information memorandum - hewison...brandon park shopping centre is located on a “gateway site”...

INFORMATION MEMORANDUMNEWMARK BRANDON PARK CORE PLUS FUND

29 MARCH 2018

Brandon Park, Wheelers Hill

1INVESTMENT SUMMARY

P.09

6FORECAST FINANCIAL INFORMATION

P.51

2DETAILS OF THE OFFER

P.15

7TAX

P.57

CONTENTS3PROPERTY INFORMATION

P.23

8BENEFITS AND RISK

P.61

4MARKET OVERVIEW

P.33

9FEES AND OTHER COSTS

P.65

5NEWMARK AND MANAGEMENT

P.45

10OTHER INFORMATION

P.69

P. 4 P. 5

This information memorandum (IM) is prepared by Newmark Capital ACN 126 526 690 ASFL 319 372 (Newmark) as the trustee (Trustee) of the Newmark Brandon Park Core Plus Fund (Trust). Newmark is the issuer of this IM and of units in the Trust (Units). Newmark Property Funds Management Pty Ltd ACN 152 323 629 is the manager of the Trust (Manager). The Trustee and the Manager have the same ownership.

You should read this IM in its entirety before making a decision about whether to invest in the Trust. This IM sets out general information about the Trust for the recipient of this IM (Recipient) to consider in making a decision as to whether the Recipient should investigate a possible investment in the Trust.

This IM is supplied personally to the Recipient of this IM on the conditions set out below, which are expressly accepted and agreed to by the Recipient, in part consideration of the supply of the IM, as evidenced by the retention by the Recipient of this IM. If these conditions are not acceptable the IM must be returned immediately.

This IM does not constitute an offer to sell or the solicitation of an offer to buy any securities or other financial products other than Units in the Trust or an offer or solicitation in any circumstances in which such an offer or solicitation would be unlawful.

This IM does not purport to contain all the information that may be required to evaluate any transaction in relation to the Trust (or would be required if it were a product disclosure statement). Before investing, the Recipient and intending investors should conduct their own independent review, investigations and analysis of the Trust and of the information contained, or referred to, in this IM and, where necessary, consults professional advisors. None of Newmark, the Manager or their related entities and their respective directors, officers, employees, advisers, associates or representatives (Newmark Group) make any representation or warranty, express or implied, as to the accuracy, reliability or completeness of the information contained in this IM or subsequently provided to the recipient by any of members of the Newmark Group,

including, without limitation, any historical financial information, estimates and projections and any other financial information derived there from, and nothing contained in this IM is, or shall be relied upon, as a promise or representation, whether as to the past or the future.

All statements of opinion and/or belief in this IM and all views expressed and all projections, forecasts or statements relating to expectations regarding future events or possible future performance of the Trust represent Newmark’s and the Manager’s assessment and interpretation of information available as at the date of this IM. No representation is made or assurance given that such statements views, projections or forecast are reasonable or correct or that the objectives or prospective returns of the Trust will be achieved. Recipients must determine for themselves what reliance (if any) they should place on such statements, views, projections or forecasts and no responsibility is accepted by the Newmark Group. Recipients are strongly advised to conduct their own due diligence.

An investment in the Trust does not represent a deposit with or a liability of any member of the Newmark Group. An investment in the Trust is subject to investment risk, development risk and other risks including possible delays in repayment and loss of income or capital invested.

None of the Newmark Group in any way guarantees the performance of the Trust or any return of capital. Recipients acknowledge that the Trust will invest in property which has a long term and illiquid nature.

Except insofar as liability under any law cannot be excluded, the Newmark Group takes no responsibility for the information contained in this IM or in any other way for errors or omissions (including responsibility to any persons by reason of negligence).

This IM has been prepared as at 29 March 2018 (Preparation Date). Its delivery at any time after the Preparation Date does not imply that the information contained in it is accurate, timely and complete at any time subsequent to the Preparation Date. Newmark may in its absolute discretion, but without being under any obligation to do so, update or supplement this IM. Any further information will be provided subject to these terms and conditions.

IMPORTANT NOTICE

Newmark has not authorised any person to give any information nor make any representation in connection with the Trust or this invitation, which is not contained in this IM and any such information or representation not contained in it must not be relied upon as having been authorised by or on behalf of Newmark.

Newmark reserves the right to evaluate any offers to invest in the Trust and to reject any or all offers submitted, without giving reasons for the rejection. The Newmark Group is not liable to compensate the Recipient or any intending acquirer for any costs or expenses incurred in reviewing investigating or analysing any information in relation to the Trust, in making an offer or otherwise.

The information in this IM is of a general nature only. In preparing this IM Newmark did not take into account any person’s needs, objectives or financial situation. Before acting on information contained in this IM you should consider whether it is appropriate for you. Recipients should seek professional investment, legal and taxation advice as to whether an investment in the Trust is appropriate for them having regard to their personal objectives, financial situation and needs. The information in this IM is provided personally to the Recipient as a matter of interest only. It does not amount to a recommendation either expressly or by implication with respect to any investment in the Trust. The contents of this IM are:

• not intended to be disclosed to any person other than the person to whom the IM has been provided to by Newmark;

• strictly confidential;

• not to be disclosed by any Recipient to any other person or entity, whether an associate or related corporation of the recipient, other than an employee or professional adviser to the Recipient and then only for the sole purpose of the Recipient considering and taking advice as to whether it will apply for Units in the Trust; and

• not to be reproduced, either in whole or in any part or parts, without Newmark’s prior written consent and, if such written consent is given, only in accordance with that consent.

All references to ‘$’ or ‘AUD’ are to Australian dollars, unless the context otherwise requires.

29 March 2018

Dear Investor,

Newmark Capital Limited is pleased to present you with the opportunity to invest in a high calibre property asset – the Brandon Park Shopping Centre (Centre, Property or Brandon Park), through a new investment vehicle – the Newmark Brandon Park Core Plus Fund.

The Centre is located in a sizeable and growing demographic with scope to renovate and expand the Centre to include other uses such as office, hotel, residential and other further uses.

This high profile and strong trading retail centre is located on the corner of Springvale Road and Ferntree Gully Road, in Wheelers Hill, Victoria, with extensive road frontages and exposure to high levels of passing traffic. Brandon Park Shopping Centre is located on a “Gateway Site” in a strong and growing demographic, 24km southeast of the Melbourne CBD. The property comprises 5.8ha (58,100m2) of land, and the retail offering is anchored by Coles, Kmart and Aldi. The Centre comprises approximately 22,805m2 of net lettable area and has some 1,341 car parking bays on site. Whilst well established and achieving high levels of sales, the Centre nonetheless has significant scope for improvement and expansion, and is well positioned to capitalise on further growth in the surrounding areas.

Newmark expects the Property to deliver secure income, whilst planning and developments are undertaken to take advantage of possible further expansion and other complimentary uses (possible office, hotel, and other accommodation options including residential, retirement and student accommodation).

Leased to a diverse range of tenants, the investment is forecast to deliver a first-year distribution of 6.0% to investors. Through management improvements and development upside, Newmark forecasts to deliver to investors a total return (IRR) of over 14% pa after the initial refurbishment and master planning phase.

Newmark is an experienced property fund manager, with the proven capability and expertise to unlock the potential of this landmark property.

The Trustee is raising $60 million of equity from investors.

We encourage you to consider this opportunity and recommend that you review the document carefully. We would be pleased to answer any questions you may have in relation to the Property.

The Newmark Brandon Park Core Plus Fund is an exciting investment opportunity and one that we are proud to be associated with and offer to investors for their participation.

Yours sincerely

Chris Langford Joint Managing Director Newmark Capital Limited

Simon T. Morris Joint Managing Director Newmark Capital Limited

INVESTOR LETTER

P. 7

THE PROPERTY COMPRISES 5.8HA (58,100M2) OF LAND, AND IS ANCHORED BY COLES, KMART AND ALDI.

LEASED TO A DIVERSE RANGE OF TENANTS, THE INVESTMENT IS FORECAST TO DELIVER A FIRST-YEAR DISTRIBUTION OF 6.0% TO INVESTORS.

Brandon Park Exterior 1

INVESTMENT SUMMARY

P. 9P. 8

1.0 INVESTMENT SUMMARY

1.1 INVESTMENT OVERVIEW

Trust Name Newmark Brandon Park Core Plus Fund (Trust)

Trust Type The Trust is expected to be a widely-held, closed-end, unlisted MIT compliant unit trust, with a single property investment – Brandon Park Shopping Centre.

Investment objective and strategy The Trustee intends to acquire Brandon Park Shopping Centre, an established and strong performing investment property.

The Trust aims to generate sustainable income and to unlock potential capital growth. The Manager aims to deliver:

• a first year annual distribution of 6.0 per cent;

• the potential for capital growth through the expansion and renovation of the Property and the inclusion of other complimentary retail and non-retail uses; and

• an equity IRR of over 14.0% p.a after the initial refurbishment and master planning phase.

Minimum Investment Term Until approximately December 2021 (3½ Years)

Redemption facility The Trustee, through the Manager intends to offer a redemption facility to investors who wish to redeem their investment in the Trust on or near December 2021.

Trust term 10 Years

The term of the Trust (Term or Trust Term) is intended to be for a period of approximately ten years, with a minimum investment term of three and a half years (until approximately December 2021).

Trustee Newmark Capital Limited (Newmark) ACN 126 526 690 AFSL 319 372

Manager Newmark Property Funds Management Pty Ltd ACN 152 323 629

1.2 PROPERTY OVERVIEW

Property Brandon Park Shopping Centre, cnr Springvale Road & Ferntree Gully Road, Wheelers Hill, Victoria

Site area 5.8 hectares (58,100m2)

Major tenants Coles, Kmart, Aldi

Number of tenancies 94, comprising 3 majors, 5 mini majors and 86 specialty retailers (including kiosks)

Net lettable area (or NLA) 22,805m2 (excluding pad sites)

Car parking 1,341 spaces

Zoning Commercial 1 Zone City of Monash

Property purchase price (AUD) $135,000,000

1.3 KEY FINANCIAL INFORMATION

Target internal rate of return (or IRR) The Trustee aims to deliver to investors an internal rate of return (IRR) of over 14% per annum (pre-tax, post fees) after the initial refurbishment and master planning phase

Distributions The forecast distribution to be paid to investors for the first full year is 6.0 cents per Unit (6.0%) per annum

Distribution payments Distributions will be paid quarterly, commencing at the quarter ending 30 June 2018

Debt facility The Manager has agreed terms for a debt facility of up to $94.5 million with a leading financial institution for a three-year term

Capital expenditure The Manager has forecast to spend approximately $5.3 million in capex in the first three years of the Trust

P. 10 P. 111.0 INVESTMENT SUMMARY

1.4 INVESTMENT DETAILS

Total Equity to be Raised $60,000,000

Equity Units on offer in Trust Up to 60,000,000 ordinary Units

Unit price Units will be issued or transferred to investors at a price (Offer Price) of $1.00 per Unit

Investment Amount A minimum investment of $500,000 will be accepted, with a maximum of $6,000,000 (unless otherwise determined by the Trustee at its discretion)

Eligible investors Wholesale investors only

Co-investment Newmark and/or entities associated with Newmark intend to subscribe for up to $6,000,000 of equity in the Trust.

Liquidity/ redemption Except for the specified redemption facility in approximately December 2021, the Trustee does not expect the Trust or the Units will be liquid during the Trust Term. However, the Trustee may, at its discretion, provide investors with an opportunity generally to withdraw (in whole or in part) from the Trust (a Liquidity Event)

Investor reporting The Trustee will provide quarterly reports to investors in relation to ongoing key activities and performance of the Trust

Fees Arranger fee 2.0% of the purchase price of the property (excluding acquisition costs).

Asset management fee 0.60% per annum of the gross asset value of the Trust

Performance fee 20% of any excess realisation above the amount by which the Trust delivers a return to investors in excess of an internal rate of return (IRR) of 10.0% and 30% of any excess above an IRR of 20.0%

Leasing fees, market review fees, project management fees, tenancy co-ordination fees, property management fees, and divestment fees as set out in Section 9 of this IM

The fees described in this IM may be payable to the Manager and related companies

1.0 INVESTMENT SUMMARY

1.5 KEY DATES*

Initial offer opens 3 April 2018

Initial offer closes 18 April 2018

Allocation of initial units 20 April 2018

Property settlement date 30 April 2018

Subsequent offer closes 30 June 2018

Minimum initial investment term ends

Approximately December 2021

*These are indicative dates only. The Trustee may change or alter these dates.

P. 12 P. 131.0 INVESTMENT SUMMARY

Young & Foolish Cafe Brandon Park

Interior Brandon Park 2

DETAILS OF THE OFFER

P. 15P. 14

NEWMARK INTENDS TO INVEST SOME $5.3 MILLION IN CAPITAL WORKS AND CENTRE UPGRADES DURING THE FIRST THREE YEARS OF THE TRUST AND INTENDS TO ALLOCATE FUNDS TO DEVELOP A MASTERPLAN AND SECURE PLANNING APPROVAL FOR FURTHER EXPANSION OF THE CENTRE.

S P R I N G V A L E H O M E M A K E R

C E N T R E ( I K E A )

V I L L A G E G R E E N H O T E L

M I C H A E L PA G EM O R G A N C O N S U LT I N G

B M WR E N A U LTH O L D E N

V O L K S W A G E N

R Y M A N H E A LT H C A R E( U N D E R C O N S T R U C T I O N )

Retirement LivingResort Style FaciliiesIndependant ApartmentsAssisted LivingLow HealthcareParking: 431

N E X U S C E N T R E

Carlisle HomesAdidasBristol MyersGSI Australia

P R O P O S E D H O T E L

139 Rooms387 Cars

B R A N D O N PA R KS H O P P I N G C E N T R E

S P R I N G V A L E R O A D

M O N A S H F R E E W AY

B R A N D O N B U S I N E S S PA R K

K M A R T H E A D O F F I C E

B M W A U S T R A L I A B U N N I N G S

F E R N T R E E G U L LY R O A D

Brandon Park Local Context

2.0 DETAILS OF THE OFFER

2.1 INVESTMENT OPPORTUNITY

Newmark has secured the opportunity to purchase Brandon Park Shopping Centre, located on the corner of Springvale Road and Ferntree Gully Road, in Wheelers Hill, Victoria. Newmark is pleased to launch the Trust as the investment vehicle for investors to participate in the ownership of this quality property.

Well established and prominently located, Brandon Park has enjoyed strong patronage and market share since its original development in 1970. Since then, it has expanded and undergone renovations on several occasions, most recently in 2015. The Centre now comprises some 22,805m2 of NLA, and is anchored by Coles, Kmart and Aldi, with some 86 specialty retailers.

Newmark believes the Centre has a number of compelling features that make it an attractive investment opportunity, including:

• its prominent gateway location on two major arterial roads, and close proximity to the Monash Freeway;

• the growing local population and improving demographics;

• the Centre’s role as a convenient food-based centre;

• the Centre’s appeal to the local workforce due to its range of dining choices, convenient parking and range of banks and retail services (post office, pharmacy, travel, telco providers), etc;

• the ongoing growth in local employment, including a shift from light industry to increased office uses, with a commensurate increase in workforce numbers and disposable income and;

• the Centre has scope for improvement and would benefit from décor upgrades and improvements in its presentation, signage and entry statements.

Newmark believes the Centre has scope for improvement and intends to undertake various initiatives to add value and develop a plan for future value enhancement opportunities, including potential planning applications and pursuing relevant authority approvals. Newmark believes there are a number of initiatives that can enhance the Property’s income returns and Newmark will target a total return of over 14% IRR after the initial refurbishment and master planning phase.

Newmark believes that this property investment will offer stable income returns along with long term capital growth. Newmark forecasts a distribution for the first distribution year of 6.0% per annum.

Newmark intends to invest some $5.3 million in capital works and Centre upgrades during the first three years of the Trust and intends to allocate funds to develop a masterplan and secure planning approval for further expansion of the Centre.

Newmark offers to issue or transfer 60,000,000 Units to investors at an Offer Price of $1.00 per Unit (the Offer). The minimum investment per investor is $500,000 (subject to variation at the absolute discretion of Newmark).

The Manager on behalf of the Trustee has agreed terms for a debt facility of up to $94.5 million with a leading financial institution for a three-year term.

Newmark Property Funds Management Pty Ltd is the investment manager of the Trust and it is expected that other related companies of the manager will provide asset management, development management and project management services, amongst other services.

Newmark is an experienced property funds manager with the capability and expertise to realise the various initiatives it has identified for the Centre. Newmark has a strong track record in delivering strong investment returns to its investors, in sectors including office, retail and mixed-use assets.

Newmark has acquired properties that have benefited from hands-on management and a strong focus on meeting the needs of occupiers and customers. Newmark’s investments have been able to successfully deliver capital growth along with sustainable income in properties at:

• 417 St Kilda Road, Melbourne, Victoria;

• Auburn Central Shopping Centre, Parramatta Road, Auburn, New South Wales;

• HomePlus+ Homemaker Centre, Warrigal Road, Chadstone, Victoria;

• Bunnings anchored assets in Maroochydore, Queensland and Launceston, Tasmania;

• The Jam Factory in Chapel Street South Yarra, Victoria and;

• Como Centre on corner of Chapel Street, and Toorak Road, South Yarra, Victoria.

P. 16 P. 172.0 DETAILS OF THE OFFER

2.2 TRUST OBJECTIVE AND INVESTMENT STRATEGY

The Trustee intends to acquire the Property and continue to operate and enhance the performance of the existing retail centre. Additionally, Newmark intends to undertake master planning and leasing discussions to develop a plan and business case for the further expansion and enhancement of the Property, and the potential inclusion of other complimentary uses on the site, including office, hotel, residential, and student housing.

Newmark intends to explore the potential for the creation of additional multi-level buildings above or adjacent to the current retail centre that may complement and enhance its operation and trading performance and deliver enhanced returns to investors.

2.3 TRUST STRUCTURE

The legal structure of the Trust will be as per Fig. 1.

2.4 TERM OF THE TRUST

The Trust Term is intended to be for a period of approximately ten years, with a minimum investment term of three and a half years (until approximately December 2021).

At that time, Newmark intends to refinance the Trust after it has secured any pre-commitments and planning approvals, and may raise equity from current and new investors to invest in the Trust.

Existing investors (Unitholders) may be offered the chance to either redeem their Unitholding in the Trust, or to remain invested in the Trust for the balance of the Trust Term.

Newmark Capital Limited (Responsible Entity) ACN 126 526 690

AFSL 319372

Newmark Brandon Park Core Plus Fund

Brandon Park Shopping Centre

Newmark Property Funds Management Pty Ltd

(Investment Manager) ACN 152 323 629

Property Manager Newmark Asset

Management Pty Ltd ACN 622 029 412

Fig. 1

2.5 SIZE OF OFFER

The Offer comprises a total of 60,000,000 Units at the Offer Price of $1.00 per Unit to raise $60.0 million. All Units will be ordinary units of the same class.


SPRINGVALE ROAD

MAG

ID A

VENU

E

BRANDON PARK DRIVE

FER

NTR

EE

GU

LLY

RO

AD

LOWER LEVEL PLAN

FOOD COURT

Indicative plan’s only. Subject to Council approval

EXISTING CENTRE


Brandon Park Possible future expansion

Brandon Park Artist’s impression of possible future expansion

NEWMARK INTENDS TO EXPLORE THE POTENTIAL FOR THE CREATION OF ADDITIONAL MULTI-LEVEL BUILDINGS ABOVE OR ADJACENT TO THE CURRENT RETAIL CENTRE THAT MAY COMPLEMENT AND ENHANCE ITS OPERATION AND TRADING PERFORMANCE AND DELIVER ENHANCED RETURNS TO INVESTORS.

P. 18 P. 192.0 DETAILS OF THE OFFER

2.6 MINIMUM COMMITMENT

The minimum commitment under the Offer is 500,000 at the Offer Price of $1.00 per Unit for a total subscription amount of $500,000. Additional commitments must be made in multiples of 50,000 Units.

Newmark may accept subscriptions below the minimum commitment at its discretion provided the investor qualifies as a wholesale client within the meaning of that term under the Corporations Act 2001 (Cth).

2.7 CO-INVESTMENT

Newmark and/or entities associated with Newmark intend to subscribe for up to $6,000,000 of equity in the Trust.

2.8 HOW TO INVEST

The Offer is only open to wholesale clients (within the meaning of that term under the Corporation Act 2001 (Cth)) receiving this IM within Australia.

Subscription for Units can only be made by completing the Application Form accompanying this IM and submitting by return mail to:

Newmark Capital Limited The Como Centre Level 9, 644 Chapel Street South Yarra, VIC, 3141

An electronic, interactive application form is available upon request from Newmark.

To participate in the initial offer, your completed Application Form and subscription monies must be received by the initial close out date of 18 April 2018 (unless extended by Newmark).

To participate in the subsequent offer, your completed Subscription Form and Subscription Monies must be received

by the subsequent offer close date of 30 June 2018 (unless closed earlier or varied by Newmark).

Payment of your subscription monies may be made by either:

• Cheque – you should make your cheque out to Newmark Capital Limited atf Newmark Brandon Park Core Plus Fund or;

• Direct Credit – you need to transfer funds to the following account: Account: Newmark Capital Limited Pty Ltd ATF Newmark Brandon Park Core Plus Fund Bank: Westpac Banking Corporation BSB: 033364 Account Number: 897294 Reference: (Name of Applicant)

A completed and lodged Application Form, together with the payment for the number of Units applied for cannot be withdrawn (unless Newmark agrees) and constitutes a binding application for the number of Units specified in the Application Form, or a lesser number as determined by the Trustee, on the terms set out in this IM. The Application Form does not need to be signed by an investor to be binding on an investor. Applications Forms must be received by the relevant offer close date. If the Application Form is not completed correctly or is received by the Trustee after the relevant offer close date, the Trustee may in its discretion either reject it or treat it as valid.

It is important that you read this entire IM and consider consulting with your financial or other professional adviser, before deciding to apply for Units.


2.9 ALLOTMENT OF UNITS

If the Offer is over-subscribed, the Trustee reserves the right to issue less than the number of Units applied for, or to reject any application in its absolute discretion. In either case, the Trustee will refund any surplus subscription monies to the applicant (without interest) as soon as practicable after the relevant offer close date. The Trustee may issue Units prior to the relevant offer close date. Where it does so, all Units will rank equally in all respects. Pending the issue of Units, Subscription Monies will not accrue interest for applicants.

2.10 DISTRIBUTIONS

It is the intention of the Trustee that the Trust will calculate distributions quarterly in arrears with the record dates for such distributions being 31 March, 30 June, 30 September and 31 December each year.

The first distribution is expected to be made in respect of the June quarter 2018.

All distributions must be paid directly into an Australian bank or an account with a financial institution (where there is a branch in Australia). Distributions will not be paid by cheque.

The Trust will not have a distribution reinvestment plan.

The Trustee will provide Unitholders with a distribution statement for each distribution payment made which will summarise the components of the distribution and may include a return of capital, unfranked distributions, franked distributions and franking credits.

2.11 RISK

Refer to Section 8 for important information regarding some of the key risks associated with an investment in the Trust.

2.12 REPORTING

Newmark will provide information to Unitholders on a regular basis including:

• distribution statement for each distribution payment;

• a report setting out the performance and operation of the Trust each quarter, and

• an annual report including audited accounts which will be available to Unitholders on request.

2.13 ENQUIRIES

If you have any enquiries regarding the Offer, please contact:

Chris Langford / Simon T. Morris

Joint Managing Directors

Tel: +613 9820 3344

Email: [email protected] [email protected]

George Deligiannis

General Manager, Distribution & Strategic Partnerships

Tel: +61 412 554 467

Email: [email protected]

P. 21P. 20

3PROPERTY

INFORMATION

P. 23P. 22

3.0 PROPERTY INFORMATION (PROVIDED BY URBIS)

3.1 PROPERTY DETAILS

Centre Classification Sub Regional

Land tenure Freehold

Site area 58,100sqm

Net lettable area 22,805sqm

Car parking 1,341sqm

Majors Coles, Kmart, Aldi

Other tenancies 5 mini majors, 86 specialties (including kiosks)

Moving annual turnover $133 million

Main Trade Area population 83,910 (Urbis September 2017)

3.2 LOCATION

With its prominent gateway location on the corner of a major north-south (Springvale) and east-west (Ferntree Gully) arterial roads Brandon Park is positioned in the middle of the south-east Melbourne employment hubs and at the centre of a large and growing population base.

These attributes provide the Property with the potential to continue its strong performance as a convenience and services-based retail centre, whilst also providing a blend of other office, hotel, residential uses amongst others.

The site is located approximately 500m from the Monash Freeway on/off ramps and is approximately 3.5km north of the Princes Highway intersection with Springvale Road. The intersection of

FROM THE MONASH FREEWAY

NORTH OF THE PRINCES HIGHWAY INTERSECTION WITH SPRINGVALE RD

VEHICLES PASSING EACH DAY THROUGH THE INTERSECTION OF SPRINGVALE RD AND FERNTREE GULLY RD

500m

3.5km

100,000

Springvale Road and Ferntree Gully Roads has over 100,000 vehicles passing each day.

The site has very good access from all directions with signalised controls ensuring visitors to the site can easily move onto adjoining roads in all directions. Surrounding roads include:

• Springvale Road,

• Ferntree Gully Road,

• Magid Avenue, and

• Brandon Park Drive.

CONSTRUCTION & FINISHES

Structure Concrete

External walls Concrete tilt panel

Floors Reinforced concrete slab

Roof covering Metal deck and steel

Floor covering Internal floor coverings to the common mall area comprise ceramic tiles, with the specialty tenancies comprising a combination of vinyl, ceramic tile and carpet

Internal walls Plasterboard

Internal ceilings Plasterboard to mall areas. Predominantly suspended ceiling tiles to the specialty and major tenancies

Lighting Recessed spot lighting to the common areas with a combination of fluorescent and spot lighting to the specialty and major tenancies

Car park Combination of at grade, rooftop and decked car parking

3.3 DESCRIPTION

Brandon Park Shopping Centre comprises the following buildings and improvements:

BUILDING LAYOUT

Brandon Park Shopping Centre is constructed over two levels with on grade, rooftop and decked car parking provided. Located on the upper level is a Coles supermarket and an Aldi supermarket in addition to 3 mini-majors, 71 specialty tenancies and 6 kiosks.

Located on the lower level is a Kmart Discount Department Store, 2 mini-majors, 8 specialty tenancies, and 1 kiosk. Priceline and the café ‘Young and Foolish Specialty Roasters’ have external frontage to Springvale Road.

P. 24 P. 253.0 PROPERTY INFORMATION

THE PROPERTY COMPRISES 58,100M2 IN SITE AREA, WITH 22,805M2 OF NET LETTABLE AREA.

P. 26 P. 27

3.0 PROPERTY INFORMATION

3.4 TENANT PROFILES

Brandon Park is leased to a number of leading Australian and international tenants. Approximately 40% of the passing income is derived from the eight corporate tenants in Fig. 2.

Fig. 2

38%

15%

30%

11%

6%SPECIALTY RETAILERS (INC. KIOSK)

COLES

ALDI

KMART

MINI MAJORS

AREA TENANCY TYPE

# AREA SQM

AREA %

GROSS INCOME $,000

Majors

Coles 1 3,512 15% 1,273

Aldi 1 1,400 6% 464

Kmart 1 6,782 30% 1,464

Mini Majors 5 2,545 11% 1,227

Total Majors and Mini Majors

8 14,239 62% 4,428

Specialty Retailers (inc. Kiosks)

86 8,561 38% 8,253

Other Income (inc. ATM)

- 6 n/a 573

Total* 94 22,805 100% 13,254

* Figures assume a fully leased centre.

3.5 PROPERTY STRATEGY

With its high-profile gateway location and proven retail trading performance, Newmark aims to immediately refresh and enhance Brandon Park’s retail mix and presentation, whilst progressively introducing other complimentary uses to the site such as office, hotel, and residential uses.

Newmark believes this will enhance and compliment the retail offer and further strengthen the Centre’s role as a key convenience non-discretionary based shopping destination for nearby residents and a genuine hub for banking, services and dining for surrounding businesses and office workers.

With the Brandon Park site measuring almost 60,000m2 and having efficient building site coverage, Newmark considers it will be viable to develop several new buildings in the northern and southern sections of the site. Planning controls support a wide range of permitted uses and site’s height controls indicate 4-6 levels is achievable (subject to Monash Council approval).

The strategy is consistent with Brandon Park’s designation as a ‘Major Activity Centre’ and the world-wide trend of creating a diversity of uses to shopping centre sites. These multi layered activity nodes enhance the creation of a place where communities can work, rest and play. This evolution also enables future uses to leverage existing facilities and consolidate infrastructure. This is already occurring nearby with over 500 apartments being constructed at The Glen Shopping Centre, a hotel and multiple office buildings at Chadstone Shopping Centre and hotel accommodation at Eastland Shopping Centre in Ringwood.

3.6 DUE DILIGENCE

Recent capital expenditure undertaken by the vendor of the Property has involved the upgrade of the amenities and food court, the creation of a void and visual connection between Levels 1 and 2, the completion of several new tenancy fit outs, and the upgrade of the climate amenity systems. A number of fire services and compliance issues have also been recently rectified.

Newmark has undertaken extensive due diligence on the Centre and has commissioned a number of independent consultants to review the Property.

Should investors wish to review these reports, they are available for review at the Manager’s office via appointment.

Legal Property Due Diligence prepared by King & Wood Mallesons

Technical Due Diligence prepared by Napier & Blakeley

Valuation prepared by Savills

Trade Area Analysis prepared by Urbis

Town Planning Urbis

Trust Structure and Bank Finance Hall & Wilcox Lawyers


SPRINGVALE ROAD

LOWER LEVEL PLAN

BRANDON PARK DRIVE

FER

NTR

EE

GU

LLY

RO

AD

MAG

ID A

VENU

E


FOOD COURT

3.0 PROPERTY INFORMATION

Current Centre (2018)

SPRINGVALE ROAD

MAG

ID A

VENU

E

BRANDON PARK DRIVE

FER

NTR

EE

GU

LLY

RO

AD

LOWER LEVEL PLAN

FOOD COURT


WITH ITS HIGH-PROFILE GATEWAY LOCATION AND PROVEN RETAIL TRADING PERFORMANCE, NEWMARK AIMS TO IMMEDIATELY REFRESH AND ENHANCE BRANDON PARK’S RETAIL MIX AND PRESENTATION, WHILST PROGRESSIVELY INTRODUCING OTHER COMPLIMENTARY USES TO THE SITE SUCH AS OFFICE, HOTEL, AND RESIDENTIAL USES.

Possible future expansion plan


4MARKET

OVERVIEW

AS PROVIDED BY URBIS

P. 33P. 32

Brandon Park Interior

Map 1 Brandon Park Local Context Source. Urbis

4.0 MARKET OVERVIEW (PREPARED BY URBIS)

4.1 LOCAL CONTEXT

Brandon Park Shopping Centre is located at the corner of two main arterial roads in the south-eastern suburbs: Ferntree Gully Road and Springvale Road. Brandon Park Shopping Centre is centrally located within the Brandon Park Activity Centre, which also includes community and civic, retail, services, education and light industrial uses (see map below). There are close to 6,000 workers within 1km of the shopping centre.

The location provides the Centre with convenient access from all directions and exposure to a high-level of passing traffic and broader markets. Average annual daily traffic volumes on surrounding roads as at 2013 were measured as follows:

LOCATION AVERAGE DAILY VEHICLES 2013

80,000

23,000

27,000

Ferntree Gully Rd (btwn Springvale Rd and Monash Fwy)

Springvale Rd (btwn Ferntree Gully Rd and Monash Fwy)

Monash Fwy (btwn Gully Rd and Blackburn Rd)

Source. VicRoads

The sizeable residential population surrounding Brandon Park Shopping Centre will further increase, with construction of the retirement village adjacent to the site that commenced in 2017. The retirement village is planned to include 340 apartments, as well as 70 assisted living suites.

This development will provide a new base of shopper and centre use on the doorstep of Brandon Park.

The Brandon Park Shopping Centre is located close to the Monash National Employment and Innovation Cluster, which includes a diverse range of education facilities and businesses, providing over 75,000 jobs. The number of workers in the precinct has the potential to double over the next 30 years, as described further below.

Key activity generators and influencers in the region are centred around Monash University and associated uses. This includes the neighbouring CSIRO and Australian Synchrotron. The Monash Medical Centre supports further medical-related industry around Clayton. The remaining areas of the Monash Cluster include a range of national and multi-national industrial-related operations.

Brandon Park is designated a ‘Major Activity Centre’ by both Plan Melbourne and the Monash Planning Scheme, which encourages development of the site for a wide variety of land uses including specialty retailing, mixed commercial uses, offices, apartments and community facilities. There is strategic support for the redevelopment of the Centre via the Monash City Council planning controls in a manner which promotes a concentration of activity of the above uses.

WORKERS WITHIN 1KM OF THE SHOPPING CENTRE

APARTMENTS PLANNED FOR THE RETIREMENT VILLAGE ADJACENT TO THE SITE

DWELLINGS IN THE PROCESS OF ACQUIRING APPROVAL IN THE SURROUNDING AREA

JOBS PROVIDED BY THE MONASH NATIONAL EMPLOYMENT AND INNOVATION CLUSTER

6,000

340

400

75,000

P. 35P. 34


4.2 DEMOGRAPHIC PROFILE

There are more than 700,000 people living within a 10km radius of Brandon Park, with the arterial road network making Brandon Park accessible to most people within that area.

A trade area for retail operations at Brandon Park has been defined to fall within a tighter area around 3-4km from the Centre (see Map 2) due to the location of larger retail centres such as Chadstone and The Glen. Nonetheless, there are currently around 84,000 people in the Main Trade Area, having grown strongly over the last five years at a rate of 2.1% per annum as a result of continuing infill development. The population is expected to grow further by more than 10,000 people over the next 10 years.

The profile of residents reflects the established nature of the region, with the key characteristics of the trade area population including:

• Higher than average household sizes.

• A diverse demographic including a high proportion of the population aged over 60, but also 14-24 years given proximity to Monash University.

• Elevated levels of home ownership, with a substantial proportion of households having paid off their mortgage.

• A higher than average share of households being families with all children over 15.

• Very high levels of residents born overseas (54% vs 36% across Melbourne), with more than a third of residents born in Asia.

+0% pts

Avg. H’hold Income

H’hold Income +$130k

0-13 14-24 25-39 40-59 60+ Families with children U/15

% H’hold with Mortgages

H’hold size % Overseas Born

Age profile

-5%

+5% pts +5% pts

+18% pts

+5%

-3% pts

-5% pts

-2% pts-1% pts

-8% pts

Household Other

Source. ABS Census (2016)

4.3 RETAIL DEVELOPMENT

As shown in Map 2, the retail trade area of Brandon Park is influenced by the location of larger, discretionary shopping centres such as Chadstone and The Glen (currently undergoing a redevelopment to increase the area of the centre to 78,000m2 in 2020). However, Brandon Park is distinguished from these centres, by offering a comprehensive convenience offer that is easily accessed and provides a car park ratio of almost 6 cars per 100m2 of retail area.

Waverley Gardens is another sub-regional centre within the trade area to the south-east, but it is differentiated by offering Target and Big W versus Kmart at Brandon Park (the stronger of the three chains in recent times).

BRANDON PARK SHOPPING CENTRE TRADE AREA - KEY SOCIO-DEMOGRAPHIC CHARACTERISTICS VS GREATER MELBOURNE, 2016

Map 2 Brandon Park Trade Area & Competitive Centres Source. Urbis

SUPERMARKET

WOOLWORTHS

COLES

ALDI

SUPA IGA

OTHER INDEPENDENT

COSTCO

REGIONAL CENTRE

SUB-REGIONAL CENTRE

DEPT. STORE / DDS

MYER

DAVID JONES

BIG W

HARRIS SCARFE

KMART

TARGETSUPERMARKET CENTRE

P. 36 P. 374.0 MARKET OVERVIEW

THE MONASH NATIONAL EMPLOYMENT AND INNOVATION CLUSTER (NEIC) HAS BEEN NOMINATED IN THE LATEST EDITION OF PLAN MELBOURNE AS ONE OF A SELECT NUMBER OF PRECINCTS AROUND MELBOURNE THAT WILL BE A FOCUS FOR EMPLOYMENT GROWTH AND TECHNOLOGY-LED DEVELOPMENT.

Map 3 Monash Employment and Innovation Cluster Source. Urbis

Source: Department of Environment, Land, Water and Planning

© The State of Victoria Department of Environment, Land, Water and Planning 2017.

Disclaimer This publication may be of assistance to you but the State of Victoria and its employees do not guarantee that the publication is without flaw of any kind or is wholly appropriate for your particular purposes and therefore disclaims all liability for any error, loss or other consequence which may arise from you relying on any information in this publication.

Ferntree Gully Rd

Princes Hwy (Dandenong Rd)

Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton

Australian Synchrotron

Brandon ParkMajor ActivityCentre

Melbourne Centrefor Nanofabrication

MonashUniversity

Clayton

MonashEnterpriseCentre

ClaytonBusinessPark

Monash MedicalCentre Clayton

Monash Children’sHospital

SpringvaleMajor Activity

Centre

ClaytonMajor Activity

Centre

Health facility, precinct

Education facility, precinct

Research or commercial facility, precinct

Industrial node, precinct

Activity centre

Road network

State-significant road

Proposed road

Key bus route

Principal bicycle network

Rail network, station

Level crossing removal

Urban growth boundary

Green wedge land

Ferntree Gully Rd


Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton




MonashUniversity

Clayton


ClaytonBusinessPark




Centre


Centre





Activity centre

Road network


Proposed road

Key bus route





Green wedge land

OUTCOME 1 27OUTCOME 1

Map 5

Monash National Employment and Innovation Cluster

Strengths

The cluster has leading education, health, research and commercialisation facilities.

Jobs

Monash is Melbourne’s largest established national employment and innovation cluster, with a mix of education, research and industry organisations. It has approximately 75,000 jobs9 and is the largest concentration of employment outside the central city.

Key attributes

The cluster has a critical mass of leading education, health and research facilities, including Australia’s largest university (Monash University), the Australian Synchrotron, the Melbourne Centre for Nanofabrication, Monash Medical Centre, a new Monash Children’s Hospital, CSIRO’s largest site in Victoria and the Monash Enterprise Centre.

Its mix of education, research and commercial facilities creates a unique environment for innovation and world-leading research, which will continue to contribute significantly to Melbourne’s economy. This unique blend of knowledge- and research-based activity will help existing businesses, such as the manufacturing sector, and produce products and services that are competitive in the global market.

Key partners for the future of this cluster include the City of Monash, City of Kingston, City of Greater Dandenong, Monash University, Monash Medical Centre, Australian Synchrotron, CSIRO (Commonwealth Government) and Monash Enterprise Centre.

Note 1 Map is not to scale and is indicative only. 2 Designation of this area as a national employment

and innovation cluster does not change the status of parkland, open space or residentially zoned land.






Activity centre

Road network


Proposed road

Key bus route





Ferntree Gully Rd


Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton




MonashUniversity

Clayton


ClaytonBusinessPark




Centre


Centre





Activity centre

Road network


Proposed road

Key bus route





Green wedge land

Ferntree Gully Rd


Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton




MonashUniversity

Clayton


ClaytonBusinessPark




Centre


Centre





Activity centre

Road network


Proposed road

Key bus route





Green wedge land


Map 5


Strengths


Jobs


Key attributes











Ferntree Gully Rd


Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton




MonashUniversity

Clayton


ClaytonBusinessPark




Centre


Centre





Activity centre

Road network


Proposed road

Key bus route





Green wedge land

Ferntree Gully Rd


Wellington Rd

Sp

rin

gva

le R

d

Bla

ckb

urn

Rd

Police Rd

Centre Rd

Cla

yto

n R

d

Fairbank Rd

Wes

tall

Rd

Heatherton Rd

Din

gley R

d

Hu

nti

ng

da

le R

d

HUNTINGDALE

CLAYTON

WESTALL

SPRINGVALE

SANDOWN PARK

Monash Freeway

Monash Freew

ay

AxxessCorporatePark

Monash BusinessPark

CSIRO Clayton




MonashUniversity

Clayton


ClaytonBusinessPark




Centre


Centre





Activity centre

Road network


Proposed road

Key bus route





Green wedge land


Map 5


Strengths


Jobs


Key attributes









Green wedge land

Note.

1. Map is not to scale and is indicative only.

2. Designation of this area as a national employment and innovation cluster does not change the status of parkland, open space, or residentially zoned land.

Source. Department of Environment, Land, Water and Planning

MONASH EMPLOYMENT AND INNOVATION CLUSTER

4.4 THE MONASH EMPLOYMENT AND INNOVATION CLUSTER

The Monash National Employment and Innovation Cluster (NEIC) has been nominated in the latest edition of Plan Melbourne as one of a select number of precincts around Melbourne that will be a focus for employment growth and technology-led development. As an already established area, the Victorian Planning Authority appear to be focussed on the Monash Cluster to promote employment growth in suburban areas.

The Cluster covers an area that is loosely bounded by the Monash Freeway in the north, Heatherton Road to the south, Springvale Road to the east and Huntingdale Road to the west. The Brandon Park site is located just to the north east of the Cluster (see Map 3).

The employment growth in the Monash Cluster and south-east Melbourne in general has been limited over the last 5-10 years, driven by the decline of the manufacturing industry in Australia, the industry the region continues to rely on most heavily. While the old industrial base is still important, it is in decline, and it is creating a need for the employment opportunities to be replaced through emerging industries.

A Draft Framework Plan for the Monash Cluster has been released publicly. It outlines a range of strategic priority outcomes related to the precinct. The framework plan aims to facilitate economic development and foster the intensification of key commercial, education, research and health precincts.


The Victorian Planning Authority (VPA) describe the Cluster and the draft plan as follows:

• Located 20km south-east of Melbourne’s CBD, the Monash National Employment and Innovation Cluster (Monash Cluster) has Melbourne’s largest concentration of jobs outside the CBD and is well positioned to grow jobs close to where people live.

• It supports approximately 75,000 jobs across a diverse range of industries and contributes over $9.4 billion to the Victorian economy each year. It is anticipated that employment numbers within the Monash Cluster have the potential to double over the next three decades.

• The Monash Cluster is home to a number of nationally significant facilities and important institutions as well as a skilled local workforce. However, increased road congestion, changing business needs and the expectations of a new breed of worker demands new approaches to guiding the growth of the Cluster.

The VPA is working closely with the Cities of Greater Dandenong, Kingston and Monash, as well as Monash University, research institutions, major businesses, representative organisations and the local community to formulate an action plan. The plan embraces the future opportunities and seeks to manage challenges for the benefit of the Cluster. It is a coordinating action plan aimed at increasing employment by driving economic growth in the suburbs through coordinated public and private investment.

Ultimately, the plan aims to leverage the current opportunities for increased employment within the cluster and overcome the hurdles that may potentially stifle future growth. The Brandon Park site is well-located to leverage the significant employment and other development that will emerge in the area over coming years.

SOUTH-EAST OF MELBOURNE’S CBD

JOBS SUPPORTED (APPROX.)

CONTRIBUTED TO THE VICTORIAN ECONOMY EACH YEAR.

20km

75,000

$9.4bn


B M WR E N A U LTH O L D E N

V O L K S W A G E N

N E X U S C E N T R E

Carlisle Homes

Adidas

Bristol Myers

GSI Australia

R Y M A N H E A LT H C A R E( U N D E R C O N S T R U C T I O N )

B R A N D O N PA R KS H O P P I N G C E N T R E

V I L L A G E G R E E N H O T E L

W A V E R L E YI N T E R N A T I O N A L

B R A N D O N B U S I N E S S PA R K

T H E G L E N S H O P P I N G C E N T R E

V I L L A G E C I N E M A S

S P R I N G V A L E R O A D

F E R N T R E E G U L LY R O A DM O N A S H F R E E W AY

Brandon Park Local Context


4.5 EMPLOYMENT AND OFFICE DEVELOPMENT

The City of Monash is a major generator of wealth representing 4% of the State’s economy. This places it second only to the City of Melbourne CBD in terms of contribution to the State among Local Government Areas. The Monash NEIC is a key element of that value created.

The municipality generates around $15 billion in Gross Regional Product, with more than 104,000 workers employed in the area. Education, Health Care and Manufacturing are the major employing industries.

The employment base of the area is shifting, however, away from the traditional manufacturing base towards

more white-collar employment such as professional services. This is creating demand for more office development in the region.

Major projects in the immediate vicinity of the Centre include the following:

• Ryman Health Care project with 340 apartments and 70 assisted living suites opposite the centre. (Under construction with the anticipated completion in November 2018).

• Nexus Corporate Park 8,400m2 office building under construction with numerous further stages proposed.

• Ferntree Business Park Development Approval received for two buildings with a combined area of 10,000m2. Construction subject to pre-commitment.

• Frasers Business Park Up to 40,000m2 scheduled to commence subject to lease pre-commitment.

The following map indicates all office developments of over 1,000m2 in the region, highlighting Brandon Park’s proximity to the concentration of office space.


REGIONAL CENTRE

SUB-REGIONAL CENTRE

SUPERMARKET CENTRE

OFFICE LOCATIONS

FUTURE OFFICE LOCATIONS

4.6 HOTEL ACCOMMODATION

The following is a list that encompasses the accommodation options that exist within the Brandon Park retail trade area. It should be noted that most accommodation options in the area are lower quality serviced apartments or basic motels. The only better quality, larger hotels are the Novotel, Ibis and Quest in Glen Waverley.

The growth in employment in the region, including education, health and white-collar jobs, is anticipated to increase the demand for quality hotel accommodation. A new hotel is proposed as part of the M-City development further south at the corner of the Princes Highway and Blackburn Road.

HOTEL ACCOMMODATION ROOM NUMBERS

Mulgrave Court Motor Inn 26

Monash Hotel 21

Monash Clayton Serviced Apartments 69

Gateway on Monash Hotel 31

Glenn Inn Motel and Apartments 32

Hotel Bruce County 38

Homelike in Glen Waverley 6

Park Avenue Serviced Apartments 40

Novotel Glen Waverley 200

Orange Serviced Apartments 10

Ibis Glen Waverley 155

The Waverley International Hotel 65

Quest Glen Waverley 88

Source. Urbis


Como Centre South Yarra, VIC

5NEWMARK AND MANAGEMENT

P. 45P. 44

1

ESTABLISHED OCT 2011 NEWMARK CAPITAL LIMITED

4

FUM MILESTONE NEWMARK CAPITAL LIMITED REACHES FUM OF $136.3M DECEMBER 2012

6

CORNERSTONE TENANTS RE-COMMIT TO 417 TENANTS, ORACLE AND RED CROSS AUSTRALIA COMMIT TO LONG TERM LEASES JUNE 2014

7

ACQUISITION PURCHASED NEWLY BUILT BUNNINGS STORE IN LAUNCESTON, TAS JUNE 2014

8

ACQUISITION LIDCOMBE SHOPPING CENTRE, SYDNEY NSW. JV PARTNER APN JUNE 2014

5.0 NEWMARK AND MANAGEMENT

5.1 TRUSTEE OVERVIEW - NEWMARK

Newmark is the trustee of the Trust. Newmark is a property funds management business that places strong emphasis on real estate fundamentals, and hands on management. Newmark has a strong track record in delivering growth and upside from both asset management and repositioning of assets. Newmark and its executive team have significant and successful backgrounds in property development and investment. Newmark is confident it will be able to successfully enhance Brandon Park Shopping Centre’s performance and investment returns.

Newmark holds Australian Financial Services License No. 319372.

5.2 TRACK RECORD

Newmark has been able to deliver strong returns to investors in both defensive and value-add investments over recent years. The following provides a brief overview of the performance of some of these investments.

Past performance with respect to our other funds is not a reliable indicator of future performance and should not be taken as a representation about future performance.

3

MAJOR REZONING CHADSTONE REZONED FROM INDUSTRIAL 1 TO BUSINESS 2 MARCH 2012

2

ACQUISITION PURCHASED HOMEMAKER CENTRE IN CHADSTONE DECEMBER 2011

5

ACQUISITION PURCHASED 417 ST KILDA ROAD PROPERTY, VIC DECEMBER 2012

13

SALE LIDCOMBE SHOPPING CENTRE, SYDNEY NSW OPENED - SOLD TO NOVION OCTOBER 2015

9

MAJOR REDEVELOPMENT & PROPERTY VALUATION INCREASES 417 ST KILDA RD FORECOURT AND RETAIL AREAS REDEVELOPED DECEMBER 2014

11

FUM MILESTONE NEWMARK CAPITAL LIMITED REACHED FUM OF $288.4M JANUARY 2015

17

DA LODGED JAM FACTORY SCHEME OCTOBER 2017

2011 2017

12

BUNNINGS ENTER LEASE ON TENANCY 7,800M2 AT HOMEPLUS+ CHADSTONE FEBRUARY 2015

15

ACQUISITION COMO JUNE 2016

10

ACQUISITION BUNNINGS MAROOCHYDORE, QLD DECEMBER 2014

14

ACQUISITION JAM FACTORY SOUTH YARRA, VIC 2015

16

SALE 417 ST KILDA RD, VIC - SOLD TO MAPLETREE JUNE 2017

P. 46 P. 475.0 NEWMARK AND MANAGEMENT

5.0 NEWMARK AND MANAGEMENT

CHRIS LANGFORDJOINT MANAGING DIRECTOR

Chris has over 28 years’ experience in commercial, retail and residential property development. Chris’ career includes 13 years with Lend Lease, 5 years with Mirvac and seven years in private business. Chris has extensive industry knowledge and is well regarded due to his ability to combine a strategic approach with problem solving skills.

ANITA YOUNGFINANCE MANAGER

High level auditing, financial management and national and international property expertise underpin Anita’s strategic analysis and chartered accountant skills.

Anita has previously had roles with Pitcher Partners, BAA Lynton (in London), APN Property Group and Ubertas Group in Melbourne. Anita combines specialist knowledge of property and sharp analytical skills to quickly identify and resolve issues. Anita is also a member of Newmark’s Compliance Committee and has significant experience in the management of trust compliance requirements.

JONATHAN CODMANGENERAL MANAGER ASSET MANAGEMENT

Over the last 30 years Jonathan has amassed significant experience in the Property and Retail Industry both in Australia and the UK. His main focus in recent years has been delivering high profile developments and projects with Westfield and the Pacific Groups.

Jonathan uses this knowledge and experienced to drive his passion for tailoring assets to compliment the community they serve. In so doing his innovative and holistic approach drives sustainable growth and value.

GEORGE DELIGIANNIS GENERAL MANAGER, DISTRIBUTION & STRATEGIC PARTNERSHIPS

With over 25 years of financial services experience George has a trusted reputation and is well connected with key industry financial advisory groups. George brings extensive industry knowledge to Newmark’s distribution network, and has strong communication skills and product knowledge. George has previously worked with Challenger and IOOF, undertaking capital raisings for property and infrastructure syndicates including overseas closed end funds.

SIMON T. MORRISJOINT MANAGING DIRECTOR

Simon has over 25 years’ experience in identifying, acquiring, developing and managing a large number of property developments across all property sectors and states in Australia. Simon has a proven track record of delivering successful property outcomes across a broad asset class and geographical spread.

RICHARD DRAKEPROPERTY & CAPITAL TRANSACTIONS

Richard gained extensive experience from physically inspecting hundreds of buildings while researching commercial property acquisitions across Australia. A trained Property Valuer, Richard has held property management and acquisition roles at Coles, Target, Officeworks and Becton.

5.3 NEWMARK EXECUTIVE TEAM

DENISE NAKIS GENERAL MANAGER MARKETING

A marketing executive with extensive experience in multi-site and corporate roles within the retail and property industry including the Westfield Group and Pacific Group of Companies. Denise has a Bachelor of Economics from Monash University and delivers through clear strategy, high standards of execution, leadership and teamwork.

JASON DAN PORTFOLIO ANALYST

Jason is a Chartered Accountant with over 9 years finance experience spanning the financial services and property sectors. Most recently, he worked as a senior analyst at Vicinity Centres responsible for strategic property and fund level modelling for a portfolio of 90+ retail assets.

GEORGIE MCCOURT GENERAL MANAGER - CENTRES

Georgie has over 11 years’ in the retail property industry predominantly within Westfield and is experienced in the delivery of Shopping Centre developments, launches and stabilisations with both a retail and marketing focus. Georgie couples her love for retail and her disciplines around operational excellence to ensure consistent delivery of strategic priorities.

JONATHAN BRADHURSTPROJECT DIRECTOR

A retail property development specialist and architect, Jonathan has 25 years national and international experience including 17 years at Westfield in Australia and United States. He brings to his role a deep understanding of developing commercial property to achieve high-level long-term results. Jonathan brings strong communication skills and savvy business acumen to negotiating land acquisitions and legal issues and gaining buy in with state and local government representatives.

ANGUS MACHUTCHISON PROJECT DIRECTOR

Angus has over 25 years’ experience retail property development, including roles with Vicinity, Westfield and McDonalds. Angus has worked on a number of major projects including Chadstone Shopping Centre and the $1.1B Emporium Melbourne project.

SIMON RUBINSTEINDEVELOPMENT MANAGER

Simon has a passion for property and brings a wealth of experience identifying, acquiring and divesting retail property for Coles Group on Australia’s eastern seaboard. A qualified Property Valuer, his knowledge of retail property drivers underpins his hands on approach to development management.

P. 48 P. 495.0 NEWMARK AND MANAGEMENT

6FORECAST FINANCIAL

INFORMATION

P. 50 P. 51

6.0 FORECAST FINANCIAL INFORMATION

6.1 SOURCES AND APPLICATION OF FUNDS

SOURCES OF FUNDS NOTES $’000’S

Proceeds of the Offer 1 $60,000

Debt facility $94,500

Total Source of Funds $154,500

APPLICATION OF FUNDS NOTES $’000’S

Purchase price $135,000

Stamp duty $7,425

Arranger fee 2 $2,700

Debt facility establishment costs 3 $1,040

Due diligence and offer costs 4 $550

Working capital $7,785

Total application of funds $154,500

Notes

1. The purchase price for the Property may be adjusted for usual adjustments of a property and purchase of an operating business. Refer Section 5.0 for further information.

2. Under the Trust’s trust deed, the Trustee will be paid an arranger fee of 2.0 per cent of the purchase price (excluding acquisition costs) of the Property for services provided in relation to the Offer and for the identification, analysis and due diligence work undertaken in the acquisition of the Property.

3. This is the cost of the establishment of the debt facility.

4. Due diligence costs include technical, environmental and valuation due diligence costs associated with the purchase. Costs relating to the Offer include the establishment of the Trust and its legal, financial, and other costs, including the preparation and production of the IM.

6.2 FORECAST PROFIT & LOSS

For the 12 month period 1 May 2018 to 30 April 2019, the Trust’s expected profit and loss based on ordinary accounting principles is:

$’000’S

Rent from leases (net) $11,122

Other Property income $1,543

Gross income $12,665

Less Property operating expenses $4,253

Net Property income $8,412

LESS

Interest expense (assumed) $6,184

Asset management fee $810

Other trust expenses $150

Non recoverable GST $345

Net operating Profit $1,233

P. 52 P. 536.0 FORECAST FINANCIAL INFORMATION


6.2 FORECAST PROFIT & LOSS (CONT.)

Net property income Net Property income is the gross income received from the Centre less property outgoings. The main assumptions underlying the Trust’s forecast net property income are:

• allowances have been made for re-leasing costs, vacancy periods and lease incentives during the forecast period;

• income increases are in accordance with lease provisions. Rentals under the retail leases increase between CPI and 5% per annum;

• there are no tenant defaults during the forecast period; and

• centre outgoings increase by 3.0% per annum.

Acquisition fee An arranger fee relating to the identification, negotiation, settlement and acquisition of the Property is payable to the Trustee. The fee is $2.7 million, being 2.0% percent of the purchase price of the Property.

Asset management fee The asset management fee is payable by the Trust to the Trustee and is 0.6% of the value of the gross asset value of the property or assets of the Trust.

Performance management fee A performance fee will be payable to the Trustee and calculated based on the total return to the Unitholders at the end of the term of the Trust, or earlier, as set out in Section 9.0. In general terms 20% of any excess realisation above the amount by which the Trust delivers a return to investors in excess of an internal rate of return (IRR) of 10.0%, and 30% of any excess above an IRR of 20.0%, payable upon the sale of the Property, at the time of a Liquidity Event (refer Section 1.4) the return of capital to investors, or upon a re-structure of the Trust, or in other limited circumstances.

Trust expenses Normal administrative and operational costs such as accounting, audit, legal, compliance, secretarial, and registry fees are paid by the Trust.

Distributions Distributions are forecast to be made quarterly in arrears commencing in the June quarter 2018.

Net finance costs Finance costs include interest and other costs incurred in connection with the arrangement of borrowings.

For a proportion of the debt, it is intended that the market interest will be fixed via an interest rate swap for the forecast period and the margin rate is assumed to be fixed under the bank loan for the forecast period are expected to result in the effective interest rate. The interest rate adopted throughout the forecast period is 6.12% p.a. Actual interest expense will change to the extent the executed margin or swap differ from these rates.

Investments It is assumed:

• the Property continues to be held beyond the forecast period; and

• no other authorised investments are made other than as set out in the sources and application of funds in Section 5.1 with any surplus assets being represented by cash or short-term deposits earning interest at an average rate of 1.00 per cent per annum.

Fair value adjustments Initially the Property will be measured at cost, including acquisition costs, and then carried at fair value.

Capital expenditure Capital expenditure of $5.3 million has been allowed over the first 3 years. Some of the capital expenditure incurred during the forecast period is part of the capital maintenance programme, and whilst it will maintain and enhance the Centre, in accordance with accounting principles and AIFRS, these costs cannot be capitalised and therefore there will be fair value adjustment during the forecast period.

Tax deferred distributions Distributions will be partly tax deferred due primarily to the availability of tax deductions for depreciation, building allowances, interest & some capital raising costs.

GST The Trust is registered for GST and will generally be able to claim input tax credits in respect of GST paid on a quarterly basis.

P. 54 P. 556.0 FORECAST FINANCIAL INFORMATION


6.3 DEBT FACILITY

The Manager on behalf of the Trustee proposes to enter into a three-year debt facility with a leading financial institution for $94.5 million on acceptable commercial terms.

The loan to the Trust is expected to be secured by a mortgage over the Property and a general security interest over the assets of the Trust.

7TAX

P. 57P. 56

7.0 TAX

7.1 TAXATION IMPLICATIONS

The following provides a general outline of some of the taxation implications of holding Units in the Trust. The information is current at the time of drafting, but may change from time to time, and does not take into account the specific circumstances of any Unitholder. It is therefore important that Unitholders obtain and only rely on independent professional advice as to the specific taxation implications for their own circumstances. The Trustee does not purport to offer any taxation advice.

The information below is based on an Australian resident Unitholder that will hold their investment in the Trust on capital account, and may not apply to Unitholders who are traders or who hold Units as part of a business.

7.2 TAXATION OF THE TRUST

Income tax status of the Trust It is intended that the number of Unitholders in the Trust will qualify the Trust as “widely held” under the definition of a ‘Managed Investment Trust’.

It is expected that the Trust will qualify as an MIT and will elect to hold the Brandon Park Shopping Centre on Capital account. It is also expected that the Trust will qualify as an Attributed MIT (AMIT). It will make a determination prior to making its first distribution whether it will elect into the AMIT regime. This election is irrevocable.

Taxation of Unitholders Distributions made to Unitholders should be included in the Unitholders’ assessable income in the year in which they become presently entitled to the income of the trust or are attributed the income under the AMIT regime. Unitholders should wait until receipt of an annual tax distribution statement for each distribution paid by the Trust each year before completing an income tax return. The distribution statement will provide Unitholders with full details of the distributions paid to the Unitholder.

Disposal of the Property The ultimate disposal of the property should be subject to the CGT rules on the basis that the Trust makes a MIT election. The capital gain on the sale of the Property will be determined as the difference between the capital proceeds from its disposal and the cost base of the Property.

Under current tax laws any capital gain made by the Trust upon the disposal of the property can generally be reduced by 50% if the property has been held for longer than 12 months. Where the Trust is entitled to the 50% CGT discount, Unitholders who are individuals or trusts will generally receive a 50% discount on their share of the capital gain. Unitholders who are complying superannuation funds will generally receive a 33.3% discount on their share of the capital gain.

The distribution of the CGT discount to the Unitholder will be tax free and will not require a reduction in the cost base of their Units in the Trust or trigger a capital gain under CGT event E4 or E10.

Returns of capital and tax deferred distributions The Fund Unitholders should have an initial cost base of $1.00 per Unit, plus any incidental costs they may incur in subscribing for the Units.

Unitholders should generally not be assessed on any return of capital comprising their initial investment in the Units. Unitholders will be required to reduce their cost base in the Units by the amount of the return of capital. To the extent the return of capital is in excess of the cost base of a Unit, a capital gain will arise to the Unitholder

Disposal of Units in the Trust Whether unitholders hold their units on revenue or capital account will depend upon their specific circumstances and investors should seek their own advice. Where unitholders hold their units on capital account they will derive a gain on the disposal of a Unit to the extent that the consideration received on disposal exceeds the cost base of a Unit. Unitholders will incur a loss on the disposal of a Unit to the extent that the consideration on disposal is less than the reduced cost base of the Unit.

Disposal of the Property The ultimate disposal of the property should be subject to the CGT rules on the basis that the Trust makes a MIT election. The capital gain on the sale of the Property will be determined as the difference between the capital proceeds from its disposal and the cost base of the Property.

Under current tax laws any capital gain made by the Trust upon the disposal of the property can generally be reduced by 50% if the property has been held for longer than 12 months. Where the Trust is entitled to the 50% CGT discount, Unitholders who are individuals or trusts will generally

receive a 50% discount on their share of the capital gain. Unitholders who are complying superannuation funds will generally receive a 33.3% discount on their share of the capital gain.

The distribution of the CGT discount to the Unitholder will be tax free and will not require a reduction in the cost base of their Units in the Trust or trigger a capital gain under CGT event E4 or E10.

Goods and Services Tax The Issue of Units and any subsequent transfer of Units by the Unitholders should not be subject to GST. The ability of an Australian resident that is registered or required to be registered for GST to claim input tax credits on related transaction costs (if any) may be restricted. This is a complex area of law and we recommend that such Australian residents seek their own independent tax advice in this regard.

Tax File Numbers (‘TFN’) Unitholders are not required to quote their TFN in relation to an investment in the Fund. However, if a Unitholder does not quote a TFN (or ABN where appropriate), tax at the highest marginal rate plus Medicare Levy will be deducted from distributions made by the Fund.

Stamp duty The issue, transfer or redemption of Units will be subject to landholder duty if, at the time of issue, transfer or redemption (assuming the Trust holds an interest in Victorian land at this time), the acquisition of Units on its own or when aggregated with other acquisitions by the acquirer, a person associated with the acquirer or any other person in an associated transaction, exceeds the acquisition threshold in Victoria, currently being 20%. Where such circumstances apply, duty will be charged at the relevant transfer rates (currently at rates of up to 6% plus the surcharge of 7% if applicable), on the proportion of the unencumbered market value of the underlying Victorian property equivalent to the interest acquired. The acquirer of the Units is primarily liable to pay the duty.

As the stamp duties laws will change from time to time, the Trustee recommends that investors seek their own independent advice before investing in the Trust.

The acquisition of the underlying Victorian property will be subject to duty in Victoria. Duty will be charged at the relevant transfer rates (currently at rates of up to 6%) and any foreign purchaser surcharge, if applicable (currently 7%) on the greater of the consideration paid for the Victorian property and the property’s unencumbered market value. The Trust will be liable for payment of the duty.

P. 58 P. 597.0 TAX

MELBOURNE CBD

8BENEFITS AND RISK

P. 61P. 60

8.0 BENEFITS AND RISK

8.1 BENEFITS

Location The property enjoys an unsurpassed location in a strong and established middle ring Melbourne suburb. Located at the intersection of Springvale and Ferntree Gully Roads in Wheelers Hill, the property enjoys excellent exposure to passing traffic on these two busy arterial roads.

Secure & diversified income The majority of the income in the Centre currently comes from major Australian retailers with a network of stores, strong customer awareness, significant advertising budgets and proven business models. With 51% of the net lettable area made up of the leading corporate tenants (including Coles, Kmart, Aldi, Priceline, Jetts Fitness & Australia Post), Unitholders benefit from a diversity of strong and reliable income sources.

Non-recourse finance The Trust expects to enter into a three year non-recourse debt facility.

Experienced manager The Directors of the Trustee and Manager have significant combined property industry experience and are supported by an experienced and well-resourced team of property specialists. The Manager will oversee the Centre’s performance and the investment performance of the Trust. Through active management of the property, monitoring cash flow performance and identifying ways to enhance returns, the Trustee will d

information memorandum - hewison...brandon park shopping centre is located on a “gateway site”...

Documents