How Does It Work?
The SPI Plus structure
The diagram below shows how SPI Plus works:
During the term of your investment in SPI Plus, you are entitled to all of the benefits of owning the asset - such as any income and/or capital gain (after the deduction of fees, costs and expenses).
Each year, we will write to you with an updated, indicative Interest Rate which will be applied to your quarterly Interest Payments from 20 June. Your SPI Plus investment will continue while you pay your Interest Payments. As part of the annual renewal process on 20 June, you can also elect to pay an additional Instalment at the same time as your quarterly Interest Payment.
There is no obligation for your super fund to continue paying Instalments after the First Instalment. This means you can tailor your participation in SPI Plus to suit your own financial circumstances and your views about the property market.
Alternatively, you can decide to end your investment in SPI Plus by selecting one of the options to end SPI Plus.
If you continue with SPI Plus:
- Pay interest only
On 20 June each year (the Renewal Date) you can nominate whether you will pay interest only for the next 12 months period and then simply make your quarterly Interest Payment (and any Costs, the deferred portion of your Establishment Fee, unpaid Outgoings or Taxes).
- Pay interest plus an additional Instalment
You may also decide to pay an additional Instalment of the Purchase Price. Instalments must be a minimum of $10,000 or a multiple of $10,000. We will adjust your Interest Payment to reflect the reduction in the Outstanding Loan Balance. You may defer paying any more of the Purchase Price for up to 10 years. When you pay Instalments it will affect your potential return from investing through SPI Plus.
If your interest rate for the previous year was fixed for twelve months, a new interest rate will be set. You might elect to fix your rate for longer than twelve months (if the option is available). If you have already fixed an interest rate that has not expired, that rate will continue to apply to your SPI Plus loan.
If you elect to pay an additional Instalment, and the period for which you have fixed your interest rate has not expired, you may incur Break Costs associated with unwinding the fixed interest rate for the portion of the loan that you repay with your additional Instalment.
If you decide to end your participation in SPI Plus you have three options:
- Physical Settlement: You (as the trustee of your super fund) can pay the Final Instalment and the SPI Plus Trustee will transfer the title of your property to your super fund.
- Cash Settlement: You can arrange for the sale of the property from the super fund to an unrelated purchaser (for a price at least equal to the Final Instalment).
- Terminate SPI Plus: You can simply notify Babcock & Brown of your decision to terminate SPI Plus and we will arrange for a real estate agent to sell the property. (This option is only available each year as part of the annual renewal process).