DomaCom Ltd (ASX: DCL) continues to make steady progress on new product releases. Based on DCL’s Rental Property Accelerator product, the company has partnered with BlueCHP – a community housing provider, on a $250m essential workers affordable housing pilot programme. DCL has also entered a partnership with Crescent Group to move forward with the new Shariah-compliant Islamic home finance product.
New insights on the opportunity in the sector were seen in the Retirement Income Review report released by the Australian Treasurer on 20 November 2020. Highlighting the need for focus on the post-retirement income stream and emphasising the government’s downsizer contributions scheme which retirees can use to access their housing wealth. The company believes that any tangible expansion in retirement income will in parallel increases attention on alternative investment strategies such as DCL’s senior equity release.
Given the steady progress on the essential worker program and the Shariah-compliant finance solution, as well as the opportunity provided by the senior equity release offering, the company reinstates the previous valuation of A$0.30–0.40 per share based on the DCF approach. The company believes that successful product launches and the resultant growth in FuM should drive a re-rating of DCL. Key risks include 1) slow increase in FuM; and 2) cyclical risk.
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About DomaCom Ltd (ASX: DCL)
DomaCom Ltd is the first ASIC registered and ASX listed Fractional Investment Fund in Australia designed to provide an asset allocation solution to investing in property by enabling property to be invested in small amounts from $2,500 upwards. The fractional model breaks down the high cost of property assets to enable more people to invest in this asset class by pooling, or syndicating, together.
DomaCom is both intermediated through Australia’s financial advice industry and marketed direct to the retail sector where it is commonly referred to as crowdfunding. The fractional model also facilitates diversification. Investors are able to choose multiple properties to spread their investment thereby minimising the risk of having all their eggs in one basket. DomaCom offers a range of thematic property investments extending residential, commercial and rural to include affordable housing, energy and infrastructure assets.
DomaCom’s AFSL (Australian Financial Services License) has been extended to include other investment categories such as lending and corporate bonds.