Laver Drive Unit Trust

Location
69 Laver Drive, Robina, QLD
Purchased
$7.605m
May 2017
Expected Syndicate Term
6-8 Years

Monthly Cash Distribution: 9.0%

Key features of this asset:

Ideally positioned purpose built freestanding office building on a large allotment of 3,774 sq metres with long-term development potential.
Originally constructed to an extremely high level of specification for the Australian Federal Police.
Benefits from pre-approved, 8-storey development with 80% site coverage, allowing for a future development of up to 22,000 sq. metres

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INFORMATION MEMORANDUM

LAVER DRIVE UNIT TRUST

69 LAVER DRIVE, ROBINA, QLD

APRIL 2017

9% p.a. INCOME PAID MONTHLY

WHY PEOPLE CHOOSE PEAK EQUITIES

Opportunity	Monthly Tax-	Expert Property
and Returns	Effective Income	Selection and
	Distributions	Management

Diversification and Liquidity

Peace of

Mind

Communication and Information

Contents

OFFER DETAILS

KEY ATTRIBUTES

PROPERTY DESCRIPTION

LOCATION HIGHLIGHTS -

ROBINA

LOCATION HIGHLIGHTS -

GOLD COAST

FINANCIAL SUMMARY

TENANCY SCHEDULE

MANAGER’S ENTITLEMENTS

RISK FACTORS

ADDITIONAL INFORMATION

APPLICATION FOR UNITS

6 - 8

Offer Details

1. The Trust - Peak Equities Pty Ltd is Trustee of the LAVER DRIVE UNIT TRUST, established on 1st April 2017. The principal activity of the Trust will be the acquisition of the investment property at 69 Laver Drive, Robina, Gold Coast

2. Due Diligence - Peak Equities Pty Ltd (the Trustee) is well advanced in its comprehensive Due Diligence investigation and analysis of the property. Subject to the satisfactory outcome of that process, an unconditional contract will be on foot for settlement on 31st May 2017.

3. Purchase Price - The purchase price has been agreed at $7,605,000.

4. Forecast Distribution Rate – The Trustee proposes to make monthly cash income distributions at the rate of 9% per annum to Investors

5. Funding - Peak Equities has conditional approval for bank funding of 65% of the contract price, on a non-recourse basis to investors. The Trustee will raise Equity Capital from Investors of $3,750,000

6. Applications for Units - Each Investor may apply for between 200 and 400 Ordinary Units of $1,000 each in the capital of the Trust (Investment Value $200,000 to $400,000). Applications may only be made on the Application Form attached to this Information Memorandum.

7. Offer Period – The offer will remain open until full subscription has been received. The Trustee has discretion as to the number of Units (if any) to be allocated to each Applicant.

8. 20% Deposit Payable - Investors must lodge a deposit equal to 20% of the value of their total investment accompanying their Application.

Deposits funds must be paid directly into the solicitor’s trust account. (see Application Form for details)

9. Balance Payment - The remaining 80% subscription price will be payable around 20th May 2017, within 7 days of written request from the Trustee. Unit certificates will be issued by the Trustee upon receipt of the balance payment by each investor.

10.Offer Limited to Wholesale Investors -

The Offer is available exclusively to Sophisticated

Investors as defined in the Corporations Act

11.Trust Documents. Prior to confirming their investment, intending Unitholders will be provided with a copy of the Trust Deed and the Unitholders’ Deed of the LAVER DRIVE UNIT TRUST, and will be required to sign a Deed agreeing to be bound by the terms of those documents.

(Source –

Key Attributes of 69 Laver Drive, Robina

LOCATION

The Property at 69 Laver Drive, Robina is ideally positioned within the fastest-growing region on the Gold Coast. Robina’s commercial centre enjoys the lowest vacancy rate in the greater Gold Coast municipality.

ASSET QUALITY

This purpose built freestanding office building was originally constructed to an extremely high level of specification for the Australian Federal Police. The property currently supports 3 tenants, each with individual access and ample parking.

OPPORTUNITY

Robina is a master-planned community. The location of 69 Laver Drive has the benefit of pre-approved, or ‘as of right’ 8-storey development with 80% site coverage. That would allow development of up to 22,000 sq. metres on the site. In our view, the medium to long-term development opportunities underpin the value of the site.

VALUE

The $7,605,000 contract price reflects a first year income yield of 8.00% on a fully-let basis and is supporter by an independent valuation from CBRE (dated April 2017). Having regard to the specific location of the property and prevailing market conditions, we consider this represents sound value.

SCARCITY AND DEMAND

Since 2009, Gold Coast City vacancy rates have steadily declined, driven by sound economic fundamentals and growth of business within the City. The vacancy rate in the Robina/Varsity Lakes area has dropped from around 10% to 6.9% during the 12 months ended January 2017. This trend is forecast to continue well into the future.

Colliers, Knight Frank IM)

SECURE INCOME

The anchor tenant, The French Beauty Academy, is one of Australia’s largest private training organisations, educating more than 500 therapists each year. The company, which has operated for more than 30 years, occupies 72% of the net lettable area and contributes 78% of the gross income, with a 6-year remaining lease term. We expect this investment to offer strong income security throughout the expected holding period.

Property Description

69 Laver Drive, Robina, QLD, 4226

A two level office building which was originally constructed in

2000 and subsequently refurbished and extended in 2013. The building comprises ground level and part lower ground level office accommodation with three office tenancies ranging from 1,095 square metres to 157 square metres. A passenger lift operates between the basement and ground level tenancy. There are 48 on site car parks including 13 basement spaces and 35 open.

The property slopes towards the rear from Laver Drive. This allows for street-front entry to The French Academy premises, and convenient ground level entry for the professional suites at the rear of the property. The site is substantially under-developed and there is an opportunity for either medium-term expansion of the current facility, or for sale as a future development site, taking advantage of the strong CBD Robina office market and favourable zoning.

Site Area:	3774m2
Net Lettable Area:	1502m2
Car Parking:	48
WALE at acquisition:	5.4 years*
Number of tenants:	3
First year net income:	$608,124**

Upper Level

Lower Level

*Expected to increase when vacant suite is let

**Including rental subsidy payment from Vendor

Location Highlights – Robina

Robina is a planned community, designed from the outset to become a benchmark CBD, residential and lifestyle center. From vacant land in 1980, Robina has grown to become to a vibrant city within a city, with almost 30,000 residents, forecast to increase to more than 90,000 by 2050. With an already thriving CBD, Robina is the geographical heart of Gold Coast City, drawing on a catchment of almost half a million people.

Robina Town Centre is Gold Coast City’s premier retail and leisure destination - the second largest center in Queensland. It has a full range of high-end department stores over 350 specialty stores, a waterfront dining precinct, 900-seat food atrium, ground-breaking cinema complex and more.

	CBUS SUPER STADIUM


				HEALTH PRICINCT


		SURFACE PARADISE
		SURFACE PARADISE	BROADBEACH
TRAIN STATION			BROADBEACH
TRAIN STATION

69 LAVER

	ROBINA PRIVATE HOSPITAL
			ROBINA TOWN CENTRE
		EASTSIDE	ROBINA LIBRARY
	THE ROCKET	EASTSIDE
	THE ROCKET
		CAMPUS ALPHA
ROBINA MOTORWAY	ROBINA STATE HIGH SCHOOL	CAMBRIDGE RESIDENCES
		CAMBRIDGE RESIDENCES

M1 MOTORWAY

Gold Coast’s signature office tower, “The Rocket” is situated within 500 metres of 69 Laver Drive. The Rocket is a 16-storey tower, constructed on a substantially smaller site.

The favourable zoning at Laver Drive allows for an even greater NLA (up to 22,000 sqm) with individual floor plates of greater than 2,500 sq. metres, which will offer substantial flexibility in design and amenity.

(Ivan Hill - CBD-Robina Office Market Update, April 2015)

Location Highlights – Robina

Robina’s population grew by 4.5% pa in the ten years from 2001 to 2011 compared to 3.1% for the rest of Gold Coast City*. The Robina/Varsity Lakes area will be the highest contributor to the economic growth of any precinct in Gold Coast City, with 24.6% of Gross Regional Product growth to 2050.**

The below table demonstrates both the growth in commercial space within the Greater Gold Coast City between January 2016 and January 2017, and the absorption of available office space in the Robina/Varsity Lakes precinct.

	Vacancy	Vacancy	Net Absorption	Total Area Vacant
Precinct	Vacancy	Vacancy	2nd half 2016	January - 2017
Precinct	January - 2017	January - 2016	2nd half 2016	January - 2017
	January - 2017	January - 2016	sqm	sqm
			sqm	sqm
Robina/Varsity	6.90%	10.00%	4,999	9,458
Lakes	6.90%	10.00%	4,999	9,458
Lakes
Broadbeach	10.80%	8.80%	-605	3,244

Bundall	14.10%	16.90%	2,370	11,997

Southport	13.20%	15.50%	2,724	19,609

Surfers Paradise	18.40%	19.30%	600	13,159

Aggregate	12.68%	14.10%	10,088	57,467

The Robina/Varsity Lakes precinct boasts a vacancy rate of 6.9% as at January 2017, which is the lowest by far in the Gold Coast, and one of the lowest commercial vacancy rates nationally. The trend has continued beyond January 2017, with significant take-up in commercial buildings, including ‘The Rocket’ which has recently seen the National Disability Insurance Agency (‘NDIA’) commit to almost 3,000 square meters.

”CBD-Robina is a standout performer, with its low vacancy, consistent net absorption and new supply activity making it unique Australia-wide.”

*ABS Regional Population Growth (March 2016)

**Urbis Independent Researchers (February 2016)

Location Highlights – Robina

Transport and Access

Robina offers easy access for Gold Coast City’s growing population. Due to its geographically central location, proximity to the M1 Motorway and excellent road network, Robina enjoys favourable drive times to and from other parts of Gold Coast City and beyond.

Robina’s transport infrastructure is already in place. Robina has a direct rail link to Brisbane and the extension from Robina to Varsity Lakes is operating. Queensland Rail has plans to extend the rail link to Gold Coast International Airport.

All Robina M1 Motorway junctions from 77 to 82 have undergone major upgrades and the M1 has been widened to six lanes throughout this stretch of motorway. Dual lane arterial roads connect CBD-Robina with the rest of Gold Coast City.

Unique Town Planning Framework and Approval Process

Robina operates within a unique town planning framework. Designated areas, including 69 Laver Drive, are subject to a pre-approved Plan of Development, ensuring speedy and cost-effective approval processes for developments within the guidelines.

The Gold Coast population is predicted to double by 2050*, and with most of that growth forecast to be in the central and western precincts, Robina is positioned in the heart of the development corridor. Current Planning approvals for approximately 2,000 additional dwellings, as well as ongoing commercial development, will continue to support Robina’s outstanding growth story.

* KPMG Beyond the Horizon Gold Coast report 2015

Location Highlights – Gold Coast

The Gold Coast has evolved into a major economic region, driven by continued and sustainable investment in major services and infrastructure. The evolution of Gold Coast City as an economic hub is set to continue with more than $13.5 billion in major infrastructure projects planned or underway largely related to the forthcoming Commonwealth Games to be held on the Gold Coast in April 2018.

•With access to two international airports, Gold Coast City is perfectly positioned as a destination for business, investment, education, sport, world events, tourism and lifestyle.

•Stretching along 57km of coastline, Gold Coast City is home to over half a million people with an economic catchment of over 3.6 million people, representing 77% of the Queensland population.

•With over 12 million people visiting the region each year, Gold Coast City is Australia’s premier tourist destination, offering a diverse and vibrant mix of natural attractions, shopping, accommodation, theme parks, and an abundance of restaurants.

The Gold Coast City commercial vacancy rates continue to decline driven by sound economic fundamentals and growth of business within the City. There has been consistent demand with steady take-up across the

commercial markets, with increases in average business sizes in the SME sector as well as continual take-up

by both State and Federal Governments.

Financial Summary

Contract Price	7,605,000

Stamp Duty & Registration Fees	456,300

Establishment Fees - 3%	241,839

Due Diligence & Borrowing Expenses	75,000

Cash Reserve	315,111

Total Funds Required	8,693,250

Mortgage - 65% of Contract Price	4,943,250

Investor Equity Required	3,750,000

Income Forecasts

	Year 1	Year 2	Year 3	Year 4	Year 5	Year 6
	$’000	$’000	$’000	$’000	$’000	$’000
Net Rental Income*	608	624	641	661	680	701
Less
Mortgage Interest (4.25%)	210	210	210	210	210	210

Management and	71	72	73	75	76	78
professional fees	71	72	73	75	76	78
professional fees

Net Income	327	342	358	376	394	413

Yield on equity	8.71%	9.13%	9.55%	10.02%	10.51%	11.02%

Capital Expenditure	20	20	20	20	70	20
Allowance	20	20	20	20	70	20
Allowance

Income distributions (9%)	352	352	352	352	352	352

Cumulative Cash Reserve	280	260	254	263	224	250

* Vendor Rental Subsidy of $100,000 applied in calculation of Net Rental Income and Cash Reserves.

Tenancy Schedule

Tenant	The French	Medrecruit	Rental Subsidy
Tenant	Academy	Medrecruit	& New Tenant*
	Academy		& New Tenant*

Area	1,095	250	157

2017 rent payable	451,433	85,414	56,520

Lease start	6/1/13	1/13/17	3/25/14

Lease end	5/31/23	1/13/20	3/24/17

Annual increases	CPI + 1%	CPI + 1%	CPI + 1%

Options	2*5

Parking spots	37	4	3

Outgoings $/m2	130	80	75

Outgoings share	142,350	20,000	12,000

Parking rental	2,682	7,404	5,400

* Keola Welness has not renewed its lease. The Vendors will contribute a sum of $100,000 in cash by way of rental support.

69 Laver Drive, Robina, QLD

$7.605m

6-8 Years

Monthly Cash Distribution: 9.0%

Key features of this asset: