Prime Location
The Property is located approximately 24 kilometres north of Melbourne’s CBD and within the Hume City
Council, one of Melbourne’s key growth areas. The Property will be within close proximity to local amenities including retail
centres, schools and recreational facilities.
Serviced Site
The Peet Group will be responsible for the provision of services to the site. This will significantly reduce the
upfront costs and risk to the Syndicate in creating the first stage of development.
Population Growth
The Hume Corridor has been one of Melbourne’s fastest growing corridors and has recorded average
population growth of 5.9% per annum over the last five years. This strong population growth is expected to continue with key
infrastructure in place and several significant projects currently underway which will continue to create employment in the area.
Experienced Management
Peet is Australia’s largest ASX listed specialist residential land developer and has been operating
for over 115 years. It currently manages 22 residential land development syndicates and has a total of 68 projects around
Australia including 25 projects around Melbourne.
Peet Core Holding
Peet will subscribe for 25% of the units on issue, but where subscriptions exceed 17 million Units,
Peet will be scaled back to a minimum holding of 10%.
KEY RISKS:
Some of the key risks associated with the Project and investment in the Syndicate are summarised below. Investors should
consider the pertained risks as outlined in section 9
of the PDS.
Lower Population Growth
Population growth in Melbourne and/or the Hume Corridor may be less than forecast by the
Consulting Economist which may negatively impact on sales rates. See section 9.1
of the PDS for more information.
Lower Price Escalation
Land values may not increase as forecast by the Consulting Economist leading to lower sales
revenue over the life of the Project. See section 9.1
of the PDS for more information.
Lower Sales Prices or Sales Rates
The initial sales prices or sales rates assumed by the Independent Valuer may not be
achieved resulting in the return to investors being lower than forecast. See section 9.1
of the PDS for more information.
Higher Development Costs
Costs to develop the Property may be higher than those estimated by the Consulting Engineer which may adversely impact on returns to Unitholders. See section 9.1
of the PDS for more information..
Greenvale Reservoir
The Property abuts the Greenvale Reservoir and to obtain a planning permit for stages 6 to 10 of the
Project, Melbourne Water needs to consent to the issuing of a planning permit. This will require Melbourne Water and the
Syndicate too agree on the location, scope and size of a Bund.
The Responsible Entity, based on expert advice, is assuming that the Syndicate will only need to provide a Bund that protects
the Reservoir from waterflows created by development within its land. Melbourne Water is seeking a Bund that would
protect the Reservoir from future residential development on land to the north and north east of the Syndicate’s land prior to
providing consent. If this is not resolved by July 2015 it may have a material impact on the returns to investors. See section 9
of the PDS
for more information.
INVESTMENT SUMMARY:
|
Offer |
This is an Offer of 17 million $1.00 Units in Peet Greenvale Syndicate, payable on application. |
|
Minimum
Investment |
All applications must be for a minimum of 5,000 Units and thereafter in increments of 1,000 Units. |
|
Asset |
The Responsible Entity, on behalf of the Syndicate, will purchase the Property, known as Lot A on Unregistered Plan of Subdivision 714625C and located at 1170 Mickleham Road, Greenvale, Melbourne. |
|
Forecast IRR |
The Responsible Entity is forecasting an Investor IRR of 17.0% before tax and after payment of all fees and expenses. Investors should refer to the profit forecast assumptions in section 7 and the risks in section 9
of the PDS. |
|
Investment
Risks |
There are risks associated with investment in the Syndicate – refer to section 9 of the
PDS. |
|
Taxation
Implications |
General information about the taxation implications of investing in the Syndicate is set out in section 12.1.10 of the PDS. |
|
Responsible
Entity |
Peet Funds Management Limited is the Responsible Entity. It is a wholly owned subsidiary of Peet Limited, a public company listed on the Australian Securities Exchange.
Peet is an experienced fund manager and is currently managing 22 syndicates with an on-completion value of more than $2.5 billion (if sold at today’s prices). Additional information on
Peet and the Responsible Entity is detailed in sections 2 and 10 of the PDS. |
|
Development
Manager |
Peet Development Management Pty Ltd is a wholly owned subsidiary of Peet Limited and is the Development Manager for the Project.
Peet is Australia’s largest ASX-listed specialist residential land developer, and is currently developing
68 projects throughout Australia with potential for approximately
48,500 lots with an estimated on-completion value of $8.8 billion (if sold at today’s prices). |
|
Syndicate
Strategy |
The Property will be developed into a residential estate, with resulting lots to be sold for a profit. |
|
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. |
|
Capital Return
Policy |
The Responsible Entity intends to 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
provided that sales are able to be achieved.
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. |
|
Redemptions |
No redemption or liquidity facility is offered by the Responsible Entity. |
|
Term of the Syndicate |
The life of the Syndicate is estimated to be 7 years from formation to winding up. Following the
settlement of all subdivided lots within the Property, the Responsible Entity will seek to wind-up
the Syndicate in accordance with the Syndicate’s Constitution and the Corporations Act with any
remaining profits and capital returned to Unitholders. |
|
Debt Facility Condition |
The Responsible Entity has received an Indicative Terms Sheet from an Australian bank for an
$11.2 million debt facility. The debt facility will be used to fund the balance of the acquisition
price, transaction costs and development of Stage 1.
It is intended to finalise the loan documentation and have a debt facility in place prior to the
Closing Date. The key terms of the proposed debt facility are detailed in section 12.1.9
of the PDS. |
|
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. |
|
Cooling Off Period |
There is no cooling off period for this investment as the Syndicate is not a liquid managed investment scheme. |
|
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 of profit 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. |
|
Borrowing Strategy |
The Syndicate will partially debt fund the acquisition of the Property and 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 from an Australian bank for an
$11.2 million debt facility. The debt facility will be used to fund the balance of the acquisition
price, transaction costs and development of Stage 1.
It is intended to finalise the loan documentation and have a debt facility in place prior to the
Closing Date. The key terms of the proposed debt facility are detailed in section 12.1.9
of the PDS. |
|
Valuation Policy |
The Responsible Entity will have the Property independently valued at least annually. Please refer
to section 1.4 of the PDS for further details. |
|
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. |
|
Complaints |
The Responsible Entity has a complaints resolution procedure – please refer to section 10.5
of the PDS. |
|
The Project |
The Project is the development, marketing and sale of
the property |
|
Zoning |
Zoned Urban Growth Zone and forms part of the Greenvale North R1 Precinct Structure Plan. |
|
Market Value |
The Market Value of the Property, assessed by Charter Keck Cramer as at 5 November 2012 was
$20.1 million (exclusive of GST). Please refer to the Independent Valuer’s Report in section 13 of the PDS. |
|
Purchase Price
|
The Responsible Entity will purchase the Property for a price of $18.0 million, exclusive of
GST, with settlement forecast to occur on 28 March 2013. |
|
Location |
The Property is located 24 kilometres north of the Melbourne Central Business District.
Greenvale is a suburb in Melbourne’s North, with a median house price above the
Melbourne average. |
|
Access |
The Property enjoys frontage to Mickleham Road and is in close proximity to the Tullamarine
Freeway and Hume Highway. |
|
Nearby Amenity |
Retail amenity such as Greenvale Shopping Centre and the under construction Craigieburn
Town Centre are located in close proximity to the Property. The Property is also well
serviced by schools, with Aitken College, Greenvale Primary School and Kolbe College in
close proximity. |
|
Lot Yield |
Approximately 437 residential lots, ranging in size from 256 to 1,334 square metres and
averaging 472 square metres. |
FREQUENTLY ASKED QUESTIONS:
Am I investing in a company or a trust?
Peet Greenvale Syndicate is an unlisted unit trust which has be en registered with ASIC as a managed investment scheme.
Investors will receive Units in the Syndicate and will be entitled to capital repayments throughout the life of the investment
and distributions once the Syndicate has generated taxable profits.
How often will distributions be paid?
It is intended that regular distributions will be paid to Unitholders once the Syndicate has made a taxable profit. Investors
should refer to the profit forecast assumptions in section 7 and the risks in section 9
of the PDS.
What is the tax status of distributions?
The Syndicate will pay fully franked distributions to Unitholders, with the exception of the final distribution which will be
franked to the extent of franking credits available.
What is the role of the Responsible Entity?
The Responsible Entity is responsible for the operation and management of the Syndicate and must perform its role in
accordance with its duties under the Corporations Act, the Constitution and the Compliance Plan. In exercising its powers
and duties, the Responsible Entity must act honestly, with care and diligence and in the best interests of Unitholders.
Where there is a conflict between its own interests and that of Unitholders, it must prefer the interests of Unitholders over
its own. The Responsible Entity has the power to appoint third parties to do anything that it is authorised to do in connection
with the Syndicate. However, the Responsible Entity remains liable for the acts of third parties, even where the third party
acts fraudulently or outside the scope of its authority or engagement. The Responsible Entity has delegated a number of
aspects of the management of the Syndicate to related entities. These arrangements are discussed in section 11
of the PDS.
Is there any recourse to investors?
The Constitution provides that the liability of Unitholders is limited to their investment in the Syndicate, including any unpaid
portion of their Units.
Will I receive regular updates on the progress of the Syndicate?
Yes. A report will be sent to all Unitholders quarterly.
What are the significant fees?
The following fee will be paid to Peet
subsidiaries in respect to its services in the establishment of the Syndicate:
|
• |
Capital Raising Facilitation Fee of 2.0% of the equity raised (payable March 2013). |
The Development Manager will charge a GST exclusive Development Management Fee of 7.0% on the GST inclusive gross
sales price of each lot sold within the Project.
The Sales Manager will charge a GST exclusive Sales Management Fee of 2.0% on the GST inclusive gross sales price of
each lot sold within the Project.
The Development Manager is entitled to a performance fee, calculated as:
|
• |
20% of all pre-tax profits which are in excess of 12% per annum of the equity raised by the Syndicate; plus |
|
• |
An additional 20% of all pre-tax profits which are in excess of 20% per annum of the equity raised by the Syndicate, averaged over the life of the Project on a simple interest basis. |
These fees and other associated costs are further explained in section 6 of the PDS.
Do I share in development profits?
Yes. The Responsible Entity undertakes the development of the Property on behalf of the Unitholders and any development profit is made on behalf of the Unitholders.
Can the Syndicate hedge against interest rate increases?
Yes. The Responsible Entity will consider the opportunity to hedge against interest rate increases at the time of negotiating bank funding.
Disclaimer
The above
information has been extracted from the Product
Disclosure Statement dated 19th November, 2012.
