15th February 2018

Email From: Charles Nee

Dear Investors,

Welcome to the 1^st monthly update for 578 Sherwood Road, Sherwood being the project also known as “Kauri”. 

Our original plans were to finalise fund raising by September 2017 and commence construction. As we did not achieve full subscription of our Fund Raise until November 2017, we were not able to commence Construction in time before Christmas.

Furthermore, we decided in November to amend plans and Finishes of the Project in order to improve our product offering to the Market. There were a number of important reasons for this decision which are detailed as follows:

1. We identified areas we could improve the Interior Plans including Living areas and Kitchen which would improve the use of space, storage light and flow of the apartments. These were amended with the help of a multi-awarded and internationally renowned architect (Nigel Fitton of Spatial Environs)
2. Our original selection and level of finishes which were chosen in 2016 are now outdated. We appointed an Interior Designer (external to the original Architects) which assisted us in contemporising the look of the Apartments, especially in spaces such as the Kitchen, Bathroom and Lobby areas
3. In observing the Market, the above changes helped our aim to provide a better product that was responsive to the market place. This being First Home Buyers seeking Owner Occupier Units that provided all the benefits of location without the disadvantages of apartment living

 In order to provide a comparison of the changes we have made, I have attached Original Renders and Schedule of Finishes originally proposed by the Architect vs. New Renders and Schedule of Finishes that we will be adopting. These changes were made knowing that they would extend the completion time of the project. However, we feel the final result will far outweigh the few months in delays. We have been working hard on this in order to achieve the improvements we wanted in as fast as possible time.

These changes will require us to resubmit to Council and complete new BA (Building Approval) permits, however as there are not significant changes to the building, the approvals for these amendments are expected to take 4-5 weeks. The end result will see a proposed completion date of April 2019. Please see attached Program Schedule detailing the Timeline for the Project.

 I will update you all again mid-monthly again from March.

15th April 2018

Email From: Charles Nee

This is the second update for the calendar year 2018.

Project delivery
I am generally very happy with the progress of the project since I last wrote to everyone in February. A lot has progressed that I am very pleased with.

Firstly, I would like to introduce Adam Pennisi to all our investors (www.linkedin.com/in/AdamPennisi). Adam is a highly experienced civil engineer. Adam has come on board as a development consultant and project manager.

Adam has previously accumulated experience delivering over $700 million dollars of civil infrastructure projects including projects such as Governor Coal Mine expansion, Brisbane Airport new runway preliminary works and the Amberley RAAF Base expansion, among many others. Adam’s civil engineering and project management experience will be a big asset in helping me to complete and deliver this current project.

Adam also separately owns his own property development company, ADPEN Pty Ltd (www.adpen.com.au). In this capacity Adam has personally over $80 million of development projects currently in his development pipeline. I have personally known Adam in a professional manner for a period of about 2 years and during that time I have seen the results he has achieved for his clients.

Project Schedule 
Last month I provided a project schedule which I will continue to refer to as we progress forward.

The Project Schedule timeline included the commencement for construction by mid July 2018. I have no reason to alter this date and we are still on target to achieve our forecast commencement. In the intervening period we have a lot of work to do.
We are currently 4 weeks from completing full project documentation for tender quotes. This process is being overseen by Adam Pennisi and a engineering and drafting team under Adam’s direct supervision.

The documentation team’s key responsibility is to ensure the building is completed on budget and on time. I expect that this is exactly what will happen.
We have also opened preliminary discussions with several competent and experienced builders to instigate competitive fixed price tenders for construction.

Design of the building
In my February email I made reference to our upgraded and improved architectural design for the project. This was an important and necessary step. It allowed us to reduce inefficiencies in the design and tighten our construction budget. It also allowed us to provide more saleable areas in many of the apartments.

So, in summary, we were able to improve cost efficiencies and provide greater value to investors. This process of improved building efficiency and greater retail value is still in train. We have engaged new structural engineer consultants to finalise this process and I am very happy at how this is progressing. The architectural modifications to the building that I have described above has currently been submitted to council through a change application request. All of these changes improve the aesthetics, use and value of the building, gaining a significant improvement to the value when comparing the previous design.

Summary 
I am very happy with the progress that has occurred since my last email to you. I am especially happy that we have brought on additional technical assistance and I am looking forward submitting my next progress report to you in May.