Jo Perrott's Allure contemplates domestic prestige vacation property fund
Property investment scion Jo Perrott is set to launch a second $30 million unit trust that will focus on buying prestige residential properties in Australia.
The move comes just two months after Perrott announced the creation of the Allure Properties Diamond Fund, which aims to buy at least six luxury properties in London, the south of France, Colorado, Queenstown and Phuket while the dollar is high and real estate prices are low. The fund spreads its risk across different currencies and economic zones.
“We are responding to the market demands and the decision to launch a domestic fund has been client-led. It will join our international fund,” says Perrott.
Like the international fund, the domestic fund will total $30 million and be a closed fund that is operational for five or six years. Properties will be in Sydney, Melbourne, Perth, Adelaide and Brisbane – possibly Noosa and the Barossa – and worth between $3 million and $6 million each.
The new fund will be launched early next year.
“We have had so much interest, particularly from Melbourne, WA and Sydney as well as from management companies, in this approach to shared investment in luxury real estate. Many clients talked about wanting domestic property with a shorter time span. We expect that by March next year we could be ready to close the international fund,” says Perrot.
While no cash has yet changed hands, Perrott believes there is already enough interest to sell each of the $250,000-a-pop units in the fund and the domestic fund will be similarly priced.
“This is new to Australians, and people need to do their research before committing $250,000. We spend a lot of time with interested parties and our Information Memorandum is a very lengthy document. Already we have about 20 potential buyers in the mix at the moment,” she says.
The Allure Properties Diamond Fund will be a closed fund operating for eight years. During this time each unit holder will be allocated two weeks of vacation time in any of the holdings, which are expected to rent out for up to $20,000 a week. This time allotment can be rolled over into subsequent years, sold or given away. After eight years the fund will be wound up and the proceeds returned to investors.
Perrot hopes to create a new prestige property fund every 18 months.
In the UK this type of unit trust has been a popular alternative to standard residential investment for high-net-worth individuals. One company, Rocksure, has created six funds since 2006 and successfully weathered the GFC and the troubled UK economy.
“The dollar is high and property prices are low. The residences that we have targeted are about 50% discounted on their prices several years ago. We have all the right indicators in place for this to work well,” Perrott says.
