DomaCom makes commercial New York move

13-Feb-2017

By Sarah Kendell

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Fractional property investing firm DomaCom is continuing its push into new markets and asset classes with the announcement of the first US commercial property development for retail investors on its platform.

Speaking to financialobserver, DomaCom chief executive Arthur Naoumidis said the group had secured an exclusive 12-month distribution deal for investors to participate in commercial crowd funding sites in New York through US crowd-funding group Prodigy Network.

“Once we get our PDS [product disclosure statement] through, we will be able to offer Australian investors access to participate in the same developments they are offering to their US clients,” he said.

“Prodigy has done four or five crowd funding projects so far – they only do large-scale Manhattan buildings – and the first two have delivered 23 per cent returns.”

Naoumidis said while investing in a foreign real estate market carried new risks, the buoyancy of the New York property market meant investors could avoid some of the broader US pitfalls.

“Everyone’s got to weigh the risks of what is the chance of another property crash in the US in the next two to four years – this is an area that Prodigy is really familiar with, it’s finite in terms of space and New York is really a city state apart from the rest of the country, like Paris or London,” he said.

He added that DomaCom was rapidly expanding the types of asset available through its platform since attaining approval from ASIC to deal in securities, with mortgages and corporate bonds next in the group’s sights following the launch of the US deal.

“We want to provide Australians with access to investment instruments that they can’t get normally – it fits in with our strategy of asset allocation,” Naoumidis said.

“You should have Australian property in your portfolio, but you should also have international and you shouldn’t have everything in equities – the mantra about risk management is diversification because there is no way to guarantee you can pick all the winners.”

He added that the group was also keen to work with the government on issues of housing affordability, and had developed a number of ideas including using self-managed superannuation funds as a vehicle for parents and their millennial children to co-fund home purchases.

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