Peer Estate is making available to you an investment opportunity secured by first ranking mortgages over 5 properties located in and nearby Griffith NSW 2680 (the ‘Properties’).

A commercial investment loan of $2,165,400 (the ‘Loan’) is to be provided at a Loan to Value Ratio (LVR) of 60% measured against the estimated market value of the Properties (and water rights). 

The proceeds of the Loan will refinance the group’s small bank loan and a short-term private loan which they took out 2 months ago to fund expansion and upgrade of equipment for the sponsor’s citrus orchard.  The proceeds of the new Peer Estate Loan will also fund Loan costs and prepaid interest for the term of the Loan.

The Loan will have a maximum term of 12 months.

Key Deal Points

- First Registered Mortgage over the Properties

- LVR of 60% measured against the estimated market value of the Properties (& water rights)

- Variable Interest Rate calculated as (Peer Estate base interest rate* plus 6.05% per annum) to investors, net of a 1.20% per annum Peer Estate management fee, paid monthly in arrears to investors

- Interest for the full 12-month term of the Loan is to be prepaid by the Borrower

 

* Peer Estate base interest rate is a rate determined by Peer Estate by reference to the 90-day bank bill rate on the first business day of each month (expressed as a percentage rate per annum and rounded up to one decimal place)

PROPERTY

This Loan will be secured by first registered mortgages over the 5 Security Properties, all located in and nearby Griffith NSW 2680. Griffith is a major regional city located in the north-western part of the Riverina region of New South Wales, Griffith is located 550 km west of Sydney, 360 km northwest of Canberra and 450 km north of Melbourne.

 

Property 1

158 Oakes Road, Griffith NSW 2680

The Property is a rural lifestyle block of 9,128 sqm with an existing fire damaged brick residence. Due to the substantial fire damage to the improvements the valuer has attributed only land value to this property.

An independent valuation of the Property was completed on 31 October 2022 with the valuer estimating the market value of the Property to be $550,000 exclusive of GST.

 

Property 2

Lot 950 Oakes Road, Griffith NSW 2680

The Property represents a vacant parcel (16,870 m2) of industrial zoned land.  The Property is  regular in shape and is mostly level and cleared of improvements

An independent valuation of the Property was completed on 31 October 2022 with the valuer estimating the market value of the Property to be $950,000 exclusive of GST.

 

Property 3

2 Kooyoo Street, Griffith NSW 2680

The Property comprises a 935.8 m2 corner block improved by a freestanding, mid 1900’s built residential dwelling.

The currently tenanted dwelling includes a kitchen, living room, two (2) bedrooms, plus open plan third area utilised as a bedroom, one (1) bathroom, rear living room and laundry.

An independent valuation of the Property was completed on 31 October 2022 with the valuer estimating the market value of the Property to be $325,000 exclusive of GST.

 

Property 4

108 Benerembah Street, Griffith NSW 2680

The Property comprises a 478 m2 block, improved by a 1960/70’s commercial and residential building.

The building comprises a small commercial office area which is currently occupied by the female sponsor for her building design business. There is a two-bedroom residential unit to the rear which is currently tenanted on a month-to-month arrangement.

An independent valuation of the Property was completed on 31 October 2022 with the valuer estimating the market value of the Property to be $380,000 exclusive of GST.

 

Property 5

7-9 Siviour Lane, Tharbogang NSW 2680

The Property comprises a 12.67 hectare citrus farm and a 4 bedroom residence (being the sponsors owner occupied home).

The valuer notes that orange trees make up the majority of the land, comprising 15–20-year-old trees of Valencia and Navel varieties. The orchard is set up with drip irrigation and is well maintained.

The main residential dwelling was built circa 2019 and comprises four (4) bedrooms, two (2) bathrooms and a double lock up garage. A secondary dwelling is located at the rear however presents in a dilapidated condition and valuer was advised that it is to be demolished in the short term. Additional improvements include a modern pump shed, modern small machinery shed, and a dated larger machinery shed.

An independent valuation of the Property was completed on 31 October 2022 with the valuer estimating the market value of the Property itself to be $900,000 and the market value of its water entitlement to be $504,000 (ie. total value $1,404,000 exclusive of GST).

 

SPONSOR AND BACKGROUND

The borrower is a Special Purpose Vehicle (SPV) which was established only to hold the debt secured by the Properties.

The sponsors are a husband-and-wife team who operate the citrus (primarily oranges) orchard as a partnership. The male sponsor is additionally a welder and boilermaker supervisor, employed by an engineering business. The female sponsor is additionally a self-employed building designer.

Unlimited guarantees and indemnities are being provided by each of the sponsors personally.

Capital Structure Stack

  • 40.0%
    Equity $1,443,600.00
  • 60.0%
    Senior Debt $2,165,400.00

RISKS

Market Valuation Risk

The risk that the Properties decline in value due to changes in market conditions or

property specific factors.

Mitigant

There are multiple properties which provide property risk diversification.

The LVR of 60% provides acceptable buffer against valuation uncertainty.

 

Interest Servicing Risk

The risk that the borrower is unable to meet interest commitments on the Loan

Mitigants

Interest on this Peer Estate loan is to be prepaid for the full 12-month term of the loan.

 

Exit Risk

The risk that the borrower is unable to repay the Loan at maturity

Mitigant

Repayment of the Peer Estate loan by the end of the 12-month term is expected to come from:

a) a proposed sale of two of the five security properties during the term of the Loan (expected to reduce the balance of the Loan to c.$1mil.

b) a refinance of the residual c.$1mil balance of the Loan (post the sale of the two properties) to another lender.

 

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Peer Estate, an authorised representative under the Qualitas Securities P/L A.S.F.L. 342242