responsible Entity in operating the Trust.
What is a Compliance Plan?
As required by law, the Trust has a Compliance Plan that has been lodged with ASIC and sets out measures that the Responsible Entity shall apply in operating the Trust to ensure compliance with the Corporations Act and the Constitution.
What is the role of the Compliance Committee?
The Compliance Committee is established to monitor compliance by the Responsible Entity with the Compliance Plan and report to the Responsible Entity on a regular basis regarding its compliance with the Compliance Plan, the Corporations Act and the Constitution.
The Compliance Committee is to report to the ASIC if the Responsible Entity does not address any issues raised in an adverse report issued to the Responsible Entity. The Compliance Committee is comprised of 3 members, with two thirds of the committee being “external” under section 601JB(2) of the Corporations Act.
What is the nature of the investment?
Each Investor becomes a unit holder in the trust. Units are issued in proportion to the amount invested relative to the total net asset value of the trust’s assets. As a result you effectively become a part-owner of the Property.
The assets of a Mair trust are generally physical property of a commercial nature. The Offer Document specifically details the assets and/or intended assets.
Issues relating to a Trust can be voted on by Investors as provided for in the Constitution. Voting rights will be proportional to the amount of each Investor’s interest.
By completing and sending an Application Form to the Manager, you are agreeing to be bound by the Constitution and the acknowledgements contained within the Offer Document.
How do I invest in a Mair Trust?
You may either:
- Contact MPF on 08 9321 5566 or email firstname.lastname@example.org to request a copy of the relevant Information Memorandum or Product Disclosure Statement.
- Register your interest online to receive a copy of the relevant Information Memorandum or Product Disclosure Statement.
Applications can only be made on an Application Form attached to an Information Memorandum or Product Disclosure Statement and accompanied by the appropriate payment.
Can my SMSF purchase units in a property trust?
Yes, complying and self managed superannuation funds may invest in our property trusts.
How is the trust income collected and expenses paid?
The Responsible Entity arranges for income from the Properties (rent) to be collected and pays it into the proceeds fund. Out of the proceeds fund, the Responsible Entity pays all costs, charges, expenses and outgoings it properly incurs. These include the Responsible Entity’s and Manager’s fees, property outgoings, establishment costs, administration and audit costs, Custodian and Compliance Committee fees, bank fees, government charges and taxes.
How are Distributions Paid?
The Constitution provides that the Responsible Entity will (if appropriate) make distributions out of the net balance in the proceeds fund every quarter. The Responsible Entity determines the amount to be distributed. Any net income (after expenses) received into the proceeds fund that are not distributed to investors, remain the property of the Trust (and therefore unit holders/investors).
Generally, a portion of the distributed income you receive will be tax advantaged, resulting in less income tax being payable on that distribution in the year it is received.
What is tax advantaged or tax deferred Income?
Tax advantaged or tax deferred income is derived from property trust distributions, generally as a result of building allowances and depreciation allowances and the amortisation of the costs of borrowing. The amount of tax deferred distributions received by investors varies depending on the circumstances of the trust. No income tax is payable by investors on that proportion of the distribution received that is attributed to tax deferred income.
However the tax deferred income received reduces the cost base of an investor’s original investment (purely from a tax accounting perspective, it does not reduce the actual dollar amount invested) in the trust. This results in an increase in the amount of the capital gain on disposal of that investment. But if the relevant asset is held for more than 12 months an investor is generally entitled to a discount on the capital gains tax and for an individual investor only 50% of the capital gain is taxed at the investor’s marginal tax rate.
Tax deferral has two clear benefits. Firstly it provides greater cash flow during the investment term as a portion of the income received is not taxable in that year. Secondly at the end of the investment term, provided the investment is held for longer than 12 months, discounted capital gains applies, reducing the tax payable by up to 50%.
What if I need to get my money back early?
Essentially our property trusts are illiquid and invested funds are not returned until the property is/are sold. Investors may exit earlier by the independent sale of their Units to a third party and you can contact the Manager to assist with the relevant documentation and information in this regard.
Why should the Trust borrow money to acquire the property?
Borrowing or gearing into an investment is a long held strategy that can significantly enhance the return on that investment. This is because the borrowed amount generally remains the same (assuming interest only payments), whilst the property value is likely to increase over time. However, the reverse can also apply should the property value significantly decrease, in which case the losses can be magnified.
A sensible borrowing policy or gearing level helps to manage any downside risk.
Unlike an investor borrowing in their own name to invest, our Trusts use non-recourse borrowings to limit any liability of investors to their initial investment amount only.
How much will the Trust borrow?
The levels of approved borrowing may vary in each trust however our policy is to only borrow a maximum of 50% of the property value.
What is non-recourse Borrowings?
All borrowings on behalf of a Trust are secured solely against Trust property (non-recourse to investors). This means that you have no financial or other commitment beyond your investment into that trust.
What is a Gearing Ratio?
A gearing ratio indicates the extent to which the Trusts assets are funded by external liabilities (debt).
How is Interest Cover Calculated?
An Interest Cover Ratio (ICR) is a measure that shows how many times the Trusts earnings can meet the Trusts interest expense each year. For example if a trust has an income of $300,000 and an annual interest payment of $100,000 then its ICR is 3:1.
Will I receive updates on my Investment?
You will be kept aware of the status of your Investment with quarterly income statements and other periodic reports.
Will I receive an Annual Tax Statement?
All investors in each Trust receive an annual tax statement within three months of the end of each financial year.
What other information or communication will I receive?
All investors in each Trust will receive an Annual Report, providing information on the Trusts’ activities for that year.
We also produce periodic newsletters providing a variety of information including trust updates, property market information and new investment offerings. Information held on our website is also frequently updated and we recommend investors and potential investors review the website content on a regular basis.
How do I notify you of any changes to my details?
It is important that you inform us of any changes to the details you originally submitted on the Application Form when investing. Any such change must be notified in writing and signed by all parties who signed the original Application Form. In order to assist with this process, refer to the Change of Investor Details form on our website.
A wealth of experience.
The team at Mair Property Funds is passionate about helping investors accelerate their wealth through commercial property. Our people are leaders in their field, but they also care. Approachable and informative, they consistently put investors’ best interests at heart.
JOHN CHRISTIAN MAIR