Funds Management

During the economic downturn, Oracle has in its own right successfully established itself as licenced fund manager and entered into its first land development partnership and co-investment.

Oracle Residential Development Project

ORACLE LAND PARTNERSHIP NO.1 - FALLINGWATER ESTATE, MELBOURNE

KEY FEATURES:Fallingwater Estate Melbourne VIC

  • 365 Lots sold in 2 years
  • $49.5m gross realisation
  • Project completed 1 year ahead of forecast
  • 100% of investors equity of $8m returned within 18 months
  • IRR to investors exceeding target
  • Project completed ahead of forecasts

Oracle entered into a strategic alliance with Australia’s pre-eminent affordable house and land developer, Devine Limited (who is majority owned by Leighton Holdings).

The alliance established a land fund which was designed to shelter investors from downside risk and provide a favorable risk adjusted return. The first project to be developed under the alliance commenced in June 2008 and outperformed expectations delivering a return of over 45%2 p.a. IRR on equity invested.

A feature of this development project was the innovative finance structure that Oracle was able to put in place. The structure provided a cash flow waterfall that allowed Oracle to receive 100% of its equity invested in the project before sharing the project profits with the joint venture developer. This structure accelerated the return of equity to Oracle and included a 12% coupon on each dollar invested.

The success of the project was also correlated with the favorable debt facility Oracle was able to secure (in July 2008, when development funding by banks was limited). The project repaid its peak debt and repaid 100% of equity, some 12 months ahead of a 3 year programme.

 

Oracle Residential Development Project

BINARY APARTMENTS - KELVIN GROVE URBAN VILLAGE, BRISBANE

KEY FEATURES:   Binary_Apartments_resized

  • Excellent location, 2km from Brisbane CBD, 100m from QLD University of Technology, public transport. KGUV is a major employment hub.
  • 38 Apartments – 28 one bed and 10 two bed apartments, café and mangers office.
  • Investor syndicate established and oversubscribed.
  • Significant initial de risking.
  • Land Acquisition subject to DA.
  • DA Approved.
  • Affordably priced.
  • Forecast strong returns to investors.
  • Marketing underway - Significant pre-sales achieved.
  • www.binaryapartments.com.au

Oracle has launched its latest medium density residential development project in Kelvin Grove Urban Village, Brisbane QLD. Development of the 38 apartment project is well underway, with marketing and presales commencing in February 2011. The project is focused on providing affordable housing stock in a strategic and sought after location.

VIVID APARTMENTS - KANGAROO POINT, BRISBANE

KEY FEATURES:                                                                                                                                   Vivid_Apartments

  • 19 apartments, all priced below $600,000.
  • 15 two bedroom, two bathroom apartments, each circa 100sqm including large balcony's with expansive views.
  • 4 one bedroom, one bathroom apartments with one carpark.
  • DA approved.
  • Forecast strong returns to investors.
  • Located in Kangaroo Point, 1.5km to Brisbane CBD.
  • One of Brisbanes strongest rental markets and history of capital growth above Brisbane averages.
  • Completion due in 2012.
  • www.vividkp.com.au

 

Oracle Advisory Funds Management

670 Hunter Street, Newcastle

As an expression of confidence in Oracle’s diverse 670 Hunter StreetNewcastlecapabilities, National Australia Bank Limited (NAB) appointed Oracle as its exclusive workout manger to administer and stabilise its investment and significant debt exposure to 670 Hunter Street Fund. Oracle has achieved significant success in improving value to stakeholders and investors.

Appointment: October 2009 to Current

Background: NAB made a debt and equity investment to fund 100% the development of a 10,500 sqm commercial office building anchored by the NSW Dept of Health at 670 Hunter Street, Newcastle. The beneficial ownership of the project was held in a complex structure, which upon failure of the original manager, who were placed into administration in 2009, become untenable for the bank.

Following an extensive Request for Proposals campaign to find a suitable workout manger for the Fund and asset, Oracle was selected by NAB from a number of competing applicants as the preferred workout manager.

Oracle’s Roles:

Exclusive Workout Manager and key advisor to NAB, responsible for:

  • Formulation of workout strategy to ensure seamless transfer of ownership to new structure without triggering stamp duty.
  • Comprehensive due diligence programme, including instruction and review of legal advice.
  • Management of external valuation programme to ensure value preservation and acceptable funding multiples.
  • Restructuring of debt and equity funding to maximise return on equity.
  • Negotiation of debt facilities and hedging instruments

Replacement Responsible Entity of the 670 Hunter Street, Registered Managed Investment Scheme.

Appointment as Investment Manager of the Fund and ongoing responsibility for:

  • Fund investment and exit strategy
  • Strategy implementation
  • Asset management
  • Asset leasing
  • Sale and disposal of Fund assets
  • Finance and administration of Fund affairs
  • Financial and management reporting