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El Jefe

6,066 Posts.

882

01/02/18

17:00

Post #: 30746212
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Originally posted by woollydog ↑

the major issues with these unlisted property trusts are

1) liquidity, or LACK thereof.
be aware that your money is often locked away and you cannot withdraw except under conditions imposed by
the fund. some of the better ones such as Cromwell Direct property allow limited monthly withdrawals,
others such as Australian Unity Healthcare property trust allow quarterly withdrawals, but others say that you cannot access your money for years. This Trilogy Industrial trust says in the PDS that it "intends to make withdrawal offer in 4 years". what does "intend" mean ? do they guarantee that ? what if they can't sell the
Mackay properties for a suitable price in 4 years time ? would that mean you would have to wait longer ?
how long ? As stated in the PDS, " Ultimately, it depends on the future property market conditions and other factors which may be outside of Trilogy Funds’ control to fund Investors’ withdrawal requests"........

2) debt.
this proved a disaster in the GFC, as numerous property trusts were unable to refinance their debt,
and thus had to shut down, no withdrawals allowed. some of them went totally bust including one that I was
in ( SAI TeysMcMahon ) and lost all my money ( about $20K ). big lesson learnt !
others eventually recapitalised after a few years, but unitholders were diluted enormously such that their investment fell by 80% or more.
I note this Trilogy industrial trust overview states target gearing range less
than 50%. that is far too risky for my liking.
in the GFC, gearing of 40% proved way too much to survive for some.
The AMP Wholesale property trust survived the GFC ( only just ) and now has a target gearing of 0 -15% , currently about 8%. Australian Unity healthcare property trust ( probably the best long term performing unlisted property trust in the country ) has a current gearing ratio of 15%
the less debt the better.

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Lots of good points thanks for taking the time in posting.
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