DomaCom Limited (ASX:DCL) CEO Arthur Naoumidis discusses the company’s fractional property ownership platform, its book-building syndicates and the growth of crowd funding.
DomaCom is a new form of securitisation focusing initially on property, in other words, fractional property investing, another form of crowd funding. So DomaCom’s role is to take lumpy assets and break them up into bite size chunks for the investors. At the moment, the majority of properties that are being purchased via a platform are residential, but we’re just in the process of expanding through to commercial property and also rural agricultural property.
Now most of the properties are being acquired by the advisors themselves, not themselves, but buyer property advocates that the advisors organised. The minimum for an investor is $2,500, because we are a retail fund, which is one of the differentiators for DomaCom. And the fees are quite straightforward, we charge an annual fee of 0.88 per cent and the actual charges are what you’d normally find with properties. So stamp duty and all the due diligence cost, you pay your share.
With DomaCom you don’t have to buy the whole property. So in other words, you don’t get concentration risk. So at the moment if you want to buy residential, it’s all or nothing. So that’s number one, you can diversify across properties. The other is in the form of you don’t need to leverage to buy a property, which means that your asset location exposure towards property remains with the target allocation you want. In fact that’s one of the key drivers behind DomaCom, is we’re targeting the financial planning asset location market.
In terms of - we obviously can’t make projections, but our target really is that in the next 12 months, DomaCom really wishes to be at a point where we’ve reached that proof of life figure. And we want to be the dominant financial fractional property-investing platform in Australia. And in fact also to expand our business model across from property, to corporate bonds and also equity release for the seniors. So it’s going to be a big 12 months for DomaCom.
DomaCom’s IPO has raised three year’s worth of funding for DomaCom. So we’ve got a really good runway and we truly aim to be cash flow positive, within that timeframe. Well clearly we’re an ambitious company, so we’re looking for the long term to take a meaningful percentage of the Australian SMSF/asset allocation market. So we want to be one of the dominant property platforms in Australia, if not the world.