A new business model is turning traditional property investment in the Hunter region on its head with the creation of a licensed managed fund that invests directly in building high-quality medium density housing.
Local property development specialists and investment managers Brett Brookfield, Matthew Wren and Michael Cradock have joined forces under the banner 35 Latitude Investment Fund, a name they chose to celebrate the economic potential of Newcastle and Lake Macquarie for investment in boutique, medium density homes.
But 35 Latitude is no ordinary property venture or unit trust. Its innovation lies in the fact it’s a licensed investment scheme, a managed fund that complies with the stringent requirements set by the Australian Securities and Investments Commission (ASIC) to ensure it has all of the vital checks and balances to protect investors.
“A lot of developers or groups of people might pool their money together into a unit trust but they’re not actually licensed so the investor’s got absolutely no protection,” Fund Manager, Brett Brookfield, said.
“They go off and do the investment and whoever’s controlling the investment potentially has all of the power. By having a licensed investment scheme we’re ASIC compliant so we have all the checks and balances in place to protect the investor, including a trustee that sits above us and controls all the expenses and accepting of money.”
It’s an ambitious move that signals confidence in the increasing demand for townhouses and villas as a practical alternative to the once-popular suburban mansion, especially given our ageing population. It’s also a sign of faith in the cities of Lake Macquarie and Newcastle as home to Australia’s largest regional population and a 38-billion-dollar economy.
According to Brett, high quality medium density homes make spectacular sense in terms of improving housing affordability for families, singles and retirees. They also offer a viable, smaller-scale opportunity for mum-and-dad investors who might be comfortable investing $50,000, rather than needing hundreds of thousands, to create value in high-yield bricks and mortar.
“Medium density is about producing a home that will suit someone to live in but also, from an investment perspective, giving people better potential returns. And I guess I like to build what I’d like to live in,” he continued.
Brett and his team have been successfully developing properties over the past decade. In the past five years alone he’s successfully managed the development of more than 50 properties from design to completion, carving out a niche in beautiful, liveable—and profitable—medium density homes. It’s a market he believes is often overlooked by large developers but creates value for smaller investors as well as a desirable product the market is crying out for.
35 Latitude Development Fund has been established to give investors the opportunity to participate in a newly-established investment vehicle that provides equity funding for investment in medium density housing in metropolitan areas of the New South Wales Hunter region (predominantly Newcastle and Lake Macquarie).