NEWMAN RESIDENTIAL ESTATE

Transcription

1 Newman Residential Estate Information Memorandum 1 NEWMAN RESIDENTIAL ESTATE INFORMATION MEMORANDUM Issued % per annum, payable monthly or capitalised 3-5 years Simple loan structure for Australian real estate development Land backed security plus additional guarantor Exit strategy refinance and/or sales to Australian buyers and superannuation (pension) funds The content of this promotion has not been approved by an authorised person within the meaning of the Financial Services and Markets Act Reliance on the promotion for the purpose of engaging in any investment activity may expose an individual to a significant risk of losing all the property or other assets. DISCLAIMER This document is prepared by MACRO Realty Developments Pte Ltd and is intended for qualifying investors located within certain jurisdictions. This document relates to possible investment in an unlisted company ( the Company ). Investment in the Company cannot be marketed to the general public in the UK. This promotion is exempt from the general restriction in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is made to qualifying investors being Investment Professionals, Self-Certified high net worth individuals, high net wealth companies, sophisticated investors and associations of high net worth or sophisticated investors within specific meanings of the FPO. You must have signed a statement as to this in a form required by the FPO not more than 12 months before you have received this document. If you do not fall within any of these categories, and have not provided a signed statement produced by MACRO stating that you do fall within these categories, you should disregard these materials and return them.

2 2 Newman Residential Estate Information Memorandum Important information for investors in the UK This document relates to possible investment in an unlisted company ( the Company ). Investment in the Company cannot be marketed to the general public in the UK. This promotion is exempt from the general restriction in section 21 of the Financial Services and Markets Act 2000 on the communication of invitations or inducements to engage in investment activity on the grounds that it is made only to the following categories of persons and if you do not fall within any of these categories you should disregard these materials and return them: a. Investment Professionals within the meaning of Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order ( FPO ), including FSA authorised persons and certain others having professional expertise in matters relating to investments; b. Self-certified high net worth individuals within the meaning of Article 48 of the FPO as described below; c. High net worth companies, unincorporated associations etc. within the meaning of Article 49 of the FPO, as described below; d. Self-certified sophisticated investors within the meaning of Article 50A of the FPO as described below; e. Associations of high net worth or sophisticated investors within the meaning of Article 51 of the FPO. For the above purposes: To qualify for certification as self-certified high net worth individual, you must either: a. Have annual earnings of at least 100,000 in the last year; or b. Have held net assets of at least 250,000 in the last year excluding: primary residence and any loan secured on it; rights under qualifying contracts of insurance within the meaning of FSMA (Regulated Activities) Order 2001; and benefits (in the form of pension or otherwise) which are payable on the termination of service or on death or retirement and to which you are (or your dependants are), or may be, entitled. You must have signed a statement as to this in a form required by the FPO not more than 12 months before you have received this document. To qualify as a self-certified sophisticated investor you must satisfy one of the following: a. Be a member of a syndicate of business angels or have been so for at least six months; b. Have made more than one investment in an unlisted company within the last two years; c. Work, or have worked, in the last two years in a professional capacity in the private equity sector, or in the provision of finance for small and medium enterprises; or d. Be currently, or have been in the last two years, a director of a company with an annual turnover of at least 1million. Additionally, you must have signed a statement as to this in a form required by the FPO not more than 12 months before you have received this document. To qualify as a high net worth company, unincorporated association etc. you must be: a. A body corporate which has, or which is a member of the same group as an undertaking which has, a calledup share capital or net assets of not less than: ii. if the body corporate has more than 20 members or is a subsidiary undertaking of an undertaking which has more than 20 members, 500,000; or iii. otherwise, 5 million; b. An unincorporated association or partnership which has net assets of not less than 5 million; c. The trustee of a high value trust; d. Any person ( A ) whilst acting in the capacity of director, officer or employee of a person ( B ) falling within any of sub-paragraphs (a) to (c) where A s responsibilities, when acting in that capacity, involve him in B s engaging in investment activity. For the purposes of paragraph 1(c) above, high value trust means a trust where the aggregate value of the cash and investments which form part of the trust s assets (before deducting the amount of its liabilities): a. Is 10 million or more; or b. Has been 10 million or more at any time during the year immediately preceding the date on which the communication in question was first made or directed. Investing in the type of investment that may be involved may expose you to a significant risk of losing all the sums invested or incurring additional liability. If you are in doubt about investing in the company you should consult an authorised person, who specialises in advising on investments such as those in the company. Any person who is in doubt about the investment to which this document relates should consult an authorised person specialising in advising on investments of the type referred to in these materials. Any investment or transaction may have tax consequences on which you should consult your tax advisers.

3 Newman Residential Estate Information Memorandum 3 Introduction We are pleased to make this investment opportunity available to you and provide an insight into Australia s top performing property market and the engine room of Australia s strong economy. The Pilbara region of Australia offers an investment environment that is truly unique and a place where a number of physical and economic factors combine. This in conjunction with our substantial real estate experience in Western Australia, allows us to make available this attractive opportunity. We believe that the combination of a simple short term loan structure with a significant interest rate, combined with the security of an underlying land asset as well as an additional guarantor; creates one of the most attractive opportunities available globally. Thank you for taking the time to review the information within this Memorandum. We trust that it will provide you with an improved understanding of the unique economic environment that exists in the Pilbara region, and why real estate development is such an exciting and important sector within this market. Veronica Macpherson Managing Director

4 4 Newman Residential Estate Information Memorandum Contents Introduction...3 Key definitions...5 Property...6 Location...6 Development...7 Development values and status... 7 Development milestones... 8 Civil works program... 8 Key development information... 8 Project...9 Revenue and cost assumptions Project loan opportunity summary...11 Use of funds Loan security Loan repayment strategy Key loan terms MACRO Realty real estate sales strategy Economic and feasibility overview...13 Iron ore Global urbanisation driving iron ore demand The Pilbara region Newman...19 Economy Loan risk and mitigant analysis...23 Development management team...23 Veronica Macpherson MACRO Realty Developments...25 MACRO Realty Successful and completed projects Frequently asked questions...26 Testimonials...28 Next steps...29 Appendices...30 Appendix A: MACRO Realty Developments financial structure Appendix B: Corporate structure of Newman Estate Appendix C: Land titles for Newman Estate Appendix D: ACRA Report for MACRO Realty Developments Pte Ltd Appendix E: Corporate registration for MACRO Realty Developments Pty Ltd Appendix F: Corporate registration for Newman Estate Project Trust Appendix G: Corporate registration for Pilbara Property Developments Pty Ltd Appendix H: Certificate of registration for MACRO Capital Enterprises Pty Ltd Appendix I: Company details for MACRO Capital Enterprises Pty Ltd Appendix J: Real Estate and Business Agent Triennial Certificate Appendix K: MACRO Realty annual audit Appendix L: MACRO Realty full feasibility model example Appendix M: Pilbara Development and Investment, Government Blueprint... 44

5 Newman Residential Estate Information Memorandum 5 Key definitions The following terms are used in this Memorandum: Term Borrower Developer Definition A Special Purpose Vehicle (being a company and unit trust established specifically for the investment) MACRO Realty Developments Pty Ltd an Australian company with registration number ACN Development The Property with approved residential land subdivision to develop 222 single dwelling lots and 22 apartment complexes over two stages, known as the Newman Estate Guarantor Lender Loan Loan Agreement Information Memorandum SPV Lot Project Property MACRO Capital Enterprises Pty Ltd (ACN ) the Developer s holding company based in Australia. A person who makes a Loan to the Borrower A Loan made by a Lender to the Borrower pursuant to the Offer outlined within this Information Memorandum and documented by a corresponding Loan Agreement The agreement for a Loan to be entered into between the Borrower and the Lender This confidential document outlining the terms of the Loan offering from the Borrower and associated information relevant to the Borrower s business and ability to repay the Loans Special Purpose Vehicle (a corporate structure comprising of a company and unit trust that is incorporated for a specific purpose) A subdivided piece of land within the Property that is earmarked for development The specific area of the Development to which this Information Memorandum relates directly. The Project includes eight lots, a house will be constructed on each, funded through investor contributions and the Developer s equity Lot 511 Great Northern Highway (corner of Kalgan Drive and Daniels Drive), Newman, WA 6753

6 6 Newman Residential Estate Information Memorandum Property The local authority is the Shire of East Pilbara. The Property is legally described as Lot 511 on Plan on Certificate of Title Volume 2741, Folio 262 (Lot 511) located on the Great Northern Highway (corner of Kalgan Drive and Daniels Drive), Newman WA Fig 1. Property location in relation to Newman Fig 2. Lot 511 Location The Pilbara is located in the north of Western Australia. It is well known for its red earth, petroleum, natural gas and iron ore deposits, which contribute significantly to Western Australia s economy. The Pilbara region has a population of approximately 85,000 and covers an area of circa 500,000km 2 which includes some of Earth s oldest rock formations (over two billion years old). Newman is a town in the Pilbara region of Western Australia. It is located about 1,186km north of Perth, and 9km north of the Tropic of Capricorn. It can be reached by the Great Northern Highway. In the 2011 Australian census, its population was 6,000. The Development is a hectare, 244 lot approved subdivision located 3km from the centre of the Newman township and 12km from Newman Airport. Positioned at a main entry into the town and behind a visitors display board, the Development is well located and enjoys a high profile with passing traffic. THE PILBARA Newman Perth Indian Ocean PORT HEDLAND KARRATHA Cape Lambert DAMPIER Wodgina Millstream Chichester PANNAWONICA National Park Pardoo Nimingarra Shay Gap Goldsworthy Yarrie Marble Bar Mesa J Mesa A WITTENOOM Cloud Break Nammuldi Brockman 2 Mount Brockman 4 Tom Price TOM PRICE Paraburdoo Eastern Range Karijini National Park Marandoo Channar Christmas Creek Yandi Area C Yandicoogina Hope Downs Orebodies West Angeles Jimblebar Mount Whaleback NEWMAN Fig 3. The Pilbara and Newman within Australia

7 Newman Residential Estate Information Memorandum 7 Development An application for the Property with the Western Australian Planning Commission (WAPC) for a 244- lot, green title subdivision was submitted on 17 July Subsequently on 18 December 2012, WAPC granted conditional approval for the application for the below lot numbers and zoning thus creating the Development. Table 1. Lots and zoning Lot type R20 sized lots (average 450m 2 ) R30 sized lots (average 287m 2 ) R40 sized lots (average 203m 2 ) R40 group/multiple dwelling lots (average 990m 2 ) Number of lots Total 244 Development values and status Due to the accommodation requirements created by over AU$6.7bn of nearby mining projects, Newman is arguably the most under-supplied property market in Australia. The Newman Estate Development is intended to satisfy part of this demand, and is the largest private subdivision ever realised in the Pilbara. Contextually however, the Newman Estate will not provide enough dwellings to match the number of mining camps (temporary accommodation) located within even 10km of the town centre, and is therefore expected to command superior rental returns by offering the best quality of accommodation in a very under supplied market. The value of land in the Pilbara is unlike other locations because of the undersupply and lack of available freehold land. This is due to Native Title issues and the region being subject to flooding. Areas that are available for development are usually released to the market strategically and through a not-for-profit preferential system administered by the government (giving last priority to private investors). For example, applications for the land submitted by first home buyers and local residents are preferred, with property investors usually the last to be accepted in the ballot type system. Sales evidence of freehold land made to the market includes the following land lots sales: 2 Hibiscus Way Newman, 287 square metres (Kurra at Newman) AU$408, Hibiscus Way Newman, 229 square metres (Kurra at Newman) AU$400, Kingsmillii Loop Newman, 229 square metres (Kurra at Newman) AU$440,000 8 Spinifex Street, 246 square metres (Kurra at Newman) AU$410, Spinifex Street, 246 square metres (Kurra at Newman) AU$420,000 Lot 90 Newman Estate, 275 square metres AU$419,000 Lot 102 Newman Estate, 200 square metres AU$400,000 The rental yields are also being used to assist valuations, (not unlike commercial property) further reason for the designs that MACRO Realty Developments is choosing (dual key houses with the equivalent of a two bedroom apartment on the ground and second level) where rent returns are most likely to bolster valuations. Sales and rental evidence of houses in the local area include the following: 8 Homestead Ramble AU$1,000,000 (single key 4 bedroom, 2 bathrooms and one kitchen) 10 Homestead Ramble AU$1,175,000 (single key 4 bedroom, 2 bathrooms and one kitchen) 27 Homestead Ramble AU$1,175,000 (single key 4 bedroom, 2 bathrooms and one kitchen) 93 Daniels Drive AU$1,100,000 (single key 4 bedroom, 2 bathrooms and one kitchen) 20 Eagle Rock Turn AU$1,250,000 (single key 4 bedroom, 4 bathrooms and one kitchen) On the market now as further examples, are two properties already built and leased within the Kurra Estate; 11 and 15 Kingsmillii Loop. They are for sale at AU$1,025,000 each and are currently leased by the Government s Department of Housing at AU$2,100 per week for a three year term, with an option to renew for a further two years. It is important to note that the majority of houses in Newman are dilapidated and more than 30 years old when monitoring the median price; rental yields and trends. We are naturally seeing a migration from people upgrading to newer homes as they become available, and more of the older properties being sold as a result of this. Housing prices and delivery in the region are at a far higher cost than in capital cities, impacted by transport costs, competing job opportunities for workers and costs associated with storage and accommodating the construction workforce. This has led to current prices for substandard and temporary accommodation at mining camps still achieving $120-$150 per night on average. Dual key homes maximise the use of the available land and minimise the cost of construction. They also increase the potential for additional rental yield as a result of effectively creating two homes under the one roof.

8 8 Newman Residential Estate Information Memorandum Development milestones Activity The civil development works achieved practical completion Feb 2015 Commencement of all landscaping works on the site Feb 2015 The West Australian Planning Commission conditions of subdivision met and all relevant clearance letters received Date Feb 2015 Individual lot titles issued Apr 2015 Settlement of single dwelling land lots commence May 2015 Landscaping works to be completed Jul 2015 Issue of titles for apartment complexes Sep 2016 Settlements of apartments commence Nov 2016 Settlements of apartments complete Jan 2017 Civil works program Stage Components Construction Period Single Bulk earth works; 244 land lots Jun 2013 to Nov 2014 (18 months) Key development information Particular Ownership Management Project description Property location Site area Zoning Planning status Current development status Comparable sales Amount to be raised Description A total of four companies with two land lots acquired by each company, each company is a trustee of a unit trust. The investors are issued security over the units in the unit trusts on the basis of one AU$1,000 unit for each AU$1,000 invested. The Developer (MACRO Realty Developments) provides the management team, and the Managing Director of the group will be the trustee of the unit trusts Eight vacant land lots with individual titles already issued, to have dual key homes built on each lot. Each house will consist of two separate two bedroom, one bathroom, one kitchen apartments Lot 511 Great Northern Highway (corner of Kalgan Drive and Daniels Drive), Newman, WA ha Residential zoned including lots zoned R20, R30 and R40 Full planning approval for a 244-lot, green title land subdivision received from the WAPC (12 Dec 2012) including land lots for 222 single dwellings and 22 multiple dwellings (apartment complexes) Land subdivision complete with individual titles issued See page 7 for a list of comparable land and built house sales AU$7,806,080 in total being AU$1,951,520 per trust

9 Newman Residential Estate Information Memorandum 9 Project The Project consists of the construction of eight dual key houses which as a substitute for two independent, two bedroom apartments are expected to serve local companies well by providing comfortable accommodation for up to 32 workers, with four bathrooms, two separate living areas and two kitchens per dwelling. Fig. 4 Map of Development FUTURE PARK R40 943m 2 256m 2 There is a strong emphasis in the region to cut down on the use of mining camps which promotes a fly-in fly-out work force (and arguably an unhealthy lifestyle that is not conducive to family integration or staff retention); but a key issue for employers is the cost of accommodation outside of mining camps. MACRO Realty Developments takes a holistic view when providing accommodation and service solutions in the Pilbara to deliver the best possible outcome to all stakeholders. R30 R30 R m 2 POS CORRIDOR 296m 2 R40 R40 R30 R30 R30 R20 450m 2 Aerial view of Newman Estate

10 10 Newman Residential Estate Information Memorandum Render of Project housing Revenue and cost assumptions Revenue assumptions have been based on estimates by MACRO Realty Pty Ltd and evidenced by the 164 land lot sales within the same estate, as well as more than 60 land lots and built house sales in the nearby Kurra at Newman estate. MACRO Realty has sold several hundred houses and apartments in Newman, South Hedland and Port Hedland over the previous seven years. Cost estimates have been based on the fixed price contract recently provided by Niche Q, a reputable builder in the North West of Australia. Two other cheaper estimates were received to construct dual key houses from builders who have delivered less built form in Newman. The builder, Niche Q previously had 130 workers mobilised to the town of Newman and a specialised camp on land made available to them by the local council for the accommodation of construction workers, making them the preferred tenderer. Introducers of this investment to you may receive 0.5-5% per annum as a fee. Table 2. Sales revenue and margin on cost AU$ total AU$ total for projects Number of houses 1 8 Gross sales revenue 1,250,000 10,000,000 Total costs 975,760 7,806,080 Net development profit 274,240 2,193,920 Development margin 21.9% 21.9%

11 Newman Residential Estate Information Memorandum 11 Project loan opportunity summary The Borrower is seeking to raise AU$7.8m to complete construction of eight dual key houses on eight lots. Investors will enter into a simple Loan Agreement with the Borrower for the purpose of developing the Project and receive security over the units of a trust that holds the assets in the Project including the land and construction contract. The Developer is the largest private developer in the Pilbara region with a track record of selling the end product that this investment will facilitate. Within the group they also manage several hundred properties and tenants throughout the Pilbara and Western Australia with their real estate agency. All interest is paid net with any applicable Australian withholding tax being paid by the Borrower. Use of funds The funds will be used to cover the costs associated with developing the Project including construction, final design and approval submissions, a marketing and sales campaign, consultants and project management costs. For the benefit of the investor, the following figures assume all interest is calculated at 16% per annum and that investors interest payments are met by the Developer. Table 3. Use of funds Loan terms Equity (AU$) Loan funds (AU$) Land 3,352,000 Acq. costs 134,080 Construction 4,320,000 Management Investor interest Developer Developer Loan security The Loan Agreements are legally binding contracts and place certain obligations on the Borrower including to make the required interest payments and to repay the Loan capital at or prior to the end of the Loan term. The Borrower is one of four Special Purpose Vehicles ( SPVs being a company and unit trust established specifically for the investment). The Special Purpose Vehicle will raise a maximum of AU$1,951,520. The following company is also a Guarantor to the Loan Agreement, providing an additional level of security: MACRO Capital Enterprises Pty Ltd (Australian Company Number ) the Developer s holding company based in Australia. Through loaning funds to the Borrower with the above mentioned Guarantor, the Lender s entitlements under the Loan Agreement are secured by the assets held by these entities such that in the event of a default, the entities could be put into receivership and the assets sold to repay investors. Receivership would also prevent the entities from being able to continue to operate. The Loan to security value (LSV) ratio of the Developer s portfolio will not exceed a maximum of 80% at all times throughout the Loan term meaning that if the Borrower was to default on the terms of the Loan, the Lenders would have sufficient recourse with contingency. Loan repayment strategy Interest payments will be met by the Developer from their own funds/existing business revenue. Interest payments by the Borrower and the ultimate redemption of Loan capital by the Lender is an absolute requirement as it represents a debt to the company and is not therefore dependent on the success of the Project. One or more of the following four methods will ensure the repayment of lenders capital and are listed below in the Developer s order of preference. The main purpose of this capital raising is for MACRO to build and retain the houses in its portfolio, which it will lease for a significant (net) cash flow positive yield. Australian major banks currently require developers to pre-sell the houses off the plan before making construction finance available. A refinance of the built houses through a major Australian bank Purchase of the property with an Australian owned MACRO equity REIT (real estate investment trust) Refinance by a MACRO Investment Fund Sale of the property through MACRO s in house real estate agency

12 12 Newman Residential Estate Information Memorandum MACRO Realty real estate sales strategy To ensure sales success of MACRO Realty Developments projects, MACRO has devised a comprehensive strategy for marketing Pilbara property as it requires. The methods include the following, An extensive lead generation system A monthly, national and international seminar program Collaboration with national and international investor clubs and financial planners A monthly Pilbara tour of Newman, Port Hedland and Karratha Webinars for property investors An additional real estate agency sales and leasing office to be constructed on Lot 11 within the Estate Key loan terms Term Interest rate Currency Payment Frequency Minimum participation 14% interest per annum will be paid for a three year investment term 15% interest per annum will be paid for a four year investment term 16% interest per annum will be paid for a five year investment term Investor s discretion Interest is paid monthly or capitalised until the end of the term (with additional interest accrued) at the investor s option. The equivalent of AU$30,000

13 Newman Residential Estate Information Memorandum 13 Economic and feasibility overview To understand why this opportunity exists and why it represents a viable investment opportunity, it is important to first understand a number of important economic and geographic factors. These factors combine to create an economic environment that is unique and that does not conform to data trends from outside the region. The primary driver that creates the opportunity is the existence of large deposits of iron ore. The huge demand for this commodity from around the world then demands a growing workforce to continue to mine the ore and to meet the demand. The secondary driver is created as many of the mines are located in remote areas without infrastructure and require workers to live in temporary accommodation and away from their families. In order to continue to meet the increasing demand and to guarantee a skilled and sustainable workforce for the growing mining industry, the Australian government is looking to build a number of modern cities with all the required infrastructure including retail and leisure facilities, that will provide a suitable prospect for relocation. In addition to a supply of quality residential homes within the mining areas that are conducive to family living. Iron ore Iron is the world s most commonly used metal. It constitutes the key ingredient of steel, used extensively in structural engineering, the maritime, automotive and general industrial industries and accounts for approximately 95% of global metal consumption. Whilst iron-rich deposits are commonplace worldwide, ore-grade mining operations are dominated by only a handful of countries and only several global mining enterprises. The main constraint within the industry is economic the infrastructure and energy costs required to ship the ore to market. Global demand for iron ore has boomed over the last 40 years. Consumption has grown steadily in average terms, following general economic trends but experiencing short-term volatility in terms of both demand and prices. Australia currently enjoys the lowest production costs of all the key iron mining countries. 97% of the country s production is located within Western Australia and accounts for around 95% of country s total export production. Iron ore prices While the last three years have seen large movements in the price of iron ore, the mines surrounding Newman belonging to BHP Billiton, Rio Tinto and Fortescue Metals Group enjoy the lowest production costs in the world and can sustain profitable production comfortably even where iron ore prices halve. The Pilbara region is responsible for 95% of Australia s iron ore exports. With the three lowest cost producers globally, Australia exports twice the volume of iron ore than any other country. Fig 5. Global iron ore producer cost curve (including royalties and freight) Domestic Chinese ore Australia Brazil India South Africa Other 150 US$/dry tonne Rio Tinto BHP FMG ,000 1,000 1,200 Cumulative Mt (wet, as delivered) Source: Metalytics Resource Sector Economics

14 14 Newman Residential Estate Information Memorandum Global urbanisation driving iron ore demand The global demand for iron ore has been principally driven by the rapid urbanisation of China, India and other Asian economies, which will see the population of urban dwellers rise by over one billion by This dramatic growth in urbanisation is forecast by global management consultants McKinsey & Company to see nearly 255 million Chinese migrate from rural regions into Chinese cities over the 15 years to This mass migration is expected to see approximately 17 million people become urban dwellers each year and will require the creation of 37 new cities the size Fig 6. China s population shift Rural Urban 1,600 1,400 Population (millions) 1,200 1, Source: Rio Tinto Fig 7. China s urban steel demand Rural Urban 3,000 2,500 An urban household will use times more steel than a rural one 2,000 Kilograms 1,500 1, Housing Workplace Automotive Homewares Infrastructure Source: Rio Tinto

15 Newman Residential Estate Information Memorandum 15 Fig 8. The spread of Chinese cities China Tier 1-3 Cities of Perth in Western Australia to accommodate this growth over the next ten years. This urbanisation in turn is driving the sustained demand for steel and therefore iron ore. It is also widely reported that India alone wants to produce 300 million tonnes of steel per annum until at least 2025 meaning India will need to import 450 million tonnes of iron ore per year during this period. The Pilbara region The Pilbara is the engine-room of Australia s economy, responsible for producing approximately 37% of Australia s exports (AU$94.8bn), yet containing a mere 2% of the nation s population. China Tier 1-3 Cities In 2011, global iron ore mining giants Rio Tinto, BHP Billiton and Fortescue Metals Group apportioned significant capital investment into the development of both existing and new mines and associated infrastructure such as rail and port in the Pilbara, facilitating a practical doubling of production levels to satisfy export demands. Tier 1: 5m+ population Tier 2: 1.7-5m population Tier 3: 1.7-5m (<GDP/capita than Tier 2) Source: BHP Billiton BHPB operations in Port Hedland

16 16 Newman Residential Estate Information Memorandum Table 4. Mining and infrastructure projects in the Pilbara Project Project type Publicly announced Feasibility stage Committed AU$bn AU$bn Committed Construction employment estimate Operating employment estimate Outer Harbour New x 20 Roy Hill New x 9.5 3,600 2,000 Sino Iron Project New x , West Pilbara New x 7.4 Jimblebar mine and rail ( WAJO) New x Jinidi New x 5 Cape Lambert magnetite project Balmoral South magnetite project (stage 1) Solomon Hub (stage 1) Balmoral South magnetite (2) Ridley magnetite project Solomon Hub (stage 2) Nammuldi expansion New x 3.7 3,300 1,000 Expansion x 3.3 New x New x 2.5 New x 2.5 1, Expansion x 2.5 Expansion x Hope Downs 4 New x ,500 Marillana New x 1.9 Yandicoogina Expansion x Hardey New x 1.5 Horizon 2 New x 1.5 Wiluna West (stage 1.3) Chichester Hub (55-95) New x 1.5 Expansion x Pilbara Project New x 1.1 Hamersley Iron Brockman 4 project (stage 2) Expansion x Marandoo Expansion x Yogi Mine project New x 1.06 Balla Balla project (phase 1) Robertson Range and Davidson Creek New x 1 New x.96 Orebody 24 Expansion x Irvine Island New x Balla Balla project (phase 2) New x.5 Mt Webber New x.42 Horizon 1 (phase A) New x Buckland project New x.25 Iron Valley project Yilgarn iron ore project (2) Wetern Turner Syncline II New x.25 New project Expansion x.152 x ,500 6,450

17 Newman Residential Estate Information Memorandum 17 Pilbara region population growth The massive boost in the global demand for iron ore has been closely tied to a very significant increase in the Pilbara s population. Specifically, after 20 years of a marginally declining population, some AU$20bn in major infrastructure projects in the Pilbara has resulted in a permanent increase in the population of some 16,000 people over the last seven years representing a 35% increase. Historic growth While the residential population of the Pilbara has risen from 39,000 to 53,000 over the seven years to 2011, the region s total population is actually closer to 73,000 once the fly in/fly out (FIFO) workforce is included. As FIFO workforces have not been a prominent feature of the Pilbara until the commencement of the early 2000s commodities boom, the total growth in the Pilbara s population has been approximately 87% over the last seven years. Future growth projections While the last seven years and over AU$20bn in major infrastructure projects has seen very significant population growth in the Pilbara, there are currently AU$95bn in committed and planned infrastructure projects for the region. According to the Western Australia State Government s Pilbara Planning and Infrastructure Framework 2012 report, the seven years from 2013 to 2020 will see Pilbara s population rise by approximately another 30% to reach 95,000. Fig 9. Pilbara population historic permanent population growth 80,000 60,000 Population 40,000 20, Fig 10. Pilbara population forecast growth Resident Fly-in/Fly-out Construction 100,000 80,000 Population 60,000 40,000 20, Source: Pilbara Planning and Infrastructure Framework 2012

18 18 Newman Residential Estate Information Memorandum Anketell Deep-water Port The Western Australian Government has now signed off a master plan for a AU$7bn multi-user, multicommodity deep-water port and rail complex in the Pilbara region, which has the potential to be the biggest port in Australia. The State Government has agreed the Anketell Port will be built on greenfields land about 30km east of Karratha, and said the project would boast an eventual export capacity of more than 350 million tonnes a year, more than double the total exports through the nearby Dampier Port and 20% larger than shipments at Port Hedland, which is currently Australia s biggest export facility. The project is being backed by China s Baosteel Resources, Korea s POSCO and American Metals and Coal International. Karratha Mayor Peter Long said the deal indicated that China still wanted WA s iron ore. Western Australia s Premier Colin Barnett said access to port space was increasingly rare in the Pilbara. Development of Anketell Port will help unlock the potential of the West Pilbara by aiding further development of the state s natural resources he said. Dampier Port Authority chief executive Steve Lewis told ABC Rural the port would encompass 4,300 hectares of land and eventually include eight berths. We now have a master plan that actually shows where the berths are, how the approaches will be done and where the channel will be. The first company building there will build at least two berths and that will grow over time as demand for iron ore increases and eventually it will be built to eight berths. Iron ore is such a rich resource up there that will continue to have decades of demand from the world. he said. The Pilbara generates highest property rental yields RP Data s top ten locations for highest rental yield in Australia for 2014 contained four locations within the Pilbara including the number one position for the town of Newman. In fact all of the top ten locations were located within regional mining precincts. The top ten results based on gross estimated value rental yield are as below: 1. Newman, East Pilbara, Pilbara, WA Rental yield: 9.8% 2. Miles, Dalby, Darling Downs, QLD Rental yield: 9.8% 3. Kambalda East, Coolgardie, South Eastern, WA Rental yield: 8.9% 4. Queenstown, West Coast, Mersey-Lyell, TAS Rental yield: 8.5% 5. Broken Hill, Unincorporated NSW, Far West, NSW Rental yield: 8.5% 6. South Hedland, Port Hedland, Pilbara, WA Rental yield: 8.4% 7. Port Hedland, Port Hedland, Pilbara, WA Rental yield: 8.0% 8. Kambalda West, Coolgardie, South Eastern, WA Rental yield: 8.0% 9. Baynton, Roebourne, Pilbara, WA Rental yield: 8.0% 10. Cloncurry, Cloncurry, North West, QLD Rental yield: 7.0% Fig 11. Average 10-year annual capital growth rates % 12% 10% 8% 6% 4% 2% 0% 4.7% 6.5% 3.9% 6.0% 8.2% Fig 12. Gross rental yields Port Hedland South Hedland Newman Sydney Melbourne 16% 14% 12% 10% 8% 6% 4% 12.2% 11.5% Source: Residex Pilbara yields consistently more 2% 0% Source: Residex

19 Newman Residential Estate Information Memorandum 19 Newman Economy About 1,186km north of Perth and 456km south of Port Hedland lays Newman, an inland mining town of the Pilbara region originally established in 1968 by a subsidiary of BHP Billiton to support the Mount Whaleback mine, Newman has become the epicentre of the iron ore industry within the Pilbara. As the location of Australia s first iron ore mine and the world s largest single-pit, open cut iron ore mine, Mount Whaleback (also called the Newman Hub); Newman has dramatically benefited from the increase in global iron ore demand, which has resulted in the town directly supporting four major iron ore mines. Currently there are AU$19.6bn of major infrastructure projects committed and planned for the Newman region, led by the AU$10m Roy Hill Project which includes a newly constructed railway and port facility at Port Hedland. As part of the Western Australian Government s multi-billion dollar Pilbara Cities initiative, there are AU$125m in civil infrastructure projects underway or planned for Newman. These amenities will add to the growing list of civil and recreational precincts around the township. Mining and civil infrastructure projects Newman has a very strong economy and a bright financial future. Its economy is solid, based on the profitability of four major iron ore mines and an assortment of smaller mines throughout the East Pilbara region, for which Newman acts as a service centre.

20 Great Northern Hwy 20 Newman Residential Estate Information Memorandum Table 5. Planned and committed mining infrastructure projects Project Proponent Location Status Cap. Ex. AU$m Peak Workforce Operational Workforce Roy Hill mine, rail and port Jimblebar mine and rail (WAIO) Hope Downs 4 Marillana Jimindi Iron Ore Mine Project Orebody 24 Yarnima Power Station Hancock Prospecting 115km N of Newman Commenced 10 3,600 2,000 BHP Billiton Pilbara Commenced 3.3 2,500 1,000 Rio Tinto/ Hancock Prospecting Brockman Resources BHP Billiton BHP Billiton 30km N of Newman 100km NW of Newman 55km N of Newman 9km N of Newman Commenced Feasibility 1.9 1, Pre-feasibility 1 Commenced.806 BHP Billiton Newman Commenced ,200 2,600 Table 6. Planned and underway civil infrastructure projects Newman Hospital upgrade Project Proponent AU$m WA Government (Opposition promise) Newman Revitalisation Project ( town centre) WA Government 20 Capricorn Sporting Complex WA Government - Shire of East Pilbara 22 Pilbara Hinterland Agricultural Development Initiative Department of Agriculture and Food 12.5 East Pilbara Arts Centre WA Government, BHP Billiton, Shire of East Pilbara, Lotterywest 8.5 Boomerang Oval upgrade WA Government, BHP Billiton, Shire of East Pilbara Fig 13. Eastern Pilbara Newman iron ore mines ROY HILL MINE To Port Hedland via Great Northern Hwy Jimblebar Wye Orebody 18/Wheelarra access road NEWMAN HUB OREBODY 25 Marble Bar Road WARRAWANDU VILLAGE OREBODY 18 JIMBLEBAR NEWMAN TOWNSITE WHEELARRA Newman Airport Perth Proposed operations Existing operations Road Rail

21 Newman Residential Estate Information Memorandum 21 Population projection 30% growth With a population of approximately 6,000 permanent residents in the 2011 census, Newman s population is expected to increase to 8,290 by 2015 according to the Western Australian government. The actual population of Newman however is estimated to be over 10,000 once FIFO workers are included. While the absolute number of FIFO workers is expected to decrease by 2015, the strong growth in the permanent population will create significant demand for new dwellings. Major projects underpin housing demand Over the last decade, the billions of Australian Dollars invested into the Newman region by BHP Billiton, Fortescue Metals Group, and Rio Tinto to develop their iron ore assets has created unprecedented demand for housing, with median rents currently at AU$990 per week according to the Real Estate Institute of Western Australia (REIWA). Pilbara Cities (the peak government body responsible for the development of the Pilbara region) estimate that the current undersupply in Newman was 283 dwellings at the start of 2013 and that a further 832 dwellings are required by 2016 to facilitate the future growth in Newman. According to Pilbara Cities, only 71 dwellings were built in 2012, leaving a projected demand for a further 761 to be delivered over the next three years (representing an average of 253 new dwellings per year). Consequently, the Pilbara has had the best performing property markets in Australia for the last ten years with respect to both capital growth and rental yield, outperforming capital cities by two to four times. Newman has been the top performing according to Residex. Fig 14. Dwellings required to normalise the property market Dwellings in 2010 Additional dwellings required 2015 normalised market 8,000 58% increase (2,850 dwellings) 66% increase (2,950 dwellings) 7,000 6,000 Dwellings 5,000 4,000 3,000 52% increase (832 dwellings) 23% increase (453 dwellings) 2,000 1,000 Karratha/ Dampier Port Hedland/ South Hedland Newman Rest of the Pilbara Source: Pilbara Cities 2012 Table 7. Indicative future dwellings required Settlement Existing dwellings Additional dwellings (cumulative) Karratha-Dampier 4,950 9,320 11,170 13,390 16,050 19,230 Port Hedland 4,450 7,660 9,650 12,140 15,280 19,230 Newman 1,610 2,790 3,350 4,020 4,820 5,770 Other 1,935 4,270 5,250 6,440 7,880 9,620 Total 12,945 24,040 29,420 35,990 44,030 53,850 Source: Pilbara Planning and Infrastructure Framework 2012

22 22 Newman Residential Estate Information Memorandum Demand for 860 to 935 new dwellings by 2015 According to the Western Australian Government s Pilbara Planning and Infrastructure Framework 2012 report, between 2010 and 2015 the required number of dwellings for Newman is forecast to rise by 1,180 dwellings. This translates to a forecast demand of 236 dwellings per annum. Data from the Western Australian Department of Regional Development and Lands (DRDL) (August 2012), estimates the number of dwellings required by 2015 at an even higher 2,895. The DRDL estimated in August 2012 that by the end of 2012, there would be 1,930 dwellings in Newman therefore implying a future demand to 2015 of between 860 and 965 new dwellings (an average of between 287 to 322 new dwellings per annum). Despite this demand, the rate of new dwelling constructions for Newman has averaged only 157 new dwellings per annum between 2008 and 2010, according to the Shire of East Pilbara. New dwelling constructions fell in 2011 and 2012 to 144 and an estimated 71 dwellings respectively. Consequently, the DRDL has forecast that between 2012 and 2015 the average number of new dwellings will be only 185 per annum well short of the required 286 new dwellings (for 2,790 dwellings estimated by the Pilbara Planning & Infrastructure Framework) to 321 new dwellings (for 2,895 dwellings estimated by DRDL) per annum required by The DRDL is forecasting a total of 670 new dwellings between 2013 to 2015, meaning a shortfall of 190 to 295 dwellings even where some 200 land lots and 200 apartments (being the development of the multidwelling lots) are delivered in the Newman Estate. Current shortfall of 283 dwellings The Department of Regional Development and Lands estimation that a shortfall of 257 dwellings exists in Newman is supported by the Western Australian s Pilbara Cities Office, which estimated in March 2012 that the shortfall in Newman was 283 dwellings with a total of 832 new dwellings (or 208 new dwellings per annum between 2012 and 2015) inline with the Pilbara Planning and Infrastructure Framework estimate of 860 new dwellings required by Table 8. Additional dwellings required (to 2015) Town Dwellings Karratha 1,531 Port Hedland 1,402 Newman 283 Remainder of the Pilbara 511 Total 3,878 Source: Pilbara Cities 2012 Fig 15. Dwellings required to normalise the property market Dwellings constructed Shortfall in dwellings c400 from Newman Estate (200 land lots apartments) 39 Population Source: Shire of East Pilbara, Newman Revitalisation Plan

23 Newman Residential Estate Information Memorandum 23 Loan risk and mitigant analysis Outlined below are certain substantive risks that are considered relevant to entering a Loan Agreement with the Borrower in relation to the Project. The list is not intended to be exhaustive. Project risk Feasibility risk Market risk Repayment risk Delivery risk Proponent Risk Revenues and cost assumptions in project feasibility are not achieved Mitigants Ample buffer provided by 21.9% profit on cost margin (AU$2.12m profit) Developer s own equity used to meet investor interest payments Low gearing across all of the Developer s projects Developer has a maximum of 20% of projects in construction phase at any one time Experienced local builder being used with a track record of delivering housing in the same town at a fixed price Risk Newman property market declines during the period before the Development is complete, reducing revenue available from the Development Mitigants Newman s population is expected to increase to 8,290 in 2015 according to the Western Australian government. The actual population of Newman however is estimated to be over 10,000 once FIFO workers are included. Expected continued demand for 860 to 965 new dwellings in 2015 Current short fall of 283 dwellings Beyond Newman Estate, short fall of 295 dwellings forecast in 2015 according to the Council and Pilbara Cities Consistently high rents with a median rent in Newman of AU$990 as of June 2015 Convenient and prominent location of estate at entrance to Newman (from airport and Great Northern Highway) provides a differentiation to existing land estates Risk Borrower has insufficient funds upon completion of project to repay Facility Mitigants Low LVR will enable a refinance to a senior lender upon completion or prior to completion Ample buffer provided by 21.9% profit on cost margin (AU$2.12m profit) Deep experience in residential property development means that the Borrower is a sophisticated investor and can actively monitor project development Experienced Development Manager/Project Manager/Construction Manager Experienced advisors Proven in-house sales and leasing team Risk Project is not completed within agreed budget and timeline Mitigants Tenderer (the builders) has capacity and capability to successfully deliver the proposed project and has recently completed the 198-lot Kurra Estate development in Newman Fixed price contracts for construction Low rise, straight forward construction method Development management team Veronica Macpherson Managing Director Managing Director of MACRO Realty Developments, Veronica Macpherson is well known in the Pilbara region of Western Australia as the largest private developer. Her role sees her presenting nationally and internationally on topics such as property investment strategy, opportunities within emerging cities, cross border (international) club deals, as well as social impact and philanthropic investments. Veronica holds an Australian Financial Planning, Real Estate and Business Agents License; as well as an MBA in Financial Modelling. Her recent work has included collaboratively facilitating real estate transactions with indigenous groups and government divisions, establishing a qualifying investment fund for migration and residency in Australia, as well as structuring superannuation funds for Australians.

24 24 Newman Residential Estate Information Memorandum Flynn De Freitas Corporate Advisor Flynn works closely with MACRO Realty Developments and is responsible for capital raising, developing and overseeing feasibility modelling, preparation of debt and equity presentations, assisting in negotiations, and facilitating capital funder due diligence. He brings experience in the acquisition and funding of residential property developments in regional mining areas, having previously led the mining towns acquisition and development strategy for a mid-sized, private property developer. Previously Flynn worked for Merrill Lynch, McKinsey & Company, and in the internal mergers and acquisitions divisions of Australian and New Zealand Banking Group (ANZ) and the National Australia Bank (NAB). Brad Schrader Client Representative Project Manager Since 2002, Brad has been involved in various projects as both a team member and leader liaising with consultants, approval authorities, overseeing construction and project managing building, subdivision, redevelopment and heavy civil works throughout metropolitan and regional Western Australia. A full member of the Australian Institute of Project Management, Brad started his career in the public service at the Department of Conservation and Land Management (now DEC). He then moved into private practice working as a consultant to the land development, redevelopment and building industries for both private and government clients. As a Project Manager he acted as both a contractor to likes of Chevron, Woodside, BHP Billiton and Rio Tinto and then as a principal Project Manager for the owners of the business overseeing their own company building development works. Development audit Halycon Property Halycon is a specialist residential land development company and has been appointed to provide services including cost auditing for the Development. Halcyon is an experienced project manager and construction manager within the Pilbara, and is currently engaged by the West Australian government s division; Landcorp to develop the land immediately adjacent to the Development. The Halcyon project team have extensive experience in the development of residential land subdivisions in urban and rural regions of Western Australia, with over 2,000 land lots delivered between the team. Project manager RFF Australia RFF is comprised of a highly skilled and diversified team of professionals who have a significant amount of experience with Pilbara and West Australian development projects as well as local town planning matters. They are currently engaged by the West Australian government s land division to assist with delivery of residential and mixed business land subdivisions and above ground construction, as well as infrastructure projects. RFF consult to MACRO Realty Developments as required and will provide an extended consultant team to ensure that the delivery of the housing, and construction on the land lots is in line with the builder s contract. Experienced consultant team The consulting team have a deep level of experience in property development having previously secured many government contracts, and are detailed in the following table: Role Civil Contractor Client Rep. PM Corporate Advisor Electrical Engineer Landscaping Lawyers Construction Lawyers Property Planners PM & Construction Manager Surveyors Consultant Wormall Brad Schrader Omega Investments Worrad Associates JDSI Consulting Engineers UDLA Architects Jackson McDonald Young & Connell Urban & Rural Perspectives Halcyon JBA Surveying

25 Newman Residential Estate Information Memorandum 25 MACRO Realty Developments MACRO Realty Developments specialises in the strategic acquisition, development and management of Australian investment property. In particular, high rental yielding property and areas in Western Australia s Pilbara region. Opportunities with MACRO extend from purchasing high yielding property; investing in Australian REITs with low entry levels, funding or co-funding development projects, through to joint venture partnerships with developments and real estate portfolios. MACRO are at the forefront of Social Impact Investing. There is strong government emphasis to reduce the fly-in-fly-out workforce in the Pilbara to create permanent, thriving communities where families no longer have to live apart. Social impact studies concluding adverse effects on relationships, physical and mental health, have led to fixed government investment programs known as Pilbara Cities and Royalties for Regions, to create a positive future for these Cities of the North as well as strong returns for investors. MACRO s business is to provide a turnkey solution to investors on a global scale, with the opportunity to receive a high yield through development of these cities, whilst also supporting the cause through sponsorship of the Mental Health Program This FIFO Life (see MACRO Realty exclusive real estate agency MACRO Realty manages over 300 dwellings and strata complexes in both Perth and the Pilbara region. Since its establishment in 2010, MACRO Realty has achieved over 500 property sales. In the event that the exit strategy for investors needed to include sales of the end product, MACRO Realty would be appointed as the exclusive real estate agency to market the Development through its real estate agency license. Successful and completed projects MACRO Realty Developments is currently developing an extensive portfolio of residential properties in the Pilbara. Completed: Port View Apartments, Port Hedland Location: 2 McKay Street Value: AU$15m Property: 21 residential apartments and 2 commercial premises Current: 5 Edkins, South Hedland Location: 5 Edkins Street Value: AU$3.6m Property: 8 self-contained 1 bedroom units Kurra Estate, Newman Location: Lot 510 Kurra Road Value: AU$246m Property: 7.86 hectares 198 houses and 112 apartments Newman Estate, Newman Location: Lot 511 Great Northern Highway Value: AU$345m Property: 14.5 hectares 222 houses and 185 apartments Future: McGregor Street, Port Hedland Location: McGregor Street Value: AU$674m Property: 8.45 hectares 630 apartments and 58 houses

26 26 Newman Residential Estate Information Memorandum Frequently asked questions Is this region still safe to invest in given that I ve heard China is slowing down? According to the Bureau of Resources and Energy Economics (the analysts and economic research unit within the Department of Industry for Australia) there will be an 85% global increase in the demand for steel which iron ore is the key ingredient for). China announced a US$6.8tr National New-Type Urbanisation Plan in March 2014, for 100 million Chinese to be integrated into urban regions (requiring the construction of new homes and cities) by India and other countries also have a demand for steel and iron ore as there is no substitute for this commodity (required for making cars, building homes etc). Is this region still safe to invest in given that iron ore prices have come down? Australia is in a very fortunate position of being the lowest cost producers of iron ore globally, which there is no substitute commodity for (in order to make steel) and there is an increasing demand for. For this reason the largest mining companies (Rio Tinto and BHP Billiton who currently have a similar cost base position) are increasing their production. The existing rail and port infrastructure as well as the highest grade of iron ore being located in the Pilbara, sees these Australian companies in a position where they can drive other higher cost producers out of the market and reduce their cost of production further. For example, Rio Tinto in the first quarter of 2015 announced a 78% increase in their profits for 2015 achieved through an increase in volume with use of existing rail and port facilities plus a conversion of expensive contract workers to in-house employees. BHP in the last quarter of 2014 announced that their expansion plans will enable them to reach a cost position of US$23 per tonne. As of May 2015, iron ore was trading at around US$60 per tonne, so this would see the BHP earning close to a 200% profit margin. Whilst this Information Memorandum is not proposing an investment in iron ore or iron ore companies, and there are many lucrative commodities and resource projects in the Pilbara (for example mining of uranium East of Newman has been recently approved with plans to export to India); it is relevant that the increase in production of iron ore, will require more workers and therefore accommodation. Why aren t Australians investing in this? They certainly do. Several senior Australian bank lenders are providing first mortgages to MACRO s Pilbara developments (albeit at low leverage ratios since the Global Financial Crises) plus several Australian Family Offices. Australian property investors seeking a higher rental yield and capital growth to balance the cash flow of their portfolios, also invest. Why won t Australian banks finance this? As above, they do and they are currently financing some of the Developer s Pilbara projects. The reason for MACRO obtaining private investment with this project is so that they can refinance the end properties and retain them; offering a one stop shop for large mining companies accommodation requirements. Obtaining construction finance from Australian major banks would require the end properties to be pre-sold off the plan. How long have the Developer s entities been established for and what is their paid up capital? Copies of the business registrations are available upon request. The Developer has been developing real estate for the previous 14 years with one project per SPV (Special Purpose Vehicle / company). The real estate agency and umbrella company / brand was not put in place until recently. MACRO Realty Developments Pte Ltd (Singapore) established 2013 with paid up capital of AU$2,000,000 MACRO Capital Enterprises Pty Ltd (Australia) established 2013 MACRO Realty Developments Pty Ltd (Australia) established 2012 MACRO Realty Pty Ltd (Australia) established 2010 Is this investment safe? It is essentially a land backed security so arguably more safe than investing in shares as there is significant recourse for the developer, who has equity / their own money in the project. While the Developer considers this investment to be very low risk as investors hold the first charge on the property and the actual development (subdivision) has already been completed; there is no such thing as a risk free investment. What is my risk? Please see the risks and mitigants section for a detailed breakdown. Being professional developers (with a vested interest), the risks have been mitigated as much as possible.

27 Newman Residential Estate Information Memorandum 27 What is the worst that could happen? As with any investment the worst scenario is that you could lose part or all of your investment. However the Developer does not foresee this as being possible or likely as they will not earn any profit or recover their own investment unless your investment is fully repaid, and in the event that the Developer defaulted on the Loan the Lenders could force the Guarantor to liquidate their assets to repay the interest and principal. The loan to value ratio is targeted to be around 80% of the project s value. Who buys the end product? For this project the Developer is seeking to retain the houses, however typically Australian property investors. The region has experienced two to four times the capital growth rate and rental yield of any other location in Australia. It is the only location in Australia that offers cash flow positive property, being that the rental yield (currently an average of 9 to 10% per annum) can be twice the rate of the bank interest rates (which can be fixed for a five year term and paid interest only at approximately 5% per annum with major banks). This in combination with Australians being able to borrow up to 90% of the property price from the bank, has been delivering property investors an extremely high return on their equity/deposit. It is a common strategy for Australian s to replace their wage and/ or fund their retirement from their property portfolio rental yields and capital appreciation. Who rents the end product? Typically first tier contractors who support the mining and infrastructure projects. Being new and some of the highest quality housing in the Pilbara, quality and higher income tenants and occupants are attracted such as engineers, shipping and rail companies, as well as the government housing companies such as Government Regional Officer Housing (GROH) who provide the housing for teachers, doctors and nurses. The tenants are usually successful and profitable companies providing the accommodation to their employees as part of the package for attracting staff to live in the Pilbara. Is it true that the average rents and prices of property are declining? Yes, and this is a good sign of an emerging market and establishment of the Pilbara Cities. There has been very little quality housing developed to date in the Pilbara and when it does become available, more of the old houses that cannot compete for the same rental yield (plus are naturally priced lower); are put on the market, which in turns brings down the average prices. This region maintains the highest 10 year average capital growth rate and rental yield when compared to all other Australian real estate markets. This in addition to the strongest population growth, makes investment in the Pilbara an attractive addition to landlords portfolios. MACRO is the only firm able to offer a turnkey solution to larger companies for providing multiple properties with flexibility and additional services; at prices that are lower than the convenient mining camp alternatives otherwise preferred, at an average of $ per night for each room. When does my money get repaid? At the end of your loan term. We are likely to offer you another project that you can reinvest in at this time. If the project has not completed, you will be offered an extension to the term but will not be obligated to extend. What happens to my investment if I pass away? Our application process requests that you nominate a beneficiary in case of this event. Can I have a charge on the title? If you are providing the total amount of funds required for the construction of one of the dual key houses, yes. If you are investing less than this amount (AU$975,760) then you will receive a unit in the unit trust that has the first charge so that you and the other investors who have collectively invested AU$975,760 hold the first charge proportionately to the amounts individually invested. View of Newman Estate from the main entry into Newman

28 28 Newman Residential Estate Information Memorandum Testimonials I have been investing my and my family s money since 2010 with MACRO Realty Developments and receiving exceptional returns. We have been repaid our capital and are now looking to reinvest into our fifth project with this group. Michael La Motte Australian Family Office We have an investor club that has been investing with MACRO Realty Developments since They have been receiving their monthly payments and are very happy with their returns. Having visited the sites and doing my due diligence, I myself have invested in one of MACRO s Newman investments and received both my interest payments and return of capital. Malvindran Ganesh Mentor and property investor More than six of my family members, associates and I have invested in funding projects that are being developed by MACRO Realty Developments. We have retained two properties in Port Hedland that we receive excellent monthly rent returns from, and recently received our capital back from investing in one of their Newman projects. Brad and Lina Woodbrook Property investors, business owner and teacher I have known Veronica since 2011 and attest to her and MACRO s good fame. My firm advises on matters associated with MACRO and effects settlements for properties sold by MACRO Realty. I provided a reference for their nomination as a responsible manager to operate a mortgage fund and obtain their own financial services licence. Josephine Randazzo Co-owner of Effective Legal law firm and settlement agency

29 Newman Residential Estate Information Memorandum 29 Next steps In the event that you wish to proceed and purchase a Loan Note or Loan Notes issued by the Borrower, please complete the following process. 1. Review this Information Memorandum and the terms of the Loan Note Instrument at schedule Complete the Loan Note Application Form which will include details about you, your preferences for receiving payments, your nominated bank account and allow the Borrower to create a Loan Note certificate. 3. Send your Loan Note Application Form and other associated agreements along with a copy of your passport or other photographic identification and proof of address to MACRO Realty Developments. 4. When you receive confirmation in writing from the Borrower that your application has been accepted, wire the funds to the account that they provide. 5. You will receive a Loan Note Certificate confirming your investment terms. Contact: Albany Hill Gloucester House 399 Silbury Boulevard Milton Keynes Buckinghamshire MK9 2AH +44 (0) info@albanyhill.co.uk

30 30 Newman Residential Estate Information Memorandum Appendices Appendix A: MACRO Realty Developments financial structure MACRO Realty Developments Pty Ltd International sales model, project funding offered offshore Equity raising and end product retention typically remains in Australia Sales Revenue forecast of $1.48bn with existing assets under management MACRO Realty Pty Ltd Real Estate Sales Property Management MACRO Realty Finance Pty Ltd Finance Broking for REITs & buyers MACRO Investments & Securities Ltd Debt and equity REITs Mortgage funds MACRO Realty Developments Pte Ltd Offshore Debt / Project Funding Agent SPVs PROJECTS Special Purpose Vehicles (SPVs) borrow offshore funds for acquisition and construction, when it suits or when senior Australian bank terms are not conducive to the objective such as retaining and leasing the properties. Each SPV is established as a company that is owned by a unit trust. SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust MAIN PROJECT STAGES Approx. 10 projects move through the following stages with less than 30% of projects being in the Construction stage at any given point of time 20 30% Margin on Development Cost (MDC) Special Purpose Vehicles (SPVs) raise equity or debt, with one SPV established for each project Veronica Macpherson the trustee and licensee of all projects 1 ACQUISITION 2 PLANNING APPROVAL 3 PRESALES / CAPITAL RAISING 4 CONSTRUCTION SPV Pty Ltd ATF SPV Unit Trust SPV Pty Ltd ATF SPV Unit Trust 5 BUYER OR REIT SETTLEMENT AND / OR REFINANCE TO CHEAPER DEBT 6 LEASING

31 Newman Residential Estate Information Memorandum 31 Appendix B: Corporate structure of Newman Estate

32 32 Newman Residential Estate Information Memorandum Appendix C: Land titles for Newman Estate

33 Newman Residential Estate Information Memorandum 33

34 34 Newman Residential Estate Information Memorandum Appendix D: ACRA Report for MACRO Realty Developments Pte Ltd

35 Newman Residential Estate Information Memorandum 35 Appendix E: Corporate registration for MACRO Realty Developments Pty Ltd

36 36 Newman Residential Estate Information Memorandum Appendix F: Corporate registration for Newman Estate Project Trust

37 Newman Residential Estate Information Memorandum 37 Appendix G: Corporate registration for Pilbara Property Developments Pty Ltd

38 38 Newman Residential Estate Information Memorandum Appendix H: Certificate of registration for MACRO Capital Enterprises Pty Ltd

39 Newman Residential Estate Information Memorandum 39 Appendix I: Company details for MACRO Capital Enterprises Pty Ltd 10/15/2015 View company details ASIC Australian Securities & Investments Commission Forms Manager Registered Agents Company: MACRO CAPITAL ENTERPRISES PTY LTD ACN Company details Date company registered Company next review date Company type Australian Proprietary Company Company status Registered Home unit company No Superannuation trustee company No Non profit company No Registered office MERCIA TAXATION AND ACCOUNTING PTY LTD, 11 KINTAIL ROAD, APPLECROSS WA 6153 Principal place of business LEVEL 3, 931 ALBANY HIGHWAY, EAST VICTORIA PARK WA 6101 Officeholders MACPHERSON, DESIREE VERONICA Born at DAMPIER WA 4 GAMBLEN WAY, WINTHROP WA 6150 Office(s) held: Director, appointed Secretary, appointed Company share structure Share Share description Number issued Total amount paid Total amount class unpaid ORD ORDINARY SHARES Members MACPHERSON, DESIREE VERONICA4 GAMBLEN WAY, WINTHROP WA 6150 Share class Total number held Fully paid Beneficially held ORD 100 Yes No Document history These are the documents most recently received by ASIC from this organisation. Received Number FormDescription Status E CHANGE TO COMPANY DETAILS Processed and imaged E CHANGE TO COMPANY DETAILS Processed and imaged E CHANGE TO COMPANY DETAILS Processed and imaged ASIC Home Privacy Statement Conditions of use Feedback 1/2

40 40 Newman Residential Estate Information Memorandum Appendix J: Real Estate and Business Agent Triennial Certificate

41 Newman Residential Estate Information Memorandum 41 Appendix K: MACRO Realty annual audit

42 42 Newman Residential Estate Information Memorandum

43 Newman Residential Estate Information Memorandum 43 Appendix L: MACRO Realty full feasibility model example

44 44 Newman Residential Estate Information Memorandum Appendix M: Pilbara Development and Investment, Government Blueprint Executive Summary The Pilbara has been a powerhouse of growth for Western Australia and the nation. Its proximity to Asia and unique and extensive resource endowments have resulted in the region being recognised as a globally significant mining and energy area. It is blessed by stunning natural landscapes, a sub-tropical environment with consistent sunshine, a dynamic and engaged community and a large Aboriginal population. The Pilbara has been the centre of the most rapid expansion of iron ore production in history and the construction of some the largest gas projects in the world. The economic activity associated with these projects has substantially increased the importance of the Pilbara to both the Western Australian and Australian economies. However, the heavy reliance on resource and energy extraction and export has created many vulnerabilities and risks, resulting in a range of challenging outcomes, which left unaddressed will continue to impede the sustainable development of the Pilbara. These include volatile population growth, an imbalanced age and gender profile and high costs for households and businesses (including housing). The region is also challenged by its relative isolation from Perth and other capital cities and significantly below average small business creation and development. The Western Australian Government s $1.7 billion Royalty for Regions Pilbara Cities program has contributed significantly to addressing these challenges, with Pilbara townships receiving significant public and private sector investment in amenity and liveability enhancements over the past five years. Effort is now required to guide and extend this investment, to engender the collective action required to continue the transformation of the region and enable new and emerging opportunities to be realised. The Pilbara Regional Investment Blueprint (the Blueprint) identifies opportunities for the region to achieve aspirational population, economic and community development outcomes. The Blueprint is the product of extensive engagement and analytical understanding of the region. It is structured and formulated by the Pilbara Development Commission but incorporates the effort, skills and knowledge of local government, key State and Commonwealth Government agencies and the non-government, community and not-for profit sectors. Central to the Blueprint is recognition that the region needs more than business as usual planning, that is, relying solely on the resources and energy industries to drive growth and development. Instead, it charts a more aspirational future and therefore establishes a long-term Vision and supporting Regional Investment Pillars to support that Vision. The Blueprint establishes the following Vision for the Pilbara: In 2050, the Pilbara will have 200,000 people living in vibrant, modern and inclusive cities and communities which offer quality services, career choice, affordable living and a thriving civic life. The economy will feature diverse, innovative and resilient local and international firms underpinned by the resources and energy industries. The achievement of this Vision is currently impeded by a lack of critical mass of residents in major centres and towns in the Pilbara. Such a critical mass is essential to realising the economic, social and environmental potential of the region. If historically large cyclical upturn and downturn trends continue, the Pilbara s population will likely grow from approximately 65,000 now to 140,000 in The Royalties for Regions Pilbara Cities investment will pull this growth forward, with the Pilbara now expected to reach 140,000 residents by 2035 or some 15 years early. Draft Pilbara Regional Investment Blueprint: Technical Report Page i