HYECORP Property Fund delivers 50 per cent return to investors in 18 months Wednesday, 30 April 2008 SYDNEY: Wednesday, April 30, 2008: Diversified Property Group HYECORP today announced a return on investment of 49 per cent over an  18 month construction period to investors in the HYECORP Property Fund No.1.  A return that was 63  per cent above forecast.   

The Fund was for the development of Ani, 20 two-bedroom apartments at 15 Kooringa Ave,  Chatswood, on Sydney’s prestigious lower north shore, an area that has seen substantial population growth and property price increases in recent years.

Group Director, Michael Abolakian, said the market had responded enthusiastically to the development  and that the shortage of housing across Sydney meant developments such as this would continue to be in demand.  “70 per cent of the properties were pre-sold and the apartments we chose to retain as  investment are delivering a rental return 93 per cent above forecast,” he said.  “The overall return was  also well above the standard 12 to 15 per cent expected from most property developments.”

“This development was one of the very few low-rise residential developments on the lower north shore. Given the well-publicised housing crisis, we believe this is a good example of how investors and developers can work together to solve what is fast becoming one of Australia’s biggest social problems.”  

“At around $900 per week, the cost of this housing is above what many would consider to be the usual crisis point.  However the cost of accommodation is increasing across the board.  Projects such as this that enhance supply at this level should certainly help ease demand across the market. Importantly, these apartments are of a very high quality in a highly sought after location – but are still very affordable.”  

Founded in 1995, HYECORP Property Group opened its first fund to investors in April 2006 and now has a development pipeline in excess of $100 million. “We have been active in the development and construction of luxury medium-density residential apartments as well as high-yielding commercial and retail properties for more than ten years,” Mr Abolakian said. “We now have six Property Funds- three active development funds, one investment fund and two development funds.  We plan to make the development funds available to investors in the near future.”   

Mr Abolakian said investors were predominately retail (with 35 per cent of the shareholder base self managed superannuation funds) but that the HYECORP model was also applicable to institutional investors.  “We have been in discussions with a number of institutional investors in recent months who are looking for exposure to the boutique residential development market.  A group of our size would not usually attract the attention of fund managers or larger investors, but they have been attracted to our demonstrable track record.  We are confident in securing arrangements with some of these investors in the next six to twelve months.”

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