Year in Review 2021
CFMG Capital
Real people.
Dear Investor, With FY2021 now behind us and CFMG Capital now progressing swiftly through FY2022, we are now able to confidently reflect again on our foundations and what has kept us moving forward with confidence. The key to our progress continues to be a management team with a history and strong philosophy of taking a conservative, yet realistic approach to investment.
the market, does not rely on short term predictions.
“While hindsight is a wonderful thing, clearly time can be a better ally than timing.”
A key to CFMG Capital’s success has been working to a clearly defined strategy which enables our long term vision to be achieved and in turn for us to continue to deliver value to our investors through disciplined acquisition and a conservative but realistic approach to investment.
It is well reported that during the first quarter of 2020 (during a period of high uncertainty and without any understanding of how the Government and markets would respond to a looming pandemic) that many experts cautioned of a 30 percent drop in the residential property market. As it turns out, this forecast could not have been less accurate - with prices reaching record highs in all capital cities and essentially none of the endless doomsday possibilities that were floated coming to fruition. In making these observations we are in no way seeking to downplay the significant impacts that the Covid-19 pandemic has had on many Australians and in many different ways. The impact has been indiscriminate and far reaching, and in some cases the simple concept of ‘luck’ has played a significant role. We acknowledge the significant health impacts which many Australian families have faced during these times and that there have been catastrophic financial challenges to some households especially those in the travel, tourism, hospitality and retail sectors. One key factor that has become clearer for us is that decisions should not be made based on short term predictions. Time in any market, as opposed to timing
2
This strategy proves that time and patience in a market are better than a quick decision in reaction to an event or change of circumstances (particularly one that is unprecedented and uncertain) and that patience and working to a documented strategy or plan results in sound investment outcomes.
Here at CFMG Capital we are proud of our track record and history of delivering attractive returns to our investors and our experience and history which since inception has enabled us to return 100% of the capital invested to all of our loyal investors. A focus for CFMG Capital during the past twelve months has been on developing new products and services, adapting to the fast changing times and to looking at the bigger picture without losing sight from our long term vision and strategy. Based on feedback from investors seeking an income based investment opportunity we are pleased to have launched the CFMG First Mortgage and Income Fund designed to offer an opportunity for attractive returns available from investments in loans for property investment while providing quarterly distributions. A unique aspect with this product is that we have also sought to reduce the risk by not including any property development loans within the Fund and to having the loans fully secured with a first registered mortgage. In accordance with our strategic plan CFMG Capital have undertaken the following key activities:
YEAR IN REVIEW 2021
Completed the sale of 491 residential lots with a gross realisation of over $142 million
Launched
In the following pages of this report, you will find some very useful and general information about our business, an overview of some new products, our projects and some market commentary. In addition, we supply a sneak preview to some of the upcoming opportunities set for FY 2022.
the CFMG First Mortgage and Income Fund to offer investors an income based investment opportunity backed by first mortgage security
As always, if you require anything from our team – please do not hesitate to get in touch.
Completed
Thank you for your ongoing support and we look forward to continuing to deliver on our commitments to you our loyal investors and to building a long term and repeat relationship.
the acquisition of our new project sites at The Outlook Yandina and Millwood Rise in Nambour, Queensland
Delivered over 240 meals within the immediate community via our involvement in the local Meals on Wheels program
Regards Scott Watson Managing Director, CFMG Capital
Launched Sunday Living Homes offering simple, no fuss and affordable home and land bundles on selected allotments within our residential communities
Expanded the Birchwood project to circa 330 residential lots via the strategic acquisition of two adjoining sites, totalling 15.8 hectares, to bring the total gross realisation beyond $80 million
Provided in excess of $50,000 in charitable donations and/ or sponsorship to local community sporting clubs and groups, including our 4th year supporting and fundraising for the Vinnies CEO Sleepout
3
CFMG Capital
Real people.
Real people.
A new look for CFMG Capital This year the team at CFMG Capital launched a fresh new look to the market. The previous branding had been operational for some time, and we thought it was time we evolved the brand to reflect the changes and growth in our business over the years and to stand out in a competitive market. The new brand and positioning included a new CFMG Capital logo and two new sub brands for CFMG Funds Management and CFMG Residential Communities. The idea behind creating the two new sub brands was to clearly and effectively communicate each business offering to our business channels and customers. The sub brands have become an evolution of the existing brand equity, with a central positioning around ‘real people’ serving you. To maintain a strong position in market, a shift was necessary to create a bold presence with strong recall to ensure the CFMG Capital brand stands out against competitors. The updated brand needed to reflect our values and goals, establishing a cohesive experience for our customers. You can rest assured you will continue to be served by ‘real people’ who value you. Thank you for being part of our journey.
4
YEAR IN REVIEW 2021
2017
Original icon
CFMG Capital: Adaptable & flexible
Outline shape
CFMG Funds Management: Strong foundation, growth on investment
2021
Shape evolved & emphasised
CFMG Residential Communities: Surrounded by nature, a strong community
5
CFMG Capital
Real people.
CFMG Funds Management Update
CFMG First Mortgage & Income Fund Based on feedback from investors seeking an income based investment opportunity, the CFMG First Mortgage & Income Fund was launched, and offers attractive returns available from investments in loans for property investment while providing quarterly distributions. Some of the key benefits for investors choosing to invest with CFMG Capital in this fund include:
Attractive returns
Proven record
Reduced risk
The opportunity for attractive returns available from investments in loans for property investment
The experience and track record of CFMG Capital in having returned 100% of the capital invested to investors
Reduced risk by not including any property development loans
Confidence
Distributions
The confidence that each loan will be fully secured via a registered first mortgage
Distributions which are paid quarterly
Investors are provided with the opportunity to choose which particular loans they decide to invest in and have the potential to diversify through investing in multiple loans with investment terms ranging from 6 to 18 months.
6
YEAR IN REVIEW 2021
CFMG First Mortgage & Income Fund 6 months investment term 6.25% p.a.
CLASS D
$800,000 raised
25.7%
CLASS A
CLASS C
$753,440
$750,000
raised
raised
24.2%
24.1%
26%
CLASS E Available soon
CLASS B
0 $804,05 raised
Our first SPDS through the First Mortgage & Income Fund was released on July 29th, offering a 6.25% net per annum return paid quarterly over a 6-month investment period. The offer was fully subscribed in under a week. Off the back of this high demand, an additional three offers were released in August and September and fully subscribed within a matter of days.
The demand for the First Mortgage & Income Fund has been higher than expected with all investments being fully subscribed by our waitlist investors and not making it to public release. To make sure you don’t miss out on future investment opportunities, call our investment team on
The low risk profile of this investment coupled with the shorter investment terms allow investors to plan their shortterm financial responsibilities, an increasingly important characteristic given the current Covid impacted market.
1800 862 058 to be added to the waitlist.
7
CFMG Capital
Real people.
CFMG Land & Opportunity Fund The CFMG Land & Opportunity Fund is an unlisted managed investment scheme that invests in the development of residential land subdivision projects that meet the very specific CFMG Capital investment criteria. This year has seen a steady increase in the number of new investment opportunities released to the market for CFMG Funds Management. A total of five investment opportunities within the CFMG Land & Opportunity Fund were released since the start of 2021 and all opportunities were fully subscribed within weeks of release. In addition to the release of new investment opportunities, 4 projects were completed resulting in all investors of those projects being fully redeemed. CFMG Capital has consistently been in market with a 12% p.a. targeted rate of return, however, having new projects in market with a range of project delivery timeframes, enables us to provide choice to our customers with a variety of interest rates on offer. To find out about the latest investment offers, please contact our investment team on:
1800 862 058 The fund offers investors the following benefits:
Targeted returns of
9-12% (net of all fees)
8
Variable investment terms
Minimum investment of just
$25,000
YEAR IN REVIEW 2021
9
CFMG Capital
Real people.
National Property Market Update Residential property prices across Australia have continued a strong upward swing since the beginning of the Covid 19 outbreak. Residential land prices and sales rates have continued to soar to new record highs, fuelled largely by low interest rates, the now concluded Homebuilder Grant program, government income support, and lockdown savings resulting from lack of discretionary spending. The suspension of open homes and auctions throughout the most recent lockdowns across the country, hasn’t seemed to impact residential property prices showing the insatiable
demand for property as a key investment asset class. All major markets across Australia have posted double digit price growth year on year, with the aggregate across the 5 major capital cities increasing by 14.9%. CFMG Residential Communities, much like the wider property market, have seen a steady increase in residential lot prices as we continue to review and consider pricing every quarter across each of our projects in both Queensland and Victoria. Despite consistent price growth, sales demand has continued to rise with transactional activity reaching record highs.
QLD Market Snapshot Across the board, it is expected that Queensland will continue to experience some of the strongest sales and price growth in the national property market. Interstate migration is considered to be one of the major drivers for this trend, with Queensland experiencing its largest jump in new residents over the past 20+ years during the December 2020 Quarter. Consolidating the information from the Big Four banks, QLD growth rate predictions are as follows: QLD
Brisbane
2021
16% (NAB)
16.6% (CBA)
2022
9.5% (ANZ)
20% (Westpac) *Growth spread over 2022-2023
2023
10
Additionally, another strong indicator of further growth in the foreseeable future is evidence of a robust construction pipeline across the state with detached building approvals increasing by 63.7% from the same time last year. These predictions are also supported by Oliver Hume’s ‘Quarterly Market Insights Report’, which demonstrates a total of 1,790 residential lot sales within Southeast Queensland, which is a 17% increase on what was experienced last year despite a current lack of supply in the market.
YEAR IN REVIEW 2021
VIC Market Snapshot Melbourne’s property market is also predicted to continue its strong growth into the future, with all four major banks now projecting property prices will continue to rise. ANZ predicts prices will rise by 16% this year, while CBA forecasts a further 6% growth next year. Westpac also predicts house prices within Melbourne will rise by 10% during the period between 2021 and 2022.
According to Oliver Hume’s ‘Quarterly Market Insights Report’, the March 2021 quarter saw a total of 4,360 residential lot sales within Metropolitan Melbourne, which is a drastic increase from the 2,250 sales experienced within the same quarter last year. Despite an increase of almost 100% in total volume across the past year, land prices have continued to rise, with a 1.3% increase realised in the March 2021 quarter alone.
Much like Brisbane, another strong indication that Melbourne’s property market will continue to thrive, is recent data showing detached building approvals are up 55% from the same time last year.
11
CFMG Capital
Real people.
Acquisitions Strategy Here at CFMG Capital we look to acquire residential subdivision sites that align with our strict investment criteria and clearly defined strategy. By doing so we are able to provide our loyal client base a continuous supply of attractive investment opportunities via the CFMG Land & Opportunity Fund and meet the housing needs of our growing population. In order to facilitate these investment opportunities, CFMG Capital’s acquisition team are constantly assessing new sites, while diligently selecting those sites that meet our clearly defined investment criteria.
- A forecast 20% development margin (before payment of fund management fees) based on a fully debt funded valuation feasibility model; and - Subject to Board discretion, an independent valuation equal to, or less than the purchase price.
CFMG Capitals investment criteria referenced above is generally defined as follows:
- Achieving further development approvals; - Improving project design, efficiencies and allotment yield; - Change of use or the incorporation of additional uses to achieve the overall highest and best use.
- Proximity to a major capital city; - Population growth and demographics of the locality; - Proximity to existing and proposed competing land estates (particularly master planned estates); - Proximity to key planned infrastructure projects; - Employment opportunities within the locality; - Lifestyle choices including schools, family security, transportation and recreation;
12
In exercising its discretion regarding proceeding with a purchase price higher to an independent valuation, key factors the Board may consider are the potential to add future value through:
In the assessment of potential projects CFMG Capital targets short, medium and long-term opportunities with the view to populate our development pipeline to meet both immediate and long term demand.
YEAR IN REVIEW 2021
Morayfield
CFMG Capital Project Pipeline
150 lots Launch:
Late 2021 QLD
Farriers Creek, Burpengary 100 lots Launch:
Early 2022 QLD
Indooroopilly Commercial lots Launch: Late 2021 QLD
Birchwood, Project Extension 240 lots Launch:
Mid 2022 QLD
Caboolture 60 lots Launch:
Late 2022 QLD
Bellmere 300 lots Launch:
2024 QLD
Sunbury 150 lots Launch:
2027 VIC 13
CFMG Capital
Real people.
CFMG Residential Communities Update Along with a new look, CFMG Residential Communities also launched two new projects on the Sunshine Coast and a new housing brand. CFMG Residential Communities strategically selected the new projects on the Sunshine Coast to capitalise on the increasing population and demand of the surrounding area. Recent property reports suggest the Sunshine Coast needs to add one entire suburb every year for the next 20 years just to keep up with surging population growth, with the area experiencing the beginning of a protracted property upswing as opposed to a short to medium term ‘boom’.
The Outlook at Yandina The Outlook at Yandina is a new residential community that was launched to the market in June 2021. This boutique residential community located in the beautiful Sunshine Coast hinterland is conveniently within 2 minutes from the main street of Yandina. A limited number of 21 residential homesites were released with stunning views down through the leafy hillside below and out to the ocean. With easy access to the Sunshine Coast, Coolum Beach is approximately 20 minutes drive away. We received significant interest in The Outlook, and the project is now sold out.
14
YEAR IN REVIEW 2021
Millwood Rise Millwood Rise is another new residential community that was launched to the market in September 2021. This community is nestled in the hillside of Nambour on the Sunshine Coast. Consisting of 63 residential homesites, this boutique community has beautiful views to the surrounding hillside and beyond. The beaches of the Sunshine Coast are within easy reach giving this community a relaxed, coastal lifestyle. A database pre-release of the development created a high demand, which resulted in deposits taken on half of the available lots within 2 weeks of the pre-release launch.
FUTURE DEVELOPMENT
N
83
1393m2
6925m2
69.3
26
1438m2
25
2593m2
8.2 72.6
27
21.6
50
.3 12.0
26.5
44.4 14
5.0
28.6
8.6
11.0
.6
43.2
39.1
9.8
.7)
20.0
12.1
.0)
(14
ESIDE
16.6
800m2 35.5
952m2 44.6
13.0 87.6
28
.7
24
62.0
58.3
1133m2
68.0
2
14.1
7.8
(20.4 )
70.7
15.4
12.1
(22
48
(14.4)
)
29
55.0
38.1 55.3
15.4
)
(16.70
(19 .7
60.8
58.3
53.2
15.4 39.3
1833m
EXISTING RESIDENTIAL
(16.5
(16
.8 42
)
.1
.0)
16
45
FUTURE DEVELOPMENT
.0
NI
CH
2288m2
73.8
3226m2
47
48
OL SS T
54.0
46
10 1.3
11
3.7
2213m2
56.7
55.6
51
1283m2
1180m2
35.4
23
897m2
86.2
18.5
31.9
24.1
30
52.1
59.0
41.0
58
15.4
30.0
52
53
(12.1)
44
33
48.6
15.0
45.1
15.0
15.0
30.2
2158m2
EXISTING RESIDENTIAL
1386m2
34
41.6
40.3
40.9
15.2
16.5 23.5
43
35
32 2 2 600m2 600m2 609m2 619m 650m 703m2 755m2 808m2 31 2 1126m2 999m 39.7
38.9
(17.5)
36
37
38
39
19.0
22
7.0
40
38.6
19.2
(15.8
)
683m2 600m2 600m2
2
)
41
21.0
15.0
15.0
21
600m 600m2 650m2
) 2.6 (3
42
15.0
15.0
15.0
15.0
15.0
15.2
(14.5)
38.6
54.0
(13.6)
(24.3)
15.8
3.5
10
1301m2
(11.3)
20
(2
54.0
15.6
19
695m2
68.6
(15.6)
18.0
8.3
16.6
16.0
15.5
15.5
59.3
18.5
(14.1)
9
1001m2
18
2 2 2 2 830m2 615m2 614m2 640m2 621m 602m 600m 601m
NTIAL
17
R
EXISTI NG R
16
16.6
31.4
(16.0)
17.6
15
ROOK D
35.1
14
GLENB
6.0 6.0
37.7 37.8
18.4
18.6
39.2
13
16.0
35.5
11.6
15.6
36.9
12
15.6
38.2
8
54.0
15.6
11
5.9
1001m2
EXISTING RESIDENTIAL
9.8 6.0
9.7 15.9
40.2
15.9
36.6
15.9
FORD AV E
2
DR
STRATH
3
39.4
29.7
4
ROOK
40.7
7
54.0
18.5
5
GLENB
600m2 600m2 600m2 618m2 15.9 25.9
1576m2
18.5
16.1
39.1
51.0
24.1
15.9
37.7
37.1
1679m2
15.9
12.3
31.6
6
15.9
32.0
(47.1)
1956m2
17.2
53.0 45.1 43.7
Creating real neighbourhoods 15
CFMG Capital
Real people.
Sunday Living Homes was introduced exclusively to CFMG Residential Communities to expand our products and services which now offers fixed price Home & Land bundles. Through Sunday Living Homes we offer:
• • • • • • • •
Exclusivity to CFMG Residential Communities Fixed price prepackaged Home & Land Bundles Priced from $535,000 Full Turn Key packages - ready to rent 4.7% yield p.a. Purchase directly from the Developer Depreciation benefits A variety of investment locations
For further information about investing in a Sunday Living Home, please contact Ryan Leddicoat on 1800 803 304.
BUILD EASY, LIVE FULLY.
Choose. Build. Live.
16
YEAR IN REVIEW 2021
Sunday Living Homes prides itself on the below values: Simple -
you pick a Home & Land bundle, it gets built
Choice -
a variety of locations to choose from
Home -
it’s not the house you live in, it’s the home you create
Affordable - Home & Land at competitive prices
17
CFMG Capital
Real people.
Community Engagement CFMG Capital prides itself on making a contribution to the community and 2021 has continued this mission with another year of Meals on Wheels deliveries PLUS a record amount raised for the Vinnies CEO sleepout.
Vinnies CEO Sleepout Scott Watson and Andrew Thomson took part in their 4th year supporting the 2021 Vinnies CEO sleepout and raised a record $29,000 at a fundraiser event. All money raised goes to changing the lives of Australians experiencing homelessness.
18
YEAR IN REVIEW 2021
Meals on Wheels Each month 2 members of the CFMG Capital team hit the streets to deliver much needed Meals on Wheels to local residents. A total of 240 meals were delivered by the team this year.
Cancer Council Greatest Morning Tea The annual Cancer Council Greatest Morning Tea was held in May this year to help raise money for cancer research in Australia. There was plenty of healthy competition from all staff members who participated with a total amount of $222 raised on the day.
19
Real people.
P 1800 155 526 E info@cfmgcapital.com.au cfmgcapital.com.au
Level 2, 117 McLachlan St Fortitude Valley QLD 4006 PO Box 663, Fortitude Valley QLD 4006
Printed: September 2021