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Port Macquarie Development

PORT MACQUARIE DEVELOPMENT
INVESTOR UPDATES


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6th September 2018

Hi Mike,

All is going as expected with Port, not a great deal to update you on as all our recent additional information requested by Council is still being assessed. 

I did phone Council’s planning officer earlier in the week just to nudge them along and see if they required anything else. It is quite possible that we “should” have an approval mid to late October as long as Council’s internal engineering department reports internally in a timely manner. 

I have also been speaking with suitable architects and builders for the next phase of development which is to design and build specific house land packages over approximately 50% of the site. This means a higher density development. 

Once I have obtained approval for the current subdivision application, I will be applying to Council for an “integrated” development application to increase Lot yield. This is always a conservative approach to build value and certainty step by step.

I am currently overseas in the UK and Europe returning 22nd October and would consider inviting your investors to participate in the second development phase to further strengthen our relationships for the future. 

Broadly speaking, investor participation would include settlement of the site.

Then there would be some bank funding for construction of subdivision roads and services. Return of capital and profits to investors would be generated from the sale of house and land packages. Note: I will need to discuss the timing with you, but typically under a house land package, the purchaser would settle the block of land with developer/investor after roads and services constructed eg registration of land, then the purchaser settles the house with builder upon completion of home. 

The benefits of this process is the developer does not pay for home construction and receives principal/profits back upon land registration instead of house completion. 

I can speak to you with more accuracy upon my return. 

Regards,

Rob Scott

Sent from my iPhone - “in rural England 😎

MICHAEL'S COMMENT


Everything seems to be on track so thanks for that Rob. I'm looking forward to producing the 'roll over' offer which, in a nutshell, means existing investors will be invited to exchange their old unit for a unit in the new offer. 

For example, If you invested $100,000 in "Port part 1", you would be invited to exchange your current unit valued at $130,000 (capital plus 30% dividend) for a new unit in "Port part 2" offering, say, 20%* on your $130,000. The returns in the new offer would be derived from selling off the first few blocks and not the sale of the entire project.

The net result would be a 56% return in this example. Not bad 🙂

*for illustrative purposes only. Final offer not yet determined.

PROJECT HIGHLIGHTS

Hotspotcentral raised the capital to fund the cost of council approvals and other costs for a 40 lot land subdivision in one of the last infill development sites in the highly prized area known as 'Transit Hill' in Port Macquarie, NSW.

According to the town planner assisting with this matter: 

"This site is considered to be amongst the best, if not the best site still available for residential development in Port Macquarie." - Graham Burns, Land Dynamics (town-planner, established in Port Macquarie for over forty years) Source

The site is zoned accordingly for detached housing with a minimum yield of 40 lots expected based on pre-lodgement discussions recently.

On offer is a 30% fixed dividend (net return) paid out of the equity released post DA approval (expected) May 2018.

MINIMUM INVESTMENT

$50k

MINIMUM FUND RAISING

$300,000

MAXIMUM FUND RAISING

$750,000

TIME TO COMPLETION

8 months (estimated)

FIXED DIVIDEND RETURN

30%

TYPE OF INVESTMENT

Preference ​Unit

PROJECT SUMMARY & EXIST SCENARIOS
Please note: the information below is superseded by the official information memorandum subsequently 

PART 1 - DISCUSS SITE PLAN AND OFFER WITH ROB SCOTT (DEVELOPER) AND MICHAEL FULLER

Located in the sought-after pocket called Transit Hill in Port Macquarie with the site being the last in-fill development land subdivision in central Port Macquarie.

Homes sell for more than $1,000,000 in the "Transit Hill" area.

According to Domain.com.au, Port Macquarie is one of the fastest growing areas in NSW. No longer just attracting retirees, families are flocking here for the great schools and friendly communities.

Across Australia, it is the fourth most searched for town on domain.com.au.Demand is not just from home-buyers but those looking for a great investment. Most price ranges are selling fast and occasionally sight-unseen. It’s certainly a seller’s market.


The DA approvals are expected in May 2018 at which point the developer will either on sell the site or refinance the equity out to repay the investors their capital of $750,000 plus 30% fixed dividend.

The amount borrowed depends on the valuation of the approved site and the LVR offered. This video explores the options and the assumptions.

PART 2 - SITE PLAN POST COUNCIL PRE-LODGEMENT MEETING

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