PDS_Driftwood_part1

FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND (ARSN 134 516 724) PRODUCT DISCLOSURE STATEMENT driftwood offer

Issued: 02 July 2013 Responsible Entity: Axias Funds Ltd ABN 44 131 251 968, AFSL 327340

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

CONTENTS Important Notices and Disclaimer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 Foreword . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 REASONs to invest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Investment Overview – Driftwood Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 1. Details of the Offer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 2. GENERAL TERMS of the Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 3. What Potential Investors Need to Do . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 4. Details of the Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 5. Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 62 6. Financial Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 7. Corporate Governance and Management Team . . . . . . . . . . . . . . . . . . . . . . . 76 8. Investor Information – Key Disclosure and ASIC Benchmarks . . . . . . . . 79 9. Investment Risks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84 10. Fees and Other Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89 11. Additional Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 12. Taxation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101 13. Glossary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 104 14. How to Invest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 106 15. Application Form . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 16. CORPORATE DIRECTORY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 116

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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IMPORTANT NOTICES AND DISCLAIMER

About this Product Disclosure Statement This Product Disclosure Statement dated 02 July 2013 relates to an offer (Offer) to subscribe for units in the Future Estate Australian Residential Property Fund ARSN 134 516 724 (Fund).

The Fund is a registered managed investment scheme under the Corporations Act. ASIC takes no responsibility for the content of this PDS. The offer under this PDS to issue units in the Fund is made by Axias Funds Ltd (ACN 131 251 968) as Responsible Entity of the Fund. The Responsible Entity holds an AFSL No 327340. Contact details for the Responsible Entity can be found in the Corporate Directory Section of this PDS. In this PDS, “we”, “us” or “our” refers to the Responsible Entity. Future Funds Management Pty Ltd (ACN 155 884 227) has been appointed by the Responsible Entity as investment manager of the Fund (‘Investment Manager’). A list of other defined terms used throughout this PDS appears in the Glossary Section of this PDS.

Disclaimer Capital and investment returns are not guaranteed. An investment in the Fund under this Offer does not represent a deposit with, or liability of, the Responsible Entity or any of its related bodies corporate and is subject to investment risk, including possible delays in repayment and loss of income and capital invested. No person involved with the production of this PDS, including the Responsible Entity, its directors and advisers or the Investment Manager or Custodian, guarantees the performance of the units or the Fund, the repayment of capital or any particular rate of capital or income return.

This is not investment advice. You should seek your own financial advice Before making a decision to invest in the Fund, prospective Investors should read this PDS in its entirety. The information in this PDS has been prepared without taking into account a prospective Investor’s investment objectives, financial situation and particular needs. A prospective Investor should consider the appropriateness of an investment in the Fund having regard to their objectives, financial situation and needs. The directors of the Responsible Entity recommend that prospective Investors obtain independent legal and financial advice from an appropriately qualified person in relation to any proposed investment to be made pursuant to this PDS. Capital and investment returns are not guaranteed to an Investor and any investment in the Fund is subject to the risks set out in Section 9 of this PDS.

Illiquid Investment An investment in the Fund is an illiquid investment. Investing in residential real estate developments and funds which invest in property developments should be considered an illiquid investment and therefore an investment in the Fund should be seen as a medium term investment. As a result, a return of capital to Investors will only be possible where the Fund realises its

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

investments in property developments (which may not occur until completion of a development) and such realisation proceeds are sufficient to provide a return to Fund Investors.

No representations other than in this PDS The Responsible Entity and Investment Manager have not authorised any person to give any information or to make any representation in connection with the Offer that is not contained in this PDS. Any information or representation in connection with the Offer that is not in this PDS may not be relied on as having been authorised by the Responsible Entity and Investment Manager.

Custodian The Custodian of the Fund at the date of this PDS is The Trust Company Limited (Custodian). The Custodian is not the issuer of this PDS, and makes no representations as to, and takes no responsibility for, the accuracy or truth of any statement in, or omission from, any part of this PDS.

Photographs in this PDS Unless stated otherwise, the photographs used in this PDS are for indicative purposes only and are not necessarily assets of the Fund.

Australian Investors only

Goods and Services Tax (GST)

This Offer has been prepared to comply with the requirements of the laws of Australia. The Offer is not open to any investors whose registered address is outside of Australia unless the Responsible Entity becomes satisfied that it would be lawful to make an offer to that Investor. The distribution of this PDS outside of Australia may be restricted by law and those persons who come into possession of the PDS should seek their own advice on, and observe any such restrictions.

All amounts in this PDS are stated exclusive of GST, unless stated otherwise. Inclusive of GST means inclusive on any non recoverable GST.

Availability of this PDS This PDS is available free of charge to any person within Australia by contacting the Responsible Entity, the Investment Manager or by requesting a copy of the PDS from info@ futurefundsmanagement.com.au. If a prospective Investor has received this PDS electronically, then the Responsible Entity will provide a paper copy free of charge upon request. The electronic version of the PDS is only available to residents of Australia.

Those persons who access this PDS via a website should make sure to download and read the entire PDS. Applications for units made by Australian residents may only be made on the Application Form attached to or accompanying this PDS.

Forward Looking Statements This PDS contains certain forecasts and forward looking statements prepared by the Responsible Entity and/or Investment Manager which represent the Responsible Entity and/or Investment Manager’s best estimates based on present circumstances. All forecasts and forward looking statements in this PDS are for illustrative purposes only, using the assumptions described in this document. Actual results may be materially affected by changes in economic and other circumstances. The reliance that you place upon the projections and forecasts is a matter for your own commercial judgment. No representation or warranty is made that any projection, forecast, assumption or estimate contained in this PDS should or will be achieved.

Updating this PDS Information contained in this PDS may change from time to time. If the change is not materially adverse to Investors, the Investment Manager will update such information on its website www.futurefundsmanagement.com.au, or via regular reporting to Investors. A paper copy of this information can be obtained free of charge by contacting the Responsible Entity or the Investment Manager. Should the information be materially adverse to the Offer, to Investors or to the Fund, the Responsible Entity will provide the information via a supplementary PDS in accordance with the Corporations Act. In addition, the Responsible Entity will fulfil its continuous disclosure requirements by disclosure of matters on its website and in accordance with ASIC Regulatory Guide 198 ‘Unlisted disclosing entities: Continuous disclosure obligations’ in the event that the Fund becomes an unlisted disclosing entity at law.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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FOREWORD Dear Investors, We welcome you to become an investor in the Future Estate Australian Residential Property Fund (‘Fund’).

The Fund is an unlisted ASIC registered managed investment scheme focused on residential property development.

This PDS is issued to offer Investors the exciting opportunity to invest in the Driftwood Residential Property Development being undertaken by the Fund at Blacks Beach, Queensland.

The Driftwood Development The Fund is raising funds to undertake the construction of a 69 apartment residential development on a prime absolute beach front location in a desirable suburb of Mackay (Blacks Beach), which is Australia’s 14th largest city.

About Mackay Mackay offers a sound long term property investment.

Mackay is one of Australia’s fastest growing regions in terms of population and had the highest capital growth of any major population centre in Australia in 2012 (9%).

Mackay is experiencing a critical housing shortage, which is driving both rental and capital growth. The Mackay region has a population of 120,000 and is forecast to grow to become a top 10 Australian city by 2031 with a forecast population of between 200,000 and 300,000 (Australian Bureau of Statistics). Mackay has a robust and diversified economy as the regional capital for the mid-north, which is underpinned by infrastructure, sugar cane production and refinery transport and logistics, mining and resources, local government, agriculture, fisheries and tourism. Mackay has

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

consistently demonstrated materially higher GDP growth, lower unemployment and higher population growth than the Australian average over the past decade. More information regarding the Mackay region can be found in Section 5 (Market Information).

Investors are given the opportunity to invest in the following ways: §§ invest to receive a share of Development Profits and receive the opportunity to purchase an apartment in the Development (this is an investment in a ‘Manufactured Equity Product’ or MEP, which essentially enables investors to ‘manufacture’ their own equity by acquiring a specific apartment at wholesale or near developer cost price); or §§ if investors do not wish to purchase an apartment, simply invest in the Development and receive a preferential return out of Development Profits (‘Preferred Income Units’ or PIU).

Investors wishing to purchase an Apartment will be given a range of Apartments to choose from so that they can select the Apartment most suitable for them.

Structure of the Fund The Fund is an ASIC registered managed investment scheme focused on residential property development.

In summary, the Fund is structured so that: 1. Each property development conducted by the Fund will have a separate class of Units issued in the Fund which relate solely to that particular development (i.e. Driftwood).

2. Investors can invest in a particular property development by subscribing for the class of Units that relate to that development.

3. Certain classes of Units will enable an investor to not only share in Development Profits but also purchase an apartment in the development. Other classes of Units will simply provide an investor with a right to a preferential return out of Development Profits.

4. Each development conducted by the Fund will be separate from the other, so an investor in one class of Units is investing only in the development which relates to those units, and not in other developments conducted by the Fund. This is designed to give investors the choice to select the exact project and apartment that suit their own investment requirements and preferences.

5. Investment returns will be capped at a certain amount depending on the development and will be paid to the Investor at completion of the development.

Development managed by a strong and experienced team of professionals The developments conducted by the Fund will be managed by Future Estate Group Pty Ltd (‘Future Estate’) in conjunction with appointed external project managers and suitably qualified consultants. Future Estate has an experienced management team and advisory board comprising professionals with a diverse background, including investment banking, funds management, property investment and development, building and project management. The executive team and advisory board of Future Estate have a wealth of experience in executing real estate transactions and have advised on, invested in and developed projects collectively valued in excess of five billion dollars.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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FOREWORD The Future Estate Mission

Future Estate’s strengths

Future Estate is focused on achieving superior above-market returns on a risk-adjusted basis for our investors.

Future Estate aims to deliver higher investment returns through superior research and analysis, stringent risk management, focused asset management and best-practice corporate governance.

§§ Track record

The PDS contains detailed information concerning the Offer and the Driftwood Project that is associated with this offer.

Investors are encouraged to read this PDS in full, taking particular note of the Investment Risks set out in Section 9.

§§ Market knowledge §§ Solution and outcome focused §§ Professional and ethical in all of our actions §§ Strong relationships with major lenders and investors §§ Development Management, Project Management and Construction expertise

We also encourage Investors to seek independent financial, legal and other professional investment advice before making a decision to apply for Units in the Fund.

We look forward to welcoming you as an Investor in the Fund.

Ben Anderson Managing Director of Future Estate

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

§§ Funds Management and Asset Management expertise §§ In-house Research Team and proprietary quantitative market analysis and prediction models §§ Structured Finance, Commercial and Investment Banking expertise §§ Stringent processes and support systems in place and compliance checks in place §§ Best practice corporate governance

REASONS TO INVEST §§ Beachfront development in prime location §§ High forecast returns (14% - 24% p.a., net of fees and costs)

§§ Potential risks identified, mitigated and carefully managed

§§ Development approvals in place §§ Option to purchase an apartment at an effective discount of 15% to property value

§§ High growth property market with strong fundamentals and compelling outlook

§§ Shortage of housing driving demand for new construction, supporting a clear project exit

§§ Unique and irreplaceable site with absolute beach frontage enjoying uninterrupted Pacific Ocean views

§§ Development approval provides for affordable 1 and 2 bedroom apartments that are tailored to suit market preferences in terms of price point, detailing and amenity

§§ For investors electing to purchase an Apartment, forecast substantial positive cash flow on a serviced-apartment basis

§§ Experienced, credentialed management Actual site photo.

team with track record PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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Investment Overview

Driftwood Offer

photo. ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND 8Actual siteFUTURE

IMPORTANT DATES1

1

Section

Offer Opens

02 July 2013

1

Offer Closes

30 November 2013

1

Allotment of Units

Anticipated within 30 days of Application for Units (and subject to completing minimum subscription raising)

1

Anticipated date of investment return distributions and return of capital

Within 30 months from Offer Close Date

1

Please note that the above dates are indicative only and subject to change.

KEY FEATURES OF THE OFFER

Section

Issue Price Per Unit

1

Manufactured Equity Product (MEP) Units: §§ A1 Class Unit: $100,000 §§ B1 Class Unit: $125,000 §§ C1 Class Unit: $150,000 Preferred Income Units (PIU): §§ D1 Class Unit: $25,000

Unit Classes

Driftwood Classes of Units.

Class of Units

6 Price of Units Apartment Price*

Manufactured Equity Product A1 Class Unit

$100,000

$360,000 – $455,000 (1 bed/1 bed + study)

B1 Class Unit

$125,000

$470,000 – $527,500 (2 bed standard)

C1 Class Unit

$150,000

$530,000 – $590,000 (2 bed premium)

$25,000

No Apartment

Preferred Income Unit D1 Class Unit

A1 to C1 Class Units require the investor to purchase an Apartment in the Development.

D1 Class Units entitle the Investor to a return of up to 14% per annum on their capital invested (comprising a fixed entitlement to a distribution of 6% per annum paid annually, plus an entitlement to a further 8% per annum paid on completion of the Development).

Amount raised under Offer

The Fund is seeking to raise up to $10,000,000 by the issue of A1 to D1 Class Units in the Fund.

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The minimum subscription under the offer shall be the amount of funds required to be raised by the Fund to enable it to complete acquisition of the Property. If the minimum subscription is not raised, Investors’ funds will be returned. * Prices correct as at date of printing. Prices subject to change.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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driftwood offer KEY FEATURES OF THE FUND

Section

The Fund

Future Estate Australian Residential Property Fund ARSN 134 516 724

2

Investment Manager

Future Funds Management Pty Ltd (ACN 155 884 227)

2

Responsible Entity

Axias Funds Ltd (ABN 44 131 251 968) (AFSL 327340)

2

Application of Funds raised under Offer

The amount raised under the Offer will be used to finance the acquisition of the Property, costs and expenses associated with the Offer and, together with debt funding to be obtained from a Senior Lender, will be used towards funding the Development.

2

(Corporate Authorised Representative Number 423555)

The Fund will issue Units to Investors and then proceed to acquire the Property and then conduct further capital raising (including raising further equity capital under the Offer and by securing debt finance) so that the Development can be carried out over the course of the anticipated Development Timeframe of up to 30 months from Offer Close Date.

Investment Rationale

The Offer to Investors represents an attractive forecast investment return and, in the case of A1 to C1 Class Units, the ability to own your own Apartment following completion of the Development and settlement of the property purchase.

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The investment is designed to provide investors with high forecast investment returns from investment in a high-quality property development that is managed by an experienced and credentialed team in a managed investment structure.

The Offer provides Investors with property investment exposure to a development in one of the fastest growing regions of Australia which is benefiting from strong underlying economic and property market fundamentals.

Investment Rationale §§ High forecast returns (14% – 24% p.a., net of fees and costs) §§ Potential risks identified, mitigated and carefully managed §§ Development approvals in place §§ Option to purchase an apartment at an effective discount of 15% to property value due to potential returns on A1 to C1 Class Units §§ High growth property market with strong fundamentals and compelling outlook §§ Shortage of housing driving demand for new construction, supporting a clear project exit §§ Unique and irreplaceable site with absolute beach frontage enjoying uninterrupted Pacific Ocean views §§ Development approval provides for affordable 1 and 2 bedroom apartments that are tailored to suit market preferences in terms of price point, detailing and amenity §§ For investors electing to purchase an Apartment, forecast substantial positive cash flow on a serviced-apartment basis §§ Experienced, credentialed management team with track record §§ Best practice corporate governance and compliance

Targeted Investment Return

The Offer to Investors represents an attractive targeted investment return for each Class of Unit: Manufactured Equity Product (A1 to C1 Classes) – Target return is 15% of price of Apartment purchased by Investor.

D1 Class – Up to 14% per annum on capital invested (including a fixed entitlement to a distribution yield of 6% per annum which is paid to holders annually).

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

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driftwood offer KEY FEATURES OF THE FUND continued...

Section

Fund Strategy for the Driftwood Project

1

The Fund’s investment strategy for the Driftwood Project Offer (‘Offer’) is to: 1. issue Driftwood Classes of Units in the Fund to Investors under the Offer in order to raise funds for the purposes of acquiring the property located at 34 Bourke Street, Blacks Beach, Queensland (‘Property’); 2. successfully complete the development of the Property, comprising the construction of 69 apartments, comprising 9 one bedroom, 9 one bedroom and study and 51 two bedroom apartments (‘the Development’); and 3. provide Investors with the opportunity to participate in the development returns and acquire an Apartment upon completion of the Development.

By doing so, the Fund aims to provide Investors with the opportunity to participate as investors in the Development and receive an attractive return out of Development Profits, along with the additional benefit of acquiring a high-quality Apartment with strong investment fundamentals and ability to derive rental returns at completion of the Development.

Investment Timeframe

The Development is estimated to take up to 30 months from the Offer Close Date.

Liquidity

The Units must be considered an illiquid investment. The Units will not be listed on a stock exchange and only limited redemption or withdrawal rights will be offered to Investors.

Liquidity will be achieved upon completion of the project and settlement of the sold apartments and other assets comprised in the Development.

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Withdrawal arrangements

Units do not have withdrawal rights and will not be able to be redeemed prior to expiration of their Term, unless otherwise determined by the Responsible Entity.

1

1

Subject to there being sufficient Development Proceeds, an Investor will receive a return of capital and any investment returns following the completion of the Development, settlement of all property sales comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

Investors may be offered limited withdrawal rights on an ongoing interim basis as determined by the Responsible Entity in its sole discretion.

Fees and Expenses

Refer to Section 10 of this PDS for detailed information concerning fees and other costs applicable to the Offer.

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Note: 50% of the upfront fees payable to the Investment Manager and Development Manager will be held in escrow until such time as the Fund receives a letter of offer for funding the Development from a Senior Lender.

Risks

Investors will be subject to the risks associated with investing in the property sector, and in particular, the risks associated with property development risks and uncertainties.

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Taxation

For details on the taxation of the Fund and relevant taxation issues for Investors, please refer to Section 12 of the PDS.

12

Reporting

Investors will receive quarterly updates regarding the operation of the Fund’s activities relating to the Offer under which they have acquired Units, along with an Annual Financial Report for the Scheme.

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PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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driftwood offer KEY FEATURES OF THE FUND continued...

Section

No Cooling Off

No cooling off period is available to Investors in the Fund.

1

Complaints

The Fund’s complaints handling procedure is available upon request from the Investment Manager at info@futurefundsmanagement.com.au.

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Complaints may be made to the Investment Manager at info@futurefundsmanagement.com.au or c/o Future Estate on 1300 FUTURE (388 873) or complaints@futureestate.com.au.

Contact Details

To contact the Investment Manager of the Fund please call 1300 FUTURE (388 873) or email info@futurefundsmanagement.com.au.

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Investment Structure – How the Investment Works Manufactured Equity Product (A1 to C1 Class Units)

step 1

Investors subscribe for a Unit in the Fund by providing investment monies as follows: §§ A1 Class Unit: $100,000 §§ B1 Class Unit: $125,000 §§ C1 Class Unit: $150,000 Investors will be liable for any applicable stamp duty on the purchase of their Unit(s) and other necessary transaction costs associated with the purchase of the Apartment.

step 2

As a condition of being issued their Unit in the Fund, an Investor must enter into an Apartment Purchase Contract to acquire an Apartment off the plan as follows: §§ an Investor who acquires an A1 Class Unit will be entitled to purchase a 1 bedroom apartment for $360,000 to $455,000; §§ an Investor who acquires a B1 Class Unit will purchase a standard 2 bedroom apartment for $470,000 to $527,500; or §§ an Investor who acquires a C1 Class Unit will purchase a premium 2 bedroom apartment for $530,000 to $590,000.

The price for an Apartment will be provided in the Apartment Purchase Contract that the Investor will enter into and will be confirmed and agreed to with the Investor prior to the Investor submitting an Application for Units and entering into the Apartment Purchase Contract.

Investors should only apply for an A1 Class, B1 Class or C1 Class Unit if they also wish to proceed with a purchase of an Apartment in the Development.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

driftwood offer Manufactured Equity Product (A1 to C1 Class Units) continued...

step 3

Investors will provide a 10% deposit under the terms of the Apartment Purchase Contract by way of cash or bank guarantee. §§ 1 bed apartment – deposit is $36,000 to $45,500 §§ 2 bed apartment (standard) – deposit is $47,000 to $52,750 §§ 2 bed apartment (premium) – deposit is $53,000 to $59,000 Please note: the deposit payable is subject to the price for the Apartment as set out in the Apartment Purchase Contract.

step 4

On completion of the Development, Investors will be required to settle on the purchase of their Apartments. Investors should be aware that they may be required to settle on the Apartment without being able to utilise the initial investment amount (as investment returns and returns of capital will be paid following completion of the Development and settlement of the Apartment purchase). Investors are urged to make their own arrangements to ensure they have adequate financial means to settle on the Apartment purchase without utilising the initial investment amount.

Investors will be liable for any stamp duty on the purchase of their Apartment.

step 5

Within fourteen (14) days of receipt by the Investment Manager of sufficient Apartment sale proceeds to meet all expenses, costs, fees, finance and liabilities associated with the Development and following payment of preferential returns to D1 Class Unitholders, Investors will be entitled to receive: §§ A proportionate distribution payment out of Development Profits to holders of A1 to C1 Class Units capped at a maximum of 15% of the listed purchase price of the Apartment that is purchased by the Investor (based on price in Apartment Purchase Contract).

AND §§ A right to a return of capital paid for their Unit, being either: §§ $100,000 (for A1 Class Units) or §§ $125,000 (for B1 Class Units) or §§ $150,000 (for C1 Class Units).

As it is intended that the Investors receive their investment return on their Units shortly following completion of the purchase of the Apartment by them, the return operates to enable the Investor to effectively acquire their Apartment at a substantial discount to market value (or near typical ‘developer cost price’). Investors should be aware, however, that they will need to have adequate financial capacity to settle on the Apartment without utilising the capital paid for their Unit or their investment returns as return of capital and investment return will occur after completion of the Development and settlement of the purchase of the Apartment by the Investor. An Investor’s entitlement to their investment return is conditional upon them first settling on the purchase of their Apartment. Furthermore, Investors should note that investment returns are not guaranteed; there is a risk that there may not be sufficient Development Proceeds for Investors to receive a return on their investment, or a return of capital invested.

Benefit of Capital Appreciation of Apartment If there is any capital appreciation of the Apartment between the price the Apartment is acquired for under the Apartment Purchase Contract and the market value of the Apartment on completion of the Development, the Investor will benefit from this capital appreciation.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

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driftwood offer Manufactured Equity Product Example (Class B1 Units used to illustrate how it works) Class B1 Unit/Standard 2 bedroom Investment Term

up to 30 Months

Property Purchase Price*

$500,000

MEP Investment Amount

$125,000

MEP Return ($)

$75,000

MEP Return (% Market Value)

15%

MEP Forecast Return on Equity (%)

60%

Pre-sale Deposit Amount (cash or bank guarantee) (%)

10%

Pre-sale Deposit Amount (cash or bank guarantee) ($)

$50,000

Stamp Duty & Legals (%)*

5%

Stamp Duty & Legals ($)**

$25,000

Weekly Rental (12 Month Rental)**

$700

Weekly Rental (ServicedApartment)**

$1,200

Effective Net Acquisition Cost* $500,000

$450,000

“Manufactured” equity of $75,000

$400,000

$350,000

$300,000

* Illustrative example, not a specific apartment ** Estimate only, returns not guaranteed All returns are net of fees and costs.

Future Estate MEP

* Retail price less gross forecast investment return

Effective Loan-to-Value Ratio (LVR) % 90%

Initial LVR reduced from 80% to 65% when compared to an ordinary “retail” purchase of the property

85%

MEP enables investors to cut out the typical developer profit and access property at near cost price.*

$500,000

$425,000

$100,000

$75,000 of Manufactured Equity

Development Profit

$25,000 GST

$45,000

$45,000

Soft Costs

$55,000

$55,000

Ordinary “Retail” List Price

80% 75% 70% 65% 60% 55% 50% 45% 40%

Ordinary “Retail” purchase

Future Estate Offer

Rental Yield Comparison 14.7%

15%

Building Cost

$200,000

$200,000

12.5% 12%

8.6%

9%

7.3%

Taxes

$50,000

$50,000

Land Cost

$50,000

$50,000

RETAIL

MEP

6%

3%

0%

* Chart above is illustrative only

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

RETAIL

MEP

12 month rental

RETAIL

MEP

Serviced apartment

driftwood offer Preferred Income Units (D1 Class Units)

step 1 step 2

Investors subscribe for a D1 Class Unit by providing subscription monies of $25,000 per D1 Class Unit.

Holders of D1 Class Units will be entitled to an investment return out of Development Profits capped at a maximum return on capital invested of 14% per annum (6% distribution yield) until the redemption date for D1 Class Units.

On an annual basis the holder shall be paid a fixed distribution of 6% per annum on capital invested.

The holder shall be entitled to a return out of Development Proceeds of up to a further 8% per annum on capital invested, payable at completion of the Development.

Such returns are paid on a preferential basis – in priority to any returns payable to A1 Class, B1 Class and C1 Class Unitholders.

The anticipated redemption date is up to 30 months from the Offer Close Date (but may be extended).

step 3

On or prior to redemption, a D1 Class Unit will receive a return of capital invested plus any investment returns payable.

KEY DATES Event

Date

Offer Opens

02 July 2013

Offer Closes

30 November 2013

Anticipated allotment of Units

Within 30 days of application and acceptance

Anticipated settlement of purchase of the Property

31 July 2013

Anticipated completion of the Development

Est December 2015

Investors settle on purchase of Apartment

Est December 2015

Investors receive Investment returns and return of capital invested

Est December 2015

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

15

16

FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

1.

DETAILS of THE Offer 1.1

Key Terms of Offer

Investment Objective

To enable Investors to invest in the Development, and acquire an Apartment following completion of the Development, under a straightforward investment structure.

As it is intended that the Investors receive their investment return on their Units shortly following completion of the purchase of the Apartment by them, the return operates to enable the Investor to effectively acquire their Apartment at a substantial discount to market value.

Fund Structure

Axias Funds Ltd (ABN 44 131 251 968) AFSL 327340 is the Responsible Entity of the Future Estate Australian Residential Property Fund ARSN 134 516 724, a registered managed investment scheme.

SRVF No 1 Pty Ltd (ACN 158 264 094) (‘SPV Development Co’) has been established to purchase the Property and undertake the Development on behalf of the Fund. The Fund is the sole shareholder of SPV Development Co. Future Funds Management Pty Ltd (ACN 155 884 227) is the Investment Manager of the Fund and has primary responsibility for the management and operation of the Fund.

Funds raised under this Offer will be advanced to the SPV Development Co for the purposes of undertaking the Development on behalf of the Fund.

Proceeds of the Offer

Funds raised under the Offer will be used to pay for the Property acquisition price, the costs associated with the Property acquisition and costs associated with the Offer.

It is intended that the acquisition of the Property will be equity funded out of proceeds raised under the Offer, however, the Investment Manager reserves the right to use external lender finance to acquire the property, should it so require.

Between settlement of the purchase of the Property by the Fund and commencement of construction for the Development, surplus equity after payment of necessary transaction and other costs will be retained in the Fund until required for the purposes of funding Development costs and other costs associated with the ongoing management of the Fund.

Unit Prices

The prices of Units offered to Investors under the Offer are as follows: §§ A1 Class Unit: $100,000 §§ B1 Class Unit: $125,000 §§ C1 Class Unit: $150,000 §§ D1 Class Unit: $25,000 The Responsible Entity or the Investment Manager reserves the right to raise additional equity or debt funding as may be required to fund the Development.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

17

1 Manufactured Equity Product (A1 to C1 Class Units) – Invest in the Fund and acquire an Apartment in the Development

The A1 Class Unit entitles the holder to acquire a 1 bedroom apartment in the Development, a B1 Class Unit entitles the holder to acquire a standard 2 bedroom apartment, and a C1 Class Unit entitles the holder to acquire a premium 2 bedroom apartment.

Total Investment Commitment

The total investment commitment for Investors will depend on the class of Driftwood Units the Investor subscribes for and the Apartment in the Development that the Investor agrees to purchase.

Manufactured Equity Product (A1 to C1 Class Units)

The range of total investment commitments for Investors is as follows:

Accordingly, the investment opportunity under the Offer for A1 to C1 Class Units involves two investment components: 1. Investors subscribe for an A1 Class, B1 Class or C1 Class Unit; and 2. Investors must then enter into an Apartment Purchase Contract.

A1 Class Unit plus 1 bedroom Apartment $100,000 (A1 Class Unit) equity investment amount $360,000 to $455,000 (1 bedroom Apartment) B1 Class Unit plus Standard 2 bedroom Apartment $125,000 (B1 Class Unit) equity investment amount $470,000 to $527,500 (Standard 2 bedroom Apartment) C1 Class Unit plus Premium 2 bedroom Apartment $150,000 (C1 Class Unit) equity investment amount $530,000 to $590,000 (Premium 2 bedroom Apartment) *Note: Investors will be entitled to receive an investment return on their Units, capped at 15% of the original list price of the Apartment purchased (based on the price in the Apartment Purchase Contract). Investors will benefit from any capital gain on the Apartment acquired that is achieved during the investment term prior to settlement.

Settlement of the purchase of the Apartment will occur prior to the investment returns on Units being paid to Investors. Therefore, Investors must be in a position to settle on the purchase of their Apartment prior to receiving their investment return on their Units.

Preferred Income Units (D1 Class Units) – Invest in the Fund for a capped priority return out of Development Profits

D1 Class Units entitle the holder to a return of up to 14% per annum on their capital invested for the term in which they hold their D1 Class Unit. This return is to be provided to a holder of a D1 Class Unit as follows: (a) The Unit holder shall be entitled to a fixed payment of 6% per annum on capital invested with such distribution paid to the holder annually; (b) At completion of the Development, the Unit holder shall be entitled to a return out of Development Proceeds capped at a maximum of 8% per annum on their capital invested for the term in which they hold their D1 Class Unit. Such return entitlement shall accrue for the term in which the D1 Class Unit is held and shall not capitalise during the term.

The investment return payable on Preferred Income Units (D1 Class Units) is paid on a preferential basis so that such return entitlements are paid in priority to all other distributions or dividends payable to Manufactured Equity Product investors (A1 Class, B1 Class and C1 Class Unitholders).

Preferred Income Unit (D1 Class) Unitholders also have a preferential right to a return of capital paid on each Unit ahead of Manufactured Equity Product investors (A1 Class, B1 Class and C1 Class Unitholders).

Please refer to pages 22-23 for further information regarding the rights attached to the various classes of Units offered under this PDS. In addition, please refer to Section 1.3 and 1.4 for additional disclosure information concerning the Preferred Income Units (D1 Class Units).

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

1 Total Investment Commitment

Preferred Income Units (D1 Class Units) $25,000 per Unit

(D Class Units) Forecast Investment Returns Manufactured Equity Product (A1, B1 and C1 Class Units)

§§ An Investor in A1 to C1 Class Units will own their Apartment post completion of the Development and settlement of the purchase of the apartment §§ Subject to there being sufficient Development Proceeds, these Investors will be entitled to share in the Development Profits derived from the Driftwood Project, such return capped on a pre tax basis at a maximum of 15% of the listed price of the Apartment they have purchased (based on purchase price in Apartment Purchase Contract).

This maximum investment return of 15% of the Apartment Purchase Price based on the price set out in the Apartment Purchase Contract entered into by the Investor will be determined out of gross Development Profits at completion of the Development. Following payment of any applicable taxation on the Development Profits by the Fund, the Investors will receive their investment return. Accordingly, an Investor’s return may be less than 15% of the Apartment Purchase Price after tax has been paid by the Fund on such Development Profits. The Investor will nevertheless likely be entitled to franking credits on such returns. Please refer to Section 12 for further information on the taxation implications of an investment in the Fund. §§ Investors receive the benefit of potential capital growth of the Apartment during the Development construction period prior to settlement of their Apartment purchase.

Important Note: As with any investment, there are risks associated with investment in the Fund. There is no guarantee that Investors will receive a return of capital paid on their Units or that Investors will receive any particular return on investment or a return at all.

The returns are conditional upon settlement of sale of all Apartments comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development, and the priority returns being paid to D1 Class Unitholders.

The forecast returns are also based on the Development completing in accordance with the feasibility model. In the event that there are any cost overruns or other matters detrimentally affecting the Development, then the Development Proceeds may be less than anticipated, in which case Investors’ returns may be less than forecast.

Forecast Investment Returns

§§ An Investor in D1 Class Units will be entitled to an investment return out of Development Profits capped at a maximum of 14% per annum (6% distribution yield) on their capital invested for the term in which they hold the D1 Class Unit.

Preferred Income Units

§§ Such investment returns shall accrue, but not compound. The accrued returns will be payable at the end of the term of the D1 Class Units (at or around completion of the Development).

(D1 Class Units)

This return entitlement for a D1 Class Unit holder comprises a fixed payment of 6% of the Unit price per annum (with such distribution paid to the holder annually) and a return out of Development Profits capped at a maximum of 8% of the Unit price per annum for the term in which they hold their D1 Class Unit.

Holders of D1 Class Units will have a right to receive their investment return out of Development Profits in priority to holders of A1 to C1 Class Units. Similarly, holders of D1 Class Units will receive a right to a return of capital in priority to holders of A1 to C1 Class Units.

However, Investors in D1 Class Units should note that there is no guarantee that they will receive the maximum investment return amount or an investment return at all, and there is no guarantee that holders of D1 Class Units will receive a return of capital invested. An Investor’s right to investment returns and a return of capital invested is conditional upon settlement of sale of all Apartments comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

19

1 The Development

§§ Residential apartment development comprising 69 units: §§ 9 x 1 bedroom / 9 x 1 bedroom + study; §§ 51 x 2 bedroom; §§ 88 car spaces; §§ The project comprises three distinct buildings, each with above-ground secured private parking within the podium, and three to four levels of residential apartments above. §§ The three buildings can be described as follows: §§ Building A comprises 6 x 1 bedroom apartments and 15 x 2 bedroom apartments over 3 levels §§ Building B comprises 6 x 1 bedroom apartments and 18 x 2 bedroom apartments over 4 levels §§ Building C comprises 6 x 1 bedroom apartments and 18 x 2 bedroom apartments over 4 levels §§ 1 bedroom apartments are typically at least 52 square metres of internal space and in excess of 16 square metres of external space. §§ 2 bedroom apartments are typically 69 to 74 square metres of internal space and 11 to 23 square metres of external space. §§ The price range of apartments is $360,000 to $455,000 for one-bedroom apartments and $470,000 to $590,000 for two-bedroom apartments. §§ The equity raised by the Fund under the Offer will be used to fund the purchase of the Property, stamp duty and necessary transaction costs and the equity contribution towards the Development, as may be required by the Senior Lender to the Development. No further equity investment will be required from Investors by the Fund.

Property

The Property that will comprise the site for the Development is located at 34 Bourke Street, Blacks Beach, Queensland.

The site enjoys an irreplaceable absolute beachfront location and will enjoy direct beach front access and expansive views over Blacks Beach, the Pacific Ocean and Great Barrier Reef islands.

Property Acquisition Price

The Property will be acquired by the Fund for total consideration of $3,200,000 + GST which is in line with current independent valuation.

This includes the Property purchase price consideration, repayment of necessary costs incurred in connection with the Property prior to acquisition and the fee for the procurement of a contract to acquire the Property.

Property Acquisition

A related party of the Fund, DOF No 1 Pty Ltd as trustee for the Bowen Basin Development Opportunity Fund No 1 Unit Trust, has entered into an agreement with the Fund’s subsidiary, SRVF No 1 Pty Ltd, pursuant to which it agreed to procure a contract to purchase the Property for SRVF No 1 Pty Ltd (or nominee) (‘Contract Procurement Agreement’).

An independent valuation of the Property has been obtained for the Property, valuing the land at $3.2m + GST. Units will be issued to Investors within 30 days of successful application (subject to minimum subscription being met), and the Fund shall use the funds raised for the purposes of completion of the purchase of the Property. The funds raised under the Offer will be held on trust until such time as the Units are issued.

If, for any reason, the Fund does not complete the purchase of the Property or elects not to proceed with the project then the Application Monies will be returned to Investors as soon as is reasonably practicable.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

site photo.21 PRODUCT DISCLOSURE STATEMENT – DRIFTWOODActual OFFER

1 Terms of Units

Manufactured Equity Product (A1 – C1 Class Units) The terms of issue of the A1 Class Units in the Fund are as follows: 1. Each Unit requires its holder to enter into a pre-sales contract to purchase a 1 bedroom apartment as a condition to such Unit being allotted.

2. Entitlement to a return of capital invested upon completion of the Development, subject to there being sufficient Development Proceeds. Any entitlement to return of capital invested will also be conditional upon settlement of all of the apartment and other assets sales comprised in the Development and payment of all liabilities, costs and expenses associated with the Development.

3. Entitlement to a share of Development Profits on a proportionate basis with A1 Class, B1 Class and C1 Class Unitholders, capped at a maximum amount of 15% of the listed purchase price of the Apartment purchased (as set out in the Apartment Purchase Contract) on a pre-tax basis, with such distribution to be made within fourteen (14) days of receipt by the Fund of sufficient proceeds from the sale of apartments at the Development in order to meet all costs and expenses associated with the Development and repayment of all bank debt funding and other liabilities associated with the Development. Any entitlement to the investment return will also be conditional upon settlement of all of the apartment and other assets sales comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development, and payment of D1 Class Unitholders’ investment returns.

4. A right to receive a return of capital on a winding up or reduction of capital (whether on termination of Unit or otherwise) ranking equally with the holders of A1 Class, B1 Class, and C1 Class Units but ranking behind holders of D1 Class Units. Such capital rights are limited to the asset of the Fund which relate to the Development.

5. Other than the entitlement to distributions referred to in items 2 to 4 above, Unitholders do not have an entitlement to any other income or capital of the Fund.

6. If the Development does not proceed for any reason and the property is sold then the Unitholder shall be entitled to a return of capital proportionate to the number of Units held (A1 Class, B1 Class and C1 Class Units) but ranking behind D1 Class Units, less all transaction costs incurred by the Fund for the Development after all such transaction costs have been paid. Note: This may result in a loss of some or all invested capital.

7. In the event that the Fund is wound up prior to completion of the Development, the Unit holder shall be entitled to a return of capital proportionate to the number of Units held in A1 to C1 Classes, but ranking behind D1 Class Units, less all transaction costs incurred by the Fund for the Development after all such transaction costs have been paid.

8. The Units terminate on a date being: (i) three (3) years from their date of issue or (ii) upon sixty (60) days following the completion of the Development, settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development, whichever is the earlier (and subject to the Responsible Entity’s right to extend the term of Units under the Constitution in order to facilitate completion of the Development prior to expiration of the term of Units).

B1 Class Units: The terms of the B1 Class Units are the same as listed above for the A1 Class Units, other than each Unit requires its holder to enter into a pre-sales contract to purchase a standard 2 bedroom apartment as a condition to such Unit being allotted.

C1 Class Units: The terms of the C1 Class Units are the same as listed above for the A1 Class Units, other than each Unit requires its holder to enter into a pre-sales contract to purchase a premium 2 bedroom apartment as a condition to such Unit being allotted.

Preferred Income Units D1 Class Units: The terms of the D1 Class Units are as follows:

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

1 Terms of Units continued...

1. Each Unit entitles the holder to a return of up to 14% per annum on their capital invested for the term in which they hold their D1 Class Unit. This return entitlement is to be provided to the holder of the Unit as follows: (a) a fixed payment of 6% of the Unit price per annum, with such distribution paid to the holder annually; and (b) a return out of Development Profits capped at a maximum of 8% of the Unit price per annum for the term in which they hold their D1 Class Unit. When calculating such return entitlement, the return shall accrue for the term of the Unit but not compound during the term. Any entitlement to such investment return will also be conditional upon settlement of all of the Apartment and other asset sales comprised in the Development and payment of all liabilities, costs and expenses associated with the Development.

2. A right to receive the return entitlement in priority to all other dividends or distributions payable to A1 Class, B1 Class and C1 Class Unitholders.

3. Entitlement to a return of capital invested upon completion of the Development subject to there being sufficient Development Proceeds and subject to settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

4. A right to receive a return of capital on winding up or reduction of capital (whether on termination of Unit or otherwise) ranking equally with the holders of D1 Class Units but in priority to holders of A1 Class, B1 Class, and C1 Class Units. Such capital rights are limited to the assets of the Fund which relate to the Development.

5. Other than the entitlement to income and capital distributions referred to in items 1 to 4 above, Unit holders do not have an entitlement to any other income or capital of the Fund.

6. If the Development does not proceed for any reason and the Property is sold then the Unitholder shall be entitled to a return of capital proportionate to the number of D1 Class Units held (and in priority to holders of A1 Class, B1 Class and C1 Class Units), less all transaction costs incurred by the Fund for the Development after all such transaction costs have been paid. Note: This may result in a loss of some or all invested capital.

7. In the event that the Fund is wound up prior to completion of the Development, the Unit holder shall be entitled to a return of capital proportionate to the number of D1 Class Units held and ranking in priority to A1 to C1 Class Units, less all transaction costs incurred by the Fund for the Development after all such transaction costs have been paid.

8. The Units terminate on a date being: (i) up to three (3) years from their date of issue or (ii) upon sixty (60) days following the completion of the Development, settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development, whichever is the earlier (and subject to the Responsible Entity’s right to extend the term of Units under the Constitution in order to facilitate completion of the Development prior to expiration of the term of Units).

Unitholders shall be entitled to one (1) vote per Unit held for meetings of Unitholders.

Debt Funding

In addition to equity raised under the Offer, the Fund may obtain debt funding for the purchase of the property, and will obtain debt funding to undertake the Development.

The Investment Manager reserves the right to utilise debt funding as it considers necessary or appropriate.

The Investment Manager will secure suitable construction funding from a domestic or foreign bank or other suitable lenders. Based on the Investment Manager’s experience and external advice of current construction financing markets, the debt facility sought is anticipated to satisfy lender criteria.

Based on the indicative feasibility model, the Fund is expected to have a maximum LVR of no greater than 60% once construction facilities have been fully drawn down, inclusive of capitalised interest and fees. The Investment Manager reserves the right to change the level of construction gearing if required, as is considered appropriate and in the best interests of Unitholders.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

23

1 Further Funding

Please note that if further funding is required to complete the Development, then the Investment Manager will seek additional debt funding from the financier of the Development and/or other financiers. Funding may also be sought by way of equity capital raising if required for the purposes of completing the Development, which may have the effect of diluting the holders of A1 Class, B1 Class, C1 Class and D1 Class Units.

Please note that the Investment Manager has allowed for significant contingencies in its budgets for the Development and the Development costs, and assumptions have been independently verified. The Investment Manager does not anticipate that additional funding should be required. However, in the unlikely event that further funding is required to complete the Development, it is a reasonable expectation that this additional Development funding will be available.

Forecast Development Completion

Up to 30 months from Offer Close Date.

Timeframe

The Development is estimated to take up to 30 months from Offer Close Date.

Term of Investment

Subject to there being sufficient Development Proceeds, an Investor will receive a return of capital and any investment returns following the completion of the Development, settlement of all property sales comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

Liquidity

The Fund is an illiquid unlisted Fund.

The Units must be considered an illiquid investment. The Units will not be listed on a stock exchange and no redemption facility or withdrawal rights will be offered to Investors.

Upon completion of the Development and acquisition of the Apartments, Investors will be in a position to retain or sell their Apartment as they wish.

Risks

There are risks associated with an investment in the Fund which should be closely considered by Investors wishing to make an investment in the Fund, prior to submitting an Application for Units and entering into an Apartment Purchase Contract.

The Responsible Entity has identified these risks to include specific property risks, financial risks and general investment risks. Please refer to Section 9 of this PDS for further information concerning the risks of investing in the Fund and this Offer.

Fees

Refer to Section 10 for detailed information concerning fees and other costs applicable to the Driftwood Project.

Note: 50% of the upfront fees payable to the Investment Manager and Development Manager will be held in escrow until such time as the Fund receives a letter of offer for funding the Development from a Senior Lender.

24

Gearing Ratio

The anticipated LVR ratio for a Development undertaken by the Fund will be no greater than 60%. However, the Fund’s maximum gearing ratio will be 70%.

Interest Cover Ratio

It is expected that any borrowings obtained in connection with a Development Project will provide for interest to be capitalised and repayment on completion of the loan term (anticipated to be aligned with completion of the Development). The borrowings plus capitalised interest will be paid out of sales from properties comprised in the Development Project. On this basis, it is anticipated that the interest cover ratio for Development Projects conducted by the Fund will be zero.

Diversification

The Units offered will only relate to the Development. Therefore, there is limited diversification.

FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

1 Distribution Practices

Other than the annual 6% distribution yield paid to holders of D1 Class Units, there will be no distributions to Investors until completion of the Development.

Withdrawal Arrangements

Units do not have withdrawal rights and will not be able to be redeemed prior to expiration of their Term, unless otherwise determined by the Responsible Entity upon the completion of a Development prior to expiration of the Term of the Units.

Responsible Entity

Axias Funds Ltd ABN 44 131 251 968 AFSL 327340

Investment Manager

Future Funds Management Pty Ltd (ACN 155 884 227) Future Funds Management Pty Ltd is a specialist property funds manager with a focus on value creation. Future Funds Management is a specialist in the residential property asset class, with particular expertise in delivering investment grade residential development projects. Future Funds Management has an in-house research team which uses quantitative analysis methods to identify capital cities and regions anticipated to offer superior property investment potential. Future Funds Management combines the local knowledge of its internal team of property specialists with the broad macro perspectives gained through rigorous and extensive market research to identify and successfully manage compelling risk-mitigated investment opportunities for clients.

Future Funds Management Pty Ltd is the funds management arm of Future Estate Group and is a Corporate Authorised Representative of the Responsible Entity.

Development Manager

Future Estate Group Pty Ltd (ACN 155 880 363) Future Estate is a specialist Australian residential property advisory, investment and development management firm. Future Estate is focused on achieving superior above-market returns on a risk-adjusted basis for its clients and investors. Future Estate aims to deliver higher investment returns through superior research and analysis, stringent risk management, focused asset management and best-practice corporate governance. Future Estate is currently invested in, managing and advising on residential property projects with an end value in excess of $250 million.

Future Estate’s strengths §§ Track record §§ Market knowledge §§ Solution and outcome focused §§ Professional and ethical in all of their actions §§ Strong relationships with major lenders and investors §§ Development Management, Project Management and Construction expertise §§ Funds Management and Asset Management expertise §§ In-house Research Team and proprietary quantitative market analysis and prediction models §§ Structured Finance, Commercial and Investment Banking expertise §§ Stringent processes, support systems and compliance checks in place §§ Best practice corporate governance Future Estate has an experienced management team and advisory board comprising professionals with a diverse background, including investment banking, funds management, property investment and development, building and project management, commercial banking, project financing and business administration.

Project Manager

It is presently intended that Highgate Management Pty Ltd (ACN 127 980 830) be engaged as client-side Project Manager, although a formal contract of engagement has not yet been entered into.

Highgate Management Pty Ltd provides development advisory and management services to both public and

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

25

1 Project Manager continued...

private sector clients. It combines its deep industry knowledge and experience with benefits-driven project planning, governance and delivery methods to create end value for its clients while reducing risks. Highgate Management Pty Ltd has successfully delivered over $1 billion of construction projects in Australia.

The Investment Manager reserves the right to appoint another suitable third party as Project Manager, should it be considered in the best interests of the Fund to do so.

Architect

AG Architects Pty Ltd (ACN 123 240 433) is the architect for the Development, conditional upon the Fund completing the purchase of the Property.

Builder

Subject to the Fund completing the purchase of the Property and the execution of commercially sound contractual agreements, the Investment Manager has identified Reed Construction Queensland Pty Ltd (‘RCQ’) as the preferred builder for the Development. RCQ are a large and established builder with financial capacity, scale, track record and importantly, significant experience delivering large scale and complex residential construction projects. RCQ are amongst the largest builders in the North QLD region. It is intended that RCQ enter into a fixed price and time contract on a ‘design and construct’ basis.

The Investment Manager reserves the right to appoint another suitable builder, should it be considered in the best interests of the Fund to do so.

Relevant Dates

Application forms are required to be submitted, with payment (by Electronic Funds Transfer), by 5.00pm on the Closing Date to Future Estate Group Pty Ltd, C/O the Investment Manager, Level 7, AMP Centre, 50 Bridge Street, Sydney NSW 2000.

An Application for Manufactured Equity Product (A1 to C1 Class Units) will not be accepted and processed until such time as the Investor has also executed an Apartment Purchase Contract. If an Investor who applies for A1 to C1 Class Units does not also execute an Apartment Purchase Contract (and provide a satisfactory deposit) then the Investor’s Application monies will be refunded and Units not issued.

Please refer to the Application Form at Section 15.

Withdrawal of Offer

The Responsible Entity and the Investment Manager reserve the right not to proceed with the Offer at any time before the issue of Units to successful Applicants. If the Offer does not proceed, Application monies will be returned to an Applicant.

Taxation

Please refer to Section 12 for further information regarding taxation issues concerning the Fund and Investors.

Please note, the taxation considerations of an investment will depend on the particular financial and taxation circumstances of the Applicant. It is the obligation of the Applicant to make their own enquiries concerning taxation consequences of an investment in the Fund and the purchase of an Apartment. If you are in doubt, you are encouraged to consult your accountant, lawyer or other professional adviser.

The Responsible Entity and the Investment Manager do not provide specific taxation advice to Investors and any potential Investors are recommended to seek their own expert taxation advice in relation to the taxation considerations concerning the acquisition of Units in the Fund and purchase of an Apartment.

How to Apply

Please refer to Section 14 for further information on how to apply and the Application Forms.

No Cooling-Off Period

There is no cooling-off period in relation to the issue of Units in the Fund under this PDS due to the illiquid nature of the Units. Therefore, as Units will be issued by the Responsible Entity, there is no obligation by the Responsible Entity to accept a request by an Applicant to withdraw their Application once received.

However, please note that an Application for A1 to C1 Class Units will not be accepted and processed until such time as a fully executed Apartment Purchase Contract has also been submitted. If an Investor who applies for A1 to C1 Class Units does not also execute an Apartment Purchase Contract (and provide a satisfactory deposit) then the Investor’s Application monies will be refunded and Units not issued.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

27

1 1.2

Anticipated timing of payments under the Investment:

Manufactured Equity Product (A1 Class, B1 Class and C1 Class Units):

Investment Step:

Amount required to be paid by you:

When is payment required?

Step 1

Investors will be required to pay the subscription monies for the Unit in the Fund:

(During Offer Period)

Purchase Unit in Fund

§§ A1 Class Unit: $100,000

Upon making your Application for a Unit in the Fund.

§§ B1 Class Unit: $125,000 §§ C1 Class Unit: $150,000 Step 2

Enter Contract to Purchase Apartment off the plan

Investors are required to pay the 10% deposit under the contract (or provide a bank guarantee in lieu of deposit):

(During Offer Period) Upon entering into Contract.

Deposit Amounts: §§ 1 bed apartment: $36,000 to $45,500 §§ 2 bed apartment (standard): $47,000 to $52,750 §§ 2 bed apartment (premium): $53,000 to $59,000

Step 3

Settlement on purchase of Apartment.

Settlement of Apartment purchase

Pay balance of Apartment price plus any applicable stamp duty and other purchase transaction costs.

Step 4

Subject to there being sufficient Development Proceeds, Investors are entitled to receive their investment return on Units and a return of capital paid. Potential returns are:

Investment Return on Units and return of capital paid

§§ A1 Class Unit: $54,000 – $68,250 §§ B1 Class Unit: $70,500 – $79,125 §§ C1 Class Unit: $79,500 – $88,500

Actual site photo.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

Upon completion of Development.

Upon completion of the Development, settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development (and payment of priority returns to D1 Class Unitholders).

1 Preferred Income Units (D1 Class Units):

Investment Step:

Amount required to be paid by you:

When is payment required?

Step 1

Investors will be required to pay the subscription monies for the Unit in the Fund:

(During Offer Period)

Purchase Unit in Fund

Step 2

Receive preferential investment return

D1 Class Unit: $25,000

Upon making your Application for a Unit in the Fund.

An entitlement to receive a return out of Development Profits capped at a maximum of 14% per annum (6% distribution yield) on capital invested for the term in which Units are held (accruing for the term of the investment but not compounding).

Upon completion of the Development, settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

The 6% per annum distribution yield is paid annually, being a distribution payment of 6% per annum of the capital invested by the Investor.

Step 3

Return of capital

1.3

Subject to there being sufficient Development Proceeds, return of capital invested.

Estimated December 2015.

Upon completion of the Development, settlement of sale of all Apartments and other assets comprised in the Development and payment of all liabilities, costs, fees and other expenses associated with the Development.

Additional Disclosures in relation to Preferred Income Units (D1 Class Units)

The D1 Class Units carry a right to a return out of Development Profits capped at a maximum return equal to 14% per annum (6% distribution yield) based on capital invested for the duration of the term of the D1 Class Units.

For example, if an Investor acquires 1 x D1 Class Unit and as at completion of the Development and expiration of the term of the Unit the Investor has held the Unit for 30 months, and there are sufficient Development Proceeds for a D1 Class Unit holder to receive their maximum capped investment amount and a return of capital, then the Investor would receive: $25,000 initial capital invested; $3,500 investment return entitlement for Year 1 (based on 14% per annum of capital invested) of which $1,500 (or 6%) is paid as cash distributions;

$3,500 investment return entitlement for Year 2 (based on 14% per annum of capital invested) of which $1,500 (or 6%) is paid as cash distributions; $1,750 investment return entitlement for Year 3 (based on 14% per annum of capital invested for a period of 6 months); EQUALS: $8,750 total investment return and return of capital at completion ($33,750 including return of capital).

Please note: the above example is based on the maximum investment return and return of capital that an Investor would be entitled to receive on a D1 Class Unit for the period of investment set out in the example. If there are insufficient Development Profits, an Investor may receive less than such amounts. However, the entitlement to an annual return of 6% per annum on capital invested is fixed.

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1 1.4

ASIC Regulatory Guide 69: Debentures and Notes

Although the D1 Class Units represent equity in the Fund (limited to the interest of the Fund in the Development Project), the D1 Class Units bear similarities to an unlisted unsecured note.

ASIC have released Regulatory Guide 69 wherein they provide guidelines for the disclosure to retail investors of information concerning the Fund, the Offer and financial products, so as to help Investors to understand and assess financial products such as unsecured notes.

To the extent that the D1 Class Units are considered similar to unlisted unsecured notes, the Fund wishes to provide the following additional disclosure to Investors in accordance with Regulatory Guide 69.

ASIC Benchmarks for unlisted notes, with their policy rationale and the Fund’s response, is set out below:

Benchmark

ASIC Policy Rationale

Fund Response

(1) Equity Ratio

If the issuer has less equity capital invested in the business, there might be no safety margin to tide things over if the business runs into financial difficulties. It could also mean that the issuer has less incentive to operate the business prudently and responsibly because less of its own money is at risk.

The Fund is intending to fund the Development via equity funding raised via this Offer, along with debt funding sourced from a Senior Lender.

Liquidity is an important measure of the short-term financial health of an issuer or business. If the issuer has insufficient cash or liquid assets, it might be unable to meet its shortterm obligations (e.g. to run the business properly, pay interest, or pay investors their money back at the end of the term).

The Fund is carrying out a property development project. By their very nature, property developments generate no revenue until such time as the development completes and the properties comprised in the development can be sold.

(2) Liquidity

The Fund intends for there to be a 60% LVR for the Development (with a maximum LVR of 70%). Funds raised under this Offer will provide equity. Therefore, the Fund intends to have a greater equity ratio than the benchmark minimum equity ratio of 20%.

The Investment Manager considers that sufficient contingency costs have been allowed for in the feasibility model for the Development as set out in this PDS.

In any event, out of funds raised under the Offer, the Fund will have sufficient cash flow to meet its projected cash needs over the next three months, as is required by the benchmark.

Furthermore, the Fund shall ensure that debt funding for the Development is interest accruing and capitalising and repayable on completion of the Development and realisation of Development Proceeds via the sale of apartments comprised in the Development.

Thus, the terms of the Fund’s Development debt funding should not detrimentally impact the Fund’s liquidity and financial health.

Other than the 6% per annum return on capital invested that is payable to D1 Class Unit holders during the term, the Fund does not have to return capital or investment returns to Investors until such time as the Development completes and the Development proceeds are realised. The Fund has appropriately budgeted for such returns that will be payable on D1 Class Units during the term. Therefore, the rights of equity investors should not detrimentally impact the Fund’s liquidity and financial health.

The ongoing fees and costs of the Development and the Fund prior to completion of the Development and realisation of Development Proceeds have been factored into the project costs summary set out in Section 6 of this PDS and will be funded out of funds raised under this Offer and debt funding sourced from a Senior Lender. Such fee and cost obligations should not therefore detrimentally affect the Fund’s liquidity and financial health.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

1 Benchmark

ASIC Policy Rationale

Fund Response

(3) Rollovers

Some note issuers rely on investors keeping their funds in the investment beyond the end of the initial period. In some cases, the terms of the issue allow this to occur automatically unless the investor makes a positive decision to withdraw their funds. In other cases, it is the investor who makes a positive decision to have their funds reinvested. It is important that investors fully understand the issuer’s approach to rollovers through clear disclosure in the PDS.

Holders of D1 Class Units have no withdrawal rights.

The term of D1 Class Units will be in line with the timeframe for completion of the Development.

The investors will receive a return of their investment capital and an investment return (subject to there being sufficient Development Profits) at the end of the term of the Units.

Investors’ funds will not be rolled over into another investment or development project of the Fund at the end of the term. At completion of the investment term, the Fund may offer the Investor the opportunity to reinvest their capital in another investment opportunity offered by the Fund, however, in such circumstances the Investor will be given a reasonable opportunity to consider such investment opportunity and have the sole discretion to elect whether to proceed with such investment opportunity.

The term of the Units will be 3 years or within 60 days following completion of the Development (whichever is the earlier). However, this term is subject to the Responsible Entity’s right to extend the term of units in order to ensure that the timeframe for completion of the Development and realisation of Development proceeds occurs prior to the expiration of the term of the Units.

(4) Debt maturity

Disclosure of debt maturities will assist investors in understanding how the business is funded in terms of the nature, timing and cost of the issuer’s debt obligations.

The Fund will procure that its subsidiary, SRVF No 1 Pty Ltd (‘SPV Development Co’), obtain a loan from a Senior Lender for the purposes of funding the Development costs.

Once the loan from the Senior Lender has been obtained, and the terms of such loan confirmed, the Fund will make disclosure of such information to Investors.

However, it is anticipated that the loan be made for the duration of the term of the Development (estimated up to 24 months) and that interest be at standard commercial rates for a property development of this nature.

(5) Loan portfolio

(6) Related party transactions

If the issuer’s loan portfolio is heavily concentrated into a small number of loans, or loans to a small number of borrowers, there is a higher risk that a single negative event affecting one loan will put the overall portfolio (and investors’ money) at risk.

For the purposes of the Development, the Fund intends to advance funds only to its subsidiary, the SPV Development Co, for the purposes of carrying out the Development.

The risk with related party transactions is that they might not be made with the same rigour and independence as transactions made on an arm’s-length commercial basis. There is a greater risk of the loans defaulting and, therefore, investors’ money is at greater risk if:

The Fund or its subsidiary may engage related parties to provide services to the Fund on a Development Project and the Fund may provide a loan to the SPV Development Co for the purpose of undertaking the Development.

The Fund has no current loans, and will not make any future loans other than the abovementioned advance of funds to its subsidiary to carry out the Development.

The Fund will ensure that the terms of the service arrangements, and the fees payable, are on arm’s length terms and in accordance with industry standards.

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31

1 Benchmark

ASIC Policy Rationale

Fund Response

(6) Related party transactions

§§ the issuer has a high number of loans to related parties; and

The Fund will ensure that the loan advanced to a related party is on arm’s length terms, in accordance with market rates / industry standards, supported by a binding legal agreement and secured by a charge over the borrower entity.

continued...

(7) Valuations

§§ the assessment and approval process for these loans is not independent.

If the issuer does not include information about valuations in the PDS, it will be more difficult for investors to assess how risky the investment is. Keeping valuations up-to-date and shared among a panel means they are more likely to be accurate and independent.

The Fund’s policy is to obtain an independent valuation of each property acquired by the Fund for the purpose of a Development Project.

The Fund’s policy with respect to valuations further requires that: §§ the valuer be independent, appropriately qualified and registered; §§ the valuer not have a conflict of interest; §§ the Fund use different individual valuers across different Development Projects where appropriate and possibly on a case-by-case basis; §§ valuations of property assets be obtained at or prior to acquisition of a property. In the unlikely circumstance where a property may be valued after acquisition, an appropriate adjustment mechanism be agreed with the relevant vendor so that the Fund ultimately only pays a purchase price that accords with, or is below, market valuation; §§ a valuation used and relied upon in support for a property acquisition shall not be used if more than 6 months old; §§ it is intended that independent valuations be obtained before a property is purchased, in which case if it is a development property the valuation is to be on an ‘as is’ and ‘as if complete’ basis, and for any other property on an ‘as is’ basis.

An independent valuation is to be obtained within 3 months after directors form a view that there is a likelihood that there has been a material change in the value of the property.

The Fund shall advise its Investors on an ongoing basis as to the value of its property assets as determined by independent valuations.

(8) Lending principles – Loan to Valuation Ratios

A high loan-to-valuation ratio means that the investment is more vulnerable to changing market conditions, such as a downturn in the property market.

Therefore, the risk of investors losing their money could be higher.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

The Fund will only intend to advance funds via a loan to its subsidiary for the purpose of carrying out the Development.

Such loan monies will rank behind the loan provided to the subsidiary by the Senior Lender.

Accordingly, the LVR for such loan may be higher than the benchmark of 70% on the basis of the latest complying valuation.

The funds will only be provided to the subsidiary in stages based on the external evidence of the progress of the Development.

PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER

33

2. general terms OF THE FUND Item

Details

Scheme

Future Estate Australian Residential Property Fund (ARSN 134 516 724)

Responsible Entity

Axias Funds Ltd (ABN 44 131 251 968) (AFSL 327340)

Investment Manager

Future Funds Management Pty Ltd (ACN 155 884 227)

Application of Funds raised under Offer

The funds raised under an Offer will be used for the following purposes: §§ to fund or partially fund the acquisition of the Property; §§ to fund or partially fund the costs associated with the establishment of the Fund and the Offer; and §§ to fund or partially fund the costs, expenses and fees associated with the Development and the Offer.

Investment Timeframe

A Development undertaken by the Fund is generally anticipated to take between 18 and 36 months from the date of settlement of the purchase of a Property through to completion of the Development.

Term of Units

The class of Units issued in the Fund for a particular Development project will have a fixed term attached to it, which is linked to the anticipated completion date of the Development relating to that class of Units.

The term of the Units may be extended as required in order to ensure that the Units expire following completion of the Development to which the Units relate.

Upon expiration of the Units, the Units will be redeemed and capital invested returned to Investors (to the extent that such return of capital is possible out of Development Proceeds or other realisable assets held by the Fund and associated with the relevant class of Units).

Liquidity

The Units must be considered an illiquid investment. The Units will not be listed on a stock exchange and no redemption facility or withdrawal rights will be offered to Investors.

Debt Funding for Development

The Fund will seek debt funding from a Senior Lender to partially finance a Development undertaken by the Fund.

Gearing Ratio

The anticipated LVR ratio for a Development undertaken by the Fund will be no greater than 60%. However, the Fund’s maximum gearing ratio will be 70%.

The gearing ratio may vary on a Class by Class basis. Please refer to Section 1 for further information relating to the gearing ratio for the Class subject of the Offer.

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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

2 Item

Details

Interest Cover Ratio

The Interest Cover Ratio relates to available income to pay interest on debts pertaining to a Development of the Fund. In general, property developments do not generate income until construction is complete and the building or buildings are occupied. The interest cover ratio is calculated separately for each Class. If applicable, the interest cover ratio for a particular Class is set out in Section 1.

Fund Borrowings

It is intended that a subsidiary of the Fund which undertakes a Development Project will obtain finance from a Senior Lender for the purpose of undertaking a Development. The Fund will act to ensure that any finance obtained will be limited recourse to the assets of the Fund which relate to the Class in which finance is sought from the Senior Lender.

Section 6 provides details of the Development and the estimated construction costs, fees and other costs associated with the Development. Details concerning the anticipated borrowings required for a particular Development project will also be set out.

Diversification

There is limited diversification offered to Investors. Investors will subscribe for Class Units in the Fund. The Units will generally relate to one particular Development project undertaken by the Fund. An investment in a particular Class of Units will not provide Investors with an investment in a diversified portfolio of assets or even provide Investors with an interest in other Development projects being undertaken by the Fund and to which other Classes of Units relate. The benefit of this is that investors can select which specific projects they wish to invest in.

Valuation Policy

The Fund will obtain an independent valuation of a Property selected for acquisition and proposed development by the Fund, at or prior to acquiring the Property. The valuation obtained may comprise an ‘as is’ valuation assessed as at the time of acquisition and an ‘on completion’ valuation of the Property assessed as at projected completion of the Development. Details of a valuation obtained are included in Section 1.

Related Party Transactions

The Fund will, in certain circumstances, acquire Properties for a proposed Development from a related party of the Fund. The Fund may also purchase a Property for a Development from unrelated vendors.

In circumstances where the Fund acquires a Property from a related party, the Fund will ensure that the purchase price of the Property equates to an arm’s length commercial terms purchase price and is not favourable to either party. The Fund will obtain relevant supporting information, including valuations where appropriate or necessary, for the purpose of verifying the terms of purchase as being on an arm’s length commercial basis.

The Fund may engage related or unrelated parties to undertake certain management, consulting, sales and project marketing and administrative services in connection with a Development project or in connection with the operation and management of the Fund with respect to that Development Project. In circumstances where a related party is engaged to perform such services, the Fund will ensure that any such engagement is on commercial arm’s length terms, at or below prevailing market rates for such services, and supported by a binding contractual agreement between the parties.

Distribution Practices

Other than D1 Class Units, the Fund will only pay distributions out of realised income and not from unrealised gains or from capital (with the exception of distributions of a portion of net Development Profits from the sale of a Development Project).

The Fund will generally issue Classes of Units that will not entitle the holder to any returns or distributions on their Units until completion of the Development and confirmation of Development Proceeds being attained. Any Units issued in a Class to which an Investor is also required to purchase an Apartment in the Development will be subject to such terms, including an additional term requiring that Investor to settle on the purchase of their Apartment before being entitled to receive any distributions on their Units.

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35

2 Item

Details

Distribution Practices

The Fund may issue Units of a Class that entitles the Investor to distributions on an ongoing basis during the term of a Development Project, however in general, distributions will occur after the completion of a Development Project.

continued...

The D1 Class Units being offered under this PDS are an example of Units of a Class that entitles the Investor to distributions on an ongoing basis during the term of a Development Project.

Distributions will be determined separately for each Class of Unit. Certain Classes of Units issued for a Development Project will be subject to a capped maximum distribution amount.

It is intended that Fund distributions will be paid out of net income derived from a particular Development Project. Distributions will only be made from realised income generated from a Development Project and not from borrowings and/or unrealised gains. In circumstances where accounting income returned by the Fund exceeds taxable income (in respect of a Class of Units), capital distributions may be made to Investors.

Upon redemption of Units on expiry of their term, Investors may receive a capital distribution on their Units.

Withdrawal arrangements

Units do not have withdrawal rights and will not be able to be redeemed prior to expiration of their Term, unless otherwise determined by the Responsible Entity or Investment Manager (as the case may be) upon the completion of a Development prior to expiration of the Term of the Units.

Fees and Expenses

Once off and ongoing, fees are payable in relation to the establishment and ongoing operation of the Fund and conduct of a Development.

The Fees and Other Costs that will generally apply for the Fund, and in connection with a Development Project undertaken by the Fund, may include the following: §§ Establishment Fee §§ Equity Arrangement Fee §§ Debt Arrangement Fee §§ Development Management Fee §§ Sales Management Fees §§ Residual Profit Share Entitlements Please refer to Section 10 for details confirming the particular fees and costs applicable for the Development subject of an Offer.

Existing Fund Assets

The Fund is currently undertaking a residential property development in Mackay, constructing 64 apartments with an anticipated Gross Realisation Value of approximately $33 million. This is known as the Riviera Mackay development project.

There are Investors in the Fund who have acquired Riviera Mackay Class Units which relate only to the Riviera Mackay Development. Investors holding Riviera Mackay Class Units have no entitlement to receive any proceeds or returns from the Driftwood Project.

Investors who acquire A1 to D1 Units in the Fund under the Offer made by this PDS will not acquire any interest in the Riviera Mackay development project and shall not receive any entitlement to receive any proceeds or returns from the Riviera Mackay development project.

Any finance obtained by the Fund in connection with the Riviera Mackay development project is limited recourse to the property subject of that development project.

Risks

36

Investors will be subject to the risks associated with investing in the property sector, and in particular, the risks associated with the property development and the Fund’s borrowings.

FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND

2 Item

Details

Constitution

Investors’ rights are governed by the Fund’s Constitution.

Taxation

For details on the taxation of the Fund and relevant taxation issues for Investors, please refer to Section 12.

Reporting

Investors will receive quarterly updates regarding the operation of the Fund and the status of the Development along with an Annual Financial Report for the Scheme.

Updated Key Investor Information

In circumstances where there are changes concerning the Fund’s policies with respect to: §§ Gearing ratio; §§ Interest cover ratio; §§ Fund borrowings; §§ Diversification; §§ Valuation policy; §§ Related party transactions; §§ Distribution practices; or §§ Withdrawal arrangements such changes will be notified to Investors.

No Cooling Off

No cooling off period is available to Investors in the Fund.

Complaints

The Fund’s complaints handling procedure is available upon request from the Investment Manager at info@futurefundsmanagement.com.au.

Complaints may be made to the Investment Manager at info@futurefundsmanagement.com.au or c/o Future Estate on 1300 FUTURE (388 873) or complaints@futureestate.com.au.

Contact Details

To contact the Investment Manager of the Fund please call 1300 FUTURE (388 873) or email info@futurefundsmanagement.com.au.

Actual site photo.

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37

3.

What Potential Investors Need to do Step 1

Read this PDS in its entirety.

Step 2

Consider all risk factors and other information concerning the Fund in light of your investment objectives and circumstances. In particular, consider the fact that the Fund is unlisted and the illiquid nature of an investment in the Fund.

Step 3

Consult your financial adviser and other professional advisers before making an investment decision.

Step 4

Complete the Application Form attached to or accompanying this PDS. Upon the completion of your Application Form, you must pay for your Units by either Electronic Funds Transfer or cheque in Australian currency.

Step 5

Application amounts must be: A1 Class Unit: $100,000 B1 Class Unit: $125,000 C1 Class Unit: $150,000 D1 Class Unit: $25,000 Cheques should be crossed ‘Not Negotiable’ and made payable to ‘The Trust Company Limited ACF Axias Funds Limited’.

If Investors wish to pay their subscription monies by electronic funds transfer, please return Application Forms and deposit investment monies into the following account with Investor name as a reference: Account title: THE TRUST COMPANY LIMITED ACF AXIAS FUNDS LIMITED BSB: 082 057 Account number: 94 501 9317

Step 6

The completed Application Form, together with your cheque, should be returned in accordance with instructions from your financial advisor or mailed to: Future Estate Australian Residential Property Fund, C/O Future Estate Group Pty Ltd, Level 7 AMP Centre, 50 Bridge Street, Sydney NSW 2000

Step 7

For Investors acquiring Manufactured Equity Product Units (A1 to C1 Class Units): 1. an Apartment Purchase Contract must be properly executed and returned along with all associated documents; plus 2. payment of the deposit payable on the Apartment Purchase Contract (or provision of a bank guarantee).

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