- 01Elm Grove fund targets $4.1m in fees and returns.
- 02Capital-light model expands to Chinnerys and Cowra, pending shareholder approval.
Aland Equity Group (ASX: AEG) has launched its Aland Elm Grove Estate Fund as it prepares to establish a new stream of property management revenue under a capital-light investment strategy.
The fund covers the marketing and sale of 56 residential lots at Elm Grove Heights in Bungendore, New South Wales, under arrangements expected to deliver approximately $4.1 million in combined fees and investment returns.
The proposed model would allow Aland to earn income from property developments without requiring its managed funds to purchase the underlying land upfront.
Aland expects the management fees to provide its first property funds management revenue, rather than income already received.
Elm Grove Fees In Focus
Under the management rights agreement established in August, Aland expects $3.37m in investment management fees, payable monthly through to 30 June 2027.
As the fund’s sole owner, it anticipates a further $725,000 in investment returns, with distributions slated to begin in March 2027.
The fund launched on 15 October, with the transaction conditional on shareholders endorsing the management rights acquisition.
Approval is linked to two further resolutions covering the Chinnerys Property Funding Deed and the Cowra Property Funding Deed, meaning all three must pass for the transactions to proceed.
Property Model Broadens Reach
Amended arrangements signed during the September quarter extend the capital-light structure to the Chinnerys and Cowra developments while retaining the previously agreed 30% gross profit margin at fund level.
At the approximately 3,200-lot Chinnerys Precinct, previously announced assumptions imply fund income of about $160,000 per lot after costs—roughly $32m annually at an assumed sales rate of 200 lots.
At Cowra, the proposed fund relates to a 107-villa seniors independent living community, where civil construction began on 20 October.
The start of site works marked a shift from planning and design to construction, although the associated funding deed remains subject to the November vote.
Broader Fund Portfolio
Aland ended September with $1.96m in cash after a quarterly net operating outflow of $1.07m, equivalent to an estimated 1.83 quarters of funding at that spending rate.
The group reported $1.68m in drawn financing facilities, including a $650,000 convertible loan repayable by conversion or cash on 31 October, with conversion approval sought for the November meeting.
Elsewhere, the Aland High Conviction Australian Equities Fund has returned 9.86% in the calendar year to date, despite recording a negative 1.65% return in the September quarter against a negative 0.19% benchmark.
Equity Story subscription revenue rose to $51,000 from $47,000 in the June quarter, while total quarterly customer cash receipts increased to $68,000 from $32,000.
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