|
Property |
The Trust in this case has
entered into a contract to acquire a Crows
Nest, North Sydney commercial property. The
Property is currently leased to a long
established sports medicine corporation. The
Trust also has an option to acquire an
adjoining car park which it intends to
redevelop. The preferred redevelopment is
for a commercial centre with medical
facilities. If this preferred option is for
some reason not capable of being achieved on
an economic basis and/or without undue risk,
then an alternative option at the end of the
current lease would be to demolish the
existing building and redevelop the site
with a combination of of commercial office
and/or retail and/or residential. |
|
Investment
|
The Trust will issue
development units designated as North Sydney
("NS") Units to investors with the aim of
further developing the Property over
approximately 24 months. At the end of that
development time, the NS Units will be
converted to ordinary units in the Trilogy
HealthCare REIT. |
|
Amount to be raised
|
$8,300,000 |
|
Minimum Investment
|
$25,000 of NS Units |
|
Additional Investment
Minimum |
$5,000 |
|
Entry and Exit Fees
|
Nil |
|
Limited Liquidity
|
An investment made in the
Trust should be considered of a long term
nature. The Manager intends putting in place
a redemption liquidity facility in respect
of ordinary units (see page 13). |
|
Targeted Total Returns
|
The Manager is targeting a
total return combining the cash income
distributions, the non-cash tax benefits and
medium to longer term capital growth.
a) Income Distributions
The Manager will distribute income to
investors on a monthly basis and during the
Planning Phase (estimated at 12 months) it
is expected to be approximately 5.6% per
annum. This is expected to fall during the
Construction Phase of the project. Income
distributions will be paid to your nominated
bank account.
b) Capital Growth
The NS Units will be revalued by the Manager
upon completion of any development of the
Property (approximately 24 months) for the
purposes of conversion to ordinary units.
The timing of the conversion, and what
constitutes the completion after
development, are each determined by the
Manager. The objective is to achieve the
maximum possible return from the development
with a minimum targeted pre-tax return in
excess of 10% per annum* net of all Trust
fees and expenses, on conversion of the
development units into ordinary units. |
| |
* WARNING:
This is a Targeted Return only and is not
guaranteed by the Manager. There is a risk
in placing undue reliance on the Targeted
Return rate. Prospective investors should
review the Targeted Return in conjunction
with the Risk Factors set out in this PDS
(see Section 7 ‘Risks’) and the assumptions
in Section 8 ‘Taxation Matters, Financial
Information, Forecasts and Assumptions’. |
|
Tax Benefits |
The Property
is eligible for non-cash tax deductions and
deferrals based on plant and equipment
depreciation and the amortisation of the
borrowing costs. These are set out in
Section 8 – ‘Taxation Matters, Financial
Information Forecasts and Assumptions’. |
|
Interest Rate Exposure |
Given the time
horizon and the non-predictability of the
amount of senior debt to be drawn down, the
Manager does not believe that it is
practical at this time to fix the interest
rate on this portion of the debt. However,
when the "construction phase" commences and
it is possible to better estimate the
building contract costs, the Manager’s
policy is to take advice as to the likely
course of interest rates for the development
phase. Based on that advice, the Manager
will select a variable and/or fixed interest
option and will advise investors of that
decision.
Further details of the financing facilities
are set out in Section 12 of the PDS
‘Additional Information’. |
|
Risks |
Investors will
have all the normal risks of ownership of a
commercial property, as well as the risk of
the development not proceeding if the
Manager considers it prudent not to proceed
or if, for example, relevant approvals are
not obtained. During the Construction Phase
there are also construction risks relating
to time, cost, and quality control.
Investors should consider Section 7 ‘Risks’
before making a decision to invest in this
Offer. |
|
Superannuation |
Compatible
Complying and self managed superannuation
funds can participate in this Offer. |
|
Experienced Management Team |
Directors and
Executives of the Manager have substantial
collective experience in the management of
property and development syndications as
well as property funds management generally. |
|
Regular Reports |
Investors will
be kept informed of the progress of the
Property, its development and the Trust
generally and any matter that the Manager
considers is of a material nature. Investors
will receive monthly distribution statements
and an annual report. |
