Q: Is the Centuria Spring Street Fund a safe investment?
A: The Centuria Spring Street Fund is “safe” in that:
- It is a single purpose fund that owns a commercial building in the heart of the Sydney CBD;
- It has a reputable and experienced manager; and
- It has credible forecasts re return, occupancy plans, re-development prospects.
Like any investment, it carries risk. In this case, risks include:
- It is an unlisted fund. There is no ready market for units in the fund – this is an illiquid investment;
- It relies on an “exit plan” to liquidate the building and return the capital back to the unitholders. There may be no ready buyer for the building when the Fund proposes to sell it – unitholders may end up holding an investment that exceeds their projected holding periods;
- The manager may not be able to improve the occupancy of the building or generate higher rents. The forecast returns may not be delivered.
I would encourage you to read the Product Disclosure Statement carefully – the major risks are described in this document.
Legally, I can’t tell you that it is a “safe” investment. However, I can indicate that we wouldn’t have carried a report in the Switzer Super Report [1] unless we felt that it was an investment that, in the right circumstances, some of our subscribers may wish to consider.
Important: This content has been prepared without taking account of the objectives, financial situation or needs of any particular individual. It does not constitute formal advice. Consider the appropriateness of the information in regards to your circumstances.