INDEPENDENT MARKET VALUATION

Transcription

1 INDEPENDENT MARKET VALUATION Proposed Residential Home Unit Development As At: 17 th March 2015 Prepared For: La Trobe Financial Services Group & La Trobe Financial Asset Management Limited Our Reference: JPM Indooroopilly Road, Taringa, Queensland, P age

2 Executive Summary Instructing Party Applicant/Borrower Date of Valuation Date of Issue Address (to be read in conjunction with the body of this report). La Trobe Financial Services Pty Ltd and La Trobe Financial Asset Management Limited. Finn Family Properties Pty Ltd & Sarla Georgie Pty Ltd. 17 th 1 st March April Indooroopilly Road, Taringa, Queensland Real Property Description Lots 4 and 155 on Registered Plan Instructions Purpose Basis of Assessment Property Overview We have been instructed to provide the following assessments for the subject property: ITEM ASSESSMENT TYPE Site "As Is" Current Market Value 7 Residential Units "As If Complete" Gross Realisation & Individual Lot Values Note: The above assessments have been prepared on an exclusive of GST basis. Market Value for First Mortgage Security Purposes only. The interest being valued is the unencumbered fee simple. The subject development site comprises two irregular shaped allotments forming a triangular shaped, internal development site with a total land area of 784m². The site has a northerly aspect with a frontage to Indooroopilly Road of approximately 31.5 metres. The land slopes steeply from the Indooroopilly Road frontage to the rear southern boundary, with a fall of approximately 10 metres across the site. The site is currently improved with an older style, two storey dwelling which has the potential to provide a small holding income pending redevelopment. The property is situated within the "Low Medium Density Residential (2 or 3 Storey Mix)" zone of the Brisbane City Plan We are aware the subject site has current town planning approval for the development of 7 two and three bedroom apartments (total of 19 bedrooms) in a four storey building, including secure car parking at ground level. This approval was granted on the 13 th of October 2014 and is due to lapse on the 13 th of October The proposed development is to comprise two south facing, two bedroom units with internal floor areas of 80m 2 and balconies/courtyard areas of 12m 2 and 109m 2 plus 5 three bedroom units with internal floor areas ranging between 111m 2 and 140m 2 and balcony areas of between 26m² and 92m 2. Additionally, each of the units is provided with storage lockers/rooms with areas of between 9m 2 and 14m 2 which is to be registered on title. The two bedroom units will be provided with the exclusive use of a single secure ground floor car space, whilst the three bedroom units are to be provided with two secure ground floor car spaces. Ancillary improvements/common facilities are to include well presented landscaped grounds, secured ground floor car parking, two covered visitor car spaces, lift access and a partly covered communal/recreation space at the front of the building. Government records indicate that the subject site was purchased by the applicant/developer on the th 12 of September 2013 for $950,000. Brief Market Commentary Over the past 24 months (approximately), the Brisbane residential development site market has seen strong improvement in demand for sites, sale volumes and for many sites, sale prices. Additionally, the adoption of the new City Plan in 2014 has further resulted in many low density residential locations now being suitable for medium or high density living and as such, there are numerous pockets which are undergoing transformation as developers and investors have acquired sites and achieved approvals for superior yielding projects. Due to the above, potential buyers of development sites are now becoming cautious regarding potential oversupply and concerns regarding construction cost increases begin to impact on development margins. Additionally, some developers are reporting caution over existing planning approvals attached to a property which may not reflect the most efficient and/or appropriate development of the property in the current market. Specialist agents comment that demand has recently been moving back towards sites in good/high quality and proven localities for the proposed product type, were the developer can greatly improve an existing approval to be more in line with current end product demand and where there is potential holding income. 2 P age

3 Brief Market Commentary (continued) The past two years has seen a turnaround in the established/end product market with both sales volumes and prices achieving good levels of growth. The multi-year low interest rate environment (currently at historic lows) has helped to underpin this recent stabilisation and growth as both owner occupiers and investors look to benefit from advantageous borrowing conditions. However, we would caution that any unanticipated upwards movement could have a significant impact on sales volumes and achievable pricing, especially to the investment market. Price points of good quality detached housing and townhouse units will likely place a ceiling on what could be achieved for a new apartment within the Taringa locality. New or near new housing within close proximity to Taringa generally start in the $700,000s, with higher quality larger dwellings being upwards of $1,000,000. Based on the current state of the market, the subject locality and style and quality of finishes and fittings, the subject units should be relatively well received by the market, provided they are appropriately priced. Cash Flow Analysis Based on our Gross Realisation assessment, the proposed development reflects the following return metrics per our cash flow analysis: KEY RETURN METRICS Maximum Exposure ($4,181,230) Payback Period 14 Months Development Profit (post-interest) $837,383 Development Profit Per Unit (post-interest) $119,626 Development Margin (pre-interest) 25.41% Development Margin (post-interest) 20.01% Note: Refer to Annexure 6 for a full copy of our feasibility cash flow. Valuation Having regard to the assumptions and qualifications contained within the body of this report, we have assessed the instructed components over the subject property for first mortgage security purposes (only) and on an exclusive of GST basis, as follows: BASIS OF ASSESSMENT Site "As Is" (Direct Comparison Method) Site "As Is" (Residual Hypothetical Development Method) Gross Realisation - 7 Apartments ( As if Complete ) MARKET VALUATION $1,000,000 $1,100,000 $5,250,000 Note: Some of the above figures may have been rounded to the nearest $250 for practical valuation purposes. Jason Matigian Director Certified Property Valuer (CPV) Associate Australian Property Institute (AAPI) Queensland Registration 2735 Carey O'Dowd Director Certified Property Valuer (CPV) Associate Australian Property Institute (AAPI) Queensland Registration 3735 Important: The above Executive Summary is a précis of the contents of the following valuation report. The valuation assessments above, plus the report, are contingent upon a number of conditions, qualifications and critical assumptions which are fully described and set out in the body of the attached report. As such, all data provided in this summary is wholly reliant on and must be read in conjunction with the information provided in the attached report. It is essential that before the instructing party (and/or who the report is being prepared for) rely on this valuation, they read the attached report in its entirety (including any annexures). This executive summary must not be acted upon in isolation. 3 P age

4 Executive Summary (to be read in conjunction with the body of this report). 2 1 Introduction Instructions Purpose of Valuation and Valuer s Interest Definitions Date of Inspection and Valuation Date of Issue Assumptions and Qualifications Risk Assessment Mortgage Recommendation 9 2 Title and Statutory Details Details 2.2 Additional Comments Town Plan Town Planning Information 12 4 Approval(s) Introduction Relevant Approval Conditions Brisbane City Council & Qld Urban Utilities Infrastructure Charge Notices 14 5 Land and Locality Land Details Road System & Amenities Environmental Matters Locality and Surrounding Development 18 6 Proposed Development Introduction Floor Areas & Configuration Construction Details and Schedule of Fittings, Finishes & Fixtures Floor Plan Design Common Facilities Proposed Lot Entitlements and Body Corporate Fees General Comments 22 7 Development Costs Introduction Development Cost Estimates GST and Construction Cost Comments Construction Timeframe 23 8 Apartment Sales Evidence and Market Commentary Introduction Brief Market Comment Sales Evidence Proposed Price List and Reported Sales 31 9 Gross Realisation of the Proposed 7 Apartments As if Complete Introduction Valuation Methodology and Considerations Rate of Sale GST Comment Gross Realisation Assessment "As if Complete" Site Valuation "As Is" Introduction Valuation Methodology and Considerations Development Site Market Commentary Sales Evidence Sales History Direct Comparison Approach Residual Hypothetical Development Approach Site Valuation Summary Valuation 42 Annexures 4 P age

5 1 Introduction 1.1 Instructions We have received instructions from Steve Lawrence at La Trobe Financial to provide the below assessments for the subject property located at 29 Indooroopilly Road, Taringa, Queensland, 4068: ITEM Site "As Is" ASSESSMENT TYPE Current Market Value 7 Residential Units "As If Complete" Gross Realisation & Individual Lot Values The above assessments have been completed on an exclusive of GST basis and the interest being valued is the unencumbered fee simple. 1.2 Purpose of Valuation and Valuer s Interest Our valuation has been prepared for first mortgage security purposes (only) in accordance with the Australian Property Institute Practice Standards and standing instructions from La Trobe Financial, insofar as they are applicable to this type of property. The valuer is suitably qualified, licensed and is registered or authorised with the appropriate state valuation body. The valuer has at least five (5) years of relevant experience (with at least two (2) years continuous experience) in valuing the above type of property. This Valuation has been instructed by the party shown on the front cover of this report. It may be relied upon by any of the following parties if so nominated by the instructing party: We acknowledge I have been instructed by La Trobe Financial to undertake a market valuation for mortgage purposes and have conducted same in accordance with La Trobe Financial's valuer standing instructions. This valuation is addressed to and for the use only of the following parties, La Trobe Financial, La Trobe Financial Services Pty Limited, La Trobe Financial Asset Management Limited, Permanent Mortgages Pty Limited, Permanent Mortgages (No. 2) Pty Limited, Perpetual Corporate Trust Limited or a Credit provider to be nominated by La Trobe Financial after receipt of the report, and the relevant Mortgage Insurer. No responsibility is accepted to any other third party who may use or rely on the whole or any part of the contents of this valuation. We declare that we currently carry the required Professional Indemnity Insurance of $2 million and certify it is fully paid up, including installments required on a policy that has been funded through an independent insurance premium funder. Neither I, nor any member of this firm, have any interest in the property described herein. Neither I, nor any member of this firm are an associate of and do not have a material interest in the borrower or any person or entity related to the borrower and neither I, nor any member of this firm have been instructed by the borrower, or any person or entity related to the borrower to value the property. The previous use and history of the zoning changes on or around this site and any other relevant information as revealed by my enquiries, together with my own local knowledge does not place this property in any significant risk of being a "contaminated site" under the Environmental Protection Act. I am not aware of any Environmental Protection Audits being undertaken in relation to the site or in the area generally. 1.3 Definitions TERM Market Value Highest and Best Use As Is As if Complete Gross Realisation DEFINITION The estimated amount for which an asset or liability should exchange on the date of valuation between a willing buyer and a willing seller in an arm s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently, and without compulsion. The most probable use of a property which is physically possible, appropriately justified, legally permissible and financially feasible, resulting in an optimum value for the asset. The current market value of the subject property as it currently exists as opposed to the value of any proposed development. The Market Value of the proposed improvements as detailed in the report, on the assumption that all construction had been satisfactorily completed in all respects at the date of this report. The valuation reflects the valuer s view of the market conditions existing at the date of the report and does not purport to predict the market conditions and the value at the actual completion of the improvements. Accordingly, the as if complete valuation must be confirmed by a further inspection by the valuer, initiated and instructed by the lender on completion of the improvements and the right is reserved to review and if necessary, vary the valuation in this report if there are any changes in relation to the project itself or in property market conditions and prices. The Gross Realisation value assessed herein is the sum of the Market Values of the individual product achieved over a specified selling period, assuming an orderly sale, between willing buyers and willing sellers, in arm s length transactions, after proper marketing, wherein the parties acted knowledgeably, prudently and without compulsion. 1.4 Date of Inspection and Valuation 17 th March P age

6 1.5 Date of Issue 31 st March Assumptions and Qualifications Our valuation has been undertaken based on a number of assumptions and qualifications, some of which are as follows: Unencumbered freehold property; Our valuation assumes there are no easements or encumbrances which would have an adverse affect on the subject property "as is", other than those described in Section 2 of this report; There are no surface or sub-surface soil problems including instability, toxic or hazardous wastes or building material hazards in or on the property, that would adversely affect the future development potential of the property or reduce its marketability; Our valuation does not purport to be a site or structural survey of the land or the existing ground improvements thereon, and any advice provided is not given in the capacity as an expert; Confirmation of a suitable soil compaction test for the subject land; The following formal searches have not been undertaken: Flood, Land Survey Plan, Heritage, Native Title, Detailed Town Planning, Local/State Road Widening, Contaminated Land Register, Environmental Management Register or Vegetation Protection. Our valuation assumes such searches would identify no issues that may affect the value and/or liquidity of the property. Should any person relying on the contents of this report be aware or become aware of an issue that may affect value and/or liquidity then the searches should be referred to the valuer for comment; Confirmation our GST based assumptions are reasonable and accurate; Any sale of the subject property(s) is to be professionally marketed by specialist agents experienced in this property sector and location. Given the scale of the total proposed development, we would envisage a likely selling period of approximately three (3) to six (6) months for the subject development site; Any sale of the subject development site will also include a new owner having ownership and control over any and all associated planning studies, approved and proposed plans, Development Approvals and all other professional reports and/or plans associated with any proposed development; Our assessed gross realisation of the 7 apartments "as if complete" is subject to the improvements being completed in a proper and workmanlike manner, in addition to the schedule of finishes and fittings described within this report and in accordance with the floor and elevation plans referred to within and annexed to this report; The issuance of separate titles for each of the proposed apartments; Confirmation the proposed development can be completed in accordance with the cost estimates and timeframe discussed in Section 7. We strongly recommend the instructing party engages a qualified and independent quantity surveyor to accurately assess the likely development costs and timing for the project and should these vary from the costs and timing discussed in Section 7, we would reserve the right to review our valuation; Our valuations of the proposed 7 residential apartments "as if complete", are based on a professional marketing campaign, undertaken by specialist agents experienced in this property sector (i.e. new residential apartments) and location, with an adequate promotional and marketing budget. The marketing of this project should only be undertaken by an experienced marketing team and our assessments are based upon the proposed apartments being sold on an "individual sale" basis; This report is subject to the proposed lots "as if complete" not being offered as part of a Managed Investments Scheme with (or without) rental guarantees and that the "as if complete" project will not be administered under the provisions of the Corporations Act 2001; All other assumptions or qualifications contained within the body of this report, and; The limitations in Section 11 and on the last page of this report. We reserve the right to review our valuation should any of these assumptions, qualifications or limitations not prove to be reasonable. 6 P age

7 1.7 Risk Assessment In undertaking our valuation of the subject property for first mortgage security purposes, we have undertaken a risk assessment, as follows: RISK ITEM MARKET COMMENT MEDIUM RISK RATING - Recent Direction Development Site - After approximately five years of volatility and numerous receivership sales, the South-East Queensland residential development site market generally stabilised throughout This recent stabilising provided a platform for minor increases in transaction volumes throughout 2014 and into 2015 date. Residential Apartments - The Taringa locality and surrounding suburbs have seen a number of new townhouse and new low to medium rise apartment projects developed in the last two years. With a strong local buyer market, relatively strong sales rates and few units from within these projects remaining for sale, we consider this evidence that there is market support for good quality, well sized units in this locality. - Supply & Demand Development Site - Improved demand for well located development sites in flood-free areas which are also close by quality infrastructure and which benefit from viable planning approval(s); - Reasonable overall demand for realistically and competitively priced development sites; - Reduced levels of demand for flood affected, sloping or multi-staged sites (due to increased costs, lower comparative end pricing and design restrictions), and; - Any over-pricing is having a negative impact on enquiry levels. Residential Apartments - There is good overall demand from the owner occupier market for well-positioned, good quality, two and three bedroom units offering two car spaces, storage areas and lift access, and; - Generally a steady/increasing supply of new, low to medium rise residential apartment projects in Taringa and neighbouring localities as a result of current demand. - Marketability Development Site - The parent parcel benefits from an approval for the development of 2 two bedroom apartments and 5 three bedroom apartments within a four storey building which includes a secure car park at ground level; - Marketability for residential development sites in this locality has generally been adversely impacted upon by the tightened lending policies of major lenders and the continued overall (and somewhat restricted) state of available finance for development sites; - The subject site has a moderate to steep fall from its northern road frontage to the rear southern boundary and is currently improved with an older style, two storey dwelling which could potentially provide a small holding income pending redevelopment. This should have a positive impact on buyer sentiment; - The subject site is located in an elevated position, with a north/north-easterly aspect and pleasant, outlook to a parkland located opposite and potential for Brisbane city skyline views from the upper levels of a proposed low to medium rise development. This should attract good interest, and; - The likely buyer profile for the development site is a small to medium sized developer. - Marketability Residential Apartments - There is generally a steady/increasing supply of new, low to medium rise apartments within the subject locality and surrounding suburbs; - The proposed units will appreciate varying degrees of views. Lots 1 and 2, located on Level 1, will appreciate elevated local views of the trees/parkland to the north/north-east, whilst those units located on Levels 2 and 3 (third and fourth floors) will appreciate varying degrees of elevated views of the nearby parkland to the north/north-east, as well as possible distant city skyline views; - The south facing units (Lots 5 & 6) look onto neighbouring residential home unit buildings adjoining at the rear of the site, and privacy and lack of view corridors from these units may deter buyers; - The apartments are proposed to be completed to a good standard as expected for the proposed price range. Additionally, the floor plan designs are considered to be generally practical and functional in layout. We note, however, that the ensuites to the main bedrooms of the two bedroom units (Lots 5 & 6) appear tight and this may also deter buyers; - The approximate Body Corporate levy of $54 per week for two bedroom units and $65 per week for three bedroom units reflects the upper end of the range for similar, boutique, upmarket projects with similar amenity in Brisbane inner-city ring localities, and; - This development will appeal mostly to the owner occupier market. 7 P age

8 RISK ITEM MARKET COMMENT MEDIUM RISK RATING - Selling Period Development Site - We would envisage a likely selling period of approximately three (3) to six (6) months for the subject development site, taking into consideration prevailing market conditions and the current offering with development approval. Residential Apartments - We have adopted a rate of sale for the subject apartments of approximately 30% pre-sales (two apartments) and then approximately one to two apartments per month over the remaining marketing and sales period for the project. ASSET MEDIUM RISK RATING - Parent Site - A fan shaped, internal development site with a steep rise from its Indooroopilly Road frontage to the rear southern boundary. The site is currently improved with an older style, two storey dwelling which could potentially provide a small holding income pending redevelopment. This should have a positive impact on buyer sentiment; - The site appreciates a north-easterly aspect with a pleasant outlook to the parkland located opposite and potential city skyline views from the upper levels of the proposed low to medium rise development, and; - The site benefits from town planning approval which is considered to be the highest and best use of the subject property. - Location & Surrounding Development - Established residential/mixed use locality of Taringa located approximately 5.3 kilometres to the southwest of the Brisbane CBD, and; - The surrounding development predominantly comprises a mix of modern style low rise and townhouse dwellings, older style detached housing, as well as residential development sites of a similar nature to the subject site. - Access - Current/proposed vehicle access is provided by Indooroopilly Road and considered to be adequate. - Costs - Development costs are rarely 100% accurate and it is anticipated the final costs will vary from those provided to date. As such, should the final costings or any independent assessment of the costs provided (including their distribution) differ from those relied upon in this report, we would reserve the right to review our valuation. Any significant change in the final costs could impact on the viability of the proposed development and our assessed value of the development site. - Settlement Risk - Settlement risk has been a major issue for new projects in South-East Queensland during the GFC through to 2013, mainly due to the weak economic conditions and market fluctuations experienced during this time frame. This resulted in retail valuations for first mortgage security purposes on individual new product frequently not supporting the purchase or contract prices. It is considered this risk has reduced over the past 12 to 24 months, however, any erosion(s) in market sentiment or wider economic pressures could increase this risk to levels experienced in recent years. MANAGEMENT MEDIUM-HIGH RISK RATING - Development / Project - Construction of the approved development is yet to commence, and; - I am unaware of the applicant's/borrower's experience in delivering projects of this nature and despite it being a relatively small project, competent management by an experienced manager/developer is required to undertake and complete the development. ENVIRONMENT MEDIUM RISK RATING - Environmental Issues - An environmental report has not been provided and the current use is not identified as a risk under the API guidance notes. - Contaminated Site - None apparent on-site. However, no formal searches have been undertaken. - Flooding - The far northern boundary of the amalgamated site, adjoining Indooroopilly Road, is identified as being within an area of medium flood risk on Brisbane City Council s Flood Awareness Map. We understand, however, that due to the steep nature of the site, it is able to be developed in accordance with the approved plans, above the indicated flood level. Nevertheless, it is important to note that a formal flood search has not been undertaken and that JPM Valuers recommends the instructing party completes one. If the results of this search differ from our commentary above, we reserve the right to review our valuation. 8 P age

9 1.8 Mortgage Recommendation Having regard to all issues, assumptions and recommendations contained within this report in its entirety, we consider the subject property(s) to be suitable security for first mortgage purposes (only). The valuation is prepared on the basis that the lender named in the valuation report may rely on the valuation for mortgage finance purposes provided that the Lender has complied with its own lending guidelines, as well as prudent finance industry lending practices and has considered all prudent aspects of credit risk for any potential borrower including the borrower s ability to service and repay any mortgage loan. Further, the valuation is prepared on the assumption that the Lender is providing mortgage financing at a conservative and prudent loan to value ratio. The valuer accepts no liability whatsoever if prudent lending practices fail to be strictly observed and/or if the lender relies solely on this valuation, and no other criteria, to advance loan funds. 9 P age

10 2 Title and Statutory Details 2.1 Details REAL PROPERTY DETAILS Tenure County Parish COMMENT Freehold. Stanley. Indooroopilly. Lot & Plan LOT PLAN 4 Registered Plan Registered Plan Local Authority Brisbane City Council. Title Reference LOT/PLAN TITLE REFERENCE NUMBER 4 on RP on RP Registered Owner(s) LOT/PLAN REGISTERED OWNER(S) INTEREST Encumbrances / Interests 4 on RP73320 Sarla Georgie Pty Ltd Finn Family Properties Pty Ltd Finn Family Properties Pty Ltd 155 on RP73320 Sarla Georgie Pty Ltd Finn Family Properties Pty Ltd Finn Family Properties Pty Ltd Refer to the below Title Search. Statutory Valuation The two lots have been assessed as one amalgamated site for $800,000. The Statutory Valuation above was assessed by the Department of Resources and Mines (assessed as at 1 st October 2013 and effective 30 th June 2014). It should be noted that Statutory Valuation assessments are for rating and taxation purposes only and accordingly, are not necessarily representative of the current market value of the underlying land. A copy of the Title Search is provided below: 2/5 3/10 3/10 2/5 3/10 3/10 Source: SAI Global 10 P age

11 2.2 Additional Comments This valuation reflects the freehold value and as such, we note that any mortgages, charges or other financial matters noted on the title search(s) have not been detailed herein, nor have we had any regard to them. Our valuation is based on there being no other registered or unregistered easements, encumbrances, restrictions or other impediments of an onerous nature which would have an adverse affect on our valuation. Should any such matter become apparent, we would reserve the right to review our valuation. 11 P age

12 3 Town Plan 3.1 Town Planning Information ITEM COMMENT Local Authority Brisbane City Council. Planning Scheme Brisbane City Plan Zone Low Medium Density Residential (2 or 3 Storey Mix). BCC Planning Scheme Zoning Map Legend Subject Property Purpose of Zone The purpose of the "Low Medium Density Residential" zone is to provide for a range and mix of dwelling types including dwelling houses and multiple dwellings supported by community uses and small-scale, non-residential services and facilities that cater for local residents. The purpose for the two or three storey mix zone precinct is to provide for a mix of dwelling types including dwelling houses, two to three storey low-rise multiple dwellings (such as apartments and row houses) and dual occupancy, in addition to providing housing diversity and a sensitive transition both to adjoining sites that contain dwelling houses and between busier roads or centres and lower density residential areas. The major overall outcomes for the two or three storey mix zone precinct are as follows: a) Development comprises a mix of low-medium rise, low-medium density residential buildings of no more than two storeys or of no more than three storeys in height where located within easy walking distance of a public transport node and that this type of development is located on suitable sites, in accessible locations, near to public transport and larger centres or key destinations; b) Development for residential uses are predominantly a mix of dwelling houses, dual occupancy, apartment and row-house style multiple dwellings; c) Development for a residential use other than a dwelling house is of a scale and bulk that co-exists comfortably with an adjoining dwelling house, even though it might have a bulk and scale greater than a dwelling house, and; d) Development for a residential use other than for a dwelling house incorporates setbacks and landscaping which contribute to a cohesive and compatible humanscale streetscape. Information has been obtained verbally and from the Council website with the valuation having been completed on the assumption that the obtained information is correct. The Town Planning information should be checked by obtaining a Town Planning Certificate from the relevant authorities. Should any such obtained information prove to be different from the Town Planning information provided in this report, we would reserve the right to review our valuation. It is important to note that Valuer's are not town planning experts and we recommend any parties relying on this report make their own investigations in relation to the town planning issues discussed herein. 12 P age

13 4 Approval(s) 4.1 Introduction On the 13 th of October 2014, the Brisbane City Council issued a Development Permit for a Material Change of Use for Multi- Unit Dwellings, in addition to a Preliminary Approval to Carry Out Building Work (Council Reference A ). We note that both approvals were granted under the previous planning scheme "Brisbane City Plan 2000". We further note that the current zoning is generally consistent with the previous zoning. Both Approvals will expire four years from the date of approval in accordance with the Sustainable Planning Act 2009, that date being the 13 th of October A copy of the Decision Notice is attached to this report at Annexure Relevant Approval Conditions Many of the conditions of the Material Change of Use approval are considered to be typical for a project of this scale and nature in this locality. However, the more pertinent of the conditions are highlighted in the table below and overleaf: NO. COMMENTS 4 Carry out the approved development generally in accordance with the approved drawing(s) and/or document(s). 10 All balconies and terraces shown on the approved drawings and documents are to remain unenclosed with no shutters, glazing, louvres or similar permanent fixtures other than those consistent with the relevant Brisbane Planning Scheme Codes/Policies and clearly depicted on the approved drawings. Any Community Management Statement is to contain a by-law which reflects the requirements of this condition. 14 Provide screening in accordance with the following: a) Where any windows of habitable rooms of the proposed dwelling(s) are (within 2 metres at ground floor level or 9 metres above ground floor level) adjoining neighbouring dwellings' windows of habitable rooms, provide suitable screening in accordance with the following: Fixed opaque glazing in any part of the window below 1.5m above floor level; Fixed external screens; Sill heights of 1.5m above floor level, or; Fencing to a minimum 1.5m above ground floor level (only applies to overlooking from windows at ground floor level). b) Where a direct view is available within 2 metres at ground floor level or 9 metres above ground floor levels from balconies, landings, terraces and decks into windows, balconies, landings, terraces and decks in an adjacent residential building, that view is to be screened. Where screening is required, it is to be: Perforated panels, or trellises that are permanent and durable and have a maximum of 25% openings, with a maximum opening of 50mm, and that are permanently fixed and durable, or; Where described on the approved drawings, as per the approved drawings. 18 All proposed earthworks are to be carried out in accordance with the relevant Brisbane Planning Scheme Codes/Policies and the verge must be re-profiled so that the grades on the crossover and the verge comply with Council standards. However, a steeper grade to the crossover area immediately adjacent to the property boundary to achieve appropriate flood immunity on the site will be accepted. 26 Provide access, parking and manoeuvring for vehicles on-site in accordance with the relevant Brisbane Planning Scheme Codes/Policies, as indicated on the approved drawing(s), and including to the following: i. A pavement of minimum Type A standard or equivalent surface material (including associated drainage) to the area on which motor vehicles will be driven and/or parked; ii. Parking on the site for 12 cars, for the loading and unloading of vehicles within the site. Two of these parking spaces are to be provided for visitor parking. A minimum of 2.3 metres height clearance to all undercover parking areas. The minimum clear height must be measured to the lowest protrusion from the ceiling (e.g. fire sprinklers, services, lighting fixtures, signs, etc); v. Height clearance sign located at the entrance(s) to undercover car parking areas and a directional visitor parking sign clearly visible from the vehicle entrance to the site; vi. An appropriate area for the storage and collection of refuse, including recyclables, in a position which is accessible to service vehicles on the site, and; vii. The internal paved areas must be signed and delineated in accordance with the approved drawings and Qld Manual of Uniform Traffic Control Devices. 28 Construct a 1.2m wide concrete footpath along the full length of the frontage(s) of the site and in accordance with the relevant Brisbane Planning Scheme Codes/Policies. 29 Refuse and recycling bins for the proposed development are to be collected from the kerb side unless alternative refuse collection arrangements are made with Brisbane City Council s Waste Services. 13 P age

14 NO. COMMENTS 30 Provide a roofed and screened waste enclosure to accommodate the type and quantity of waste/recycling bins required to service the development. 38 Provide a 6 metre wide Type A permanent vehicular crossover to the Indooroopilly Road frontage(s) of the site in accordance with the relevant Brisbane Planning Scheme Codes/Policies and Standard Drawings and located as shown on the approved drawings. The grades on the crossover must comply with Council standards. However, a steeper grade to the area immediately adjacent to the property boundary to achieve appropriate flood immunity on the site will be accepted. Note: No further permits are required to carry out the crossover works. Street trees must not be removed or pruned without prior approval from Council s Asset Services Branch. 4.3 Brisbane City Council & Qld Urban Utilities Infrastructure Charge Notices The Council infrastructure charges and contributions payable as per Council s Adopted Infrastructure Charge Notice and the Queensland Urban Utilities Charge Notice are as follows: CONTRIBUTION PAYABLE AMOUNT Community Purposes, Stormwater and Transport $57,000 Water Supply Network $20,460 Sewerage Network $41,540 TOTAL AMOUNT DUE $119, P age

15 5 Land and Locality 5.1 Land Details The subject property is located at Taringa, approximately 5.3 kilometres to the south-west of the Brisbane CBD. Specific details of the subject property are as follows: ITEM Land Area DESCRIPTION 784m². BOUNDARY METRES (Approx.) Indooroopilly Road Frontage (Northern) Boundary 31.5 Western (Side) Boundary 40.6 Eastern (Side) Boundary 44.9 Southern (Rear) Boundary 4.0 Situation Topography Services Improvements Views Access Identified by reference to the RP Data Cadastral Plan and a copy of Registered Plan 73320, street address and visual inspection. Situated on the southern side of Indooroopilly Road, being the ninth and tenth registered allotments east of the Bellevue Parade/Indooroopilly Road intersection. The subject development site comprises two adjoining allotments forming a triangular shaped, internal site. The land narrows from the Indooroopilly Road frontage (northern boundary) to its rear southern boundary. Additionally, the site has a steep rise of approximately 10 metres from the street frontage to the rear southern boundary. Reticulated town water, sewerage, telephone and electricity are all available for connection to the subject property. We have assumed that the proposed development, "as if complete", will be connected to all major urban utility services. The subject amalgamated development site is currently improved with an older style, two storey dwelling. The dwelling appeared to be in reasonable condition given the age of the building from external inspection and could potentially be tenanted to provide a small holding income pending redevelopment. Varying degrees of elevated local residential/parkland views, as well as potential distant city skyline views from the subject proposed development. Adequate access is provided by Indooroopilly Road (northern boundary). An aerial map, bird's eye view photograph, extract from Registered Plan and cadastral map identifying the subject site, in addition to photographs taken on inspection, are detailed below and on the following pages of this report: Subject Property Subject Property Aerial (Source: Nearmap) Bird's Eye View (Source: Nearmap) Extract from Registered Plan Cadastral Map (Source: RP Data) 29 Indooroopilly Road Northern Portion of Site (Looking East) 15 P age

16 Existing Dwelling Rear Southern Portion of Site (Looking South) View to North (From Rear of Site) View to North-East (From Rear of Site) View to North (From Centre of Site) View to North-West (From Centre of Site) For more and better particulars of the subject site (including site dimensions), please refer to the attached Registered Plan at Annexure 2. The far northern boundary of the amalgamated site, adjoining Indooroopilly Road, is identified as being within an area of medium flood risk on Brisbane City Council s Flood Awareness Map. BCC Flood Awareness Map Legend We understand, however, that due to the steep nature of the site, it is able to be developed in accordance with the approved plans, above the indicated flood level. Whilst we have physically inspected the boundaries of the subject property, we are not surveyors and our valuation does not purport to be a site or structural survey of the land or any existing improvements thereon. Furthermore, no warranty can be given without the benefit of an identification survey any advice provided is not given in the capacity as an expert. 5.2 Road System & Amenities The subject development site has frontage to Indooroopilly Road along its northern boundary. Indooroopilly Road is a twoway, bitumen-sealed, local, through road which generally runs in an east/west direction, with concrete kerbing, channelling and footpath on both sides. It carries a generally low to moderate volume of vehicular traffic. 16 P age

17 Indooroopilly Road (looking East) Indooroopilly Road (Looking West) Access to the Brisbane CBD is provided by Coronation Drive, approximately 1.2 kilometres to the north of the subject site (via Gailey Road/Brisbane Street). Coronation Drive is a sub-arterial road offering between two and four lanes of traffic between Toowong to the north-west of the site and Brisbane CBD to the north-east. A Department of Transport and Main Roads search has not been sighted and this valuation is based on there being no additional Government Authority requirements for the land. It is recommended that the instructing party undertake its own searches in this regard. Key urban amenities which are located within reasonable proximity by road of the subject amalgamated site are as follows: ITEM Bus Transport Taringa Train Station Guyatt Park City Cat Ferry Terminal Brisbane CBD Toowoong Bowls Club Saint Lucia Golf Links Indooroopilly Golf Club Toowong Rowing Club Brisbane Boys College Rowing Shed Brisbane Botanic Gardens Ironside State School Indooroopilly State School Indooroopilly State High School St Peter s Lutheran College Brisbane Boys College Queensland Academy for Science, Mathematics and Technology University of Queensland St Lucia Campus Wesley Hospital Toowong Village Shopping Centre Indooroopilly Shopping Centre DISTANCE & DIRECTION FROM SUBJECT Within 100 metres. 2.3 kilometres to the west. 1.6 kilometres to the east. 5.3 kilometres to the north-east. 500 metres to the east. 1.6 kilometres to the south. 4.2 kilometres to the south. 2.3 kilometres to the east. 2.3 kilometres to the east. 3.2 kilometres to the north-west. 1.8 kilometres to the south-east. 3 kilometres to the south-west. 1.8 kilometres to the south. 3 kilometres to the south. 850 metres to the north. 1.4 kilometres to the north-west. 1.7 kilometres to the east. 3.3 kilometres to the north-east. 1.4 kilometres to the north. 3.6 kilometres to the south-west. 5.3 Environmental Matters The immediate previous use (where known) and history of the zoning changes on this site and any other relevant information as revealed by our enquiries to local council together with our own local knowledge does not place this property in any significance of being a contaminated site under the Environmental Protection Act. Whilst we did not observe any on site, it should be noted that we have assumed for the purpose of this valuation that the subject property is not contaminated or affected by any surface or sub-surface soil problems including instability, toxic or hazardous wastes, toxic mould, asbestos or building material hazards. The instructing party is advised that the Valuer is not a qualified environmental expert and as such, we would recommend that they satisfy themselves in relation to any environmental risks or contamination issues by obtaining advice from suitably qualified expert environmental consultants. Our valuation further assumes a suitable soil compaction test. Additionally, the subject property is not expected to be subject to Native Title issues. However, no searches were undertaken in this regard. Should any of the above problem(s) become apparent, we would reserve the right to review our valuation. 17 P age

18 5.4 Locality and Surrounding Development The subject development site is situated on the southern side of Indooroopilly Road, being the ninth and tenth allotments east of the Indooroopilly Road and Bellevue Parade intersection, in the inner south-west Brisbane suburb of Taringa, Queensland. Taringa is an established, mixed use suburb located approximately 5.3 kilometres to the south-west of Brisbane CBD. Development within Taringa predominantly comprises a mix of modern style low to medium rise and townhouse dwellings, older style detached housing, as well as residential development sites of a similar nature to the subject site. Given the close proximity to retail development and public transport services, this locality is expected to see an increase in low to medium rise and townhouse unit development. Development immediately surrounding the subject property includes: A modern, 7 unit, two storey attached and detached townhouse development to the east; Semi-modern style lowrise apartment developments to the south and south-west; A modern, four storey apartment development to the west, and; Perrin Park and Toowong Creek opposite to the north. Taringa Subject Site Source: Google Maps Source: Google Maps Subject Site Source: Google Earth 18 P age

19 6 Proposed Development 6.1 Introduction The proposed lowrise apartment development has been approved for 2 two bedroom apartments and 5 three bedroom apartments (19 bedrooms) within a four (4) storey building (including parking at ground level). CGI of Proposed Development Proposed Development Site Plan 6.2 Floor Areas & Configuration The individual floor areas and configuration for the units are as follows: CAR AREA (m²) LOT FLOOR BEDS BATHS SPACES Internal External Total Living Storage The above floor areas have been derived from Draft Survey Plan (refer to Annexure 3) and they are subject to confirmation and final survey. Should the final surveyed areas differ from those detailed above, we would reserve the right to review our valuation. 6.3 Construction Details and Schedule of Fittings, Finishes & Fixtures A summary of the proposed construction is as follows: ITEM Footings Flooring External Walls Internal Walls Ceilings Window Frames Roof DETAIL Reinforced concrete. Reinforced concrete slab to ground floor and reinforced concrete suspended slab upper floors. Reinforced concrete block and light weight cladding system. Painted plasterboard. Painted plasterboard. Powder coated aluminium. Metal. The applicant/borrower has provided a schedule of fittings, finishes and fixtures for the proposed apartments. Generally, these are considered to be of an average to good standard given the location and target market with a summary of the proposed unit fit-out provided overleaf. 19 P age

20 Double bowl under mount sink; KITCHEN Gooseneck kitchen sink mixer to 2 bedroom units; Pull out swivel mixer to 3 bedroom units; Timber veneer and Polytec (laminate) high gloss doors and drawer fronts; White laminate carcass; Soft close drawers; Brushed aluminium laminate kickboards; Polished reconstituted stone bench tops; Polished tile splash back to 2 bedroom units; Glass splash back to 3 bedroom units; Pendant lights over breakfast bar; Bosch dishwasher; Bosch 600mm ceramic cooktop to 2 bedroom units; Bosch 900mm ceramic cooktop to 3 bedroom units; Bosch pyrolytic built-in oven; Bosch built-in oven/microwave combination (3 bedroom units only); Bosch rangehood ducted to the outside of the building, and; Tiled floor. Stainless steel laundry tub; LAUNDRY Ceramic tiled splash back over tub; Laminex high gloss bench tops; Dryer ducted to the outside of the building; Polished chrome swivel mixer, and; Tiled floor. BATHROOM/ENSUITE/POWDER ROOM Polished chrome plated tapware; Vitreous China vanity basin; Vitreous China soft close toilet; Bathtub to bathrooms; Polished reconstituted stone vanity bench top to 2 bedroom units; Limestone bench top to 3 bedroom units; Polytec high gloss vanity cabinet with soft close drawers; Recessed medicine cabinet wall mirror; Tiled shower recess with feature niche; Shower head on rail; Bath towel rail and guest towel rail to bathrooms; Swivel bath towel bars to ensuites; Semi-frameless glass shower screens; Toilet; Feature strip lighting, and; Tiled floor and full height wall tiling. 2,700mm high ceilings; Tiles to living area; Square set cornices; GENERAL Wool blend carpet to bedrooms; Mirrored door built-in robes with melamine shelves and chrome hanging rail to second and third bedrooms; Selected designer fit-out of to master bedroom walk-in robes in 3 bedroom units; LED light/fan combinations to all bedrooms; LED down lights over bedside tables in master bedrooms; LED down light fittings throughout; Magnetic door stops, and; Stiebel instant electric (tankless) hot water system. 6.4 Floor Plan Design The proposed floor plan designs are as follows: 2 BEDROOM APARTMENT (UNITS 5 & 6) Entry; Second bedroom with built-in robe; Kitchen; Bathroom with laundry cupboard; Living/dining; Linen cupboard, and; Master Bedroom with built-in robe and ensuite; Balcony/Patio or courtyard area. 3 BEDROOM APARTMENTS (UNITS 1 TO 4 and 7) Entry; Powder room; Living/dining; Bathroom; Kitchen; Laundry; Master bedroom with walk-in robe and ensuite; Linen cupboard, and; Second and third bedrooms, each with a built-in robe; Balcony. 20 P age

21 The above layouts may be viewed in the floor plans detailed below (and Council approved plans attached to this report at Annexure 5): GROUND FLOOR FIRST FLOOR SECOND FLOOR THIRD FLOOR 6.5 Common Facilities Common facilities and ground improvements for the proposed lowrise apartment project are proposed to be as follows: Partly covered communal/recreation area at front entrance; Secured ground level residents car park; Lift access, and; Quality landscaped grounds. 6.6 Proposed Lot Entitlements and Body Corporate Fees The applicant/developer has provided the draft disclosure statement for the subject proposed apartment development. Details of the proposed lot entitlements and weekly body corporate fees for each of the units are provided following: LOT CONTRIBUTION/INTEREST ENTITLEMENT WEEKLY BODY CORPORATE FEE 1 12 $ $ $ $ $ $ $65.08 AGGREGATE P age

22 6.7 General Comments Each of the two bedroom units (Lots 5 and 6) are to be provided with one secure ground floor car space, whilst each of the three bedroom apartments (Lots 1, 2, 3, 4 and 7) are to be provided with two secure ground floor car spaces. Additionally, two visitor car spaces are to be provided under croft at the front of the building. Each unit also has a lockable storage room on the first floor, ranging in size between 9m 2 and 14m 2. Lots 1 and 2, located on Level 1, will appreciate elevated local views of the trees/parkland to the north/north-east, whilst those units located on Levels 2 and 3 (third and fourth floors) will appreciate varying degrees of elevated views of the nearby parkland to the north, as well as varying degrees of distant city skyline views. The south facing units (Lots 5 & 6) look onto neighbouring residential home unit buildings adjoining at the rear of the site, and privacy and lack of view corridors from these units may deter buyers. The apartments are proposed to be completed to an average to good standard as expected for the proposed price range. Additionally, the floor plan designs are considered to be generally practical and functional in layout. We note, however, that the ensuites to the main bedrooms of the two bedroom units (Lots 5 & 6) appear tight and this may also deter buyers. The approximate Body Corporate levy of $54 per week for two bedroom units and $65 per week for three bedroom units reflects the upper end of the range for similar, smaller scale boutique projects with similar amenity in the Brisbane locality. It is considered that the proposed development should be reasonably well received by mostly the owner occupier markets given the proposed level of finish, the size of the units, proximity to residential amenities, proposed price point and proposed Body Corporate Fees. 22 P age

23 7 Development Costs 7.1 Introduction The applicant/developer has provided us with a copy of their feasibility analysis for the subject proposed development, as well a construction quote from Xenia Constructions (QLD) Pty Ltd, dated the 25 th of March We have relied upon these provided cost estimates for the purposes of our assessment and they are discussed in the following sections of this report. 7.2 Development Cost Estimates The development costs provided (exclusive of GST) are detailed as follows: ITEM AMOUNT $/UNIT % OF TOTAL Construction Costs $2,464,339 $352, % Professional Fees $83,328 $11, % Contributions & Charges $150,940 $21, % Contingency $134,482 $19, % Land Holding Costs $17,000 $2, % TOTAL $2,850,089 $407, % 7.3 GST and Construction Cost Comments We note that the total construction cost provided in the Xenia Constructions quotation of $2,469,091 exclusive of GST is approximately $246,909 less than the construction cost of $2,716,001 inclusive of GST ($2,469,092 excluding GST) included in the feasibility assessment provided to us. As per the developer/applicant's advice, we have adopted the lower figure included in the quotation in our hypothetical development model. We are not qualified to comment on the accuracy of the development cost estimates provided. As such, we strongly recommend that the above detailed costs as provided by the applicant/borrower are independently verified by a suitably qualified professional. Furthermore, we recommend they are continually monitored and updated where necessary throughout the construction period. Should the actual costs vary significantly from the above revised costs, please refer to the valuer for comment. Our valuation of the subject development site has largely been determined with the aid of a cash flow model which uses the cost estimates provided and amended where applicable as detailed in this report. As such, the accuracy of the cost estimates provided and their distribution could have a significant impact on the financial viability of the proposed development and the assessed value of the subject development site. Accordingly, should the final costings or any independent assessment of the costs provided (including their distribution) differ from those relied upon in this report, we would reserve the right to review our valuation. Any significant change in the final costs could impact on the viability of the proposed development and our assessed value of the development site. The cost estimates utilised in our cashflow assessment have been done so on an exclusive of GST basis. The developer has the ability to claim an input tax credit on the GST paid in relation to the cost of developing and selling the completed product (assuming they are registered for GST). As such, the developer should not incur any additional net increase in development costs due to the GST. This is apart from their cash flow position which will incur a period of time between when the GST is paid by the developer and the time that they receive the input tax credit on the money expended. Our cashflow feasibility analysis has therefore included a lag period of two (2) months from when development cost Tax Credits are incurred versus when they are received from the ATO. It is important to note that GST is not payable on infrastructure charges or other Council fees. 7.4 Construction Timeframe The construction quotation provides for a construction timeframe of 10 months for practical completion of the proposed residential apartment building. After having had regard to construction periods for other similar sized projects, we consider this construction period to be in line with wider market parameters. 23 P age

24 8 Apartment Sales Evidence and Market Commentary 8.1 Introduction The subject development site is proposed to be developed with 7 two and three bedroom residential apartments in a four storey building. As per our instructions, we are to assess the Gross Realisation "as if complete" for the proposed 7 residential apartments. As such, JPM has reviewed the local and surrounding areas to identify key sales of residential apartments and competing developments which would be considered useful for comparison purposes to the subject proposed development. 8.2 Brief Market Comment Taringa is located approximately 5.3 kilometres to the south-west of the Brisbane CBD. Furthermore, the subject site is within close proximity to residential amenities including shopping centres, state and private schools, Taringa Train Station, Guyatt Park City Cat Ferry Terminal, University of Queensland St Lucia Campus and various public sporting facilities/parklands. Throughout 2013, end product generally stabilised and especially in the latter half of the year, there was an overall improvement in sales volumes and prices. This trend continued throughout 2014 and into 2015 to date. However, we would caution that the current low interest rate environment has had a large impact on this stabilisation and recent growth. Price points of good quality detached housing and townhouse units will likely place a ceiling on what could be achieved for a new apartment within this location. Broadly speaking, new or near new housing within close proximity to Taringa generally start in the $700,000s, with higher quality larger dwellings being upwards of $1,000,000. Based on the current state of the market, the subject locality and style and quality of finishes and fittings, the subject units should be relatively well received by the market, provided they are appropriately priced. 8.3 Sales Evidence We have had regard to a range of available sales evidence of residential home units within under construction and established apartment buildings within the subject and surrounding localities, as detailed over the following pages of this report. 24 P age

25 "CHLOE ON CLARENCE" JPM Valuers & Property Consultants Address: Clarence Road, Indooroopilly. Distance From Subject: Approx. 2kms to the south-west. Developer: Raise Projects Pty Ltd. Product: 20 Units. Comment: The development proposed is a five level residential development containing 19 x two bedroom, two bathroom units and a single one bedroom unit, each having a private balcony area and lock-up storage unit on level 1. The building is serviced by one level of secure parking at street height and an internal passenger lift. At completion, the development will provide average street presentation. We are aware of the following most recently reported sales within the development: LOT BED/BATH /CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) 4 2/2/1 U/C 101 $520,000 $5, /2/1 U/C 89 $499,000 $5, /2/1 U/C 117 $540,000 $4, /2/1 U/C 94 $480,000 $5,106 Comparison: Inferior location with similar quality of improvements. Larger development with similar common facilities and slightly larger floor areas. Overall, considered to be inferior to the subject proposed units. "SEVEN OAKS" JPM Valuers & Property Consultants Address: 16 Seven Oaks Street, Taringa. Distance From Subject: Approx. 750m to the south-west. Developer: BJE Property One Pty Ltd. Product: 10 Units. Comment: The development proposes the construction for a multi-unit dwelling over four levels, with a total of 10 units (9 x two bedrooms plus 1 x three bedroom). Unit sizes range from 78m² for a two bedroom unit up to 111m² for a three bedroom unit. No communal recreational facilities are proposed. Each level will be accessed by a single passenger lift and stairwell. We are aware of the following most recently reported sales within the development: LOT BED/BATH /CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) 1 2/2/2 U/C 104 $599,000 $5, /2/2 U/C 103 $609,000 $5, /2/2 U/C 95 $625,000 $6, /2/2 U/C 95 $629,000 $6, /2/2 U/C 131 $595,000 $4,542 Comparison: Slightly inferior location and similar quality of improvements. Slightly larger development. Similar inferior common facilities and slightly larger floor areas. Overall, considered to be slightly inferior to the subject proposed units. 25 P age

26 "IBLISS" JPM Valuers & Property Consultants Address: 25 Vincent Street, Indooroopilly. Distance From Subject: Approx. 3.5kms to the south-west. Developer: ML Projects Pty Ltd. Product: 10 Units. Comment: A recently completed unit complex with three levels of unit accommodation above a single level of ground floor secure car park. The site is in a quiet location and is within close proximity to Indooroopilly Shopping Centre. The units are finished to a very good standard and are configured between two and four per level. A single lift services all levels and a single car space is provided to all units. Internal finishes include 40mm stone bench tops, gas cook tops, built-in study desks and ducted air-conditioning. The building is serviced by a passenger lift. There are no notable recreational facilities provided within the development. The project has above average street appeal. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 1 2/2/1 16/12/ $535,000 $4,496 Local 2 2/2/1 14/12/ $535,000 $4,534 Local 3 2/2/1 28/01/ $529,000 $4,232 Local 4 2/2/1 11/02/ $525,500 $4,416 VIC 5 2/2/1 10/12/ $559,000 $4,737 QLD 6 2/2/1 25/01/ $565,000 $4,788 Local 7 2/2/1 31/01/ $555,000 $4,703 QLD 9 2/2/1 25/01/ $585,000 $4,795 Local 10 2/2/1 25/11/ $585,000 $4,606 Local Comparison: Inferior location. Slightly larger development with quality of finishes/fittings and similar common facilities. Larger floor areas. Overall, considered to be useful for broad comparison purposes to the subject proposed units. 26 P age

27 "LAURENTINA" JPM Valuers & Property Consultants Address: 157 & 159 Gailey Street, St Lucia. Distance From Subject: Approx. 900m to the south. Developer: ONR Pty Ltd. Product: 16 Units. Comment: A multi-level complex situated in a steeply sloping site that adjoins a retail complex and is in a busy position. The complex has a high standard of presentation with attractive view corridors provided from the majority of dwellings. The complex provides single level and two level townhouse style units. Internal features include ducted air conditioning, built in study, stone bench tops and integrated dishwasher. The units mostly all have large courtyards and balconies. The complex has a passenger lift and storage cages are provided at the ground floor. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 1 3/2/2 10/04/ $738,888 $4,829 Local 2 3/2/2 26/06/ $785,000 $4,701 Local 3 3/2/2 05/05/ $745,000 $5,174 Local 4 3/2/2 27/02/ $729,000 $5,927 Local 5 3/2/2 12/02/ $745,000 $5,321 Local 6 3/2/2 11/06/ $699,000 $5,874 Local 7 3/2/2 19/02/ $824,000 $4,247 Local 8 3/2/2 15/03/ $825,000 $4,635 Local 9 3/2/2 14/07/ $819,500 $4,604 Local 10 3/2/2 23/06/ $800,000 $4,878 Local 11 3/2/2 17/06/ $899,000 $4,162 Local 12 3/2/2 18/04/ $859,000 $3,959 Local 13 3/2/2 01/04/ $879,000 $5,426 Local 14 3/2/2 01/04/ $899,000 $5,549 Local 15 3/2/2 21/12/ $899,000 $5,549 Local Comparison: Slightly inferior location and quality of improvements. Larger floor area, Similar good quality building and fit out. Larger development. Similar common facilities. Overall, considered to be useful for broad comparison purposes to the subject proposed units. 27 P age

28 "THE LAFITE" JPM Valuers & Property Consultants Address: 26 Ryans Road, St Lucia. Distance From Subject: Approx. 1km to the south-east. Developer: St. Lucia Projects Pty Ltd. Product: 14 Units. Comment: Comprises a complex of two separate buildings. Accommodation is provided over three levels above ground level parking. The complex has above average street presentation. Located in a quiet location with good views although vehicular access is considered "awkward.". Internal finishes include stone bench tops, gas cook tops and ducted air conditioning. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 2 3/2/2 09/02/ $885,000 $6,062 Local 2 3/2/2 01/09/ $900,000 $6,164 Local 3 3/2/2 12/08/ $959,000 $7,157 Local 4 3/2/2 12/09/ $1,080,000 $7,826 Local 4 3/2/2 04/01/ $1,020,000 $7,391 Local Comparison: Superior location and Brisbane River views. Slightly superior quality building and fit out. Larger development with similar common facilities. Slightly smaller gross floor areas. Overall, considered to be superior to the subject proposed units. "ELYSIUM RESIDENCES" JPM Valuers & Property Consultants Address: 115 Indooroopilly Road, Taringa. Distance From Subject: Approx. 600m to the south-west. Developer: ABOR Investments Pty Ltd Product: 5 Units. Comment: A complex of five units configured throughout a three level building over parking. Units 1-2 and 3-4 are configured two per level. The complex has a very high standard of presentation, it is however in a semi busy location. Some good local views are provided to the upper levels. Each of the above units is provided with at least two external areas, two car spaces and additional storage areas. Serviced by a single passenger lift. Internal finishes include ducted air-conditioning, stone stop kitchens and bathrooms, stainless steel Swiss appliances, soft close drawers, video intercom and floor to ceiling stacker glass doors. There are no notable recreational facilities provided within the development. The project has above average street appeal. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 1 3/2/2 26/08/ $870,000 $4,780 Local 2 3/2/2 28/05/ $903,000 $4,239 Local 3 3/2/2 18/06/ $900,000 $4,918 Local 4 3/2/2 09/06/ $870,000 $4,943 Local Comparison: Slightly inferior location. Slightly smaller, boutique development with similar/slightly superior quality fittings/finishes. Similar common facilities and larger floor areas. Overall, considered to be slightly superior to the subject proposed units. 28 P age

29 "BALCONY" JPM Valuers & Property Consultants Address: 35 Brasted Street, Taringa. Distance From Subject: Approx. 800m to the south-west. Developer: Brasted Street Pty Ltd. Product: 8 Units. Comment: Comprises 6 two bedroom, two bathroom units and 2 three bedroom, two bathroom units within a four storey building completed in mid The complex is configured with three units per floor on the first and second levels and two units per floor on the upper level. Single passenger lift access to each level. Single car space is provided for each of the two bedroom units and two car spaces are provided for each of the three bedroom units. Internal floor areas of 89m 2 for the two bedroom units and 117m 2 /118m 2 for the three bedroom units. Units have been finished to a high standard. External floor areas range between 20m 2 and 34m 2. We are aware of the following most recently reported and confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 1 3/2/2 U/C 141 $875,000 $6,206 N/A 2 2/2/1 12/12/ $609,000 $4,259 Overseas 4 3/2/2 05/12/ $905,000 $4,866 Local 5 2/2/1 U/C 109 $579,000 $5,312 N/A 6 2/2/1 U/C 109 $609,000 $5,587 N/A 7 2/2/1 10/05/ $550,000 $4,264 Local Comparison: Slightly inferior location. Similar size development with similar common facilities. Larger floor areas. Overall, considered to be similar/slightly superior to the subject proposed units. "THE EDGE ON RAVEN" JPM Valuers & Property Consultants Address: 39 Depper Street, St Lucia. Distance From Subject: Approx. 1.3kms to the south-east. Developer: Liverland Development Pty Ltd. Product: 15 Units. Comment: Completed late The complex provides lift access to all floors and consists of 1 one bedroom plus study nook apartment, 12 two bedroom, 2 bathroom plus study apartments and 2 three bedroom plus study, 2 bathroom top floor apartments, with either one or two secure car spaces. Features include 40mm stone benches, gas cooktops, oven and microwave with dishwasher, polished timber floors to living/kitchen/dining or carpet throughout. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 11 2/2/1 15/12/ $638,000 $3,938 Local 12 2/2/1 24/09/ $558,000 $4,729 Local 14 3/2/2 15/09/ $849,000 $3,949 Local 15 3/2/2 14/06/ $892,000 $4,073 Local Comparison: Similar location. Similar/slightly superior quality of improvements. Larger development with similar common facilities. Larger floor areas. Overall, considered to be similar/slightly superior to the subject proposed units. 29 P age

30 "FRESH APARTMENTS" JPM Valuers & Property Consultants Address: 29 Alpha Street, Taringa. Distance From Subject: Approx. 300m to the west. Developer: F.C.(2) Pty Ltd &, Savve Developments Pty Ltd & Westpoint Consultants Pty Ltd. Product: 92 Units. Comment: Completed in late Comprises 92 one, two and three bedroom units in three separate buildings. Common facilities include passenger lifts, ground floor car parking, two swimming pools, fully equipped gym and landscaped garden/lawns. We are aware of the following most recently confirmed sales within the development: LOT BED/BATH/CAR SALE DATE GROSS FLOOR AREA (m 2 ) SALE PRICE RATE ($/m 2 ) BUYER PROFILE 1 3/2/1 26/03/ $575,000 $2,447 Local 39 1/1/1 17/07/ $385,000 $3,468 Local 50 3/2/2 15/10/ $765,000 $4,069 Local 32 3/2/2 03/02/ $705,000 $3,711 Local 36 3/2/2 12/04/ $790,000 $3,911 Local 28 1/1/1 09/07/ $382,500 $3,787 Local 37 3/2/2 03/10/ $800,000 $3,960 NSW Comparison: Similar location and a considerably larger development. Superior common facilities. Generally larger floor areas. Overall, considered to be inferior to the subject proposed units. In addition the above apartment projects, we have had regard to the following individual sales of low to medium rise apartments in surrounding localities: PROPERTY BED/BATH/CAR SALE DATE SALE PRICE BUYER ORIGIN Lot 5 "Signature Point", 74 Gailey Road, St Lucia Lot 11 "The Regent on the River", 523 Coronation Drive, Toowong 3/2/2 11/11/2014 $880,000 Local Brief Comments: The property comprises a modern, circa 2010, part two level, rendered brick and metal roof home unit which reportedly contains three bedrooms, two bathrooms and two car accommodation. Gross Floor Area: 281m². The unit has been finished to a good standard and features modern fittings and fixtures throughout. The complex has a total of 10 units. Distance From Subject: Approximately 300 metres to the south-east. In Comparison: Similar location, larger unit, similar bedroom and bathroom accommodation to the three bedroom apartments, similar modern style building with good street appeal and quality fit out. Overall, considered useful for broad comparison purposes to the proposed three bedroom product. 3/2/2 07/09/2014 $825,000 Local Brief Comments: The property comprises a semi-modern, circa 1999, highrise home unit which reportedly contains three bedrooms, two bathrooms and two car accommodation. The complex has a total of 18 units. Distance From Subject: Approximately 1.8 kilometres to the north-east. In Comparison: Inferior location and older style apartment, similar bedroom, bathroom and car accommodation to the three bedroom units and inferior quality fit out. Superior views. Overall considered useful for broad comparison purposes to the proposed three bedroom product. 30 P age

31 PROPERTY BED/BATH/CAR SALE DATE SALE PRICE BUYER ORIGIN Lot 47 "Precinct Toowong", 26 Holland Street, Toowong 3/2/2 13/07/2014 $1,200,000 Local Brief Comments: The property comprises a modern, circa 2002, medium rise home unit which reportedly contains three bedrooms plus study, two bathrooms and two car accommodation. The unit has been finished to a good standard and features modern fittings and fixtures throughout. Floor Area: Living/Balcony 286m².The complex has a total of 47 units. Distance From Subject: Approximately 900 metres to the north-west. In Comparison: Similar location, larger unit, similar bedroom accommodation, bathroom accommodation to the three bedroom units, older style unit with inferior street appeal and quality fit out. Overall considered useful for broad comparison purposes to the proposed three bedroom product. 8.4 Proposed Price List and Reported Sales The applicant/developer has advised that Ray White Project Marketing Queensland have been marketing the project for a period of approximately three months. The marketing programme to date has involved listing the project online and a signboard on site. Furthermore, we are advised that one unit (Lot 7) is currently under contract for $1,200,000. A schedule of the asking/sale prices within this development are provided following: LOT FLOOR LEVEL BED/BATH /CAR TOTAL LIVING AREA (m 2 ) SALE STATUS PROPOSED LIST/SALE PRICE 1 1 3/2/2 157 For Sale $879, /2/2 137 For Sale $849, /2/2 157 For Sale $899, /2/2 137 For Sale $869, /2/1 189 For Sale $585, /2/1 92 For Sale $575, /2/2 232 Under Contract $1,200,000 Note: The above sale/list pricing is inclusive of GST. We have been provided with an extract of the executed copy of the contract of sale for Lot 7. We understand that the contract is now unconditional to a Brisbane based buyer with the full 10% deposit paid on the 20 th of March We consider this price to be at the upper end of the market value range for low to medium rise units in the subject and surrounding localities. We strongly recommend the instructing party have the sale contract for Lot 7 reviewed by a suitably qualified professional. We reserve the right to review our valuation should our understanding of the contract be proven to be different. 31 P age

32 9 Gross Realisation of the Proposed 7 Apartments As if Complete 9.1 Introduction In accordance with our instructions, we are to assess the Gross Realisation from the individual sale of the 7 proposed residential apartments on an "as if complete" basis. Our assessments assume the subject apartments are completed as a single stage and we note the assessments have been prepared for First Mortgage Security Purposes (only). Please refer to Annexure 5 of this report for a copy of the Council Approved Floor and Elevation Plans. 9.2 Valuation Methodology and Considerations In assessing the market value of the proposed subject residential apartments "as if complete", JPM considers the primary approach to valuation to be the Direct Comparison method. Under this approach, JPM has compared and contrasted the sales evidence of residential apartments in low to medium rise developments, as discussed in Section 8 of this report. Allowances have been made for variations between the subject apartments and the sales evidence. In assessing the market value of the subject proposed apartments "as if complete", the following additional matters have been taken into consideration: General and immediate locality of the proposed development (including proximity to residential amenities and transport links); Range of common facilities available to the subject apartments; The internal and external living areas of the subject apartments; The floor plan layouts and proposed fittings/finishes; The available view corridors; The estimated body corporate fees; The limited comparable product within the immediate locality; The car parking allowances for the proposed apartments; Advice provided by specialist marketing agents; Current market conditions; The requirement of a commercially acceptable rate of sale for the subject apartments, and; Our valuation assumptions and qualifications throughout this report. 9.3 Rate of Sale In adopting a commercially acceptable rate of sale for the subject apartments, we have had regard to the location and proposed quality of the subject development, rates of sale of similar developments within other comparable localities and our assessment of the gross realisation from the individual sale of the subject proposed apartments. Based on these parameters, we have adopted an approximately 30% pre-sale rate (two apartments) for the proposed development plus an average of approximately one to two apartment sales per month over the remaining marketing and sales period. Our adopted rate of sale is based on the level of existing and proposed competition which is known at the present time, together with the general residential market conditions and number of units within the proposed development. Should there be a significant increase in the supply of new low to medium rise apartments within the subject area, the rate of sale for the development as proposed may be adversely affected. Our rate of sale assessment is based on a professional marketing programme undertaken by an experienced project marketing team, together with an appropriate promotional budget and selling period. 9.4 GST Comment We have been provided with written advice from the applicant/borrower and their accountant advising that they are able to apply the margin scheme in calculating the applicable payable GST upon the sale of the completed subject apartments. As such, GST should be calculated as 1/11 th of the difference between our GST Inclusive Gross Realisation assessments "as if complete" and the cost base. For the purposes of our assessment, we have adopted the cost base as the site purchase price (contracted in September 2013) at $950,000. It is important to note that we are not GST experts and our exclusive of GST valuation is subject to confirmation of the above GST assumption being correct. 32 P age

33 9.5 Gross Realisation Assessment "As if Complete" Having had regard to the considerations in Section 9.2 of this report, in addition to the available market evidence detailed in Section 8.3, we have assessed the current market value of the 7 subject apartments "as if complete" and on an individual sales basis as follows: LOT FLOOR BED/BATH /CAR AREA (m²) INTERNAL EXTERNAL TOTAL ASSESSMENT (Incl. GST) ASSESSMENT (Excl. GST) 1 1 3/2/ $840,000 $776, /2/ $815,000 $753, /2/ $865,000 $798, /2/ $835,000 $771, /2/ $575,000 $535, /2/ $550,000 $512, /2/ $1,200,000 $1,103,250 TOTAL GROSS REALISATION "AS IF COMPLETE" $5,680,000 $5,250,000 Note: The above areas have been derived from Draft Survey Plan and are subject to final survey and confirmation. Additionally, some of the above exclusive of GST figures may have been rounded to the nearest $250 for practical valuation purposes. Our gross realisation assessment of the proposed apartments "as if complete" has been prepared on an individual sale basis and not "in-one-line". Additionally, our assessment is a gross realisation and does not include any allowance for selling costs (including agent commissions, legal fees, advertising and promotion costs). Our valuation is further based on a professional marketing and promotion period, undertaken by selling agents experienced with the sale of this type of property and having an appropriate marketing and promotion budget. The marketing of this project should only be undertaken by an experienced project marketing team. 33 P age

34 10 Site Valuation "As Is" 10.1 Introduction In accordance with our instructions, we are to undertake a current market value assessment of the subject development site on an "as is" basis for first mortgage security purposes (only). The subject parcel of land comprises a triangular shaped, internal site with a total area of 784m 2, having a steep rise from its Indooroopilly Road frontage to the rear southern boundary. The site is to be developed with a four (4) storey apartment building (including secure car parking at ground level) containing 7 units (19 bedrooms). The highest and best use of the subject property in the current market is considered to be as a residential development site, approximately in line with the current approval Valuation Methodology and Considerations In assessing the market value of the subject development site in accordance with our instructions and having taken into consideration our assessment of the property s highest and best use, JPM considers the primary approaches to valuation to be the Direct Comparison and Residual Hypothetical Development methods. In establishing the market value by using the Direct Comparison method, sales evidence of suitable development sites are compared and contrasted to the subject property, with allowances made for variations. In establishing the market value by using the Residual Hypothetical Development method, JPM has constructed and relied upon a cash flow model. In assessing the market value of the subject development site, the following matters have been taken into consideration: Location and building topography; Land area of the site and its proximity to residential amenities plus transport facilities; Town planning designations and the existing Development Approval; The provided development cost estimates; Previous sales history of the property; Advice provided by specialist marketing agents; Current market conditions for land parcels suitable for medium density residential development in Brisbane, and; Our valuation assumptions and qualifications throughout this report Development Site Market Commentary Taringa is located approximately 5.3 kilometres to the south-west of the Brisbane CBD. Furthermore, the subject site is within close proximity to residential amenities including shopping centres, state and private schools, Taringa Train Station, Guyatt Park City Cat Ferry Terminal, University of Queensland St Lucia Campus and public sporting facilities/parklands. The South-East Queensland residential development site markets were heavily impacted by the significant decline in values and demand across all real estate sectors during the years of , resulting in numerous development sites becoming available for sale at reduced prices as developers battled with rising interest rates, worsening economic conditions, competition, price under-cutting from other developers and no-longer feasible projects due to conditions in the end product market forcibly deteriorating. However, the site market has greatly improved since the lows experienced during the height and aftermath of the GFC. Over the past 24 months especially, there has been a general increase in demand for sites, sale volumes and for key sites, sale prices. It is important to note however, that potential buyers remain somewhat cautious, especially for those sites in secondary locations, where the proposed/approved development is a departure from the surrounding development or where the proposed/approved development forms a multi-staged and medium to long-term project. For these sites, demand is much thinner and purchasers are focusing heavily on supply/demand characteristics for the end product, price point sensitivities, transport and other residential amenities, in addition to site constraints such as flooding, slope, surrounding development, zoning parameters and accessibility. Given the recently improved conditions, development and holding costs are also becoming more of a critical point in a site's viability as margins come under pressure. Specialist agents comment that despite the overall improved conditions, demand is primarily for key sites in prime locations where a developer can greatly improve an existing approval to be more in line with current end product demand or where there is good holding income pending redevelopment. Additionally, they advise that although improved, current market conditions indicate that sites need to be realistically priced in order to achieve a sale. 34 P age

35 10.4 Sales Evidence We have had regard to a range of market evidence from within the subject and other comparable localities in assessing the current market value of the subject development site "as is". The evidence used for comparison purposes is detailed below and over the following pages: Sale 1 Address 29 Bellevue Parade, Taringa, QLD, Distance From Subject 350 metres to the south-west. JPM Valuers & Property Consultants Sale Date 6 th February Town Plan Brisbane City Plan Sale Price $810,000. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 660m² ($1,227/m²). Product *4 units ($202,500/unit). Comments Sold without Approval. *Development approval has subsequently been gained for a townhouse project comprising 4 three storey, attached units. Each unit is to comprise three bedrooms, two bathrooms plus powder room and tandem lockup garage. Comprises the amalgamation of two adjoining allotments forming an irregular shaped site with frontage to Bellevue Parade on its eastern boundary. The site slopes moderately to steeply from the Bellevue Parade frontage to the rear western boundary. Improved with an older style dwelling at the time of sale. Comparison Slightly inferior location with a smaller land area to the subject property. Inferior yield. Overall, considered to be similar to the subject property on a rate per square metre of site area basis and superior on a rate per product basis. 35 P age

36 Sale 2 Address 57 Payne Street, Indooroopilly, QLD, Distance From Subject 2.1 kilometres to the west. JPM Valuers & Property Consultants Sale Date 17 th April Town Plan Brisbane City Plan Sale Price $922,500. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 810m² ($1,139/m²). Product 8 units ($115,312/unit). Comments Comparison Sold with Approval for the development of a three storey walk-up building providing 2 one bedroom units and 6 two bedroom units, with secure car parking at ground level (dated February 2013). Comprises two adjoining allotments forming a regular shaped internal site with frontage to Payne Street along its southern boundary. The site slopes up moderately from its Payne Street frontage. Improved with an older style, highset dwelling at the time of sale which has since been demolished. Construction of the 8 units has commenced on the site. Inferior location with a slightly larger land area to the subject property. Slightly superior yield. Overall, considered to be inferior to the subject property on both a rate per square metre of site area basis and a rate per product basis. Sale 3 Address 117 Indooroopilly Road, Taringa, QLD, Distance From Subject 600 metres to the south-west. JPM Valuers & Property Consultants Sale Date 15 th April Town Plan Brisbane City Plan Sale Price $1,075,000. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 819m² ($1,313/m²). Product *10 units ($107,500/unit). Comments Comparison Sold without Approval. *Development approval for a four storey building comprising 10 three bedroom units with either a single or double lock-up garage at ground level was granted in November We understand that the Body Corporate of the adjoining building to the north-east (Elysium Residences) subsequently lodged an appeal with the Planning and Environment Court based on the building's overall bulk and scale exceeding what is prescribed under its town planning designations. However, we are unaware of the status of this appeal. Comprises two adjoining allotments forming a generally regular shaped, internal site with frontage to Indooroopilly Road along its eastern boundary. The site slopes gently to moderately from its road frontage to the rear north-western corner of the site. Improved with an older style, midset dwelling at the time of sale which has since been demolished. Slightly inferior location with a slightly larger land area to the subject property. Superior yield. Overall, considered to be slightly superior to the subject property on a rate per square metre of site area basis and inferior on a rate per product basis. 36 P age

37 Sale 4 Address 16 Kings Road, Taringa, QLD, Distance From Subject 1.3 kilometres to the south-west. JPM Valuers & Property Consultants Sale Date 12 th September Town Plan Brisbane City Plan Sale Price $1,135,000. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 1,012m² ($1,122/m²). Product *12 units ($94,583/unit). Comments Comparison Sold without Approval. *Development Approval has since been gained (January 2015) for a four storey building providing 11 two and three bedroom units plus basement car parking and the retention of the original dwelling at the front of the site. Comprises a regular shaped internal site which rises up gently from the Kings Road frontage on its western boundary to the rear eastern boundary. The front of the site is retained above road height. Improved with an older style, high set dwelling which is subject to a demolition control. Inferior location with a larger land area to the subject property. Superior yield. Overall, considered to be slightly inferior to the subject property on a rate per square metre of site area basis and inferior on a rate per product basis. Sale 5 Address 17 Indooroopilly Road, Taringa, QLD, Distance From Subject 55 metres to the east. JPM Valuers & Property Consultants Sale Date 22 nd September 2013 (Advised Settled 03/2015). Town Plan Brisbane City Plan Sale Price $1,200,000. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 911m² ($1,317/m²). Product *8 units ($150,000/unit). Comments Sold without Approval. Comprises the amalgamation of two allotments that form a regular shaped parcel situated on the southern side of Indooroopilly Road. The site is currently improved with a two level brick and rendered masonry block dwelling in an average to below average condition. The parcel slopes from the north-west to the south-east corner and according to Brisbane City Council records, the property is partially affected by flooding from the adjacent Toowong Creek. *The property was approved in March 2015 for a three level residential development which will comprise 8 three bedroom units with secure car parking at ground level. The first and second floors consists of three apartments and the third level comprises two apartments. Comparison Similar location with a larger land area to the subject property. Slightly superior yield. Overall, considered to be slightly superior to the subject property on both a rate per square metre of site area basis and on a rate per product basis. 37 P age

38 Sale 6 Address 45 Clarence Road, Indooroopilly, QLD, Distance From Subject 2 kilometres to the south-west. JPM Valuers & Property Consultants Sale Date 17 th July Town Plan Brisbane City Plan Sale Price $1,320,000. Zoning Low Medium Density Residential. Area ($/m²) 683m² ($1,933/m²). Product 10 units ($132,000/unit). Comments Comparison Sold with Approval for a five level residential development comprising 8 two bedroom units and 2 three bedroom units with secure car parking at road height on the second floor (granted December 2013). Comprises a regular shaped internal site that falls moderately to steeply from road height to the rear western boundary. Additionally, the site has a slight cross fall from north to south. Improved with an older style dwelling at the time of sale. Slightly inferior location with a smaller land area to the subject property. Superior yield. Overall, considered to be superior to the subject property on a rate per square metre of site area basis and inferior on a rate per product basis. Sale 7 Address 31 Brasted Street, Taringa, QLD, Distance From Subject 750 metres to the south-west. JPM Valuers & Property Consultants Sale Date 24 th October Town Plan Brisbane City Plan Sale Price $1,550,000. Zoning Low Medium Density Residential (2 or 3 Storey Mix). Area ($/m²) 1,214m² ($1,277/m²). Product *18 units ($86,111/unit). Comments Sold without Approval. *Development approval was gained in July 2014 for the development of a four level building comprising 18 one, two and three bedroom units. Comprises the amalgamation of three adjoining allotments forming a generally regular shaped internal site which slopes up from the Brasted Street road frontage to the rear boundary. Comparison Slightly inferior location with a larger land area to the subject property. Superior yield. Overall, considered to be similar to the subject property on a rate per square metre of site area basis and inferior on a rate per product basis. 38 P age

39 A summary of the above sales evidence is tabled below: NO. ADDRESS SALE DATE SALE PRICE LAND AREA (m 2 ) SOLD WITH APPROVAL RATE ($/m²) RATE ($/UNIT) 1 29 Bellevue Parade, Taringa 06/02/2014 $810, No $1,227 *$202, Payne Street, Indooroopilly 17/04/2014 $922, Yes $1,139 $115, Indooroopilly Road, Taringa 15/04/2014 $1,075, No $1,313 *$107, Kings Road, Taringa 12/09/2014 $1,135,000 1,012 No $1,122 *$94, Indooroopilly Road, Taringa 22/09/2013 $1,200, No $1,317 $150, Clarence Road, Indooroopilly 17/07/2014 $1,320, Yes $1,933 $132, Brasted Street, Taringa 24/10/2013 $1,550,000 1,214 No $1,277 *$86,111 Note: * Denotes yield based on Development Approval gained following site purchase Sales History Government records indicate that the site was purchased by the applicant/borrower on the 12 th $950,000. of September 2013 for 10.6 Direct Comparison Approach In using the direct comparison method to assess the subject development site, we have had regard to the available sales evidence detailed in Section 10.4 above, in addition to our valuation considerations. Based on these parameters, we have assessed the current market value of the subject development site on an "as is" basis and exclusive of GST as follows: COMPONENT ASSESSMENT $1,250/m² of site area (lower range) Adopt $980,000 $1,300/m² of site area (upper range) Adopt $1,020,000 7 $135,000/unit (lower range) Adopt $945,000 7 $145,000/unit (upper range) Adopt $1,015,000 VALUATION Adopt $1,000,000 This assessment reflects approximately $1,276/m² of site area (784m 2 ), approximately $52,632/approved bedroom (19 approved bedrooms) and approximately $142,857/approved unit (7 units) Residual Hypothetical Development Approach Given the subject property s location, topography, land area, views and shape characteristics, in addition to it being approved for a low to medium rise home unit development, it is considered the Residual Hypothetical Development approach should be used in helping to assess the subject property s site value. Under this approach we have prepared a cash flow model for the proposed apartment development (refer to Annexure 6). This cash flow model notionally develops the subject land, having regard to the estimated Gross Realisation, before deducting the costs of development (professional fees, sales costs, construction costs and finance costs etc.) over the assumed development timeframe and our analysed sales period. By adopting a pre-determined profit and risk margin, the feasibility analysis provides a residual land value. The costs and timeframe can have a significant impact on the financial viability of a development and accordingly, our cash flow model. As such, we reserve the right to review our valuation should the final costs, their distribution and/or timing of the project vary from those adopted herein. Hypothetical Development Cash Flow Model In undertaking our analysis we have utilised the following inputs for the proposed development: Development Product Development / Hold Period Marketing & Sales Costs Acquisition Costs (Stamp Duty & Legals) Interest Charges CASH FLOW INPUTS 7 Residential Apartments 14 months (10 months of construction) 4.40% (including GST) 5.50% (including GST) 6.75% p.a. (assumes 100% debt funding) 39 P age

40 Gross Realisation Estimate Our gross realisation estimate for the proposed residential apartments is based on our knowledge of existing low to medium rise apartment sales evidence from surrounding and comparable localities. Hurdle Rate Our cashflow model assesses the subject property s value in relation to the development margins or internal rates of return considered to be relevant for a low to medium rise apartment development of a similar scale to the proposed development of the subject property. Suitable development returns have been established by the analysis of similar type developments and our market knowledge. Given the size, scale, location and gross realisation assessment of the proposed development, we consider a minimum development margin after interest and on a fully-funded basis in the order of 20% to be appropriate. The internal rate of return (IRR) for a project of this scale and time frame is not considered to be as prominent a key indicator, as many developers for projects of this nature and timeframe are predominantly concerned with the development profit/development margin. Based on the above, a summary of our cash flow analysis is provided below: DEVELOPMENT FINANCIALS SUMMARY Gross Realisations (including GST): - 7 Residential Units $5,680,000 - Less Selling Costs (including GST) ($249,920) - Less GST Payable on Sales ($430,000) - Add Input Tax Credit on Selling Costs $22,720 ($657,200) NET REALISATIONS $5,022,800 - Less Development Costs (excluding GST) ($2,850,089) - Less Adopted Land Purchase Price (excluding GST) ($1,100,000) - Less Acquisition Costs - Stamp Duty & Legals (including GST) ($60,500) - Add Input Tax Credit on Acquisition Costs $5,500 ($4,005,089) DEVELOPMENT PROFIT (pre-interest) $1,017,711 - Less Interest ($180,328) DEVELOPMENT PROFIT (POST-INTEREST) $837,383 Note: Some of the above figures may have been rounded to the nearest $1. Refer to Annexure 6 for a full copy of our feasibility assessment. Residual Site Valuation Based on the comments earlier in this section of the report and utilising the Residual Hypothetical Development approach, we consider an appropriate residual land value for the subject property to be as follows: BASIS OF ASSESSMENT AMOUNT AMOUNT Residual Site Value (exclusive of GST) $1,100,000 Based on the adopted residual land value of $1,100,000 (excluding GST), the proposed residential development reflects the following: KEY RETURN METRICS Maximum Exposure ($4,181,230) Payback Period 14 Months Development Profit (post-interest) $837,383 Development Profit Per Apartment (post-interest) $119,626 Development Margin (pre-interest) 25.41% Development Margin (post-interest) 20.01% Our cash flow model has been prepared for valuation purposes only. We have adopted certain cash flow projections/forecasts based upon our reasonable investigations and enquiries that include forecasts of estimated future income and expenses. These forecasts have been based on the information and assumptions referred to in our valuation report and where information has been provided by others, we have indicated who has provided that information. 40 P age

41 Despite this information having been accepted as a basis for our valuation, we do not adopt or verify the reliability, accuracy, correctness or completeness of this information. The achievement and/or sustainability of financial projections will, by their very nature, be affected by a variety of fluctuating economic and property market conditions of the type that are not necessarily capable of being known or predicted at this or any given time. Therefore, dependent upon other future occurrences that cannot be foreseen, the actual results/value may vary considerably from the value contained herein. Accordingly, whilst all reasonably ascertainable attempts have been made to verify the likelihood of such forecasts/projections being achieved and/or sustained, in addition to being subject to our comments above, the valuer does not warrant nor assume responsibility for the ultimate correctness of those projections given the possibility of unforeseen events affecting such projections/forecasts. Therefore, and to that extent, this valuation must be qualified and read within the context of these warnings and assumptions Site Valuation Summary Having regard to both the direct comparison and the hypothetical development methods of valuation, we have assessed the current market value of the subject property on an "as is" basis and exclusive of GST for first mortgage security purposes (only) as follows: BASIS OF ASSESSMENT VALUATION Direct Comparison Approach $1,000,000 Residual Hypothetical Development Approach $1,100,000 Reasonable Selling Period We would envisage a likely selling period of approximately three (3) to six (6) months for the subject development site. This timeframe takes into consideration prevailing market conditions, in addition to the current offering with development approval. Our selling period also assumes the implementation of an appropriate marketing campaign and promotional budget, undertaken by professional real estate operatives active and experienced in the sale of property similar to the subject property. We are unable to predict future market conditions and the instructing/reliant party should not assume this assessment of selling period would remain unchanged should market conditions alter. Furthermore, should the property be sold or required to be sold under forced conditions or in a short timeframe, there may be a potentially significant discount achieved to the site assessments provided within this report. It is important to note that we consider a prospective purchaser of a development site would be more likely to rely upon a Residual Hypothetical Development method as compared with the Direct Comparison method. The Hypothetical Development method reflects the expectations of a purchaser in relation to site yield, selling prices, development timing, development and infrastructure costs, rates of sale and profit margins etc. This is as compared to the Direct Comparison method, which is the price per product or hectare/square metre of land area that other developers have paid in the market place. The Direct Comparison method may not fully reflect the individual attributes of each site. 41 P age

42 11 Valuation Having regard to the assumptions and qualifications contained within the body of this report, we have assessed the market value of the subject property for First Mortgage Security Purposes (only) on an exclusive of GST basis as follows: BASIS OF ASSESSMENT Site "As Is" (Direct Comparison Method) Site "As Is" (Residual Hypothetical Development Method) Gross Realisation - 7 Apartments ("As if Complete") MARKET VALUATION $1,000,000 $1,100,000 $5,250,000 Jason Matigian Director Certified Property Valuer (CPV) Associate Australian Property Institute (AAPI) Queensland Registration 2735 Carey O'Dowd Director Certified Property Valuer (CPV) Associate Australian Property Institute (AAPI) Queensland Registration 3735 Disclaimers This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period (including as a result of general market movements or factors specific to the particular property). We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of the above comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of ninety (90) days from the date of the valuation, or such earlier date if you become aware of any factors that have any affect on the valuation. It should be noted that the 90 day reliance period does not guarantee the value for that period. The assessment always remains a valuation as at the date of valuation only. This valuation report is for the use of and may be relied upon only by La Trobe Financial Services Pty Ltd and La Trobe Financial Asset Management Limited (for first mortgage security purposes only) and no other party is entitled to use or rely upon it and the valuer does not assume any liability or responsibility to any other party who does so rely upon the valuation without the express written authority of JPM Valuers and Property Consultants. This valuation is prepared on the basis that the Lender named in the valuation report (and no other) may rely on the valuation for mortgage finance purposes provided that the Lender has complied with its own lending guidelines, as well as prudent finance industry lending practices and has considered all prudent aspects of credit risk for any potential borrower, including the borrower s ability to service and repay any mortgage loan. Furthermore, the valuation is prepared on the assumption that the Lender is providing mortgage financing at a conservative and prudent loan to value ratio. The valuer accepts no liability whatsoever if prudent lending practices fail to be strictly observed and/or if the lender relies solely on this valuation, and no other criteria, to advance loan funds. Neither the whole nor any part of this valuation or any reference thereto may be included in any published documents, circular or statement, nor published in part or full in any way, without written approval of the form and context of which it may appear. Only a signed original of this valuation should be relied upon and no responsibility will be accepted for photocopies of the report or signatures to the report. Notwithstanding the foregoing, the instructing/reliant party agrees that in the event that it does communicate to a third party the whole or any part of this Valuation or the Valuation Services, it shall also communicate to that third party the information has been solely provided to them only to indemnify JPM. 42 P age

43 ANNEXURES 1. Letter of Instruction 2. Registered Plan Draft Survey Plan Decision Notice (Development Approval) 5. Approved Floor and Elevation Plans 6. Cash Flow Analysis. 43 P age

44 Annexure 1a Letter of Instruction 44 P age

45 Annexure 1b Letter of Instruction 45 P age

46 Annexure 2a Registered Plan P age

47 Annexure 2b Registered Plan P age

48 3a Draft Survey Plan P age

49 3b Draft Survey Plan P age

50 3c Draft Survey Plan P age

51 Annexure 4a Decision Notice 51 P age

52 Annexure 4b Decision Notice 52 P age

53 Annexure 4c Decision Notice 53 P age

54 Annexure 4d Decision Notice 54 P age

55 Annexure 4e Decision Notice 55 P age

56 Annexure 4f Decision Notice 56 P age

57 Annexure 4g Decision Notice 57 P age

58 Annexure 4h Decision Notice 58 P age

59 Annexure 4i Decision Notice 59 P age

60 Annexure 4j Decision Notice 60 P age

61 Annexure 4k Decision Notice 61 P age

62 Annexure 4l Decision Notice 62 P age

63 Annexure 4m Decision Notice 63 P age

64 Annexure 4n Decision Notice 64 P age

65 Annexure 4o Decision Notice 65 P age

66 Annexure 4p Decision Notice 66 P age

67 Annexure 4q Decision Notice 67 P age

68 Annexure 4r Decision Notice 68 P age

69 Annexure 4s Decision Notice 69 P age

70 Annexure 4t Decision Notice 70 P age

71 Annexure 4u Decision Notice 71 P age

72 Annexure 4v Decision Notice 72 P age

73 Annexure 5a Approved Floor and Elevation Plans 73 P age

74 Annexure 5b Approved Floor and Elevation Plans 74 P age

75 Annexure 5c Approved Floor and Elevation Plans 75 P age

76 Annexure 5d Approved Floor and Elevation Plans 76 P age

77 Annexure 5e Approved Floor and Elevation Plans 77 P age

78 Annexure 5f Approved Floor and Elevation Plans 78 P age

79 Annexure 5g Approved Floor and Elevation Plans 79 P age

80 Annexure 5h Approved Floor and Elevation Plans 80 P age

81 Annexure 6a Cash Flow Model 29 Indooroopilly Rd, Taringa MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH TOTAL JPM-2091 (March 2015) Sales 7 - Units 7 7 Total Rate of Sale 7 Settlements - Units 7 Total Settlements 7 GROSS REALISATIONS: UNITS AVG RATE - Units 7 $811,429 $5,680,000 TOTAL GROSS REALISATION $5,680,000 Less Selling Costs Residential (Incl. GST) 4.40% ($249,920) Input Tax Credit on Selling Costs 10.00% $22,720 Less Allowance for GST Payable (Margin Scheme) ($61,429) ($430,000) NET REALISATIONS $5,022, % 6.0% 7.0% 10.0% 14.0% 16.0% 14.0% 11.0% DEVELOPMENT COSTS (Excl. GST): % - Construction Costs ($2,464,339) ($123,217) ($147,860) ($172,504) ($246,434) ($345,007) ($394,294) ($345,007) ($271,077) - Professional Fees ($83,328) ($4,166) ($5,000) ($5,833) ($8,333) ($11,666) ($13,333) ($11,666) ($9,166) - Contributions & Charges $ 10,000 ($150,940) - Contingency ($134,482) ($6,724) ($8,069) ($9,414) ($13,448) ($18,827) ($21,517) ($18,827) ($14,793) - Land Holiding Costs ($17,000) ` ($ 5,100) ($ 5,100) - GST Allowance 10.00% ($268,215) ($13,411) ($16,093) ($18,775) ($26,821) ($37,550) ($42,914) ($37,550) ($29,504) - Reclamation of GST (two month lag) $268,215 $13,411 $16,093 $18,775 $26,821 $37,550 $42,914 TOTAL DEVELOPMENT COSTS ($2,850,089) ($147,518) ($177,022) ($198,215) ($278,943) ($394,276) ($450,337) ($375,501) ($281,626) LAND ACQUISISTION COSTS: - Land Valuation ($1,100,000) ($1,100,000) - Legals & Stamp Duty 5.50% ($60,500) ($60,500) - Input Tax Credit on Acquisition Costs 10.00% $5,500 $5,500 TOTAL COSTS (Land & Development) ($4,005,089) ($1,160,500) ($147,518) ($171,522) ($198,215) ($278,943) ($394,276) ($450,337) ($375,501) ($281,626) Monthly cash flow $1,017,711 ($1,160,500) ($147,518) ($171,522) ($198,215) ($278,943) ($394,276) ($450,337) ($375,501) ($281,626) Interest 6.75% ($180,328) ($6,528) ($7,394) ($8,401) ($9,563) ($11,186) ($13,467) ($16,075) ($18,278) QUARTERLY CASH FLOW - after interest $837,383 ($1,160,500) ($154,046) ($178,916) ($206,615) ($288,506) ($405,462) ($463,803) ($391,576) ($299,904) Cumulative cash flow ($1,160,500) ($1,314,546) ($1,493,462) ($1,700,078) ($1,988,584) ($2,394,046) ($2,857,849) ($3,249,425) ($3,549,329) PROFIT - after interest $837,383 DEVELOPMENT MARGIN - before interest 25.41% DEVELOPMENT MARGIN - after interest 20.01% MAXIMUM EXPOSURE ($4,181,230) PAYBACK PERIOD - Months P age

82 Annexure 6b Cash Flow Model 29 Indooroopilly Rd, Taringa MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH MONTH TOTAL JPM-2091 (March 2015) Sales - Units 7 2 pre-sales Total Rate of Sale Settlements - Units Total Settlements GROSS REALISATIONS: UNITS AVG RATE - Units 7 $811,429 $5,680,000 $1,622,857 $1,622,857 $811,429 $811,429 $811,429 TOTAL GROSS REALISATION $5,680,000 $1,622,857 $1,622,857 $811,429 $811,429 $811,429 Less Selling Costs Residential (Incl. GST) 4.40% ($249,920) ($71,406) ($71,406) ($35,703) ($35,703) ($35,703) Input Tax Credit on Selling Costs 10.00% $22,720 $6,491 $6,491 $3,246 $3,246 $3,246 Less Allowance for GST Payable (Margin Scheme) ($61,429) ($430,000) ($122,857) ($122,857) ($61,429) ($61,429) ($61,429) NET REALISATIONS $5,022,800 $1,551,451 $1,428,594 $659,360 $720,788 $717,543 ($58,183) $3, % 8.0% DEVELOPMENT COSTS (Excl. GST): % - Construction Costs ($2,464,339) ($221,791) ($197,147) - Professional Fees ($83,328) ($7,500) ($6,666) - Contributions & Charges $ 10,000 ($150,940) ($150,940) - Contingency ($134,482) ($12,103) ($10,759) - Land Holiding Costs ($17,000) ($ 5,100) ($ 1,275) ($ 425) - GST Allowance 10.00% ($268,215) ($24,139) ($21,457) - Reclamation of GST (two month lag) $268,215 $37,550 $29,504 $24,139 $21,457 TOTAL DEVELOPMENT COSTS ($2,850,089) ($233,083) ($357,465) $24,139 $20,182 ($425) LAND ACQUISISTION COSTS: - Land Valuation ($1,100,000) - Legals & Stamp Duty 5.50% ($60,500) - Input Tax Credit on Acquisition Costs 10.00% $5,500 TOTAL COSTS (Land & Development) ($4,005,089) ($233,083) ($357,465) $24,139 $20,182 ($425) Monthly cash flow $1,017,711 ($233,083) ($357,465) $1,575,591 $1,448,776 $659,360 $720,788 $717,118 ($58,183) $3,246 Interest 6.75% ($180,328) ($19,965) ($21,388) ($23,519) ($14,789) ($6,723) ($3,052) QUARTERLY CASH FLOW - after interest $837,383 ($253,048) ($378,854) $1,552,071 $1,433,987 $652,637 $717,736 $717,118 ($58,183) $3,246 Cumulative cash flow ($3,802,377) ($4,181,230) ($2,629,159) ($1,195,172) ($542,535) $175,202 $892,320 $834,137 $837,383 PROFIT - after interest $837,383 DEVELOPMENT MARGIN - before interest 25.41% DEVELOPMENT MARGIN - after interest 20.01% MAXIMUM EXPOSURE ($4,181,230) 14 PAYBACK PERIOD - Months P age

83 CONTACT DETAILS Jason Matigian Carey O Dowd jm@jpmvaluers.com.au cod@jpmvaluers.com.au GENERAL DISCLAIMERS, TERMS AND CONDITIONS Full Disclosure The Instructing/Reliant Party acknowledges that this Valuation and the Valuation Services have assumed that a full disclosure of all relevant information has been made. We will not assume any liability or negligence where a full disclosure of relevant information has not been made. Title & Easements A title search on the property has been completed. The valuation is issued on the understanding that no dealings or changes have occurred since the date of search. This valuation has been prepared on the understanding that no easements, rights of way or encroachments exist by or on the subject property other than those detailed herein. We have not sighted boundary markers and for the purposes of this valuation, have assumed that all improvements have been erected within the legal confines of the site and that no adjoining improvements encroach onto the boundaries. Town Planning Information has been obtained verbally and from the Council website with this valuation completed on the assumption that the information is correct. The Town Planning information should be checked by the obtaining of a Certificate under from the relevant authorities. We will not assume any liability or negligence for our reliance on the Local Authority's advice. Sales Data The sales evidence used herein has been obtained from reliable sources including PDS Live and RP Data (sales data produced from the Land Titles Offices and Valuer General s Department). We have also, where possible, had discussions with Real Estate Agents to undertake a process of verification of the data. Should it be revealed that any of the sales information stated herein, upon which we have relied, is incorrect or misleading, we reserve the right to reconsider our opinion of Market Value as determined herein. Where sales data has been obtained from the PDS Live database or RP Data, we have considered that to be the most current sales data available. However, sales which have occurred during the course of the last three months or sales which have been the subject of deferred settlement terms may not necessarily appear immediately on official records. Accordingly with this type of transaction, we rely on separate enquiries to attempt to obtain all available sales data. Should data become available after submission of our valuation that may affect our valuation outcome; we reserve the right to review the relevant information and our valuation. In certain instances, it has not been possible for us to inspect sale evidence properties internally; however they have been externally inspected for the purposes of carrying out our valuation. Where there is a paucity of directly comparable sales evidence in a locality, it is necessary for us to either consider other comparable localities and/or to consider sales evidence which is outdated in the immediate area to gain an understanding of the historical sales value base for the area. In analysing the sales evidence referred to herein, it is noted that we have attempted to ascertain whether or not the sale price is inclusive or exclusive of Goods and Services Tax (GST). Apropos sales evidence, it is emphasised that official records do not currently differentiate between or record whether or not the sale price is inclusive or exclusive of GST. Where we have not been able to verify whether or not GST is included in the sale price, we have assumed that the Land Titles Office record sales price is exclusive of GST. Should this not be the case for any particular sale used as evidence, we reserve the right to reconsider our valuation. Environmental Risks We have endeavoured to comment on all areas of Environmental concern based on our superficial inspection. An actual environmental audit may reveal matters that affect our valuation herein that were not readily discernible at the time of inspection. In such an event, we reserve the right to reconsider our findings herein. The Instructing/Reliant Party acknowledges and recognises that JPM is not expert in identifying environmental hazards and compliance requirements affecting properties. We have, however, endeavoured to superficially identify all matters of environmental concern and the affect they might have on the value of the property. However, we will not be held liable nor responsible for failure to identify all such matters of environmental concern and the impact which any environmental related issue has on the property and its value including loss arising from site contamination or the non-compliance with any environmental laws or costs associated with the clean-up of a property in which an environmental hazard has been recognised (including action by the relevant Environmental Protection Authority to recover clean up costs pursuant to the relevant Environmental Protection Act). Accuracy of Information We advise that any objective information, data or calculations set out in the Valuation will be accurate so far as is reasonably expected from a qualified and experienced valuer, reflecting due skill, care and diligence. However, we have not independently verified third party information, adopted it as our own, or accepted its reliability. If any of the information provided by others and referred to in the valuation report is incorrect, it may have an impact on the valuation. The valuation is provided on the proviso that the Instructing/Reliant party accepts this risk. Limited Liability Liability limited by a scheme approved under professional standards legislation. This scheme does not apply in Tasmania. Pest and Termite Infestation The Instructing/Reliant party acknowledges and recognises that the valuer is not a pest inspector and/or pest expert. The absence of pests, including termites, can only be confirmed by a suitably qualified expert after a comprehensive inspection and the use of specialist equipment. Should any pest or termite infestation concerns become apparent, the valuer should be consulted and the valuer reserves the right to reassess any affect on the value stated in this report. Asbestos Please note we are not qualified to conclusively determine the existence or non-existence of asbestos and recommend you satisfy yourself in this regard. The presence of asbestos and changing community attitudes have the potential to reduce future marketability and value, however this is a common building product in houses of this era. The valuer has had consideration for the existence of asbestos in this assessment. 83 P age

84 84 P age