I am thinking of putting 50,000- 80,000 on the Cromwell City hearts Trust . It will be my first time to invest in Property Trust and the offers seems attractive. Can I ask for your expert opinion? Much Appreciated. Thank you.
Are you considering this as part of a portfolio of investments or as a major % of your investment?
What is your exit strategy ie are the units liquid & easily traded?
What is being offered ie one or several assets? Single or multiple classes – commercial, retail, industrial?
I had a look at this prospectus, Cromwell are one of the better managers in this area, in my opinion. The return is good, tax effective and they are not paying out of borrowed funds. However, you have to take into account that you are getting only $0.92 of property for each $1.00 you put in. When the trust is wound up there will be selling costs incurred as well as a bonus to the manager. In a very flat market you would have to doubt there will be much in the way of capital appreciation in these units.
My read is that it could be used very effectively by someone with non deductible debt and a strong income, because of the relatively high tax advantaged distributions that are expected, but it probably won't deliver much in the way of capital gains. But, then again, who knows?
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