Brisbane City Model Portfolio Three 1 Contents EXECUTIVE SUMMARY 1 ABOUT SPRING FG REALTY 1 INVESTMENT RANGES AND OPTIONS 1 HOW TO INVEST 1 BRISBANE PORTFOLIO 2 PORTFOLIO MARKET 2 Summary list and objectives 5 Blackfold, West End 5 Brisbane Casino Towers, South Brisbane 6 Laguna - Newstead Central, Newstead 7 Mode, Newstead 9 Highline, West End 10 PORTFOLIO SUBURBS 12 West End and South Brisbane 12 Newstead 12 KEY ABS STATISTIC BY PORTFOLIO SUBURBS 13 PORTFOLIO DEVELOPERS 14 WHY AN OFF-THE-PLAN PORTFOLIO 16 THE GENERAL RISKS OF PROPERTY INVESTMENT 16 CONCLUSION 17 DISCLAIMER AND FEES 17 2 Executive Summary direct and SMSF residential real estate investment. Spring FG Realty Pty Ltd has partnered with Spring Financial Group clients hold residential DomaCom Australia Limited to offer multi-property property investments exceeding $500M in value. residential portfolios through DomaCom’s fractional investment platform. The portfolios take advantage of Investment ranges and options DomaCom’s multi-property book-build functionality Domacom multi-property portfolios prepared by offer a direct property solution with immediate Spring FG Realty are available from as little as $10,000 diversification across multiple properties, developers giving the investor exposure to up to five (5) properties and locations. in different geographic locations. The portfolios are open to retail and wholesale An investment of $25,000 gives an investor exposure investors through Domacom-accredited advisers or to up to ten (10) properties. directly by opening a Domacom account. In accordance with DomaCom fund rules all $100,000 or more provides exposure to up to 15 properties have been independently valued by properties in different geographic locations. a leading valuation house. All properties include The model portfolios offered in the first release of window furnishings, depreciation schedules, third- portfolios designed by Spring FG Realty comprise a party quality inspections on settlement and first tenant total of in excess of $25M of high-quality inner-city and/or rental guarantee periods of a minimum of 42 Melbourne and Brisbane residential assets developed days and up to 90 days providing investors further by Australia’s leading public and private company peace-of-mind. developers. Each of the developers, developments and individual Each of the projects is under development properties in the assembled portfolios has passed construction with various expected completion dates Spring FG Realty’s stringent due diligence processes over the next 6-18 months. to facilitate not only inclusion in the DomaCom portfolios but investment by Spring Financial Group How to invest direct investing clients. Investment in this portfolio is available to direct About Spring FG Realty investors by opening an account with Domacom or through a Domacom-accredited financial adviser. Spring FG Realty Pty Ltd is a wholly-owned subsidiary of ASX-listed diversified financial group Spring FG You should also download and read the Domacom Limited (ASX: SFL) and part of the Spring Financial Product Disclosure Statement (PDS) and consider the Group. information contained therein before making any decisions regarding the products. It holds corporate real estate licences in New South Wales (1708663), Queensland (3510266), Victoria Please note that this information memorandum has (074746L) and ACT (18401881). Its role in the Spring been prepared without taking into account your Financial Group is to research and identify residential objectives, financial situation or needs. Before acting property solutions for inclusion in portfolios of Spring on any information contained herein we recommend Financial Group clients. that you consider whether it is appropriate for your circumstances and consider obtaining advice from a Spring FG Limited (Spring FG) is a diversified financial suitably qualified adviser. services company offering financial planning and investment advice; wealth management; insurance and superannuation; finance; and tax & accounting services. Its advice and product offerings are broad and include a specialisation in the high-growth markets of self-managed superannuation funds (SMSFs); and 1 Brisbane Portfolio properties and the included suburbs and Market: Brisbane localities including in later sections. Number of properties: Brisbane, Queensland Total 5, consisting of 2 x 1-bed and 3 x 2-bed Population growth; a diverse economy not overly apartments reliant on a single facet; and a strong track-record Portfolio value: of innovation and infrastructure investment from governments from both sides of politics, make $2,619,500 (excluding stamp duty) Queensland and its capital Brisbane a sound place to Suggested investment size*: invest for the longer term. $10,000 to $500,000 Anticipated gross rental yield*: Queensland generates around 20% of Australia’s gross 4.5% pa domestic product through an economy built upon Anticipated annual capital growth over mining, agriculture, tourism and financial services. 10-year cycle*: Queensland’s main exports are coal, metals, meat 4.2% pa and sugar. Spring FG’s Brisbane Portfolio consists of five (5) Queensland’s ports are amongst the busiest and luxurious apartments across five landmark projects by fastest growing in the country. Port Brisbane for the leading Brisbane developers Devine Limited, BPM example has seen more than $1.3Bn of infrastructure Group and Metro Property Group. and asset investment over the past 20 years and now facilitates more than 2,400 ships pa, transporting more The portfolio has been assembled with investors with than 32 million tonnes of cargo. a minimum of $10,000 and up to $500,000 to invest in mind. Like the Port of Brisbane the city’s airport has also *Based on Spring FG Realty’s market analysis of historical 10 and 15 year sales data and prevailing trends. seen significant growth in recent years. Brisbane Airport is now the largest capital city airport in Portfolio market Australia – three times the size of Sydney. The Airport in currently undergoing a massive $5.2 billion The Brisbane Portfolio has been assembled to expansion; underpinned by the construction of the deliver investments that will provide a sound new $1.35 billion parallel runway. On completion in balance of rental returns with strong capital 2020 Brisbane Airport will become the “Gateway to upside in future years. Our goal in assembling the Australia” and will have the same capacity as both portfolio is to strike the right balance between Hong Kong and Singapore. buying great real estate and achieving superior investment outcomes. Like any market Queensland is not immune to global economic factors and the potential for global Rental yields will vary across the portfolio relative economic weakness; but there is little or no doubt to market conditions at settlement and from as to the long-term demand for Queensland’s time-to-time however we have carefully selected agriculture and mining resources on a global basis, the included properties to a) offer an edge nor for it’s incredible tourism landmarks, and as such when offering the assets to the rental market we invest with confidence in the mid-to-long term in to ensure minimum vacancy across the life of the State. the investments; and b) endeavour to ensure Population growth has long been significant and demand from investors and owner-occupiers consistent. The ABS noted Queensland’s population alike when offering the assets for sale in future at 4,476,000 people as at 2011 representing years. staggering growth of more than 23% over the 10 years from 2001 (just behind WA at 24%). To put that The underlying logic of constructing the portfolio in perspective across the same 10 year period the across Brisbane is set out below with further ABS notes Australia’s population growth as a (still information on each of the specific portfolio very healthy) 13.4%. And Queensland’s population 2 growth continues with total population increasing to Capital prices in Brisbane remain considerably 4,792,000 by the end of September 2015 according more affordable than Sydney on a like-for-like basis to the ABS. Further the ABS is forecasting it to around representing great value-for-money investment double by 2061 to between 7.9 and (an incredible) opportunities. The latest quarterly data from leading 11.1M. research house RP Data Core Logic showed Brisbane median apartment prices at $380,000 or an incredible Brisbane’s (greater metro area) population growth 42% more affordable than the $660,000 median for generally mirrors, and typically runs ahead of the apartments in Sydney. It remains a similar picture for broader State. From 2001 to 2011 the ABS reports the houses with Brisbane 47% more affordable at $490,000 greater Brisbane area population grew by 24% (just versus $921,500. behind Perth at 25%). Yet according to the latest ABS data the annual pre- The Brisbane population was 1.72M at the 2006 census tax wage and salary of those living in Brisbane was and by 2011 was in excess of 2.15M; with an average $52,171 trailing Sydneysiders at $57,612 by just 9%. annual rate of growth of more than 43,000 people. Significantly from an investment perspective, greater Despite a softening in global commodity markets and current affordability translates to greater room for an end to Australia’s so-called mining “boom” the capital upside in our assessment. Brisbane tenants Brisbane population continued to grow across FY2015 and owner-occupiers have more scope to pay with a net increase of more than 35,000 people increased rental and capital prices even if wages again being recorded with most recent ABS forecasts growth remains flat. This is a critical factor in times of estimating sustained growth to between 4.1M and regional and global economic uncertainty. 5.6M by 2061. People living in Brisbane do not need to earn more Whilst the Brisbane market, like any real estate market, to be able to afford to pay more.