R

CBA.0001.0318.0922

®)JLL h ADVISORY

25 July 2013 R

CBA.0001.0318.0923

Contents

Executive Summary 4

Why JLL? 5

How Will We Maximise the Price? 6

Unrivalled Experience - 2014 Pub Sales 8

Unrivalled Experience - 2013 Pub Sales 10

Asset Overview 12

Liquor Licence Overview 13

Gaining Performance Analysis 14

Estimated Realisation 15

Pre Marketing / Due Diligence 16

Method of Sale 17

Marketing Timings & Process 18

Marketing Strategy & Budget 19

Draft Marketing Material 20

Basis of Appointment and Fees 21

Reporting & Probity 22

Annexures 23

Biography Marketing Schedule National Property Source Insert

Nambucca Hotel, Macksville 2 _R

CBA.0001.0318.0924 R

CBA.0001.0318.0925

Executive Summary

Address: 2-4 Wallace Street, Macksville NSW 2447

Method of Sale: Expressions of Interest

Project Team: ■ Sam Handy, Vice President - Pub Investment Sales

■ Charlie Laverty, Analyst - Pub Investment Sales

■ Stephanie Gregory, Associate - Marketing

■ Natalie Davey, Executive Assistant - Investment Sales

■ David Turner, NSW City & Country Hotel Brokers

Indicative Pricing $2,800,000 - $3,000,000

Target Market ■ Entry level publicans

■ Qualified bidders from previous comparable campaigns

■ Existing and regional NSW publicans

■ Existing Brisbane and regional QLD publicans

■ Existing operators of liquor retailers on the NSW Mid North Coast

■ Owners of land/buildings within Macksville

■ Parties seeking a lifestyle and seachange

Timing: ■ Agency appointment Monday 4 August 2014

■ Due Diligence information collection Monday 4 August 2014

■ Marketing material production Monday 11 August 2014

■ EOI campaign commencing Saturday 16 August 2014

■ EOI campaign closes Thursday 18 September 2014

■ Second stage shortlist close Thursday 25 September 2014

■ Exchange Friday 26 September 2014

■ Settlement Monday 03 October 2014

Marketing Budget: $15,619.13

Basis of Appointment Exclusive Agent period of 120 days

Fees 2.75% ex. GST

Nambucca Hotel, Macksville 4 R

CBA.0001.0318.0926

Why JLL?

Track Record

JLL Hotels & Hospitality Group have a comprehensive and unrivalled track record in the sale of pub assets. This track record not only represents the number and size of transactions but also maximised price outcomes for our vendors. We have unparalleled market knowledge and this will provide Hayes Advisory with the strongest platform to ensure all potential buyers are canvassed and entered into a competitive process which will generate robust negotiations and ultimately lead to a successful outcome.

Building value into a transaction

JLL Hotels & Hospitality Group have a proven track record in building value into transactions for both purchasers and vendors alike. We are highly adept at ensuring that purchasers look past traditional net profit/yield valuation metrics and have a very clear understanding of a pub assets investment highlights and various upside opportunities. This leads to maximised price outcomes for our vendors.

Outstanding Sales & Marketing Strategy

JLL Hotels & Hospitality Group have built a specific sales and marketing strategy that will generate Hayes Advisory the highest and best price for the Nambucca Hotel. Our ‘best in class’ marketing communications combined with our integrated sales strategy will add true value to the process.

Integrated Team

JLL Hotels & Hospitality Group consider that there will be interest in the hotel from both Queensland and given Macksville’s location between Brisbane and Sydney. Subsequently, we believe that it is imperative that Hayes Advisory seek to appoint an agency that has an office, market knowledge, database, recent transactional experience and most importantly existing relationships in both states.

In terms of local experience and serviceability, we would seek to appoint David Turner of NSW Hotel Brokers in a conjunctional capacity. David is very experienced, based in Port Macquarie and brings recent and comparable transactional experience to the team. He will also accompany all prospective purchasers on all inspections throughout the course of the campaign.

Nambucca Hotel, Macksville 5 R

CBA.0001.0318.0927

How Will We Maximise the Price?

The Nambucca Hotel represents a compelling opportunity for an owner-operator to acquire an entry-level freehold pub on the mid north coast of New South Wales. Whilst we expect that there will be some interest from prospective purchasers seeking to acquire the hotel and run it under management, we consider that the highest and best sale price outcome is going to be achieved via an owner operator from either Queensland or New South Wales.

The purchaser that is going to pay the highest and best price will need to be someone that is willing to take into account a combination of the hotel’s current earnings, its upside and the underlying land, building and PME value as opposed to someone that is just going to apply unsophisticated net profit/yield valuation metrics.

Substantiate historical and current earnings and highlight the relative underperformance of the business

We have conducted a detailed review of the historical profit and loss statements and consider that the hotel demonstrated an approximate EBITDA of $475,000 for the F14 financial year. We have benchmarked the Nambucca Hotel’s revenues, cost of sales, gross profit percentages and expenses against other comparable hotels and consider it to be a relatively underperforming business. There appears to be excessive expenditure in overheads such as: wages, repairs and maintenance, advertising, entertainment, staff meals, legal costs etc.

In an attempt to substantiate the historical earnings at this level, we will provide purchasers with a detailed add-back and adjustment schedule based on industry averages. We will also use the post-receiver appointment revenues to substantiate the fact the pre-receiver appointment revenues.

Demonstrate the hotels investment highlights and various upside opportunities

The Nambucca Hotel boasts excellent core trading attributes, well balanced revenue streams and compelling upside in the bar, food, gaming, accommodation and bottleshop departments. JLL Hotels & Hospitality Group will very clearly articulate the hotels investment highlights and various upside opportunities, which include:

■ Capitalising upon the planned $780 million Pacific Highway upgrade between Warrell Creek & Nambucca Heads ■ Creating an outdoor smoking solution for all 12 PMEs and upgrading the gaming machine hardware/ software ■ Creating a stronger public bar and sports bar proposition

■ Upgrading the existing TAB facility with improved

■ Seeking to negotiate a preferred food/beverage/accommodation provider agreement with contractors working on the upgrade ■ Leasing the kitchen out to improve the overall bistro offering and saving approximately $150,000 pa in wages overheads ■ Leasing the bottle shop out improve the retail iiquor offering, receive a passive rent and saving approximately $165,000 in wages overheads ■ Improving the layout and retailing standards of the bottle shop

■ Exploring the possibility of erecting a large signboard on top of the hotel and deriving a passive income for advertising

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How We Will Maximise the Price? (cont.)

Demonstrate the underlying land, building & PME value

The Nambucca Hotel occupies a prominent 1,686sqm site on the Pacific Highway. There is a nearby vacant development site in Wallace Street that is 1,502sqm and is being offered for sale at $750,000. This represents approximately $500 per square metre. On the basis of a similar square metreage metric, the Nambucca Hotel site alone would be worth $850,000 and this doesn’t take into account the value of the building, furniture, fixtures and fittings etc.

There are 12 Poker Machine Entitlements (PMEs) attached to the hotel. These are classified as regional PMEs (as opposed to metropolitan) and would achieve approximately $200,000 per block of three in a ‘country to country' PME transaction. This would mean the underlying PME value would be $800,000. However, a purchaser could achieve a price of $235,000 per block of three in a ‘country to city’ PME transaction which would mean the underlying PME value would be $940,000. Note, that regional hotels are only allowed one ‘country to city’ PME transaction per calendar year and this sell down would therefore take four years to complete.

Nambucca Hotel, Macksville 7 R

CBA.0001.0318.0929

Unrivalled Experience - Pub Sales______2014

JLL Hotels & Hospitality Group have been dominant in the disposal of a diverse range of Hotels in the NSW sector, hav­ ing already brokered 20 pub transactions in the first half of 2014.

Crest Hotel, Sylvania Palms Hotel, Chullora

Date of Sale: July Date of Sale: July Date of Sale: June

Sale Price: $19,200,000 Sale Price: $25,120,000 Sale Price: $22,000,000

Yield: 5.58% Yield: 10.35% Yield: 10.45%

Vendor: Reserve Hotels Vendor: Redmond Family Vendor: Coles Myer Property Developments

Purchaser: ISPT Purchaser: Private Investor Purchaser; Iris Hotel Group

Beach Palace Hotel, Coogee Buena Vista Hotel, Mosman Hotel Centennial, Woollahra

Date of Sale: April Date of Sale: March Date of Sale: February

Sale Price: $37,000,000 Sale Price: $13,000,000 Sale Price: $6,000,000

Yield: N/A Yield: 8.00% Yield: 9.16%

Vendor: Jomaring Pty Ltd & Ardilo Pty Ltd Vendor: Newhaven Hotels Limited Vendor: Diakofti Pty Ltd

Purchaser: Merivale Purchaser: Medich Corporation Purchaser: Medich Corporation

Wiley Park Hotel, Wiley Park Waterworks Hotel Patonga Beach Hotel, Patonga

Date of Sale: May Date of Sale: July Date of Sale: July

Sale Price: $15,500,000 Sale Price: $8,250,000 Sale Price: $8,500,000

Yield: 10.00% Yield: 10,30% Yield: 9.41%

Vendor: Jetobee Pty Ltd Vendor: Goff Family Vendor: Robert Osbourne

Purchaser: Nelson Meers Liquor & Hospitality Purchaser: Lantern Hotel Group Purchaser: Andrew Smith R

CBA.0001.0318.0930

Unrivalled Experience - Pub Sales 2014

rw« ivfiiiim Paddington Arms Hotel, Paddington Australian Arms Hotel, Penrith Triple 8 Hotel, Haymarket

Date of Sale: March Date of Sale: May Date of Sale: April

Sale Price: $5,150,000 Sale Price: $4,400,000 Sale Price: $10,000,000

Yield: 7.00% Yield: 10.30% Yield: 10.25%

Vendor: Saleh Enterprises Vendor: Allan & Jann Quinn Vendor: Nelson Meers L & H Group

Purchaser: Merivale Purchaser: Matthew & Peter McCoy Purchaser: Iris Capital

HUtU U'J 3p

Lansdowne Hotel, Chippendale Clarendon Tavern, Clarendon Watershed Hotel, Darling Harbour

Date of Sale: February Date of Sale: April Date of Sale: June

Sale Price: $6,200,000 Sale Price: $2,950,000 Sale Price: Confidential

Yield: N/A Yield: 11.35% Yield: Confidential

Vendor: Kodrum (No.11) Pty Ltd Vendor: Price Waterhouse Coopers Vendor: Kavia Holdings

Purchaser: Oscars Hotels Purchaser: Phisol Pty Ltd Purchaser: John Lucas

Bird In Hand Inn, Pitt Town Noble Bar (Trumps Tavern), Sydney Macquarie Arms Hotel, Windsor

Date of Sale: April Date of Sale: April Date of Sale: June

Sale Price: $1,100,000 Sale Price: $2,750,000 Sale Price: $3,750,000

Yield: 13.65% Yield: 7.00% Yield: 11.15%

Vendor: Stella Dawson Vendor: JDA Hotel Investments Vendor: Pelathon Management Group

Purchaser: Paul McGurr Purchaser: Merivale Purchaser: Michael Patterson

Steelworks Hotel, Port Kembla Imperial Hotel, Condobolin

Date of Sale: January Date of Sale: June

Sale Price: $2,100,000 Sale Price: $800,000

Yield: 14.20% Yield: N/A

Vendor: Tony Bray Vendor: PKF Lawler

Purchaser: Neil Fletcher Purchaser: Sheree Waks R

CBA.0001.0318.0931

Unrivalled Experience - Pub Sales 2013

JLL Hotels & Hospitality Group were dominant in the disposal of a diverse range of Hotels in the NSW sector in 2013, having brokered more transactions than all other firms combined.

Jackson’s on George, Sydney Crown Hotel, Surry Hills Empire Hotel, Kings Cross

Date of Sale: October Date of Sale: December Date of Sale: July

Sale Price: $22,500,000 Sale Price: $15,500,000 Sale Price: $12,000,000

Yield: 6.66% Yield: 11.60% Yield: 5 00%

Vendor: Marsico Holdings Vendor: Padrava Pty Ltd Vendor: Kingston Capital

Purchaser: Lend Lease Purchaser: Lantern Hotel Group Purchaser: Duggan Family Holdings

Crest Hotel, Kings Cross Guildford Hotel, Guildford Bank Hotel, Kings Cross

Date of Sale: January

Yield: Not applicable Yield: Closed at time of sale

Vendor: Australand Vendor: Wiley Park Properties Pty Ltd Vendor: Techtonic Pty Ltd

Purchaser: Nelson Meers Liquor & Hospitality Purchaser: Iris Hotel Group Purchaser: Asteria Holdings Pty Ltd Group

King Street Brewhouse, Sydney PJ Gallagher’s, Drummoyne Macquarie Hotel, Sydney

Date of Sale: September Date of Sale: January Date of Sale: February

Sale Price: $14,320,000 Sale Price: $20,000,000 Sale Price: $8,500,000

Yield: 11.93% Yield: 11.14% Yield: 10.29%

Vendor: GR8 Pty Ltd & VillacostaPlenty Pty Ltd Vendor: Gallagher Hotel Management Vendor: Schwartz Family Company Pty Ltd

Purchaser: Red Rock Leisure Purchaser: Iris Hotel Group Purchaser: Christian Denny Unrivalled Experience - Pub Sales 2013

Date of Sale: February Date of Sale: October Date of Sale: September

Sale Price: $4,020,800 Sale Price: $2,650,000 Sale Price: $3,575,000

Yield: 12.19% Yield: 11.32% Yield: 10.18%

Vendor: Lucky Australian Tavern Pty Ltd Vendor: Maguire Family Vendor: Australian Executor Trustees Limited

Purchaser: Pelathon Management Group Purchaser: Pont Investments Purchaser: Michael Patterson

Date of Sale: December Date of Sale: September Date of Sale: August

Sale Price: $1,915,000 Sale Price: $400,000 Sale Price: $5,027,670

Yield: Not applicable Yield: Not applicable Yield: Not applicable

Vendor: Dirou Hotel Management Vendor: Soho Properties Vendor: Renroc Hotels

Purchaser: Waugh Hotel Management Purchaser: Peter Phillips Purchaser: Gallagher Hotel Management

Nambucca Hotel, Macksville 11 R

CBA.0001.0318.0933

Asset Overview

Address 2-4 Wallace Street, Macksville NSW 244/

Site 1,686sqm

Zoning B3 - Commercial Core

Weekly Revenues FY14 FY13

Bar $11,107 $10,827

Bottleshop $54,625 $52,252

Bistro $3,558 $4,734

Gaining $4,958 $5,922

Accommodation $1,005 $951

Other $2,071 $1,864

Total $77,324 $76,550

Net Profit (FY14) $450,000 $475,000

Gaming Machines 12 (SIA 12)

LGA Nambucca Shire

Top 200 Position 955 (March 2014)

Liquor Licence Monday - Saturday 5:00am - 12:00pm Sunday 10:00am- 10:00pm

Accommodation Rooms 13 (5 rooms ensuited + manager’s residence)

Upside ■ Capitalise upon the $780 million Pacific Highway upgrade ■ Harness the gaming opportunity - smoking solution & gaming hardware/software upgrade ■ Upgrade the TAB facility ■ Preferred accommodation provider with contractors on Pacific Highway upgrade ■ Create a stronger public bar & sports bar proposition ■ Improve the retailing standards of the bottleshop or lease out ■ Reposition the bistro offering or lease out

Nambucca Hotel, Macksville 12 R

CBA.0001.0318.0934

Liquor Licence Overview

The Nambucca Hotel has a Hoteliers Licence by the Liquor Administration Board of New South Wales with the following details:

Location 2-4 Wallace Street, Macksville NSW 2447

Licence Owner Hayes Advisory

Licensee Hayes Advisory

Approved Devices 12 Poker Machine Entitlements (PMEs)

Trading Hours Monday - Saturday 5:00am - Midnight Sunday 10:00am- 10:00pm

Gaming Shutdown Hours 4:00am - 10:00am

LGA Classification Country

LGA Band 3

Gaming Machine Threshold 12

Gaming Machine Entitlements 12

Poker Machine Permits 0

Maximum Gaming Machine 12 Authorisations Allowed

Nambucca Hotel, Macksville 13 R

CBA.0001.0318.0935

Gaming Performance Analysis

A review of the below Nambucca LGA gaming ranking listing and the Nambucca Hotel's profit & duty report will demon­ strate that the gaming performance has been in a sharp decline over the last three years.

JLL Hotels & Hospitality Group will seek to demonstrate how to improve the hotel’s gaming turnover/profit via implement­ ing a smoking solution, reviewing the existing gaming hardware and software and improving the gaming room’s overall layout, spacing between machines, privacy, lighting etc.

Golden Sands Tavern Nambucca Heads 750 783 759 712 716 680 703 683 696

Bowra Hotel Bowraville 812 789 886 977 993 1,095 1,187 1,153 1,214

VWall Tavern Nambucca Heads 881 882 955 1,030 875 970 1,028 1,050 975

Star Hotel Macksville 932 838 966 1,020 930 928 1,019 1,024 893

The Valla Beach Tavern Valla Beach 941 941 979 1,008 934 957 1,027 1,049 1,085

Nambucca Hotel Macksville 955 965 962 873 976 892 918 807 885

The Pub with no Beer Taylors Arm 1,391 1,381 1,440 1,481 1,444 1,509 1,407 1,415 1,425

4% Trade & NSW Trad* a lnv«lineHl Investment GF'O 0&X 7060, Sydney NSW 2001 NSW Office of Liquor, teaming -S Racing T«i 9995 0300 I Fax 9995 QMS Web wMw.olgr.nsw.gav.au A0N 72 189 fllO 072

NSW Office of Liquor, Gaming and Racing Gaming Device Profit ana Tax History

Premises

116713 LIOH4Q011B713 Nambucca Hotel MACKSVILLE

Period Ended $ Net Profit $ Tax Period- Elided 5 Net Pf&frt STax

Mar-02 153.004.03 29,173.80 Mar»09 150,246.27 32,695.93

Jun-02 180.168.45 36,051.83 Jun-09 151,670 20 33,163.82

Sep-02 183.890.34 37.020.99 Sep-09 153,846.06 34,605.98

D&C-D2 173,178.09 34,245.44 Dec-09 147,676.64 32,850.73

Mar-03 154,110.94 29.305,14 Mar-10 108,254.45 21,201.81

Jun-03 190,273.44 28.310.05 Jtin-10 124,589 66 26,004.36

Sep-03 155,371.61 29,631 34 Sep-10 112,067.64 20,482.32

Dec-03 16 V019.56 31.095.17 Dee-10 1Q6J7S.15 1S.7S6.7S

Mar-04 159.250.36 30.036.77 Mar-11 74.921.25 8,224,01

Jun-04 177,759.42 35,432.47 Jun-11 36,914 39 12.181.75 t5,746H> Sep-04 182.073.11 37,024.37

Dec-04 167.980.40 33,889.81 Dec-11 108,300.71 19,265.63

Mar-05 164.S11.67 33,075,65 Mar-12 86,719.06 12,117.29

Jyn-05 182,200.22 37,658.05 Jun-12 109.002.30 19,470.96

Sep-05 202.6S2.19 44,293.74 CSec-12 95,366.92 14,971.dsD>

Dec-05 172.561.62 36.139.20 Dec-12 94,009.98 14,523.29

Mar-06 168.962.89 35,163.94 Mar-13 $4,638.36 4.830.76

Jun-06 177.885.77 37.58204 Jun^13 66,370 27 12.002.19 9J17.9s1> Sep-06 227,386.92 52,311.16 77,933.18

Dec-00 153,090 54 31.731.OB

Mar-07 129.527.81 25.204.20

Jiin-07 156.445.94 32,660.53

Sep-07 119.223.17 23,045.93

Dec-07 127,205.18 25.296.86

Mar-00 103.126,72 18,506.74

■Juin-OS 119,105.11 23,012 64

S-ep-08 157,234.99 34.708.68

Dec-00 123.984.41 25,132.51

Nambucca Hotel, Macksville 14 R

CBA.0001.0318.0936

Estimated Realisation

The below estimated realisation has been calculated after taking into account recent discussions with Michael Hogan and Alan Hayes, an informal inspection of the hotel, a review of the pre-receiver appointment financials and a discussion with a local hotel valuer. We have also given due consideration to the below recent and comparable sales transactions. Consideration has also been given to the hotels condition, underlying land, building and PME value and various business upside opportunities.

There has been much recent conjecture regarding the yields of freehold going concern hotels within coastal New South Wales, particularly for pub asset sales between Newcastle and Coffs Harbour. Recent sales within this region have largely been distressed and/or sold at break-up value which has meant it has been proven quite difficult to apply an accurate yield to the Nambucca Hotel, Macksville.

Nonetheless, the below table is an accurate analysis of recent and comparable pub transactions that have sold within the region and market evidence would therefore suggest that sale yields achievable for entry level mid north coast pubs would be within the range of 14% and 30%.

However, it is accepted by operators and investors alike that hotel businesses that provide a good mix of trade, demonstrate obvious upside, are in good condition and are located in strong coastal centres are generally capped at a sharper yield by valuers, financiers and indeed purchasers. JLL Hotels & Hospitality Group consider that the Nambucca Hotel is one such asset.

Lambton Park Hotel Newcastle Jul-14 $2,620,000 $400,000 15.3% Midnight 15 1,039 $30,500

Northern Rivers Hotel Lismore Feb-14 $1,050,000 $315,000 30.0% Midnight 10 2,078 -

Station Hotel Lismore Dec-13 $1,850,000 $444,000 24.0% - 10 2,078 $70,000

Tattersalls Hotel Casino Dec-13 $1,225,000 $245,000 20.0% Midnight 13 1,994 $19,500

Railway Hotel Armidale Dec-13 $1,700,000 » * Midnight 12 3,818 -

Commercial Hotel Mullumbimby Nov-13 $2,270,000 $365,000 16.1% Midnight 15 1,128 $32,239

Wicklow Hotel Armidale Oct-13 $2,605,000 $377,725 14.5% 3am 15 1,870 -

Imperial Hotel Murwillumbah Jul-13 $2,400,000 - - Midnight 17 2,540 -

Australian Hotel Ballina Mar-13 $2,300,000 $322,000 14.0% 3am 12 1,787 $34,192

Tattersalls Hotel Inverell Apr-12 $1,150,000 $161,000 14.0% 10pm 14 1,454 $39,700

Civic Hotel Lismore Mar-12 $1,500,000 - - 3am 15 1,053 $23,160

West Kempsey Hotel Kempsey May-11 $2,150,000 $516,000 24.0% Midnight 13 2,225 $63,300

With consideration given to all of the above factors, we believe that prospective purchasers will likely apply a yield range of between 16% and 17% to the Nambucca Hotel. As previously advised, we have reviewed the pre-receiver appointment financials and provided the post-receiver financials substantiate the revenues from these financials, we would consider that the current maintainable EBITDA of the business would be approximately $475,000.

On the basis of a maintainable EBITDA of $475,000 capitalised against a yield range of 16% -17%, we would consider that the hotel will likely achieve a sales price of between $2,800,000 and $3,000,000.

Whilst there is significant opportunity for an incoming operator to increase the hotels profitability (by realising the various upside opportunities available), this realisation will require some capital expenditure on reconfiguration, renovation and refurbishment. Given this expense it is therefore unlikely that prospective purchasers will place any higher value on this figure.

Clearly throughout this process JLL Hotels & Hospitality Group will do everything possible to achieve a premium above this estimated realisation. We will market the hotel at a price point of $2.5m. However, most purchasers are going to require some debt for the acquisition and this will likely require a valuation. Both of these requirements are unlikely to accommodate a sales realisation exceeding the upper range indicated.

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CBA.0001.0318.0937

Pre Marketing / Due Diligence

Nambucca Hotel, Macksville 16 R

CBA.0001.0318.0938

Method of Sale

In any particular hotel divestment market, and definitely in the current climate, the marketing strategy for any pub asset divestment is bespoke to the type of hotel business being sold and the other key property and business attributes. Furthermore, the ability to substantiate earnings and overheads and the ability for these to be easily valued, and debt and equity sourced by a prospective purchaser, is a key driver of the decision with regards to an optimum sales strategy.

As previously advised, we have reviewed the pre-receiver appointment financials for F13 and F14 and consider that the hotel is generating a maintainable EBITDA of approximately $475,000. Flowever, this figure is heavily reliant on us making some significant add-backs and adjustments, most of which are not easily substantiated via a third party. On this basis, we consider that there is going to be varying levels of ambiguity between purchasers around an accurate EBTIDA.

There will also be a perception from the market that these pre-receiver appointment financials were prepared in the knowledge that the hotel was soon to be marketed for sale via Manenti Quinlan which will likely arouse some suspicion as to their accuracy. Furthermore, it is now obvious that the vendor was in some degree of distress and prospective purchasers will likely approach these pre-receiver appointment financials with a further degree of caution.

We also consider that some prospective purchasers will likely significantly differ in their yield application on the asset given some of them will emanate from both QLD & NSW, Others will differ in yield application given their acceptance of the upside that the business presents, the condition of the building and whether or not the asset is deemed coastal or regional. The fact that the hotel has already undergone an unsuccessful campaign may also create some disparity between those that are new to the asset and those that participated in the previous campaign.

The Nambucca Hotel will likely attract interest from a wide range of investors (first time publicans, owner-operators, existing publicans seeking to run the hotel under management, parties seeking a lifestyle change and liquor retailers) all of whom have very different valuation metrics and investment criteria. This reason coupled with the above factors impacting both EBITDA and yield applications will mean that there will more than likely be large variance between offers. We would therefore note recommend a method of sale whereby the purchasers do not have any transparency of each other’s bids.

With the above in mind, it is our recommendation that we offer the hotel via an initial Expressions of Interest campaign followed by a one week shortlist Tender process. Prospective purchasers would be invited to submit Expressions of Interest by the scheduled close date and shortlisted parties would be then be given one week to submit highest and best offers in the form of an executable Contract of Sale. The shortlist Tender stage will ensure genuine commitment from bidders as it requires them to have all of their purchasing entities, the contract of sale, a deposit cheque and debt sourced by the second round close.

This process is widely accepted by the prospective purchasers, allows for little to no transparency between bidders and provides Hayes Advisory with adequate time and flexibility to review all bids and negotiate price and conditionality throughout the shortlist Tender stage.

Nambucca Hotel, Macksville 17 R

CBA.0001.0318.0939

Marketing Timings & Process

Marketing Program

The section below illustrates JLL Hotels & Hospitality Group proposed process and timings for the sale of the Nam­ bucca Hotel. It is designed to produce maximum exposure to produce ready, willing and able purchasers at the highest possible price. The description of the process is as follows:

IB

Monday 4 August 2014 Agent appointment

Monday 4 August 2014 Due Diligence information collection

Monday 11 August 2014 Preparation of marketing material

Thursday 14 August 2014 Approval of marketing material

Saturday 16 August 2014 EOI campaign (5 weeks)

Thursday 18 September 2014 EOI close

Friday 19 September 2014 Short-list

Thursday 25 September 2014 Second round process close

Friday 26 September 2014 Exchange of Contracts

Monday 3 October 2014 Settlement

The initial stage of a successful disposition involves a formal inspection, extensive due diligence (collation) and PHASE ONE production of marketing materials to create the right message to take to market. JLL Hotels & Hospitality Group will Preparation work closely with Hayes Advisory at this stage to generate ‘best in class' marketing and due diligence material.

JLL Hotels & Hospitality Group will prepare a co-ordinated and high quality marketing program which will include PHASE TWO media advertising, website contents, a detailed Information Memorandum comprising an analysis of the asset, an Marketing Material electronic brochure sent to our database, formal Press Release and personal presentations to targeted prospective Production purchasers. JLL Hotels & Hospitality Group will ensure that all relevant information on the property is made available and is put in to a format that can be easily accessed and understood by buyers.

Once the due diligence information and marketing material has been prepared, JLL Hotels & Hospitality Group will PHASE THREE launch the asset to market. A critical component of this phase is the flow of information to the targeted prospective Market Launch purchasers which we will deliver through face-to-face presentations.

Once the asset has been launched' qualified enquirers and targets will receive the Information Memorandum and PHASE FOUR access to the Due Diligence information. Throughout this phase we will meet with, follow up and answer any queries Inspections and from prospective purchasers and ensure the market is fully focussed on this opportunity. We will also conduct Campaign inspections during this time and will address any further queries on the part of prospective purchasers. We will ensure Hayes Advisory receives consistent reporting and feedback on the hotel throughout this time.

PHASE FIVE From the Expressions of Interest received, a decision can be made on which way to move foiward. If an attractive bid Expressions of is made from a reliable party with an acceptable price, terms and conditions, then we may seek to transact Interest (close and immediately. Alternatively, we may elect to shortlist the most attractive bids and provide them with a defined period of shortlist process) time to review Contract amendments and submit best and final offers.

PHASE SIX Management of the exchange and settlement process with all stakeholders including purchaser, Hayes Advisory, Contract Executing Solicitors, Accountants, Lenders and Valuers. and Settlement

Nambucca Hotel, Macksville 18 R

CBA.0001.0318.0940

Marketing Strategy & Budget

Marketing Strategy

Given the requirement for a definite outcome, we propose a high profile marketing campaign. JLL Hotels & Hospitality Group has no peer in the formation and execution of pub divestment campaigns.

■ Direct presentations - we will directly contact all publicans between Sydney and Brisbane and highlight the opportunity

■ Press advertisements - we would propose to advertise the pub in the ‘Hotels for Sale’ section of the Sydney Morning Herald and the Brisbane Courier Mail

■ Electronic Brochure - an electronic brochure will be sent to our pubs, commercial and retail property databases

■ Information Memorandum - a high quality Information Memorandum will be compiled to highlight the rarity of the availability of these assets

■ Website - we will feature the assets on Pubs for Sale, The Shout and Real Commercial

■ Signboard - we will erect a signboard on the hotel given its exposure to the Pacific Highway. This will also differentiate the current selling process from the previous unsuccessful one and demonstrate the pub is for definite sale.

Marketing Budget

With a clear understanding of the target market, and a core belief in the pub asset selling proposition, the marketing message can be delivered in a full and integrated strategy.

An itemised breakdown of the marketing budget has been included below.

Press Advertising Sydney Morning Herald & Brisbane Courier Mail $10,424.66

Real Commercial The Shout Website Listings $114.55 JLL Hotels & Hospitality Group NSW City Country Hotel Business

Information Memorandum Professional design and printing by JLL $0.00

Press Release Local coastal / regional newspapers $0.00

Electronic Brochure $0.00

Advertisement $400.00

Signboard $1,200.00 (approx.)

Project Management Management of media bookings and overseeing artwork $260.00

Miscellaneous Copying, searches, postage, travel etc. $1,000.00

Total excl. GST $13,399.21

GST @10% $1,339.92

Nambucca Hotel, Macksville 19 R

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Draft Marketing Material

For Sale by Expressions of Interest Closing Thursday 25 September 2014

• Capitalise upon $780m Pacific Highway upgrade ■ Annual turnover in excess of $4m - compelling upside • Strong existing retail liquor business - $50,000 p/w

Sam Handy Entry-level Mid North Coast freehold pub opportunity

• Capitalise upon the $780 million Pacific Highway upgrade - Warrell Creek to Nambucca 0412 590 509 Heads • Annual turnover exceeding $4 million - well balanced revenue stream • 12 gaming machines - compelling upside to significantly increase gaming tumover/profit David Turner • Prominently situated f ,686sqm site on the Pacific Highway • Strong existing drive-through bottleshop business - $50,000+ revenue per week 0420 360 644 • TAB. bottleshop. 13x accommodation rooms, manager's residence & on-site car parting FOR SALE BY EXPRESSIONS OF INTEREST Level 25,420 George Street, Sydney Closing 4pm (AEST) Thursday 25 September 2014. haves ■ Aoviiotv

www.jlLcom.au/XXXXXX For further information or to arrange an inspection, please contact the following agents:

Sam Handy John Musca Signboard Vice President - Investment Sales National Director - Investment Sales Hotels & Hospitality Group Hotels & Hospitality Group 02 9220 8588 02 9220 8710 0412 560 509 0424 257 004 [email protected] [email protected]

E-Brochure Capitalise upon the $780m Pacific Highway upgrade

Nambucca Hotel. Macksville • Entry-level mid north coast freehold pub • Annual turnover in excess of S4mil!ion • 12 PME s - compelling upside in gaming turnovef/profit via a smoking solution (STCA) • Strong existing retail liquor business - approx.S50.000 per week • Prominant 1.686sgm site situated on the Pacific WL •- "■ifAi Highway •TAB, bistro, 13 accommodabon rooms, nnffiTnfi managers residence and on-site parking EXPRESSIONS OF INTEREST Closing 4pm (AEST) Thurs 25 September 2014 „ Sam Handy 0412 590 509 John Musca 0424 257 004

Sydney 02 92218777

SMH—Pubs for Sale

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Basis of Appointment & Fees

Basis of Appointment

JLL Hotels & Hospitality Group are seeking an exclusive appointment for a period of 90 days. We would offer a conjunction agreement to David Turner of NSW Hotel Brokers.

Fees

JLL Hotels & Hospitality Group have a demonstrable track record of not only transacting the biggest and best pub assets, but also for generating premium pricing outcomes for our clients.

We believe that a fair success-based remuneration is an integral part of a healthy partnership and on this basis we would propose a fee of 2.75% + GST on the gross sale price achieved.

Nambucca Hotel, Macksville 21 R

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Reporting and Probity

Reporting

To ensure Hayes Advisory remains informed and involved at all stages of our marketing campaign, we will have a weekly teleconference meeting with Michael Hogan and Alan Hayes as best suits your schedule.

In these meetings we will provide you with detailed written reports outlining:

■ Enquiry Register ■ Purchaser interest and feedback, both positive and negative ■ Negotiation stages ■ Campaign collateral hit rates ■ Details of our active canvassing

Please note, we are able to adapt our reporting format and timing to fit within Hayes Advisory’s preferred process if required.

Probity Obligations

JLL Hotels & Hospitality Group understands the need to maximise value and are aligned to ensuring risk mitigation for Hayes Advisory in terms of your probity obligations. Our dealings, marketing, reporting, advice and conduct at all times will reflect this and Hayes Advisory will receive accurate, timely and transparent marketing updates and relevant advice throughout the course of the campaign.

Furthermore we are acutely aware of the need to ensure that all components of the asset and opportunity are communicated to all the target markets identified to categorically be able to deliver an outcome that is unequivocally the highest and best available in the market place.

Nambucca Hotel, Macksville 22 R

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Biography

Nambucca Hotel, Macksville 24 _R

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Current responsibilities Sam Handy joined JLL's Hotels & Hospitality Group in 2009 as the New South Wales Pub Investment Sales Manager specialising in the assessment and disposal of metropolitan Sydney pub assets within the midmarket price range of $5m - $20m price range.

Previous experience Prior to joining JLL’s Hotels & Hospitality Group, Sam spent eight years in the hotel and pub industry working in a number of key sales roles for ’s largest alcoholic beverage distributor, Diageo Australia.

During this time he developed credible and professional relationships with key industry stake holders across the state including some of the industry’s largest and most active hotel owners and investors. Client experience

With an extensive family heritage in pub ownership and management, Sam has an intimate • Merivale Group knowledge of hotel operation. • Keystone Hospitality • Pelathon Hotels Appointed to the role of Manager at JLL’s Hotels & Hospitality Group in 2009, Sam is responsible for Management both metropolitan and regional pub sales and has rapidly established himself as an industry leader in midmarket metropolitan pub divestments. • Lantern Hotel Group • Thomas Hotels Group Major Clients • Laundy Hotel Group ■ Merivale Group • Iris Capital ■ Keystone Hospitality ■ Pelathon Hotel Management • Murphy Hotel ■ Lantern Hotel Group Management ■ Thomas Hotels Group • Gallagher Hotel Management Recent Transactions • Redcape Property Fund ■ Empire Hotel, Kings Cross $12.0m ■ Balmain Monkey Bar, Balmain $ 6.9m ■ PJ Gallagher's, Drummoyne $17.0m ■ Macquarie Hotel, Sydney $ 8.5m ■ Lucky , St Marys $ 4.1m ■ Chatswood Monkey Bar, Chatswood $6.95m ■ Canterbury Club Hotel, Canterbury $ 7.4m ■ Northlakes Hotel, San Remo $ 8.0m

For more information, contact: Sam Handy______

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Marketing Schedule

Nambucca Hotel, Macksville 25 MARKETING SCHEDULE/ TAX INVOICE NO: JS044276 Property: Nambucca Hotel, Macksville JLL Master Code: 103410 Date: Friday, 25 July 2014 Prepared by: Steven Mah Agent: Sam Handy & John Musca Version: 1 Campaign Type: Trading as: Attention to: Address:

Contact number: E-mail:

MEDIA Sydney Morning Herald Colour Load Saturday 30/08/14 Hotels For Sale 9 cms x 4 col included $2,390.47 06/09/14 Hotels For Sale 9 cms x 4 col included $2,390.47 13/09/14 Hotels For Sale 9 cms x 4 col included $2,390.47

Brisbane Courier Mail Friday 29/08/14 Primesite 9 cms x 2 col (M3x2) $1,626.63 05/09/14 Primesite 9 cms x 2 col (M3x2) $1,626.63

Total Media $10,424.66

PRODUCTION Advertisement Production (9 X 4 X $5pccm) + min alts ($35) + despatch ($75) $400.00 Real Commercial 3 month enhanced listing (Tier 2) $114.55 Signage Signage allowance $1,200.00 Internet Listing www.theshout.com.au & www.jll.com $0.00 Project Management Management of media bookings and overseeing artwork $260.00 Miscellaneous Travel, searches, couriers and other incidentals $1,000.00

Total Production $2,974.55 Total Media $10,424.66 Total ex GST $13,399.21 GST @10% $1,339.92 Total $14,739.13

Campaign will commence upon signed approval this invoice.

APPROVED BY: JONES LANG LASALLE:

DIRECT CLIENT: ...... DIRECTOR: ......

DATE: ...... DATE: ......

NB: Media costs are correct at time of preparation, however they are subject to change. Any differences will be advised at time of booking. All media and production costs are subject to agency seivice fee of 6%.

Prepared by: Blaze Advertising | Level 15, 35 Clarence Street, Sydney NSW 2000 | Ph 02 9020 8700 | Fax 02 9020 8766 | ABN 23 062 625 834 R

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National Property Insolvency Services

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National Property Insolvency Services

The complete solution for insolvency practitioners

Maximising the value, effectiveness and long-term viability of corporate real estate investments can be a challenge. National Property Insolvency Services directly address the requirements of insolvency practitioners in today’s fast moving environment.

How we help Experience never loses value

We understand the need to maximise value and align a range JLL is ideally placed to advise on and execute a broad range of of property services to ensure risk mitigation for liquidators and transactional and advisory services across commercial, industrial, mortgagees. Our quality advice encompasses the needs of residential development, health and aged care, retail and hotels. insolvency practitioners to comply with their duties under The Having operated in Australia since 1958, we have provided advice Corporations Act. through some of Australia’s toughest economic conditions not only to insolvency practitioners but to many financial institutions including the Our diverse team draws on our Firm’s depth and breadth of major banks and directly with companies in distress. resources, experience and networks. JLL’s local and global reach combined with our market-leading research, ensures our clients Today, JLL is creating real value by concentrating on providing quality receive accurate, timely, transparent and relevant advice right across advice to insolvency practitioners, administrators and banks, applying Australia. the same best practices regardless of asset class and value. _R

CBA.0001.0318.0951

Sales and Investments Should disposal be necessary, we can extract the full value of your asset/s via - Auction, Tender, Expression of Interest, private treaty or discreet off-market. The promotion of your asset is supported by a tailored marketing plan that utilises our extensive database of active local and offshore investors. Our expertise allows clients to act quickly.

Research and Strategic Consulting Customised research complemented by market-leading analysis and forecasting services ensuring you are accurately informed in regard to market activity, trends and forecasts.

Valuations and Advisory An accurate and current market assessment of your single asset or portfolio to ensure you approach the market at the right time and for the right price.

Plant and Equipment Valuations Deep experience and effective solutions over a wide range of assets including plant, machinery, equipment, chattels, mobile plant, vehicles, infrastructure and property fit-out.

Corporate Solutions Asset and / or portfolio realignment, real estate risk analysis and mitigation.

Project and Development Services Realise the potential of unfinished projects or the benefit of redevelopment to maximise your asset’s value through building and project consultancy, development and project management.

Property and Facilities Management Maximise your asset’s efficiency whilst minimising operational costs to ensure market appeal.

Leasing Utilise our leasing services to decrease vacancy and increase income streams and marketability.

Energy and Sustainability Services Maximise the demand, rental return and sale realisation of your asset by ensuring it complies with recently introduced NABERS ratings and ever increasing tenant and workspace demands.

Residential Project Marketing Implement a cost-effective sales and marketing strategy that’s focussed on a successful outcome.

“JLL’s capabilities are second to none. Their ability to profile key buyers and negotiate strongly on our behalf while managing the sale in a rapidly changing economic market assisted us greatly in maximising the sales outcome” Annette Mansfield, Manager, Administrative Services, Schering-Plough

Australia QLD WA Aaron Hatch Jacob Swan Tom Nattrass Director, Residential Project Marketing Director Director

NSW SA rr WORLD’S MOST TM John Macree Roger Klem i—i o ETHICAL Director Director CM COMPANIES® WWW.ETHISPHERE.COM

VIC ACT Stephen Bolton Andrew Balzanelli Director Director

www.jll.com.au

Jones Lang LaSalle ©2014 Jones Lang LaSalle IP, Inc. All rights reserved. All information contained herein is from sources deemed reliable; however, no representation or warranty is made to the accuracy thereof.