Investment management

URF Investment Management Pty Limited (a subsidiary of Dixon Advisory Group Pty Limited) is the Investment Manager of the Fund (Investment Manager).

The Investment Manager provides investment management services to the Fund, including assessing market conditions and investment opportunities, selecting and recommending properties for investment, monitoring the Fund’s property portfolio, and determining and recommending the sale of properties in the Fund’s portfolio.

Since establishment, the Investment Manager has inspected and modelled nearly 4,000 properties representing some 10,000 housing units in the target area on behalf of the Fund and currently monitors over 2,000 housing units.

For these services, the Investment Manager currently charges no fee on the first $100 million of gross assets of the Fund and 1.24% per annum (exclusive of GST) of gross assets of the Fund thereafter.

Responsible entity and administrative services

Walsh & Company Investments Limited (also a subsidiary of Dixon Advisory Group Pty Limited) is the Responsible Entity of the Fund (Responsible Entity).

The Responsible Entity’s duties include establishing the Fund’s compliance plan and procedures and monitoring against regulatory and legislative requirements, the issuance of disclosure documents, the appointment and monitoring of external service providers to the Fund and overall administration of the Fund.

For these services, the Responsible Entity currently charges a Responsible Entity fee of 0.08% per annum (exclusive of GST) of the gross assets of the Fund and an Administration Fee of 0.25% per annum (exclusive of GST) of the gross assets of the Fund.

Australian Fund Accounting Services Pty Limited (also a subsidiary of Dixon Advisory Group Pty Limited) provides administration and accounting services to the Fund. Time spent by staff is charged to the Fund at agreed rates under a Services Agreement.

Architecture, design, and construction

Dixon Projects, LLC (a subsidiary of Dixon USA, Inc which is itself a subsidiary of Dixon Advisory Group Pty Limited) provides Architecture, Design, and Construction services to the Fund, including procurement and inventory management, permitting and approval process management and construction project management. Dixon Projects provides on-site project administration and management, overseeing and coordinating all aspects of the construction process, working closely with contractors to control quality and costs for the Fund.

Dixon Projects is a leading premium townhouse renovator in the New York metropolitan area, and its services are integral to value generation for the Fund. Dixon Projects is also committed to the betterment of the neighbourhoods in which it operates. Reflecting this, Dixon Projects was awarded the Preservation Initiative Award by the Jersey City Landmark Preservation Conservancy in 2014 and the Rising Star Award at the New York Construction  Awards in 2015.

For these services, Dixon Projects currently charges market based hourly rates for its architecture and design services and a development fee of 5% of the cost of renovations, which include labour and materials, general conditions, and insurance. These costs are capitalised to the relevant investment properties.

All expenses relating to Dixon Projects, including salaries for all architecture, design, and construction professionals as well as all overheads, are borne by Dixon Projects and are not charged to the Fund.

Property management and leasing

Dixon Advisory USA provides property management services to the Fund, including property management, inspections and security, and legal and government relations. Dixon Advisory USA currently manages over 900 housing units for the Fund. Dixon Advisory USA is entitled to be reimbursed for costs incurred in the provision of these services.

For these services, Dixon Advisory USA is entitled to charge an Administrative Services Fee. In 2015, Dixon Advisory USA charged an Administrative Services Fee of 8.86% of the costs incurred.

Dixon Advisory USA provides tenant leasing services to the Fund, including coordinating marketing campaigns, stagings, showings, administering inquiries, conducting background checks including criminal, eviction, and financial history, evaluating tenant applications, and negotiating and executing leases. Dixon Advisory USA’s leasing capabilities have enabled it to achieve record rents in several neighbourhoods for the Fund.

For these services, Dixon Advisory USA currently charges a leasing fee of 1 month’s rent.

Transaction services

Dixon Advisory USA provides property acquisition and disposal execution services to the Fund, including property negotiations, conducting due diligence, coordinating title searches, insurance, and third-party reports and inspections, organising all documentation and closing, and coordinating marketing campaigns.

For these services, Dixon Advisory USA currently charges 1.99% of the value of the property for acquisitions and 2.49% of the value of the property for disposals.

Dixon Advisory USA provides debt arranging services to the Fund, including contacting and liaising with capital providers, negotiating borrowing terms, and executing documentation. Dixon Advisory USA has been successful in securing a dozen tranches of debt across both the bank market and public capital markets at very attractive terms for the Fund, providing significant diversification to the Fund’s capital sources.

For these services, Dixon Advisory USA currently charges a debt arranging fee of 2% of the amount of debt financing raised.

Reimbursement of expenses

The Responsible Entity and Dixon Advisory USA Inc (a related entity of the Responsible Entity) are entitled, pursuant to the management agreements, to recover certain direct expenses incurred in the management of the Fund’s activities. The expenses recovered from the Fund are primarily in respect of the Fund related payroll expenses, office lease and depreciation recoveries. Certain payroll and overhead expenses that are not recovered from the Fund are borne by Dixon Advisory USA with the intention that such ongoing costs are met out of the Management fees paid by the Fund or US REIT.

Under the Fund’s Constitution a number of the above fees and charges may be changed within certain parameters. Where a fee or change specified in the Constitution was proposed to be changed the Responsible Entity would announce the change before it was implemented.