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How To Get Onto The Property Ladder (Without Buying)

Kiwis love property. Commercial property can offer good yields and it’s a tangible asset that people can see and touch.

29 October 2021

But, for many New Zealanders looking to invest in commercial property, it’s just too expensive to own a building outright. This is where syndication with Syndex comes in.

Syndication offers investors greater access to commercial property, with experienced managers, both private and corporations, offering proportional ownership opportunities.

How does syndication work?

Syndication is where multiple investors own one or more units in land or a building managed by the syndicator. Most syndicates have a minimum investment requirement.

The number of investors needed for the scheme depends on the level of equity needed. Most syndications don’t have a termination date, and will continue until most investors vote in favour of winding them up.

What are the challenges?

Once invested, the key challenges to the investor are liquidity (how hard it is to sell your investment), transparency of performance, and how you can compare your investment against others.

How does Syndex overcome the challenges?

Syndex overcomes those challenges with its trading platform, where you can buy and sell both newly issued units and those on the secondary market.

Syndex makes sure the issuer supplies the investor with financial and operating reporting, and publishes the trading history of units or shares, so there’s full transparency of the units’ investment performance.

It’s an easy way to diversify

You can also diversify into agriculture, viticulture, and horticulture with commercial property-type structures. In those cases, the asset is generally leased to an operator.

You receive a fixed yield from your investment and, if you purchase via Syndex, you will get access to information, transparency, and own a tradeable asset. Its value may also increase, due to strong operator performance or a boost in commodity price.

These investments have proved popular, recognising New Zealand’s position as a key player in the growing demand for food, especially to the growing middle class.

Back and forth with bids and questions

If you use the Secondary Market to buy a unit in a syndicate via Syndex, you bid for an opportunity against others. The market also allows you to go back and forth with questions and bids during the process.

Market and economic forces will ultimately decide on the value of the asset. Sometimes these work in favour of the buyer; sometimes the seller.

Over time, Syndex has seen buyers pay above issue-value for horticulture assets, very close to offer price for commercial property assets, and discounts to offer and issue price on dairy units.

Photo: Hop vines being harvested.

Feel more comfortable in property

So, there are advantages to both sides, issuers and investors, with the market forces being the ultimate decider on the day. But, most importantly, it allows for more comfort in an asset class that New Zealanders love – property.

Whether it’s commercial units, horticulture, dairy, beef, or sheep, investing via Syndex allows greater control and peace of mind.

To keep updated on current primary and secondary offers as soon as they reach the market, register at www.syndex.exchange.

What is Syndex?

- A peer-to-peer exchange. Investors can buy and sell their investments in real time, and Syndex makes the settlement process easy.

- An investor portal. Syndex has an online suite of portfolio-management tools and services, including valuations, messaging, communications, and access to syndication paperwork.

- A total management solution for syndicates. The Syndex syndicate-management module can be used for syndicates and company structures. These include ownership registry, investor management, and communication. Syndex covers all the paperwork involved and legislative compliance.

- Check out some of our latest investment opportunities:

- Arran Farm

- Tapawera Hops

- Sign up to hear about the latest market offers on Syndex.

This article was brought to you by Syndex. JUNO does not contain financial advice as defined by the Financial Advisers Act 2008. Consult a suitably qualified financial adviser before making investment decisions. This story reflects the views of the contributor only. Content comes from sources that JUNO considers accurate, but we do not guarantee that the content is accurate.

This article provides general information only. The information is not advice and does not have regard to the financial situation or needs of any reader. As individual circumstances differ, you should seek appropriate professional advice.

Informed Investor's content comes from sources that Informed Investor magazine considers accurate, but we do not guarantee its accuracy. Charts in Informed Investor are visually indicative, not exact. The content of Informed Investor is intended as general information only, and you use it at your own risk.


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