4 Acacia Apartments
1 7
5
Inte Exte
6
4
2
1 7
A 1. Kitchen
5
3. Master Ro
3 Internal Living External Living
5. Second B
70 SQM 11 SQM
7. Second B
8
1
6
Sliding
7
Cupboa Laundry
2
3
ACACIA FLOOR PLAN 4
Hot Wa A/C uni
ACACIA FLOOR PLAN
5
6
1. Kitchen 8
5. Second Bedroom 2
2. Living Room
6. Study
3. Master Bedroom
7. Second Bathroom
4. Ensuite Bathroom
8. Balcony
3
1. Kitchen
2. Living Room Internal Living
3. Master Room
4. Ensuite Bathroom
5. Second Bedroom
6. Study
7. Second Bathroom
8. Balcony
Internal Living Area
70 SQM 11 SQM
External Living
70 SQM
External Living Area 11 SQM OTHERS Sliding Door & Window
Sliding Door & Window Cupboard
Cupboard Door & Bifold Door & Bifold Laundry Laundry
ACACIA FLOOR PLAN
1. Kitchen
2. Living Room
Hot Water Cylinder + 3. Master Room A/C unit
4. Ensuite Bathroom
5. Second Bedroom
6. Study
7. Second Bathroom
8. Balcony
8
OTHERS Sliding Door & Window Cupboard Door & Bifold Laundry Hot Water Cylinder + A/C unit
48
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
4 Melaleuca Apartments
MELALEUCA FLOOR PLAN
1
1
1. Study
2. Family Bathroom
3. Second Bedroom
4. Master Bedroom
5. Ensuite
6. Kitchen
7. Living Room
8. Balcony
2
OTHERS Sliding Door & Window
Internal Living External Living
Hot Water Cylinder + A/C unit
Internal Living External Living
74 SQM 14 SQM
70 SQM 11 SQM
3
2
7
4ACACIA FLOOR PLAN
5
1. Kitchen
2. Living Room
3. Master Room
4. Ensuite Bathroom
5. Second Bedroom
6. Study
7. Second Bathroom
8. Balcony
6
8
OTHERS Sliding Door & Window Cupboard Door & Bifold Laundry Hot Water Cylinder + A/C unit
MELALEUCA FLOOR PLAN
1
MELALEUCA FLOOR PLAN 1. Study 2. Family Bathroom
2
1. Study
2. Family Bathroom
3. Second Bedroom
4. Master Bedroom
5. Ensuite
6. Kitchen
5. Ensuite Bathroom
Internal LivingRoom Area 7. Living
6. Kitchen
External Living Area 14 SQM OTHERS
3. Second Bedroom
7. Living Room
4. Master Bedroom
8. Balcony
74 SQM8. Balcony
Sliding Door & Window Sliding Door & Window Hot Water Cylinder + A/C unit
Internal Living External Living
3
7
4 6 5
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
49
4 Banksia Apartments
5
2
4
Internal Living External Living
8 3
1
BANKSIA FLOOR
7
1
6
5
Internal Living External Living
1
70 SQM 11 SQM
4. Sec
5. Family Bathroom
6. Ma
7. Ensuite Bathroom
8. Bal
Cupboard Door & Bifold Laundry Hot Water Cylinder + A/C unit
5
2 Internal Living External Living
ACACIA FLOOR PLAN
6
4
BANKSIA FLOOR PLAN 1. Kitchen 8 2. Laundry Cupboard
2
1. Kitchen
2. Living Room
3. Master Room
4. Ensuite Bathroom
5. Second Bedroom
6. Study
7. Second Bathroom
8. Balcony
5. Family Bathroom
Internal Living Area
6. Master Bedroom
External Living Area 23 SQM OTHERS
3. Living Room3
7. Ensuite Bathroom
4. Second Bedroom
8. Balcony 8
69 SQM
Sliding Door & Window
Sliding Door & Window Cupboard
ACACIA FLOOR PLAN
1. Kitchen
2. Living Room
3. Master Room
4. Ensuite Bathroom
Cupboard Door & Bifold 5. Second Bedroom Door & Bifold Laundry Laundry Hot Water Cylinder + A/C unit
70 SQM 11 SQM
6. Study
7. Second Bathroom
8. Balcony
OTHERS Sliding Door & Window Cupboard Door & Bifold Laundry Hot Water Cylinder + A/C unit
50
3. Living Room
Sliding Door & Window
7
3
2. Lau
OTHERS
7
6
1. Kitchen
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
4 Eucalypt Apartments
5 3 Internal Living External Living
4
EUCALYPT FLOOR
2
1
1
7
1. Study / Laundry
2. Kitc
3. Living Room
4. Mas
5. Balcony
6. Bath
OTHERS
6
Sliding Door & Window
5
Hot Water Cylinder + A/C unit Internal Living External Living
70 SQM 11 SQM
MELALEUCA FLOOR PLAN
6
4
1
2 EUCALYPT FLOOR PLAN
1. Study / Laundry 2. Kitchen 3
3. Living Room
2. Family Bathroom
3. Second Bedroom
4. Master Bedroom
5. Ensuite
6. Kitchen
FLOOR PLAN Internal LivingRoom Area ACACIA 52 SQM 7. Living 8. Balcony External Living Area 16 SQM OTHERS 2. Living Room 1. Kitchen
4. Master Bedroom 2
1. Study
5. Balcony
Sliding Door & Window 3. Master Room Sliding Door & Window
6. Bathroom
5. Second Bedroom Hot Water Cylinder +
4. Ensuite Bathroom 6. Study
A/C unit
7. Second Bathroom
Internal Living External Living
8. Balcony
8
OTHERS Sliding Door & Window Cupboard Door & Bifold Laundry
3
Hot Water Cylinder + A/C unit
7
4 6 5
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
51
4 Gardenia Apartments
1 3
6
Internal Living External Living
5
2
GARDENIA FLOOR PL
4 7
1. Kitchen
2. Liv
3. Study Room
4. Ma
5. Bathroom
6. lau
7. Balcony
1 7
OTHERS Sliding Door & Window Hot Water Cylinder + A/C unit
5
MELALEUCA FLOOR PLAN Internal Living
70 SQM 11 SQM
External Living
1
GARDENIA FLOOR PLAN 6
4
1. Kitchen
5. Bathroom
2. Living Room 3. Study
2
1. Study
2. Family Bathroom
3. Second Bedroom
4. Master Bedroom
5. Ensuite
6. Kitchen
Internal7.Living Area Living Room
2
58 SQM8. Balcony
External Living Area 18 SQM OTHERS
6. Laundry
ACACIA FLOOR PLAN
Sliding Door & Window Sliding Door & Window
7. Balcony
Hot Water Cylinder + A/C unit
4. Master Bedroom 3
Internal Living External Living
1. Kitchen
2. Living Room
3. Master Room
4. Ensuite Bathroom
5. Second Bedroom
6. Study
7. Second Bathroom
8. Balcony
8
3
OTHERS Sliding Door & Window Cupboard Door & Bifold Laundry Hot Water Cylinder + A/C unit
7
4 6
52
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND 5
Apartment Interior Finishes FLOORS TILES Entry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Living / Dining . . . . . . . . . . . . . . . . . . . . Kitchen . . . . . . . . . . . . . . . . . . . . . . . . . . . Study . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ensuite / Bathroom . . . . . . . . . . . . . . . Laundry . . . . . . . . . . . . . . . . . . . . . . . . . .
Ceramic Tiles Ceramic Tiles Ceramic Tiles Ceramic Tiles Ceramic Tiles Ceramic Tiles
CARPET Robes / WIR . . . . . . . . . . . . . . . . . . . . . . Bedrooms . . . . . . . . . . . . . . . . . . . . . . . .
WALLS PAINT General Areas . . . . . . . . . . . . . . . . . . . . Paint Finish on Plasterboard Doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . Paint Finish Architraves & Skirting . . . . . . . . . . . . . Paint Finish on Pine TILES Ensuites / Bathroom / Laundry . . . . . Generally: Ceramic Wall Tiles With: Tile Feature in Shower Recess and behind vanity
Ceilings Generally . . . . . . . . . . . . . . . . Ceilings Wet Areas . . . . . . . . . . . . . . . . Paint Finish on Water Resistant Plasterboard
Bench Tops . . . . . . . . . . . . . . . . . . . . . . . Cabinetry Generally . . . . . . . . . . . . . . . Feature Cabinetry . . . . . . . . . . . . . . . . . Splash Back . . . . . . . . . . . . . . . . . . . . . . Kickplate . . . . . . . . . . . . . . . . . . . . . . . . . Sink . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tapware . . . . . . . . . . . . . . . . . . . . . . . . . . Cooktop . . . . . . . . . . . . . . . . . . . . . . . . . . Oven . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Rangehood . . . . . . . . . . . . . . . . . . . . . . . Microwave Oven . . . . . . . . . . . . . . . . . . Dishwasher . . . . . . . . . . . . . . . . . . . . . . . Fridge Space . . . . . . . . . . . . . . . . . . . . . Hardware . . . . . . . . . . . . . . . . . . . . . . . . .
Reconstituted Stone or similar Melamine Carcass / Laminate on 16mm MR particle board Melamine Carcass / Laminate on 16mm MR particle board Ceramic Tiles Laminate on 16mm MR particle board Stainless Steel Single Bowl Chrome Mixer Ceramic Cooktop Stainless Steel Electric Oven Slide-Out Stainless Steel Rangehood Freestanding Dishwasher 800mm Wide Satin Chrome Finish Joinery Handles
53
Apartment Interior Finishes
Basin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Toilet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Basin Mixer . . . . . . . . . . . . . . . . . . . . . . . Shower Head. . . . . . . . . . . . . . . . . . . . . . Shower Mixer . . . . . . . . . . . . . . . . . . . . . Mirrored cabinet . . . . . . . . . . . . . . . . . . Shower screen . . . . . . . . . . . . . . . . . . . . Accessories . . . . . . . . . . . . . . . . . . . . . . .
Chrome Mixer Chrome Shower Head Chrome Mixer Frameless with Polished Edges / Melamine carcass Semi Frameless Glass Chrome Fixtures & Fittings
LAUNDRY FITOUT Doors . . . . . . . . . . . . . . . . . . . . . . . . . . . . Tub . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Dryer . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hardware . . . . . . . . . . . . . . . . . . . . . . . . . Tapware . . . . . . . . . . . . . . . . . . . . . . . . . .
Laminate on 16mm MR Particle Board Stainless Steel Tub with under cabinet Wall Hung Dryer Satin Chrome Finish Joinery Handles Chrome Mixer
. . . . . . . . . . . . . . Laminate on 16mm MR particle board .................... Internal . . . . . . . . . . . . . . . . . . . . . . . . . . Melamine Finish Cabinetry and Chrome Finish Hanging Rails Hardware . . . . . . . . . . . . . . . . . . . . . . . . . Satin Chrome Finish Joinery Handles
DOOR HARDWARE . . . . . . . . . . . Metal Lever Handles
Ceiling Fans to Living Areas and Bedrooms Air Conditioning Split System to Living Areas and Bedrooms
Data Points to Living, Study and Bedrooms Telephone Points to Study and Master Bedroom
54
General Finishes
Balcony / Terrace . . . . . . . . . . . . . . . . . . Reinforced Concrete Slab and/or Slip Resistant Tiling . . . . . . . . . . . . . . . . . . . Painted Masonry
............... Doors to Balconies . . . . . . . . . . . . . . . . Windows . . . . . . . . . . . . . . . . . . . . . . . . . Balustrades . . . . . . . . . . . . . . . . . . . . . . .
Standards Fire Rated Doors with Paint Finish Powdercoated Aluminium Framed Sliding Doors with Glazing Powdercoated Aluminium Frames with Glazing In accordance with Council and BCA Requirements Powdercoated Aluminium Framed & Glazed Balustrade
Outdoor Pool Gymnasium Outdoor BBQ Area
4.10 Communal Facilities GYM EQUIPMENT POOL EQUIPMENT BBQ FURNITURE
55
4 4.11 Elevation Images
56
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
4
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
57
4 BUILDING A
AERIAL FLOOR PLANS
58
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
BUILDING B
BUILDING C
4
4 4.12 Indicative Computer Generated Images
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
59
4 4.12.1 Kitchen and Dining
4.12.2 Living Room
60
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
4 4.12.3 Bedroom
4.12.4 Bathroom
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
61
5. Market Information MACKAY
62
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Shaw Is
LAGUNA QUAYS Anchor Islands Linne Is
BLOOMSBURY
Carlisle Is
ST HELENS BEACH
YALBOROO
5.1
Overview of Mackay
Mackay is one of the fastest growing regions in Australia. Looking to the future, robust growth is forecast, with the regional population projected to grow to between 200,000 and 300,000 within 20 years. The growth is driven by a diverse regional economy. Mackay hosts much of the engineering, manufacturing and mining services industries supporting the regional economy. In addition, Mackay boasts agribusiness, tourism, logistics, government sector, education and marine sectors.
Brampton Is
SEAFORTH CAPE HILLSBOROUGH
CALEN
creating jobs, both directly and indirectly and supporting growing incomes. Due to the strong local economy, average incomes are
Keswick Is St Bees Is
MOUNT OSSA SHOAL POINT MOUNT CHARLTON
KUTTABUL BLACKS BEACH SLADE POINT
HAMPDEN
FARLEIGH
MARIAN
MACKAY HARBOUR
MACKAY
WALKERSTON BAKERS CREEK
DUNNROCK
ETON
BALBERRA
SUNNYSIDE
Source: Mackay Regional Council, ABS).
5.2
Snapshot of Economic Conditions AUSTRALIA
GDP
During the December quarter of 2012, the
The Mackay Region is one of the fastest growing billion to the economy during the year 2011, which
When population is accounted for, the output per capita is more than 2.5 times the size of greater than the Australian GDP per capita. Aside from being the regional capital and supporting over 50 operating mines, Mackay has a diverse economic ecosystem, with many and varied industries.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
63
5 AUSTRALIA POPULATION 30 June 2011 of 22.5 million people is projected to increase to between 30.9 and 42.5 million people by 2056, and to between 33.7 and 62.2
Region at 30 June 2011 was 120,752 persons, an
population, already evident in the current age structure, is expected to continue due to sustained low levels of fertility combined with increasing life
is expected to increase to between 134,336 and 142,715 persons by 2016 and to between 200,000 and 300,000 persons by 2031. The median age of the Mackay region population is projected to increase by 2.6 years from a median age of 35.7 years in 2006 to a median age of 38.3 years in 2031, compared with a median age of 40.6 years in Queensland.
projected to increase to between 38.7 years and 40.7 years in 2026 and to between 41.9 years and 45.2 years in 2056.
EMPLOYMENT
During the year 2012, the number of people employed increased by a seasonally adjusted The increase in employment was driven by increased part-time employment, up 20,200 people to 3,450,700. This was enough to counterbalance the fall in full-time employment by 9,800 to 8,098,400. In January 2013, the number of unemployed persons increased by 2,000 people
This compares with an increase of 3,137 persons or
The unemployment rate in the Mackay statistical
The occupational category of Technicians and Tradespersons employed the largest proportion of
was due to the number of people looking for part time work increasing by 7,800.
INFLATION
N/A through the year to the December quarter 2012,
in the December quarter 2012, compared with a
INTEREST RATE
The benchmark interest rate in Australia was last
interest rates over the past year as growth has dwindled with poor international sentiment and the local strong dollar diminishing international
64
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
N/A
5 Annualized Population Growth 2001-2012
Annualized Population Growth
5%
The Mackay Region has demonstrated consistently higher population growth compared with the Australian National Average.
4%
3%
2%
1%
0% 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012F
Year Australia
Source: ABS 2012
Mackay
Annualized Unemployment Rate 2001-2012
Annualized Unemployment Rate
10%
The Mackay Region has demonstrated a consistently lower unemployment rate compared with the Australian National Average.
8%
6%
4%
2% 2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012F
Year Source: ABS 2012
Australia
Mackay
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
65
66
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
5 5.3
Demographic Snapshot
5.3.1
Strong Population Growth
Mackay Region Population 1986-2031
According to the Australian Bureau of Statistics (ABS), the Mackay Local
300,000 //
population of 116,123 at June 2010. This equates to a strong population growth rate
HIGH CASE
200,000
LOW CASE
above the national average. A growth rate Population
//
to a healthy property market through sustained demand for new and existing housing. The Mackay community has a median age of 35 years, which is younger than the national average of 38.3 years. A younger population generally bodes well for future demographics and population growth compared to an older population that may decline as it ages.
125,000 120,000 115,000 110,000 105,000 100,000 95,000 90,000
// 1986
1996
1991
2001
Population Projections
2011
2031
Year
Source: ABS 2012
5.3.2
2006
Projected Population Growth in Mackay Region 2011-2031
Of the total population residing within the Mackay LGA, the bulk of residents are located within the Mackay City region. The population is skewed towards residents aged 15 years and younger
350,000
300,000
older. The bulk of the households in the Mackay LGA are separate houses, with
the Mackay LGA are either owned outright or in the process of being purchased, leaving a rental market comprising owner occupier and rented premises is indicative of a healthy property market. Mackay is forecast by ABS to experience sustainable high population growth over the next 20 years and grow into a top 10 city in Australia by 2031.
Projected Population
250,000
Low 200,000
Medium High
150,000
100,000
50,000
0 2011
2016
2021
2026
2031
Year Source: ABS 2012
Long term population growth of 3% p.a. is forecast to underpin sustainable demand for housing in the region.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
67
5 5.4
Mackay Property Market
5.4.1
Market Conditions
The Mackay region experienced a in order to provide housing for new residents expected to live in Mackay by 2031. Despite the anticipated demand, relatively few high-rise residential development projects were ready to begin construction in 2012. Limited current and short term supply, combined with strong near term and positive long-term demand, provides a favourable demand supply dynamic for property investment.
double-digit growth and a major peak term, all the suburbs which make up the Mackay market have double-digit growth house prices), typically averaging around (APM) The rental market is very strong in Mackay,
Agent commentaries suggest that demand for apartment living is increasing
Given strong demand drivers, most commentators expect rents to continue to face upward pressure in coming years.
demand, lifestyle changes and the needs of business travellers.
Cumulative Annual Median Dwelling Price Growth Cumulative Annual Median Dwelling Price Growth Mackay 2002-2012
Mackay 2002-2012
280
280 260
260 240
240 220 220 200 200 180 180 160 160 140 140 120 120 100 2002
100
2002 Source: AP Data
Source: AP Data
68
2003
2003
2004
2004
2005
2005
2006
2007
Years
2006
2007
Years
2008
2008
2009
2010
2011
2012
2009 2010 2011 2012 Dwelling Price Index (base: 2002)
Dwelling Price Index (base: 2002)
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
5 5.4.2
Drivers of current Residential Market
Strong local economy with low unemployment, high incomes and
QLD average) for Australia) Low current and forecast supply
Strong population growth rate national average) Major infrastructure developments are creating jobs Mackay is the primary infrastructure and export hub for the region with Dalrymple Bay) Idyllic tropical North Queensland lifestyle on the Great Barrier Reef with an abundance of natural beauty and attractions
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
69
6. financial Information 6.1 Summary of Investment Return Entitlements
The entitlement is to receive a return out of Development
on the price set out in the Apartment Purchase Contract).
Important note The Investment Manager has made
model are realistic and conservative. However, no guarantee or warranty is made as to the accuracy of the forecasts when compared to actual performance. Property development projects are subject on capital invested are not guaranteed and
investment return entitlement ranks in priority to the investment
Investment returns referred to below are on a pre tax basis and so the Fund will be required to pay any applicable tax on the receiving their returns. As the Fund is likely to be treated as a public trading trust for tax purposes, Investors may receive franking credits for dividends /
70
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Section 9 of this PDS). various contingencies, including in particular the successful completion of the Development and construction costs and other Development costs, expenses and liabilities being within those estimated by the Investment Manager based on all relevant materials, quotations and inquiries conducted.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
71
6 6.2 Investors’ investment return entitlements on their Units are subject to Development Proceeds
6.3
Prior to Investors being entitled to receive distributions for the
investment period. In the event the investment period is longer than 24 months, the resultant IRR to investors will be lower.
the following costs and expenses must be met in full: Costs and expenses associated with the acquisition of the Property;
Indicative forecast equity return
interest rate. Assuming other factors remain the same, the IRR is higher if the investment period is shorter in duration. The amounts referred to below are on a pre tax basis.
All costs and expenses associated with the Development All costs and expenses associated with the Driftwood Any other liabilities of the Fund in connection with
Return on Equity Invested Over 24 months
Investment
-100,000 100,000
unforeseen litigation). The above costs and expenses will be met partially out of funds Senior Lender during the term of the Development, and then
Investment Return Total
60,000 -100,000
160,000
IRR of Apartments and other assets comprised in the Development. Investors will then be entitled to receive payment of their investment return out of the Development Proceeds remaining after all of the abovementioned costs, expenses, fees and liabilities have been met and after any applicable taxes have
Development Proceeds available to pay such returns.
Note: based on a maximum capped investment return of $60,000 (being 15% of $400,000 1 bedroom Apartment)
Return on Equity Invested Over 24 months
Investment
-125,000 125,000
Investment Return Total
75,000 -125,000
200,000
IRR Note: based on a maximum capped investment return of $75,000 (being 15% of $500,000 standard 2 bedroom Apartment)
Return on Equity Invested Over 24 months
Investment
-150,000 150,000
Investment Return Total
82,500 -150,000
232,500
IRR Note: based on a maximum capped investment return of $82,500 (being 15% of $550,000 premium 2 bedroom Apartment)
72
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
6 The previous examples are illustrative only and actual results may vary. Those examples assume no capital growth in the Apartment
An example of the capped maximum investment returns on Investors is below:
of capital growth of their Apartment from the date of entering the Apartment Purchase Contract to the date of settlement). Investors should also note that the forecast investment return for an individual Investor, which is capped at the maximum cash will depend on the list price of the particular Apartment acquired.
Apartment Type
Typical list price of Apartment Type
1 Bed Apartments:
Typical list price is
2 Bed Apartments
Typical list price is
2 Bed Apartments
Typical list price is
15% (rounded)
A sample forecast investment return, based on a full return
Return of Investments Over 24 months Rounded to nearest $500
Investment
- 25,000
Distribution Yield
1,500
1,500
their particular Apartment Purchase Contract to determine their maximum capped return entitlement.
25,000 Investment Return Total
4,000 - 25,000
1,500
30,500
IRR
6.5 Investment returns may be lower than maximum capped amount The investment returns that Investors are entitled to on their
* Annualised net return
receive an investment return at the maximum capped amount. The above example represents the maximum capped return that a pre-tax basis that is equal to their maximum capped return entitlement is contingent upon the success of the Development
6.4 Investment returns are capped at a maximum amount
Development Proceeds for the maximum return entitlements
invested on a per annum basis. This return entitlement comprises distribution paid to the holder annually) and a return out of price per annum for the term in which they hold their D1 Class receive their return entitlements in priority to holders of A1 to C1 The investment returns that Investors holding A1 to C1 Class
Furthermore, Investors are likely to actually receive an amount less than the maximum capped amounts as these amounts are on a pre-tax basis. The Fund will be required to pay tax on corporate tax rate as it is likely to be taxed as a public trading trust. Investors may, however, receive franking credits on their dividends / distributions and depending on their circumstances may be entitled to a rebate. Please refer to Section 12 for further information relating to taxation matters concerning the Fund and Investors.
Purchase Contract).
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
73
6 6.6 Investors entitled to capital appreciation of Apartment achieved by completion of Development Investors are entitled to any notional capital appreciation for an
6.7
Construction Costs
Based on the elemental costing of the construction costs for the Development, as provided to the Investment Manager by the appointed builder for the Development, the total construction costs landscape and external works and works beyond the lot.
determined by the Apartment purchase price) and the date of completion of the Development.
Important Note: executed and hence the actual construction contract may vary feasibility analysis.
6.8
Project Cost Summary
The following is a list of estimated costs associated with the Driftwood Project: Amount Land Purchase and associated costs including establishment fee, stamp duty, legal costs and land valuation
Source
Amount
Senior Lender Finance Total
Consultant Fees Holding Costs
Infrastructure Contributions Marketing, advertising and sales commissions
Project Revenues Revenues
Amount
Apartment Sales, car park sales and other revenue Total
escalation)
Key Assumptions and basis for Assumptions and associated fees)
construction costs) Project Management / Development Management Fees Investment Manager fees Fund costs, insurance, audit, compliance and sundry costs Total Note: Certain costs are not payable until Development completion.
74
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Project anticipated Development costs, source of funds and project revenues are based on a number of key assumptions. The estimates are based on information and data supplied by consultants to the Investment Manager and on other information and data sourced directly by the Investment Manager. Accordingly, the Responsible Entity and Investment Manager consider there to be a reasonable basis for making the estimates, as the estimates are supported by reliable information provided by consultants to the project.
6 6.9
Further Information outlining the Assumptions
6.9.1
Project Costs
These costs include the cost of purchasing the property from the existing vendor and the reimbursement of property related costs and the contract procurement fee payable to DOF No 1 Pty
These amounts assume the maximum amount is raised under
This estimate includes costs of external expert consultants such
the approval, which in turn is dependent on the level of funding provided by a senior funder to the project.
consultants as reasonably required. It does not include project management or development management.
costs and fees Property holding costs are based on assumed rates and land tax applicable to the Property. development services for the project duration. These costs include amounts payable to Mackay Regional Council for operational works permits, council infrastructure charges, and contributions allowances. In general, these amounts relate to the amounts payable by a developer for either using existing water and sewerage infrastructure or for developing new such infrastructure.
bank charges.
6.9.2
Source of Funds
The source of funds estimates completion of the capital raising
This estimate assumes marketing and advertising spend of
6.9.3
Project Revenues
marketing spend will be required for the purpose of generating purchaser demand and to achieve Apartment sales targets.
of Apartments in the Development at sales prices based on the list price that the Development Manager will aim to achieve, sale of management rights and surplus parking spaces.
The construction costs estimates are based on the elemental costing for the construction of the apartment complex comprised in the Development, as provided to the Investment Manager by the builder appointed for the Development, RCQ Construction. The elemental costing provided by RCQ Construction detailed
cover additional contingencies.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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7. Corporate Governance & Management Team BOARD OF DIRECTORS
RESPONSIBLE ENTITY
DELEGATED AUTHORITY
COMPLIANCE & CORPORATE GOVERNANCE
INVESTMENT MANAGER FUTURE FUNDS MANAGEMENT P/L
AXIAS FUNDS LTD
SERVICE AGREEMENT
COMPLIANCE COMMITTEE
ADVISORY BOARD
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
INVESTMENT COMMITTEE SERVICE AGREEMENT
DELEGATED AUTHORITY DEVELOPMENT MANAGER
EQUITY UP TO $10M
FUTURE ESTATE GROUP P/L
CUSTODIAN THE TRUST COMPANY LTD
CLASS ASSETS
HOLDS FUND ASSETS AS CUSTODIAN PAYMENT AUTHORISATION
DRIFTWOOD PROJECT FUND SERVICE PROVIDERS CORPORATE GOVERNANCE FUND ASSETS
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
7.1
Responsible Entity
Axias Funds Ltd is an unlisted public company which holds Australian Financial Services Licence no. 327340 authorising it to act as responsible entity of the Fund. As the Responsible Entity of the Fund, Axias Funds Ltd will be responsible for ensuring the Fund is operated in accordance with best practice corporate governance principles, and shall perform the functions conferred on it by the Constitution and comply with its duties under the Corporations Act. The Investment Manager is responsible for primary operational and management control for the Fund.
7.2
Investment Manager
Investment Manager for the Fund. Future Funds Management is responsible for assisting the Responsible Entity with the day to day management of the Fund and is a Corporate Authorised Representative of the Responsible Entity. Future Funds Management is a specialist property funds manager, with a particular focus on the residential development sector. Future Funds Management combines the detailed local knowledge of its team of property specialists with perspectives gained through rigorous and extensive market research to identify compelling risk-mitigated opportunities. Future Funds Management has experience and demonstrated capability in all aspects of property markets and property funds management.
Company Directors.
7.4
Development Manager for the Fund. Future Estate is focused on achieving superior above-market returns on a risk-adjusted basis for our clients and investors. Future Estate is focused on delivering returns by superior research and analysis, stringent risk management, focused asset management and best-practice corporate governance. Mr. Mark Anderson Mark Anderson has a background in both client side and contractor side project and development management, having studied a Diploma of Building and Bachelor of Applied Science Mark has a successful transactional history in both Australia and of projects. These range from private hospitals and commercial refurbishments in Melbourne to Grade 1 heritage listed private residences in London. management for tier 1 construction companies and client side project and development management for both listed companies and private clients.
7.5 7.3
Fund Manager
Mr. Ben Anderson (LLB. B.Comm, MAICD) Ben Anderson has over a decade of technical and hands-on experience in property funds management, investment banking, and all aspects of property development and investment. Ben is the founder and Managing Director of Future Estate Group, a innovative and client focused investment solutions and advice clients and private individuals.
Development Manager
Advisory Board
The Fund has appointed an Advisory Board comprising a majority track record in all facets of the property industry from funds management, investment, advisory, development, legal banking The purpose of the Advisory Board is to provide additional external corporate governance to the business, in particular the managed funds. The Advisory Board is advised of all material matters and is responsible for strategic advice and input on material investment decisions. The Advisory Board meets monthly. The Advisory Board includes: Mr. Mark Hamilton
successful track record in structuring, executing and managing
development management, research and investment advisory, fund and capital structuring, asset management and corporate advisory to top-tier property clients managing multi-billion dollar property portfolios.
Mark has over 20 years of investment banking experience where he has developed extensive origination, structuring and execution skills across a wide variety of merger and acquisitions, equity capital market and debt capital market transactions primarily includes senior executive investment banking roles with National Australia Bank, Merrill Lynch, Goldman Sachs JBWere and ABN Amro. Mark has extensive equity capital markets experience and expertise where he has advised on the structuring and raising
Ben holds a Bachelor of Laws and Bachelor of Commerce with has also undertaken executive training programs at Princeton
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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7 Mr. Paul Anderson
Phillip Grundy Phillip is a Director at Pointon Partners Lawyers, practising in the areas of Corporate and Commercial law. His areas of expertise include mergers and acquisitions, capital raisings,
Paul Anderson was also one of the founders of Axias Funds Ltd and is a licensed real estate agent/auctioneer in NSW and registered Licensed Building Practitioner in NSW. Paul has held companies in the construction industry and has been responsible
negotiation and management of large projects including building organisational capability, training and safety management, quality control and cost management. Details of the Advisory Board can be found on www.futurefundsmanagement.com.au.
7.8
Custodian
Professional and ethical in all of our actions;
The Trust Company Limited ABN 59 004 027 743 is the Custodian of the Fund and has been appointed by the Responsible Entity to act as an independent Custodian to hold and maintain the assets of the Fund and to act on proper instructions from the Responsible Entity pursuant to a Custody Deed between the Responsible Entity and the Custodian dated 5 December 2008. The Custodian shall be entitled to payment of its fees for providing such services to the Fund as are set out in Section 10 of this PDS.
Strong relationships with major lenders and investors;
7.8
7.6
Strengths of the Management Team
Track record; Market knowledge; Solution and outcome focused;
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 and support systems in place and compliance checks in place; and
Compliance Committee
The Corporations Act requires that the Responsible Entity establish a compliance committee if less than half of the directors of the Responsible Entity are external directors. The compliance committee must comprise a majority of external directors. the Fund has appointed a compliance committee for the Fund. The compliance committee comprises a majority of independent representatives.
Best practice corporate governance. services, in particular auditing and compliance-related aspects.
7.7 Board of Directors of Responsible Entity Mr. Ben Anderson (LLB. B.Comm, MAICD) Refer to the above.
Grant Freeman was one of the founders of Axias Funds Ltd. He
Ltd. Both companies are boutique investment banking groups.
Business Administration, Grant has completed many corporate, debt and equity transactions in Australia, Africa, North America and Europe.
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
The compliance committee will monitor and report on the operation of the compliance plan and any contraventions of the plan, and must report to the responsible entity, and in certain circumstances, to ASIC. Mr. Ashley Course managed funds. Ashley specialises in the provision of auditing, compliance and assurance services and is responsible for ensuring best practice corporate governance, compliance culture and process. Ashley commenced in the compliance and assurance industry over 12 years ago and has a broad range of technical
experience also extends to designing audit software for both commercial and private purposes, training the CPA Australia Quality Reviewers on Auditing and Professional Standards and lecturing in
8. Investor Information
Key Disclosures and ASIC Benchmarks 8.1
ASIC Regulatory Guide 46 – Unlisted Property Schemes
ASIC Regulatory Guide 46 provides guidance as to the key principles for disclosure to retail investors in the unlisted property sector. ASIC requires responsible entities of unlisted property managed investment schemes to provide a statement addressing eight disclosure principles.
unlisted property schemes. eight disclosure principles set out in Regulatory Guide 46 are set out below:
The Fund is an unlisted property scheme as it is an unlisted managed investment scheme that has or is likely have at least
Disclosure Principle & Benchmark
Background
Fund Policy
Gearing ratio
The gearing ratio indicates the
The Fund maintains a gearing policy that governs the level of gearing for the Fund. The Fund will comply with the gearing policy for the Driftwood Project. The Fund meets this Benchmark.
are funded by interest bearing liabilities. ratio the higher reliance it has borrowings) to fund assets. In addition, the higher the gearing ratio the more exposed the Fund will be to increases in funding costs in property values. A high gearing ratio also means the Fund will have
The Fund intends to source borrowings from Senior Lender in order to The Fund will establish a subsidiary to carry out and undertake the Development Project. It is intended that this subsidiary shall source borrowings for the Development Project and provide security over the property and its assets and undertaking in order to secure It is intended that any such borrowings be limited recourse; limited to the Development Project to which the borrowings relate and the
The gearing ratio may vary on a Class by Class basis.
site photo. PRODUCT DISCLOSURE STATEMENT – DRIFTWOODActual OFFER 79
8 Disclosure Principle & Benchmark
Background
Fund Policy
Interest
The interest cover ratio measures the ability of the scheme to service debt from earnings.
A subsidiary of the Fund will undertake Development Projects to
& Interest
the sustainability and risks associated The lower the interest cover, the higher the risk that the scheme will not be able to meet its interest expense. A scheme with a low interest cover ratio only needs a small reduction interest rates or other expenses) to be unable to meet its interest expense. ASIC Regulatory Guide 46 benchmarks include the Responsible Entity maintaining and complying with a written policy for its level of interest cover, and include a benchmark that the interest expense of a scheme not be capitalised.
Scheme Borrowings
It is expected that any borrowings obtained in connection with a Development Project will be interest only and will provide for interest to be capitalised and repayment on completion of the loan term 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. Accordingly, the Fund does not have an interest cover policy for the Driftwood Project and will not meet this benchmark. Nevertheless, the interest cover ratio will be determined on a case by case basis for each Development Project, and may depend on the structure of the Development Project being undertaken. Interest will be capitalised, therefore the Fund does not meet this benchmark. The Fund has budgeted to fund the ongoing distribution yields
The Fund intends for its subsidiary carrying out the Development impact on the viability of a scheme. Relatively short-term borrowings and credit facilities with short expiry dates are a risk factor if they are used to fund assets intended to be held long term. A failure to renew borrowing or
proportion of its borrowings that mature within a short timeframe, it
favourable terms or not available at all. need to sell assets on a forced sale basis with the risk that it may realise a capital loss. Breach of a loan covenant may result in penalties being applied, or the loan becoming repayable immediately. less favourable terms or sell assets.
80
A subsidiary of the Fund established to carry out the Development Project will obtain borrowings, and such borrowings will be interest bearing debt.
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
undertaking a Development.
sought from the Senior Lender. It is also intended that any loans obtained for the purpose of a Development Project will be for 18 to 36 months, so as to ensure that the loan term is in line with the anticipated Development timeframes. For borrowings obtained, the Fund will disclose to its Investors via its half yearly reporting the following details:
Item
Disclosure
Borrowings that mature in 5 years or less
The aggregate amount owing and the maturity
Borrowings that mature in more than 5 years
The aggregate amount owing
Credit facilities
The aggregate undrawn amount, the assets to which the facility relates, the loan to value ratio and interest cover covenants under the facility, the interest rate of the facility and whether the facility is hedged.
8 Disclosure Principle & Benchmark
Background
Fund Policy
Scheme Borrowings
also mean the scheme is no longer viable.
The Fund will also disclose to Investors the amount by which the value of its property assets or other assets used for security for the loan facility must fall before the scheme will breach any covenants in any credit facility.
continued...
Investors should be aware that amounts owing to creditors and scheme. with information concerning scheme borrowings including any breaches of loan covenants. Where borrowings and credit facilities are due to mature within 12 months, the Fund will disclose to the Investors information address funding requirements and liabilities.
Portfolio
ASIC requires a scheme operator to disclose the current composition of
The structure and strategy of the Fund is such that Investors will There will be one property in each Development Project. Therefore,
information such as geographic sectors, recent valuations, occupancy rates and so forth).
Investors with an interest in other Development Projects being
Generally, it is considered that the lower the risk that an adverse event will put the overall portfolio at risk. A concentration of development assets in a scheme exposes investors to increased risks involved in the development of property assets.
Valuation Policy
Investing in a property scheme exposes investors to movements in The value of real property assets can be volatile, particularly when access to credit is constrained and more properties are on the market. A an increase in gearing ratio and may trigger a breach of loan covenants. Investors therefore need information to assess the reliability of valuations. The more reliable a valuation, the more likely the asset will return that amount when it is sold. However, any forced sale is likely to result in a
for an Investor in the Fund. Investors will be kept informed of the progress of the Development on an ongoing basis, including the progress of a Development as against the development timetable.
The Fund meets this benchmark. acquired by the Fund for the purpose of a Development Project. In certain circumstances, the purchase price of a property may be for this and why the purchase is nevertheless commercially sound. The Fund will obtain valuations of its properties where required by its Constitution or by accounting standards.
Development Projects where appropriate and possible on a caseby-case basis;
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
81
8 Disclosure Principle & Benchmark
Background
Valuation Policy
shortfall compared to the valuation unless the valuation has been made on a forced sale basis.
continued...
The ASIC Benchmark requires a Responsible Entity to maintain a Regulatory Guide 46.
Fund Policy
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 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
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.
Related party transactions
Related party transactions carry a risk that they could be assessed and length third party transactions. ASIC expects that responsible entities that enter into transactions with related parties describe related party arrangements relevant to the investment decision, including information relating to the value
The Fund meets this benchmark. The Fund or its subsidiary may engage related parties to provide services to the Fund on a Development Project. If so, the Fund will ensure that the terms of the service arrangements, and the industry rates. In certain circumstances, the Fund or its subsidiary will acquire a property for a Development Project from a related party. Where the Fund or its subsidiaries acquire properties from a related party, the Fund will put in place appropriate arrangements to ensure that the
of the relationship, whether the terms, whether member approval has been sought, risks associated with the arrangement and whether the responsible entity is in compliance with its policies on related party transactions. The ASIC Benchmark requires a Responsible Entity to mantain and comply with a written policy on related party transactions.
Distribution practices
82
Some property schemes make distributions partly or wholly from unrealised revaluation gains, capital, borrowings, or support facilities arranged by the responsible entity, rather than solely from cash from operations available for distribution. This may not be commercially
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
This will include obtaining an independent valuation of the property prior to acquisition. If, for any reason, that is not possible, and the valuation of the property is obtained following acquisition, the Fund and its related party will provide for a market value adjustment arrangement so that shortly after acquisition of the property and of some other form of valuable consideration) is made, as between the related party and the Fund. This will ensure that the related determination of the independent market valuation.
The Fund meets this benchmark. The Fund will only pay distributions from its cash from operations
being attained.
8 Disclosure Principle & Benchmark
Background
Fund Policy
Distribution practices
sustainable over the longer term, particularly when property values are not increasing.
distributions on an ongoing basis during the term of a Development
continued...
ASIC Benchmark requires the Fund to only pay distributions from its borrowings) available for distribution. 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 made to Investors.
Withdrawal arrangements
The Fund is not liquid. have limited or no withdrawal rights.
Investors have no withdrawal rights.
to exit. that term.
Net tangible assets
backing of a scheme gives investors information about the value of the tangible or physical assets of the scheme. The initial and ongoing NTA
closed end schemes where the value of Fund assets is relevant for disclose the value of the NTA of the Fund or Class Assets on a per
factors, including fees and charges paid up-front for the purchase of properties, costs associated with capital raising, or fees paid to the responsible entity or other parties.
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83
9. Investment Risks The performance of the Fund and the ultimate value of the Fund are subject to risks. Detailed below are some of the risks that you should be aware of when investing in the Fund and/or acquiring an Apartment in set out in this section are not intended to be exhaustive. Prospective Investors should read this PDS in full and seek independent professional advice in order to make an informed decision about investing in the Fund. “Risk� refers both to the variability and volatility of an decrease in the amount of income generated, or a lower than expected rate of return) and the likelihood of you will lose some or the entire initial amount invested). The Directors, the Responsible Entity, or entities and persons associated with the Responsible Entity do not guarantee the performance of the Fund or the The business activities of the Fund are subject to known and unknown risks and there are many factors which may impact the future performance of the Fund. These the general business, legal, construction, property, economic and environmental climate. These risks need to be considered carefully by Investors before
Fund. Some of these risks can be mitigated by the use of safeguards and appropriate systems, but some are outside the control of the Fund and cannot always be mitigated.
the Fund; holding of direct property; and General investment risks associated with any investment. The following is a non-exhaustive list of the investment risks typically encountered in a property development project and their countermeasures.
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Risk Factor
Risk Description
Liquidity
The Fund is illiquid and is not listed on a recognised stock exchange and there is no intention to list. There is no with by an Investor and any such proposed dealings may only be carried out in accordance with the Constitution or as approved by the Responsible Entity. Further, if the Fund holds property assets then such assets may be illiquid. If for any reason it becomes
Lack of
The Fund will only hold interests in real property Development Projects, and no other industry or asset types.
Returns not guaranteed
of repayment of capital amounts invested in the Fund. Investors will not be entitled to any guaranteed There is no guarantee that distributions will be at a certain level or that there will be distributions at all. If certain events arise that result in a Development Project costing more than anticipated, or if there are any Development Project, then there is a risk that Investors will make a loss on their investment. purchased by them in a Development Project carried out by the Fund. The level of return may therefore be subject to an independent valuation determination or list price which the Investor may or may not agree with.
Third Party
counterparties. The failure of the counterparties to perform their contractual obligations may detrimentally Development may become insolvent or otherwise default in their obligations on completion. There is a risk that the property may not be able to be re-sold at the same price or re-let at the same rental. Contractual counterparties may default on their obligations to the Responsible Entity or Investment Manager thereby leading to a capital loss or a reduction in income for the Fund. Risk Mitigation: should allow the Investment Manager to identify, assess and manage these risks.
interest and arm’s length transactions
The Responsible Entity may, subject to the provisions of the Constitution and the law, appoint related entities to perform services or functions in relation to the Fund. Risk Mitigation: terms will be entered into for any transactions between related parties of the Fund. The Fund has a compliance plan which has procedures for dealing with related party transactions and the Fund has appointed a compliance committee.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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9 Risk Factor
Risk Description
Key Personnel Risk
There is a risk that the departure of key personnel from the Fund, the Investment Manager, the Responsible Entity, the Board or from any subsidiaries or related parties of the Fund may be disruptive to the business
Unforeseen litigation
earnings of the Fund and your investment returns. Risk Mitigation: The Investment Manager will seek to minimise the impact of such unforeseen costs by seeking legal advice in relation to key decisions of the Fund.
Due diligence
Failure of due diligence investigations to identify potential risks, or the potential impact of such risks on the project or the Fund. Risk Mitigation: The Investment Manager may engage appropriate experts to investigate the environmental, structural, taxation and legal aspects of the project. The Investment Manager will engage experts who are widely regarded for their specialist knowledge in the areas in which the Investment Manager has sought advice. risks associated with investments by the Fund.
Regulatory
The Responsible Entity is required to operate in accordance with the Corporations Act and the conditions of its AFSL. If the Responsible Entity fails to abide by and meet its regulatory and compliance obligations it may be forced to retire as Responsible Entity which may potentially disrupt the operation of the Fund.
Risk Factor
Risk Description
Property Market
Increase in supply or fall in demand in any of the sectors of the property market in which the Responsible Entity property. The assets of the Fund shall be real properties or indirect interests in real properties and the Fund is subject to the general risk of changes to supply and demand in the property sector, which may impact ongoing values. There is a risk of a fall in Australian residential property prices, a decline in rental returns and occurrence of other factors which may cause a low level of liquidity in the property market. It is also intended that the Fund may invest in certain concentrated geographic areas. The performance of the Fund may therefore correlate with the performance of the residential property market in the particular geographical areas in which the Fund invests. Furthermore, changes to the taxation environment, in particular state stamp duty and land tax, can have an impact on the level of supply and demand for properties and the performance of the Fund. Risk Mitigation: Prospective developments will be evaluated having regard to the impact that property market risks may have on the level of return that will be generated. Property market risk may be reduced through a
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
9 Risk Factor
Risk Description
Inability to sell the development on completion
The inability to sell the completed project at the expected sale price and/or within the projected sale period will result in higher holding charges, reducing the return on the Development, or could result in the Development making a loss. There is a risk that purchasers ultimately default in the performance of their contracts. Risk Mitigation: period, ensuring there will be no forced sale. However, in certain circumstances the Fund may bear the risk of holding costs exceeding those anticipated. While it will be usual that non-refundable deposits paid by for the same purchase price.
Delivery increased costs and lower returns on investments. Risk Mitigation: Much of the time risk in a project is usually carried by the builder. To the extent that this is not the case this is a development risk that may be borne by the Fund if the Development Manager views this as appropriate.
Escalation Risks
the Fund in relation to a Development Project. Nevertheless, there is a risk of costs escalation on Development Projects from those costs anticipated for a given project or provided for in a feasibility study for any project. While the Fund will endeavour to manage such costs escalation risks and unforeseen events, events beyond the control of the Fund and other relevant persons involved in a Development Project may occur, which may increase the actual costs beyond anticipated costs. Any such costs escalations may reduce returns to Investors in the Fund.
Planning
Planning approvals for developments may be delayed or denied, thereby slowing or preventing Developments. Further, they may not be granted in the form anticipated.
Environmental Risk Mitigation: Due diligence has been undertaken to try and identify potential environmental issues or risks.
Industrial Relations
Industrial disputes may delay completion of Developments or increase the cost of a project. Risk Mitigation: The cost of delays due to industrial disputes will in many circumstances be largely allocated to the builder under the building contract. However, there may be circumstances in which the Fund bears this risk where the Investment Manager views this as appropriate.
Insurance circumstances policies may not cover an event. The result may, in turn, have a negative impact on the net income Risk Mitigation: underwriters who are engaged to seek the most appropriate insurance resolution.
Variations Risk Mitigation: usually in circumstances where the Development Manager is of the view that the variations should give rise to increased revenue.
Expenditure
There is a risk that any capital expenditure required on the properties could exceed cost expectations, thereby reducing potential distributions to Investors.
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9 Risk Factor
Risk Description
Finance Risk
The Fund may experience delays in receiving funding, or fail to receive funding at all, from a Senior Lender for the Development. Such funding will be necessary for the Fund to successfully carry out the Development.
9.3
General Investment Risks
Risk Factor
Risk Description
Economic
Any change in the general economic environment can have a positive or negative impact on the value of the Fund.
Interest Rates Risk Mitigation: In any event, to mitigate this risk the Investment Manager has taken reasonable steps to ensure appropriate contingency allowances for interest rates has been built into the feasibility assessment.
Escalating
construction costs. Risk Mitigation: The construction cost allowance included in the development feasibility has been subject to an
The relevant arrangements may require the developer to bear the risk of costs exceeding that agreed in the building contract. However, the Investment Manager may bear such risks in certain circumstances where the Investment Manager is of the view that this is appropriate. Changes in income tax, indirect tax or stamp duty legislation or policy, particularly with regard to property
the law or government policy
policy of the Fund having to change.
Taxation
The Fund is subject to Australian tax legislation and the legislation of governments in countries where the experience in taxation matters that relate to the Fund and its investments. To the extent that legislation or administrative practice changes in a jurisdiction this may impact on the returns to Investors. Risk Mitigation: taxation matters that relate to the Fund and its investments.
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10. FEES AND OTHER COSTS 10.1 Consumer Advisory Warning statements are required to include the standard consumer on fees and other costs in this Fund.
Did you know? and costs can have a substantial impact on your long term
whether features such as superior investment performance or the provision of better member services justify higher contribution fees and management costs where applicable.
based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( ) has a managed investment fee calculator to help you check out
89
10 10.2 Fees and other costs This document shows fees and other costs that you may be charged. These fees and costs may be deducted from your money, from the returns on your investment or from the Fund assets as
Type of fee or cost
Amount
should read all information about fees and costs because it is important to understand their impact on your investment.
How and when paid
Fees when your money moves in or out of the Fund Establishment Fee The fee to open your investment
Development Cost for the Development Project.
The fee on each amount contributed to your investment Withdrawal Fee
amount of funds raised.
Nil.
N/A
Nil.
N/A
The fee on each amount you take out of your investment Termination Fee The fee to close your investment
Investment Management Fee
Payable to the Investment Manager for investment management Costs, per annum
The fees and costs for managing your investment
Development Management Fees
payable monthly in arrears.
Costs, based on a 24 month term.
will be paid to the Development Manager, with such fees payable in equal monthly installments over a 24 month term. The fee payable to the Development Manager is approximately
Fund Operating Expenses
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Paid from Fund assets based on actual costs and out of pocket expenses incurred by the Responsible Entity, Investment Manager and Development Manager.
10 Type of fee or cost
Amount
How and when paid
Investment Switching Fee
Nil.
N/A
The fee for switching your investment options
Other Fees, Commissions and Entitlements Type of fee or cost
Amount
How and when paid
TBC. capital returned in full and maximum capped investment returns.
Sales Commission
Based on gross sales, and calculated on the list price of the Apartment purchased by an Investor. the Apartment. This fee is payable to third party introducers of purchasers of
Debt Arrangement Fee
Based on a percentage of debt raised. This fee is payable to the external consultants who arrange debt for the Fund for the purposes of the Development.
10.3 Additional explanation of Fees and Costs Please note that the fees that may be charged from the Fund
A description of the fees generally charged from the Fund is as follows:
by the Fund.
10.3.1 Establishment Fee
Fees and expenses which relate to the Fund generally will be which relate solely to one particular Development Project will be paid out of Fund assets to which that Development Project
The fee will be calculated based on a percentage of the total forecast development cost for a Development Project. This fee overall cost of establishing the investment.
Development Project.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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10 10.3.2 Sales Commission
10.3.6 Project Manager Fee
Sales agents, real estate agents and other introducers of purchasers of properties will be entitled to receive a sales commission fee in respect of the sales of properties comprised in
If the Fund engages a project manager to manage a Development Project, a Project Manager may be engaged and in consideration for their services be entitled to a fee out of the Fund.
10.3.7 Debt Arrangement Fee the property subject of the sales commission.
Costs Reimbursement This is a fee payable to the Responsible Entity for managing and operating the Fund. This fee will be payable monthly in arrears,
This is a fee payable to debt originators for the Fund and will be calculated based on a percentage of debt raised for the Fund for a Development Project. This fee will be payable on completion of the debt raising.
10.3.8 Equity Arrangement Fee / Contribution Fee This is a fee payable to the Investment Manager, or alternatively, to other advisors, brokers, dealers and agents who introduce
10.3.4 Investment Management Fee This is a fee payable to the Investment Manager for undertaking contracted Fund management services on behalf of the Responsible Entity, including managing and operating the Fund. This fee will be payable monthly in arrears.
10.3.9 Responsible Entity and Investment Manager Termination Fees removed as Responsible Entity of the Fund.
10.3.5 Development Manager Fee This is a fee payable to the Development Manager for managing the Development on behalf of the Responsible Entity.
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share entitlement if it is removed as Investment Manager for a Development Project.
10 10.3.10 Fund Operating Expenses The Responsible Entity and Investment Manager are entitled to be reimbursed by the Fund for all expenses and liabilities incurred in respect of establishing, administering and managing utilities, and stationery). Such expenses are to be paid by the Fund as and when incurred. If such expenses are incurred by the Responsible Entity or Investment Manager on behalf of the Fund then such expenses are to be reimbursed to such parties as soon as practicable from the Fund.
who have managed or consulted with the Fund to provide Development Project after meeting necessary costs and expenses of the Development Project and meeting its obligations with respect to any forecast returns payable to Investors. For the purposes of the Development Project subject of this
10.3.11 Custodian Fees
costs and expenses of the Development Project are met and all investment returns and capital returns paid to Investors.
The Custodian will be entitled to a fee and be reimbursed for its costs and expenses in accordance with the terms of its Custody Agreement.
10.3.14 Additional Fees and Costs
10.3.12 Taxes, GST and Stamp Duty During the course of conducting its business and activities, the Fund will incur general taxes, goods and services tax and stamp
agents or project marketers may have to pay an additional fee. Investors may incur certain other personal costs such as conveyancing, accounting, legal costs, stamp duty and other taxation costs. Investors should seek their own professional advice in relation to tax consequences of the investment in the Fund and an Apartment. In addition, the costs of various third party consultants have been provided for in the feasibility model. Where necessary or appropriate, the Investment Manager may undertake some of these roles and be paid at market rate for such services.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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10 10.4 Example of Annual Fees and Costs table to compare this product with other managed investment products.
Example
Balance of $50,000 with contributions of $5,000 during year Nil
PLUS
EQUALS
Management Fees. What it costs you will depend on the investment option you choose and the fees
Notes: 1.
2.
The Management Costs include the estimated Investment Management Services Fees and Development Management Fee.
3. 4. sales commission.
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
11. Additional Information
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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11 Suitable Investors
Due to the nature of the investment strategy, the investment term and the fact that the Fund is illiquid, the investment is suitable for Investors with a long term investment strategy and expectation. advice from professional advisers before investing in the Fund. meet the total investment commitment required given that the investment requires the subscription for Investors should read the entire PDS and closely consider their investment time frame and individual risk
Responsible Entity
Axias Funds Ltd is the Responsible Entity of the Fund. In summary, the roles and responsibilities of the Responsible Entity for the Driftwood Project are as follows: Project; Corporate governance and compliance obligations; Appointment and overseeing of Investment Manager to oversee the Driftwood Project; Appointment and overseeing of service providers appointed in connection with the Driftwood Project.
Investment Manager
Future Funds Management Pty Ltd is the Investment Manager for the Fund, having been appointed by the Responsible Entity pursuant to an Investment Manager Services Agreement. The Investment Manager is a Corporate Authorised Representative of Axias Funds Ltd. In summary, the roles and responsibilities of the Investment Manager shall be as follows: Managing and overseeing of the ongoing day to day conduct of the Fund with respect to the Driftwood Project; Participation in Project Control Group meetings; Engagement of consultants for the Fund; Engagement of advisors to the Fund; Financial analysis and modelling.
Withdrawal Rights
Investors will not be able to withdraw from their investment.
accept or refuse a transfer request in its sole discretion.
Transfer of Units
Investment Management Services Agreement
96
As noted above, the Responsible Entity has appointed Future Funds Management Pty Ltd ACN 155 884 227, as the Investment Manager under an Investment Management Services Agreement dated 02 July 2013 to provide investment management services and general management duties in connection with the Driftwood Project to be carried out by the Fund. This includes, but is not limited to, the day to day general management of the Driftwood Project, engagement and management of contractors and advisors to the Development and overseeing the Development. For the execution of its duties and provision of services, the Investment Manager shall be entitled to fees set out in Section 10 of this PDS.
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
11 Development Manager
As noted above, the Responsible Entity has appointed Future Estate Group Pty Ltd ACN 155 880 363, as the Development Manager under a Development Management Services Agreement dated 02 July 2013 to provide development management services and general management duties in connection with the Driftwood Project to be carried out by the Fund.
Project Manager
Highgate Management Pty Ltd will be appointed as the Project Manager for the Development. Highgate Management Pty Ltd provides outcome-focused development advisory and management services to both public and private sector clients. Highgate combines its deep industry knowledge and experience
Management Rights
right to act as body corporate manager for the properties and to receive services fees in consideration for providing such management services, form an asset of the Development Project that is the subject of this management rights will be used to meet costs and expenses associated with the Development Project, the
Applications
Investors should complete the Application Form accompanying this PDS and submit together with your payment to the Investment Manager. Payment methods and details are included in the Application Form. Application moneys are to be paid into an interest bearing account upon receipt that complies with section 1017E of the Corporations Act. Any Please refer to Section 14 for more information.
Meeting of Investors
Corporations Act or the Constitution. holders and the rules governing the holding of a meeting.
How we calculate Unit prices
Fund Borrowings Policy
Development Project conducted by the Fund, and will be determined on a case by case basis for each
It is intended that the Fund will have borrowings for each Development Project conducted by the Fund. the required funding for a Development Project will be sourced from a Senior Lender and other lenders if required. The Fund is a registered managed investment scheme under the Corporations Act and is governed by a Constitution which has been lodged with ASIC. other management entities or functions. This PDS provides a brief outline of the provisions of the Constitution. Provisions of the Constitution include, but are not limited to, the following:
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11 Obligations, duties and powers of the Responsible Entity and delegation of its functions;
continued...
Investments of the Fund and valuation principles for assets; Distribution of income and capital;
Withdrawals from the Fund;
Appointment, retirement and removal of the Responsible Entity; and
The Responsible Entity may amend the Constitution from time to time, subject to the provisions of the Constitution and the Corporations Act. It may retire as the responsible entity and Responsible Entity of the Fund as permitted by law and must retire when required by law. A copy of the Constitution is available from the Responsible Entity upon request. The Fund has a Compliance Plan which has been lodged with ASIC. This sets out the measures applied in operating the Fund to ensure compliance with the Constitution and the Corporations Act. An independent audit is conducted on the Compliance Plan and lodged with ASIC on an annual basis. Compliance with the Compliance Plan and Constitution is to be monitored by a compliance committee appointed by the Responsible Entity. The Trust Company Limited ABN 59 004 027 743 has been appointed by the Responsible Entity to act as an independent Custodian to hold and maintain the assets of the Fund and to act on proper instructions from the Responsible Entity pursuant to a Custody Deed dated 5 December 2008. The Custodian shall be entitled to the fees as set out in Section 10.
Limitation of liability of Unit holders
Assets of the Fund but not an entitlement to or interest in any particular part or asset of the Fund. The
Anti-Money Laundering
In December 2006, the Australian Government enacted the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) (“AML/CTF Act�)
Terrorism Financing
The Responsible Entity has a number of obligations under the AML/CTF Act time to time thereafter. The Responsible Entity may therefore request additional or updated information is received by the Responsible Entity. The Responsible Entity may in its absolute discretion choose to reject applicants who fail to provide the requested information in a reasonable time. When legally bound to do so, the Responsible Entity may disclose the information gathered to any relevant regulatory authority and/ or law enforcement agency. Transactions may be delayed, refused or blocked where the Responsible Entity has reasonable grounds to believe that the transaction breaches any law or sanctions, and in such cases, connection with the Fund.
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
11 Privacy to the Investment Manager at info@futurefundsmanagement.com.au or the Responsible Entity at committed to managing and using personal information in ways that comply with the National Privacy Principles of the Privacy Act 1988 (Cth) and amendments. By completing the Application Form attached to this PDS, you agree to the Responsible Entity or the Investment Manager collecting, holding and using personal information about you to process your Application, and administer and manage the products and services which the Responsible Entity or the Investment Manager provides to you. This includes the purposes of evaluating your Application, the issuing
investment opportunities. The Fund is also required to collect information to verify your identity pursuant to our obligations under the AML/CTF Act and to obtain information from you to update your identity information from time to time pursuant to these laws. If you choose not to provide us with accurate and complete information, the Investment Manager may not be able to process your Application or provide you with the appropriate level of service. information. This information will be retained for record-keeping purposes, however, once your personal information is no longer required, we will destroy it or retain it in such a way that does not identify that it relates to you.
any party in strict accordance with the relevant legal requirements. The Responsible Entity or the Investment unless you request us not to do so. Investors may request access to the personal information held by the Fund and correct any errors in the information. The following service providers: Future Estate Group Pty Ltd; Future Funds Management Pty Ltd; The Trust Company Limited; Pointon Partners; AG Architects; RPS Australia East Pty Ltd; Building Services Integration Pty Ltd; and have made no statement included in this PDS and have given and not withdrawn their consent to the statements made about them in this PDS in the form and context in which they appear. These parties false or misleading statement included in any other part of this PDS and have not authorised or caused the issue of any part of this PDS.
Investor considerations
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11 Indemnity Liabilities incurred by the Responsible Entity in connection with the Fund and the Fund assets; Liabilities incurred by the Responsible Entity relating to the execution of any powers, duties, authorities and discretions vested in it by the Constitution; and Costs incurred by the Responsible Entity in relation to proceedings concerning the Fund. However, such right of indemnity shall not include a right of indemnity where such liabilities or costs were caused by fraud or breach of trust by the Responsible Entity or its related parties. Such rights of indemnity are also granted to the Investment Manager and Development Manager in connection with the performance of their duties for the Fund.
Reporting Quarterly report/newsletter reporting on the status of the Development;
Updated Key Investor Information
Gearing ratio; Interest cover ratio; Fund borrowings;
Related party transactions; Distribution practices; and Withdrawal arrangements
handling
are to be dealt with and sets out a complaints procedure to be followed by complainants and the Responsible Entity. The Responsible Entity has procedures in place for dealing with and considering complaints from investors. If you have a complaint or query in relation to the administration or management of the Fund then please contact the Investment Manager by email at info@futurefundsmanagement.com.au or by post to Future Funds Management Pty Ltd, C/O Level 7 AMP Centre, 50 Bridge Street, Sydney NSW 2000. The Investment Manager will acknowledge receipt of the complaint within 20 days of receipt of the complaint and shall then ensure that the complaint receives proper consideration.
Labour standards and environmental, social or ethical considerations
100
The Responsible Entity does not take labour standards or environmental, social or ethical considerations into account for the purposes of selecting, retaining or realising investments in the Fund.
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
12. TAXATION This section provides a brief guide in relation to is not intended to be a complete statement of the relevant taxation laws. This section is not intended to be tax advice. The tax implications of investing can be complex and Investors are advised to seek independent professional advice in relation to taxation laws and how deciding to invest in the Fund.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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12 Taxation of the Fund (Public Trading Trust)
of being a public trading trust are that the Fund will be subject to tax in the same manner as a company and not taxed as a trust.
The Fund will receive franking credits for the amount of tax paid by it. The Fund will be able to frank
The Fund will generally be taxed on revenue account on gains arising from its activities. Where the Fund realises a revenue loss, the loss cannot be passed on to Investors for tax purposes. Instead, the taxation laws, there are restrictions on the ability of the Fund to claim an allowable deduction in respect
The Fund will acquire properties in the course of its business. The properties will generally be acquired and taxed as ordinary income. The trading stock rules apply to property held by the Fund for the purposes of development and sale. The law in relation to the taxation of the Fund may be amended from time to time. On an ongoing basis, Investors should seek their own professional advice in relation to their own taxation implications of
Taxation of Investors
The taxation implications for Investors may vary depending on the Investors circumstances and therefore all Investors are encouraged to seek independent professional taxation advice in relation to their own circumstances. The following is a general summary of the taxation rules that could apply to Investors investing in the Fund.
in their assessable income. The resident Investor would be entitled to a franking rebate equal to the franking credit. In circumstances where there are excess franking credits over and above the tax payable by the
be available to the resident Investor.
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Taxation of Investors continued...
For any amounts paid to resident Investors by the Fund which are a return of capital, these amounts will be
subject to capital gains tax on the amount. The realised gain would be included in the calculation of the
subject to stamp duty on the acquisition of the property. If an Investor is holding the property on capital choose to sell the property). Investors who rent the property would need to include the rental income for any given year in their assessable income in respect of that income year.
Taxation of Fund (if the Fund is not treated as a Public Trading Trust)
taxed in accordance with ordinary taxation rules as apply to trusts, then the following would apply. The Fund would intend to fully distribute its taxable income each year so that it will not incur an income tax liability. In this situation, any income distributed to Investors by the Fund will be assessable to Investors and
Investors who are not Australian residents for taxation purposes may have non-resident withholding tax withheld from distributions at prescribed rates. Revenue losses incurred by the Fund could not be passed on to Investors for taxation purposes and would
Tax File Number (TFN) or Australian Business Number
Goods and Services Tax (GST)
claim an exemption, the Fund will be required to deduct tax from your distributions at the highest marginal
distributions made by the Fund to Investors should not give rise to any GST consequences.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
103
13. GLOSSARY In this PDS:
in the Fund on the terms set out in this PDS. ‘AFSL’ services licence. ‘Apartment’ means an apartment to be built under the Development, and includes 1 bedroom apartments, 2
‘Business Day’ means a day other than a Saturday or Sunday on which banks are open for general banking business in Sydney. in the Fund on the terms set out in this PDS.
in connection with a particular
‘Development Proceeds’ means net proceeds of the Development after paying all costs, expenses and
the Property and the Development, and less any fees associated with
associated costs in connection with the Development. equals the
means a contract to be entered into by an Investor for the purchase of an Apartment in the Development the Apartment Purchase Contract is accompanying this PDS. ‘Apartment Purchase Price’ means the purchase price for an Apartment as listed in an Apartment Purchase Contract. ‘Application’ means a valid application attached to, or accompanying this PDS, and accompanied by monies paid by a prospective Investor in respect of the application. means the Australian Securities and Investments Commission or any regulatory body which replaces it or performs its functions. means the Australian Securities Exchange. ‘Bank account’ means an account with an Australian Authorised Approved includes a building society and credit union). in the Fund on the terms set out in this PDS. ‘Board’ means the board of directors of the Responsible Entity.
104
in connection with the Development). refers to the assets of the Fund which relate to a particular with a particular Development Project. means the Compliance Plan for the Fund dated 15 March 2011 and any subsequent amendments. means the Constitution of the Fund and as amended from time to time. means the regulations. means The Trust Company Limited ABN 59 004 027 749. in the Fund, issued on the terms set out in this PDS. ‘Development’ means the building and construction of a property development under a Development Project to be conducted by the Fund. ‘Development Manager’ means the manager of a Development to be conducted by the Fund, as appointed by the Responsible Entity or its subsidiary undertaking the Development Project.
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
payable by the Fund). ‘Development Project’ means a property development project to be conducted by the Fund under the structure set out in this PDS. ‘Development Timeframe’ means the anticipated timeframe for the Development as set out in Section 2. means
connection with the Driftwood Project. ‘Driftwood Project’ means the raising carrying out of the Development of the Property. ‘Financial year’ means the period commencing 01 July and ending 30 June. ‘Fund’ means the Future Estate Australian Residential Property Fund ARSN 134 516 724. ‘Future Estate Group’ means Future 363) and its related group companies. ‘Gross Realisation Value’ means the value of the gross revenues derived from the sale of property assets comprised in a Development.
‘GST’
time to time. ‘Investment Manager’ means the Investment Manager appointed by the Responsible Entity in respect of the management of the Fund, being Future Funds Management Pty Ltd. ‘Investor’ or ‘Unit holder’ means a
this PDS. means 30 November 2013 or any such other date as determined by the Responsible Entity at its discretion. means 02 July 2013. ‘PDS’ means this Product Disclosure Statement dated 02 July 2013. has the same meaning as that term is ‘Property’ means the property located at 34 Bourke Street, Blacks Beach, Queensland. ‘Recipient’ means the persons receiving this PDS. ‘Responsible Entity’ means Axias Funds Ltd ABN 44 131 251 968, AFSL 327340. ‘Senior Lender’ means the senior lender to the Developments. means the total forecast cost of the Development as set out in Section 6.8. ‘Unit’
‘we’, ‘our’, ‘us’ means the Responsible Entity of the Fund.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
105
14. how to invest
106
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
14.1 Application Process and Forms
The Responsible Entity may at any time decide to withdraw this
14.1.1 How to Invest in the Fund
return all Application Monies as soon as practicable, or at the
Application Form attached to and forming part of this PDS. Please read the instructions on the Application Form carefully before completing it.
14.2 Applications
Completed Application Forms may be accompanied by a cheque in Australian dollars, crossed “Not Negotiable” and made payable to “The Trust Company Limited ACF Axias Funds Limited” and forwarded to:
Future Estate Australian Residential Property Fund C/O Future Funds Management Pty Ltd Level 7 AMP Centre 50 Bridge Street Sydney, NSW, 2000
14.2.1 Anti-Money Laundering & Counter Terrorism Financing Act 2006 Applicants, whether individuals, companies, partnerships or the Responsible Entity at the time an Application is lodged, or By applying to invest in the Fund, you warrant that: you are not aware and have no reason to suspect that: the monies provided to the Responsible Entity for your investment in the Fund have been derived from or related
subscription account:
illegal activities, whether prohibited under Australian law, international law or convention or by agreement; or
BSB: 082 057 Account number: 94 501 9317
any illegal activities; and
All Application monies will be deposited into a separate bank account of the Custodian as the agent for the Responsible Entity or the Application monies returned. Any interest earned on this
accordance with the phrase used and applied in the AntiMoney Laundering & Counter-Terrorism Financing Act 2006 and the Rules made under that Act).
14.2.2 Privacy also submit an executed Apartment Purchase Contract together
the Investor has also properly submitted an executed Apartment Purchase Contract.
14.1.2 Acceptance of Applications A completed and lodged Application Form together with cheque or funds transfer for the Application monies constitutes a binding and
The Investment Manager recognise that your privacy is important to you. Any personal details provided to the Investment Manager when you invest, or at any other time in relation to your investment, will be used to administer and report on your investment with us, and for purposes related to that. The Investment Manager may also disclose information to other persons to enable us to provide services to you. Such people include: third parties we appoint as advisers, agents or service providers such as auditors, custodians or legal advisers;
Application Form on the terms set out in this PDS and the Constitution.
third parties you authorise to act on your behalf in relation to
any Applicant, and retains the right to reject any Application or to accept only part or all of an Application. Application monies which have not been allocated will be refunded.
Government authorities when and to the extent required by law.
signed) will not be processed and the application money will remain in the account until the correct documentation is received. If correct documentation is not received within one month, the application money will be returned to you by cheque, with no interest payable. Further, if the targeted minimum raising amount is not in fact raised then the Responsible Entity reserves the right to elect not to will by returned by the Custodian to Investors without interest
adviser, broker or solicitor; and
By making an application to invest in the Fund you will have consented to our collection and use of your personal information as stated above. The Investment Manager aims to keep your personal details as up to date and accurate as possible. If any of your personal what personal details the Investment Manager hold with respect to you, please contact the Investment Manager at info@futurefundsmanagement.com.au or write to the Investment Manager at the address listed in this PDS.
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
107
15. APPLICATION FORM
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Application Form Future Estate Australian Residential Property Fund ARSN 134 516 724 This Application Form relates to the Application for units in Future Estate Australian Residential Property Fund (ARSN 134 516 724) under the PDS dated 02 July 2013 issued by Axias Funds Ltd (ACN 131 251 968). This form must be accompanied by the PDS when provided to any person.
(Individual, Joint, Director or Trustee) Full Name (Title, given name(s) & Surname)
Date of Birth
/
/
Joint Applicant #2 - Full Name (Title, given name(s) & Surname)
Date of Birth
/
/
Joint Applicant #3 - Full Name (Title, given name(s) & Surname)
Date of Birth
/
/ (Company, Trust or Self-Managed Super Fund Name)
Company, Trust or SMSF
Line of Business
ABN/ACN
(Street Address and a phone number must be supplied as a minimum) Contact Name
Residential Address
Suburb
Phone Number
State
Postcode
State
Postcode
Mobile Number
Email Address
Suburb
Phone Number
Mobile Number
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
109
Applicant
TFN
Exemption (if any)
Joint Applicant #2
TFN
Exemption (if any)
Joint Applicant #3
TFN
Exemption (if any)
5 ADVISER DETAILS Financial Adviser Name
Adviser Company Name
AFSL Holder
AFSL Number
Authorised Representative Number
Adviser Postal Address
Suburb
State
Business phone number
Postcode
Mobile phone number
Adviser email address
Assistant name
Business phone number
Mobile phone number
Assistant email address
For more information regarding this investment, please contact: Adviser / Assistant (Circle one)
I would like to receive a copy of my client’s annual tax statements: Electronic / Hard copy (Please circle)
If fee details are not completed, no upfront professional fee for service will be paid to an advisor Have you and your client agreed on you receiving all or part of the upfront professional fee for service: YES / NO (Please circle) If yes, circle the percentage to be paid:
110
0%
1%
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
2%
3%
FINANCIAL ADVISER DECLARATION – AML LEGISLATION VERIFICATION RECORDS AND CUSTOMER IDENTIFICATION PROCEDURES
Application Form.
represents to the Responsible Entity that they: 1.
have followed the IFSA/FPA Industry Guidance Note No.24 and any other applicable AML Legislation;
2. 3. Applicant; 4. after their relationship with the Applicant has ended; 5. 6.
will not knowingly do anything to put the Responsible Entity in breach of AML Legislation; and
7.
will notify the Responsible Entity immediately if they become aware of anything that would put the Responsible Entity in breach of AML Legislation.
Adviser Stamp
Date:
/
/
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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8 INVESTMENT DETAILS ( To be completed by all Applicants) Amount you wish to invest:
$
(Price Per Unit: A1 Class $100,000; B1 Class $125,000; C1 Class $150,000; D1 Class $25,000) No. of UNITS
A1 Class
B1 Class
C1 Class
D1 Class
– Made payable to “The Trust Company Limited ACF Axias Funds Limited” Drawer
Bank
Branch
Amount of cheque
$ $ $ $ $ ( To be completed by all Applicants) Where would you like your distributions credited?
Paid to an Australian Bank account nominated below
If you do not nominate a preference, your distributions will be automatically reinvested into the Fund and additional Units issued to you. Bank account details for distribution & withdrawal payments
Branch name
BSB number
Account name
112
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Account number
11 INDIVIDUALS, INDIVIDUAL TRUSTEES, JOINT INDIVIDUALS, JOINT INDIVIDUAL TRUSTEES OR SOLE TRADERS
(Trustee Applicants also complete Section 13) Section 7 and send us a copy of the relevant IFSA/FPA Form.
Option 1 – provide a
photograph of the person Foreign passport or similar travel document containing a photograph and the signature of
Option 2 – provide one
Category A
document from category A and one secondary category B Pension card issued by Centrelink Health card issue by Centrelink
Category B A document issued by the Commonwealth or a State or Territory within the preceding 12
A document issued by the ATO within the preceding 12 months that records a debt payable
A document issued by a local government body or utilities provider within the preceding three months which records the provision of services to that address or to that
If under the age of 18 years, a notice issued to the individual by a school principal within and records the period of time that the individual attended that school
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
113
– that are Australian proprietary limited companies
Section 7 and send us a copy of the relevant IFSA/FPA Form.
Directors
Number of Directors
Director 1 – full name
Director 2 – full name
Director 3 – full name
Shareholders Provide all details
Shareholder 1 – full name
Street Address
Suburb
State
Postcode
State
Postcode
Shareholder 2 – full name
Street Address
Suburb
A search extract from the relevant ASIC database
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
Sections 1 and 11. Sections 2 and 12. This section must be completed by all trustee Applicants.
Section 7 and send us a copy of the relevant IFSA/FPA Form.
Option 1 – self managed super funds.
Option 2 – all other trusts.
14 AUTHORISATION I / We acknowledge and declare that by signing this Application Form I/we have read and understood the attached PDS and attached instructions and declare that all details and statements made by me/us are complete and accurate. I / We agree to be bound by the constitution of the Future Estate Australian Residential Property Fund. APPLICANT(S) SIGNATURE Print Name
Sign
Date
Position held (for a Company, Trust or SMSF)
Print Name
Sign
Date
Position held (for a Company, Trust or SMSF)
Print Name
Sign
Date
Position held (for a Company, Trust or SMSF)
PRODUCT DISCLOSURE STATEMENT – DRIFTWOOD OFFER
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16. corporate directory Investment Manager:
Future Funds Management Pty Ltd Level 7, AMP Centre 50 Bridge Street Sydney NSW 2000 Phone:
1300 FUTURE (388 873)
Email:
info@futurefundsmanagement.com.au
Website: www.futurefundsmanagement.com.au
Responsible Entity:
Axias Funds Ltd Level 5 56 Pitt Street Sydney NSW 2000 Phone:
(02) 8823 3193
Email: Website: The Trust Company Limited ABN 59 004 027 749 Level 15 20 Bond Street Sydney NSW 2000
Fund Solicitors:
Pointon Partners Pty Ltd Level 14 565 Bourke St
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FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND
FUTURE ESTATE AUSTRALIAN RESIDENTIAL PROPERTY FUND (ARSN 134 516 724)