The power of syndication investment
Commercial property syndication has provided us the ability to have partial ownership in high quality properties, offering strong tenancy profiles and long-term leases. Property syndication provides the ability to spread our funds and coverage over a variety of properties. These properties are then managed by professional knowledgeable property managers who specialise and understand the wider and local market to a very high standard that as individuals we would find hard to duplicate. Syndication has provided us with the passive income, freedom and a professional management level beyond what we could obtain as single investors.
Freedom throughout our life has been our overriding goal. We released we could only achieve true freedom by obtaining a passive perpetual income stream. Reflecting on the methods that we had used over the years such as residential housing, business ownership, share-market, commercial property we found the commercial property syndication model was the model most in harmony with our values and goal of freedom and our desire to have a truly passive income stream.
Property syndication and the structure and framework behind it helped us to achieve our financial freedom and retirement earlier than otherwise would have been possible. We retired at age 40, 12 years ago giving us time while healthy to enjoy our lives together which includes plenty of travel, boating, diving and fishing without input into or worry about our property portfolio. Our trust in the system and people extends to the point that we invested 10 years ago our daughter Jasmines funds who died of cancer at the age of 18 into a long term commercial syndication. Jasmine had strong goals and one of her key goals was to own her own hairdressing salon, she just loved the hairdressing industry and had saved a pretty sizable amount at the time of her death but her only wish was that she would never be forgotten so we can say with some pride that Jasmines syndication has provided consistent returns now for 10 years. At first the returns went to Make A Wish, Canteen and other worthy causes that helped her and us through the cancer journey.
We approached HITO (hair industry training organisation) to see if we could set up a scholarship award in Jasmines name for hair dressing apprentices, we now have 10 recipients who have benefited from the use of the syndication returns to obtain specialised training, such as photography, fashion, and business management. These young people have now in turn reached their own personal and business goals and for us it is truly humbling and a testament to the value of good quality syndications and the power of passive investment. Our Family Motto “Live each day like there’s no tomorrow”
Murray and Denise McBeth
The last 20 years investing with Augusta
I would like to record a few thoughts of our experiences over the last 20 years investing with Augusta Funds Management (previously KCL).
Our first investment with Augusta was in 1997 with an investment in a Brisbane syndicate, this was at the same time that we set up our own business. Over the last 20 years we have now invested in a total of 22 syndicates, several of which have been sold. We have been very pleased with the overall performance of our portfolio of investment properties, this period covered the time the world experienced the GFC which had a major impact on many investments. It was in these difficult times that the identification of properties that have excellent location, building type, quality of tenant and good lease profiles proved essential.
I believe that Augusta has a very high regard for the interests of investors, and works in the best interests of the investor. I also consider that individual investors do have the ability to have a say on how the investment is managed.
I consider that Augusta very carefully mange three distinct areas. Namely:
1. Identifying property opportunities and securing strong tenants.
2. On-going professional management of the properties and tenants.
3. Managing and reporting to investors.
The option of syndicated commercial properties as an investment class, gives smaller investors the opportunity to invest in medium to larger sized properties with typically larger and normally more secure tenants, that would not otherwise be available to an individual. It also enables investors to spread the risk of investment over a number of properties with different location, property type and investment profile. The Augusta investment model allows individual investors a level of involvement not available in other types of investment. I believe the size of the Augusta operation is a good mix of large enough to get good opportunities but not too big for investors to be just another number.
The recent implementation of the secondary market where investors are able to buy and sell units has given the investments a much greater level of liquidity and mitigates one of the previous concerns for investors who wish to exit from their investment for any reason or change in circumstance.
I am more than happy to discuss with any potential investor who wishes to contact me who may wish to discuss investing with Augusta (in general terms).
No surprises approach!
We have been investing in commercial property, initially with KCL, now Augusta, since 2007. These properties are part of a larger portfolio of investments which allow us to diversify our holdings both in New Zealand and in Australia .
We have always been very impressed with the briefings that KCL and now Augusta have given to prospective investors; detailing risks, rewards, and costs that occur with such investments. While we appreciate that Augusta’s commissions charged are not small, we also understand and appreciate the expertise, knowledge and management skills that Augusta bring to the investments. We have also been impressed with the quarterly reporting that occurs giving us a “no surprises” knowledge situation reporting on the state of the properties, and relevant tenant and financial information.
The monthly distributions allow us to accumulate funds for further investments to secure our retirement and our next generations’ future.
At an investment seminar Bryce Barnett once said to the group that we should always have some fun with our investments. Augusta certainly go that extra mile to ensure their investors have some fun.
The added benefits of social gatherings of many investors during AGM times give a chance to meet investors in many walks of life and see old friends again. The dinners, entertainment and interesting guest speakers all add to the value of this investment group. We do enjoy being part of the Augusta investment family.
Ian & Judith Armstrong, Taranaki