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Peet Point Cook Kingsford Syndicate |
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Cash Rebate |
3.00% |
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Closing Date |
coming soon |
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Minimum Investment |
$5,000 (thereafter increments of $1,000) |
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Investment
Term |
Approximately 6.5 years |
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Research |
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coming soon |
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CHAIRMAN’S
LETTER
Dear Investor
Peet Limited has a long and successful track record
in land syndication and development and I am pleased
to offer you the opportunity to invest in a new
project in Point Cook, Victoria. Those who invested
in Peet & Co Point Cook Land Syndicate Ltd will be
familiar with Point Cook, Peet’s development
expertise in the locality and the excellent returns
they received.
Peet Point Cook Kingsford Syndicate (‘Syndicate’)
proposes the development and sale of approximately
567 residential lots in a locality that has
experienced significant population growth in recent
years.
THE PROJECT
The Property is located at the south-eastern corner
of Sneydes and Hacketts Roads in Point Cook, some 25
kilometres from Melbourne’s Central Business
District. Point Cook enjoys good access to the city
and the eastern suburbs via the Princes Freeway, and
to the northern and western suburbs via the Western
Ring Road.
The Property is already zoned for residential
development and planning of the residential estate
is well underway. The Project will be known as
Kingsford and development is forecast to commence in
March 2010.
Kingsford is immediately south of Peet’s Innisfail
Estate where more than 1,590 of the 1,825 lots have
now been sold. It is anticipated that the remaining
lots will be sold by late 2010. Peet also developed
and marketed the nearby Point Cook Gardens estate
which finished sales in 2007, and the almost
complete Point Cook Junction.
DISCOUNT TO VALUATION
The Responsible Entity has the right to purchase the
Property from the Vendor, a wholly owned subsidiary
of Peet Limited, on deferred payment terms, at a 9%
discount to valuation.
THE MELBOURNE PROPERTY MARKET
The Melbourne property market is experiencing strong
underlying demand for dwellings, which is expected
to continue, with more than 26,000 new households to
be formed annually through to 2014. This demand is
expected to drive house price growth, with the
Consulting Economist forecasting 5% per annum growth
through to 2015.
THE OFFER
The Syndicate will be structured as a registered
managed investment scheme, with Peet Limited as the
Responsible Entity. It is intended that the
Syndicate will operate as a trading trust for income
tax purposes.
The Offer is for 22 million Units at an issue price
of $1.00 per Unit, payable as $0.50 on application
and $0.50 in November 2010. The offer of Units will
raise equity toward the cost of acquiring the
Property and the cost of the Issue.
MANAGEMENT
Peet Development Management Pty Ltd, a wholly owned
subsidiary of Peet, will be the development,
marketing and sales manager of Kingsford.
Peet is one of Australia’s largest residential land
syndicators. It currently manages 25 syndicates,
which own properties around the country, on behalf
of its many investors.
Peet is committed to environmental excellence and
sustainability and is recognised as setting
benchmarks within these fields. The industry
recognition and awards Peet has received in recent
years are testament to the quality of the land
estates and communities it creates.
RETURNS
It is intended that, as profits emerge from the
settlement of lot sales, fully franked distributions
will be paid to Unitholders. Distributions and
capital will be returned progressively as available
funds, taxation legislation and the Corporations Act
permit.
The Responsible Entity is forecasting an average
compound return to investors of 16.0% per annum
before tax. The first capital return is expected in
April 2011 and the first distribution expected to be
paid in January 2013. Please refer to the Profit
Forecast Assumptions and Profit Forecasts in section
6.
RISKS
Whilst Peet has managed many similar projects, there
are risks associated with land development which may
adversely impact on the Syndicate. Please refer to
the risks highlighted in section 8.
The constitution of the Syndicate provides that the
liability of Unitholders is limited to their
investment in the Syndicate, including any unpaid
portion of their Units.
The PDS contains important information about the
Offer and it should be read in its entirety. The
forecast financial information is presented in
section 6 along with the risks and sensitivity
analysis. I recommend that you consult your
financial advisor before making an investment
decision.
The Syndicate provides an excellent opportunity to
invest in the development, marketing and sale of a
residential land estate in Melbourne’s Point Cook
growth area. The Syndicate offers the prospect of
strong profit performance and distributions under
proven management.
I commend this Offer to you and invite you to become
a Unitholder of Peet Point Cook Kingsford Syndicate.
Yours faithfully
Tony Lennon
Chairman
Peet Limited |
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INVESTMENT SUMMARY
|
Offer |
This is an
offer for 22 million $1.00 Units, payable in
instalments, in Peet Point Cook Kingsford
Syndicate. |
|
First
Instalment |
The First
Instalment of $0.50 per Unit is payable on
application. |
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Final
Instalment |
The Final
Instalment of $0.50 per Unit is due on 15
November 2010. |
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Minimum
Investment |
All
applications must be for a minimum of 5,000
Units (first payment of $2,500) and
thereafter in increments of 1,000 Units. |
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Asset |
The
Responsible Entity, on behalf of the
Syndicate, will purchase the Property, known
as 295 and 305 Sneydes Road Point Cook, from
a Peet Limited wholly owned subsidiary at a
9% discount to valuation, on deferred
payment terms. |
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Forecast IRR |
The
Responsible Entity is forecasting an
Investor IRR of 16.0% before tax, including
franking credits and after payment of all
fees and expenses. |
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Investment
Risks |
There are
risks associated with investment in the
Syndicate – refer to section 8 of the
PDS. |
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Taxation
Implications |
General
information about the taxation implications
of investing in the Syndicate is set out in
section 11.1.10 of the PDS. |
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Responsible
Entity |
Peet Limited
is the Responsible Entity. It is a public
company listed on the Australian Securities
Exchange having a market capitalisation of
approximately $500 million. Peet is an
experienced fund manager and is currently
managing 25 syndicates with a gross
development value of more than $3.5 billion
(if sold at today’s prices). Additional
information on the Responsible Entity and
its Directors is detailed in section 9 of
the PDS. |
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Development
Manager |
Peet
Development Management Pty Ltd is a wholly
owned subsidiary of Peet Limited and is the
Development, Marketing and Sales Manager
(Development Manager) for Kingsford. Peet is
Australia’s largest ASX-listed specialist
residential land developer, and is currently
developing 75 projects throughout Australia
with potential for approximately 34,400 lots
with an estimated on-completion value of
$6.9 billion (if sold at today’s prices). |
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Syndicate
Strategy |
The Property
will be developed into residential lots for
sale. |
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Distribution
Policy |
It is intended
that distributions will be paid once the
Syndicate has declared its maiden taxable
profit and that all distributions will be
fully franked, with the exception of the
final distribution which will be franked to
the extent of available franking credits. |
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Capital Return
Policy |
The
Responsible Entity will return capital to
Unitholders regularly once settlements
commence. The proceeds from the settlement
of each lot contain a portion of Unitholders’
original capital enabling regular returns of
capital to be made.
Distributions and capital returns will vary from period to period depending on the lot
settlements achieved, annual profits generated, available franking credits and working capital
requirements. |
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Redemptions |
No redemption
or liquidity facility is offered by the
Responsible Entity. |
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Term of the Syndicate |
The life of the Syndicate is estimated to be
six years. Following the settlement of all
subdivided
lots within the Property, the Responsible
Entity will seek to wind up the
Syndicate
in accordance with the Corporations Act with
any remaining profits and capital
returned
to Unitholders. |
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Minimum Subscription Condition |
The Responsible Entity reserves the right
not to proceed with the Offer if it does not
receive
valid
applications for 10 million Units by the
Closing Date. If the Responsible Entity
exercises this
right or the Debt Facility Condition is not
satisfied, the Responsible Entity will
return the
subscription
monies to subscribers as soon as practicable
after the Closing Date. Interest will
be
payable on the subscription monies refunded
- please refer to section 11.1.4 of the PDS. |
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Debt Facility Condition |
The Offer is conditional on the Responsible
Entity obtaining a debt facility on
substantially
similar
terms to those set out in section 11.1.9,
prior to the Closing Date. Should this
not
eventuate or the Minimum Subscription
Condition is not satisfied or waived by the
Responsible
Entity, the Offer will not proceed. If the
Offer does not proceed then the
Responsible
Entity will return the subscription monies
to subscribers as soon as practicable.
Interest
will be payable on the subscription monies
refunded - please refer to section 11.1.4 of
the PDS. |
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Underwritten |
Subject to satisfaction or waiver of the
Minimum Subscription Condition by the
Responsible
Entity
and the satisfaction of the Debt Facility
Condition, the Offer will be underwritten by
Peet Limited,
the terms of which are summarised in section
10, and the Syndicate will proceed. |
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Liquidity |
It is not intended that Units be listed on a
securities exchange, therefore Units should
be
considered
illiquid. Investors do not have any
withdrawal rights as the Syndicate is not a
liquid
managed investment scheme. Investors may,
subject to the laws of Australia and the
Constitution,
sell or transfer their Units. |
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Cooling Off Period |
There is no cooling off period for this
investment as the Syndicate is not a liquid
managed
investment
scheme. |
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Tax Status |
The Syndicate is a managed investment scheme
that is intended to operate as a trading
trust.
Accordingly, the Syndicate will pay tax at
the corporate rate (currently 30%) on
taxable
profits
derived. The Responsible Entity will not pay
distributions prior to the Syndicate’s first
payment
of tax following its first taxable profit.
All distributions, with the exception of the
final
distribution and returns of capital, will be
fully franked. |
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Borrowing Strategy |
It is intended to partially debt fund the
acquisition of the Property and to fully
debt fund the
development
of Stage 1. Development of future stages
will be funded through a combination
of
working capital and debt. The debt facility
will be repaid progressively during the life
of the
Project
from proceeds received from the sale of the
residential lots. |
|
Debt Facility |
The Responsible Entity has received an
Indicative Terms Sheet for a three-year debt
facility
of
$20 million which will be used to fund the
balance of the purchase price and to fund
development
of the Property. The maximum permitted
loan-to-value ratio in the Indicative
Terms
Sheet is 50%. It is intended to finalise the
loan documentation and have the loan
facility
in
place prior to the Closing Date. |
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Valuation Policy |
Under the terms of the proposed debt
facility, the Responsible Entity will be
required to
have
the property independently valued annually.
Valuers will be instructed to undertake
their
valuation
in accordance with industry standards and to
outline their valuation methodology
within
the valuation report. |
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Voting Rights |
At a meeting of Unitholders, each Unitholder
may cast one vote on a show of hands and
one
vote for each Unit held on a poll. |
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Complaints |
The Responsible Entity has a complaints
resolution procedure - please refer to
section 9.5 of the PDS. |
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