Successful Completion of Armidale No1 Property Syndicate
The Armidale No1 Property Syndicate was established on the 1st of May 2002 after the acquisition of the Kmart Plaza Shopping Centre in Armidale in NSW. The syndicate performed at or above prospectus forecasts with all investors enjoying excellent tax effective income returns.
Since the commencement of the syndicate, the main investment risk for investors was closely monitored - this being the possible introduction of a competing retail development on land comprising the site of the former Armidale gasworks. The proposed development included a Big W, a relocated Woolworth’s supermarket, an unnamed “mini major” and some 40 specialty shops.
The proposed development varied significantly over the course of the last two and half years. A possible joint venture agreement between the local council and a developer to facilitate certain aspects of the development to ensure its viability and completion became available. We believed the possible impact on the Kmart Plaza had grown to a point where the future viability of the syndicate was at risk and too great to ignore.
With these concerns now very real and our strong desire to protect all investors’ capital, we discreetly canvassed the market for possible interest in Kmart Plaza.
In order to be in a better position to evaluate the best interests of all investors in the syndicate, an updated valuation was commissioned from independent valuers, M3 Property. The M3 Property report valued Kmart Plaza at $18,500,000 – a very pleasing result considering the syndicate purchase price of $15,360,000.
We were delighted to negotiate a cash offer of $20,000,000 for the property from a consortium of private investors. A contract was entered into and the property eventually settled in February 2005.
In accordance with the constitution of the Syndicate and the Corporations Act, the Syndicate wound up in May 2005 and returned investors their initial capital plus a capital gain component. Investors received a capital payment of $1.26 for each $1 invested.
Over the life of the syndicate Armidale No1 investors received total distributions (income and capital) of $1.555 for each dollar invested. Assuming a tax rate 48.5c in the dollar, the total tax liability on the distribution is 15.0c. A net result of $1.405 after tax with an after tax IRR of 13.40%
Total Returns on a $10,000 investment at an individual tax rate of 0.485 cents
Click here for further detail on the Armidale No.1 returns.
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