City Model Portfolio Two

i Contents EXECUTIVE SUMMARY 1 ABOUT SPRING FG REALTY 1 INVESTMENT RANGES AND OPTIONS 1 HOW TO INVEST 1 MELBOURNE PORTFOLIO 2 PORTFOLIO MARKET 2 Summary list and objectives 5 The Grove - Oak, Brunswick West 5 Night Fall, South Melbourne 6 Gravity Tower, South Melbourne 8 Shadow Play, South Melbourne 9 PORTFOLIO SUBURBS 10 Brunswick West 10 South Melbourne 10 Southbank 11 KEY ABS STATISTIC BY PORTFOLIO SUBURBS 12 PORTFOLIO DEVELOPERS 13 WHY AN OFF-THE-PLAN PORTFOLIO 14 THE GENERAL RISKS OF PROPERTY INVESTMENT 14 CONCLUSION 15 DISCLAIMER AND FEES 15

i Executive Summary direct and SMSF residential real estate investment. Spring FG Realty Pty Ltd has partnered with Spring Financial Group clients hold residential DomaCom 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), 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 Melbourne Portfolio Melbourne, Victoria Market: Melbourne Victoria has one of the strongest economies and enviable lifestyles in the developed world. Number of properties: Its economy is highly diversified with particular Total 4, consisting of 2 x 1-bed and 2 x 2-bed strengths in finance, manufacturing, research, IT apartments and education. Logistics, agriculture, resources Portfolio value: and transportation and tourism also contribute. $2,127,000 (excluding stamp duty) Victoria is headquarters for many of Australia’s Suggested investment size*: largest corporations, including five of the ten largest $10,000 to $100,000 in the country (based on revenue), and four of the Anticipated gross rental yield*: largest six in the country (based on share market 4.5% pa capitalisation). Anticipated annual capital growth over 10-year cycle*: Victoria is Australia’s industrial centre with a very 4.2% pa wide variety of manufacturers, ranging from petrochemicals, aircraft parts and pharmaceuticals Spring FG’s Melbourne Portfolio consists of four (4) and biotech to fashion garments, paper luxurious apartments across four landmark projects by manufacturing and food processing. two leading Melbourne developers BPM Group and Like Queensland, Victoria is of course not immune to Blue Earth Group. global economic factors and the potential for global economic weakness but its economy is diverse and as The portfolio has been assembled with investors with such risk is spread. a minimum of $10,000 and up to $500,000 to invest in mind. Economically Melbourne is as diverse as Victoria with *Based on Spring FG Realty’s market analysis of historical 10 and 15 year sales data and prevailing trends. much of the State economy based in the city. It is an important financial centre. Two of the big-4, NAB and Portfolio market ANZ are headquartered in Melbourne and the city has carved out a niche as Australia’s leading centre The Melbourne Portfolio has been assembled to for superannuation funds, with 40% of the total, and deliver investments that will provide a sound balance 65% of industry funds including the $40 billion-dollar of rental returns with strong capital upside in future Federal Government Future Fund. years. Our goal in assembling the portfolio is to strike the right balance between buying great real estate The city is also home to Australia’s largest and and achieving superior investment outcomes. busiest seaport which handles more than 3,100 ship movements every year and around 37% of the Rental yields will vary across the portfolio relative to nation’s container trade. market conditions at settlement and from time-to- Melbourne is of course the second most populous time however we have carefully selected the included city in Australia. And its population is growing rapidly. properties to a) offer an edge hen offering the assets to According to the ABS, Melbourne’s population grew the rental market to ensure minimum vacancy across by 647,200 from 2001 to 2011. In subsequent years the the life of the investments; and b) endeavour to growth has actually accelerated with an incredible ensure demand from investors and owner-occupiers 91,593 in the 12 months to June 2015 bringing the alike when offering the assets for sale in future years. trailing 10-year average to 83,212 pa.

The underlying logic of constructing the portfolio This is the strongest growth in raw numbers of any city across Melbourne is set out below with further Australia-wide (Melbourne has led population growth information on each of the specific portfolio in Australian capital cities for the last 15 consecutive properties and the included suburbs and localities years) and it is forecast to continue. including in later sections.

2 The ABS forecasts Melbourne’s population to grow to between 7.6M and 9.8M by 2061 with its mid-and-top end forecasts suggesting it strips Sydney of its most- populous city title by that time.

This population growth is being driven by a combination of interstate and regional migration; and significant immigration. The trends are long-term and sustainable.

The desirability of Melbourne is a driving factor in its population growth and therefore demand for property this is reflected by the fact that Melbourne is the only city in the world to win the Economist Magazine’s highly-coveted “World’s Most Liveable City award” an amazing five times, most recently in 2015.

Development Developer Apart. Suburb State Bed Bath Car Total sqm Price

The Grove Blue Earth 3514 Brunswick West Vic 2 2 1 78 $585,000 Night Fall BPM 701 South Melbourne Vic 2 2 1 78 $635,000 Gravity Tower Blue Earth 201 South Melbourne Vic 1 1 0 67 $485,000 Shadow Play BPM 1102 Southbank Vic 1 1 0 46.9 $422,000 Total portfolio value (excluding stamp duty) $2,127,000

3 4 Summary list and objectives Each of the five properties in the Melbourne Portfolio is summarised in the table above.

The portfolio has been assembled with an objective of striking the right balance between buying great real estate and achieving superior investment outcomes. Key to this is investing in suburbs and localities with the right fundamentals.

Our default position has been to include properties close to the CBD in Melbourne and/or in areas with a solid mix of (most or all of) infrastructure and amenity such as transport, education, health care, recreational and retail and high centralised The building will be 8 storeys high and will feature employment. We have targeted more affluent a mix of 115 one, two & three bedroom residential and desirable areas and areas that have already apartments in addition to ground floor retail. undergone, or are well advanced with, urban renewal and gentrification. The Grove is located:

The underlying logic for the inclusion for each of the • 600m to the nearest Tram Stop properties is provided below with further information • 650m to Brunswick North West Primary School on suburbs, localities and portfolio developers in later • 2.1km to Essendon High School sections. • 3km to Brunswick Secondary College • 3km to RMIT University Brunswick The Grove – Oak, Brunswick West • 5.4km to The Grove - Oak by Blue Earth Group • 2.1km to Queens Park & Pool 1-5 Olive York Way, Brunswick West, Victoria • 2.6km to Grantham Street Village – Coles, Apartment 3514 Pharmacy, Australia Post etc. 2-bed 2-bath 1-car • 3km to Royal Melbourne Hospital $585,000 (excluding stamp duty and other • 5km to Royal Children’s Hospital costs) • 4km to Royal Park and Architect: MAP Architecture • 8km to Melbourne CBD Interiors: Adele Bates Design Total apartments: 115 apartments The portfolio includes apartment 3514 which Key amenity: Retail café, exclusive health represents exciting buying at $585,000. The floor plan retreat for residents and private spa, outdoor is a large layout by Melbourne standards for a 2-bed kitchen, bocce court, table tennis, private apartment with a total of 78m2 of space. kitchen with dining room and business centre for tenants. Adele Bates Design Studio has created spectacular and carefully designed interiors that respond to the The Oak is the third stage of Blue Earth Groups highly common issue of inadequate storage that is often anticipated development, The Grove located in found in modern apartments. Each floorplan has the emerging Melbourne suburb of Brunswick West. been designed with the philosophy in mind of “a This three stage development has been designed place for everything”. As result residents will find in association with MAP Architecture and interior ample, properly integrated storage that frees up designer Adele Bates Design. living space for an uncluttered life. These designs are topped off with extensive use of natural materials like All apartments within the development will be engineered timber floors and stone benchtops and superior in both style and functionality. The amenity is splashbacks. unparalleled for the location and this address will set the benchmark for living in the area. Expected completion: November 2017 5 • 26 2-bed and 2-bed plus study apartments • 2 3-bed apartments • 1 rooftop sky terrace with entertaining facilities • Secure and convenient stacker parking • Internal hidden bike storage

The site is located within a short walk of shopping, dining, universities, schools, parklands and world class cultural facilities as well as a short stroll to Port Philip Bay.

The South Melbourne dining and entertainment precinct is an energetic cultural blend of trendy new restaurants, cafes, bars, clubs, retail, are all within just a few minutes’ walk.

Situated on the calm Gladstone Street, the site has a lovely “suburban” feel yet is in the heart of the action and just: • 150m to the Montague St light rail • 200m to Bay Street – the South Melbourne dining Night Fall, South Melbourne and entertainment precinct. Night Fall by BPM Group • 700m to the South Wharf Promenade and nearby 165 Gladstone Street, South Melbourne, retail and hospitality district which includes Victoria leading destinations such as DFO, Roche Mining, Apartment 701 Macarthur Coal, SMEC, Sinclair Knight Merz, 2-bed 1-bath 1-car Macmahon $635,000 (excluding stamp duty and other • 550m to the iconic South Melbourne Markets costs) • 800m from Woolworths and Aldi South Melbourne Architect: DKO Architects • 900m the Melbourne Convention & Exhibition Interiors: Hecker Guthrie Centre Total apartments: 45 apartments • 1.0km from Coles South Melbourne Key amenity: Ground floor retail, bicycle • 1.3km Crown Melbourne Entertainment Complex storage and Sky Terrace with entertainment • 1.5km from famed Victorian College of the Arts facilities. Secondary School • 1.5km to Southern Cross Train Station Night Fall in South Melbourne is a stunning 7-storey • 1.7km from Albert Park, Port Melbourne Beach development designed in collaboration with award- and Station Pier winning architects DKO and renowned interior designers Hecker Guthrie and is by one of Australia’s The specific property included in the portfolio is most respected private developers, BPM. apartment 701 priced at $635,000. Apartment 702 is a 2-bed 2-bath investment located on the 7th floor Night Fall will provide residents with the opportunity of the development and is on the south-east side of to experience the best of sophisticated inner-city the building. The floor plan is a well-designed I2-layout living in Melbourne’s historic Montague precinct. The with a total of 78m2 of space inclusive of a well-sized development is ideally located just 1.5km from the 10m2 balcony. Melbourne CBD and is surrounded by all the arts, music, food, fashion and shopping in thriving South The apartment features a free-flowing living space Melbourne shopping district. that expands to the main balcony. The master bedrooms also features its own ensuite and private Night Fall comprises: balcony. • 45 apartments • 17 1-bed and 1-bed plus study apartments Expected completion: Aug 2017

6 7 Occupying a commanding position on the corner of Montague and Gladstone Streets in South Melbourne, this signature 29 storey tower by the acclaimed Blue Earth Group combines enduring appeal with sleek, modern styling.

Gravity Tower features: • 144 1-bed & 2-bed apartments • 1 retail shop • “Altitude Club” with teppanyaki grill & BBQ and rooftop spa with city views • Indoor internal recreational spaces and indoor private dining room with city & bay views • Designer lounge with fire place • Outdoor cinema and cinema spa with bay views

The dynamic exterior architecture and stunning interior design are the result of collaboration with highly-awarded Plus Architecture. The exterior of the tower presents a singular, iridescent form, with a striking façade which creates for a definitive architectural statement. Internally the development is just as impressive with exquisite apartment designs and finishes and generous residential amenities on offer; similar to that which you would expect from a fine hotel.

The project is located on the edge of Melbourne CBD and the location is described as being a “Walker’s Paradise” with a Walk Score rating of 92 out of 100. • Coffee shops literally at the door • 150m to the tram station running into Southbank and the CBD Gravity Tower, South Melbourne • 650m to The Melbourne Convention Centre and Gravity Tower by Blue Earth Group incredible Southbank precinct 89 Gladstone Street, South Melbourne, • 800m to Port and Victoria sports precinct Apartment 201 • 850m to South Melbourne Market including 1-bed 1-bath Woolworth $485,000 (excluding stamp duty and other • 850m to Bunnings costs) • 1km to Aldi & Coles $485,000 (excluding stamp duty and other • 1.3km to Melbourne CBD costs) • 2km to Royal Botanic Gardens Architect: Plus Architecture • 2km to Port Melbourne beach Interiors: Plus Architecture Total apartments: 144 apartments The portfolio includes apartment 201 at an excellent Key amenity: Ground floor retail, expansive entry-point price of $485,000. foyer, teppanyaki grill & BBQ, Spa with city views, private dining rooms & kitchen, The floor plan is a large layout by Melbourne residents lounge & fireplace, outdoor cinema, standards for a 1-bed apartment with a total of 67m2 cinema spa with bay views. of space.

8 The apartment has been designed to optimise natural services, private dining facilities, business light and provide enduring appeal with sleek, modern lounge. styling and a sophisticated colour palette. The superb finish in a range of contemporary materials deliver an Brilliantly located at 105 Clarendon Street, Southbank effortless feeling of space and openness. The loft-style Shadow Play will serve as a cultural barometer and timber floors throughout the living, kitchen and dining beacon and be a future icon in Melbourne’s skyline. area and plush carpeting in the bedroom emphasise The development is located at the entrance to this modern, luxurious lifestyle. Melbourne’s entertainment and recreation precincts.

The European style kitchen provides for maximum The incredible exterior design of Shadow Play can storage and features reconstitute stone bench tops, be attributed to the work of renowned architects fixed under-mount rangehood, high technology Elenberg Fraser, an internationally recognised design Bosch appliances, and integrated fridge and practice whose signature is evident in many of pantries. The bathroom is detailed to a high level and the world’s most coveted buildings. The interiors of features chic design elements such as brass pendant Shadow Play are equally as impressive and have lighting and mirror-fronted storage offering generous been created by leading firm Hecker Guthrie. capacity. Shadow Play will feature: Residents at Gravity Tower will love this fantastic • 388 apartments comprising of a mix of 1, 2 & location and the fact that it is nestled perfectly 3-bedrooms amongst some of Melbourne’s most vibrant • 46 levels neighbourhoods. Yet, they may never want to leave • 4 high-speed elevators home with the generous, resort style facilities that • 150 car spaces Gravity Tower offers. • Retail amenity at ground level • Incredible rooftop sky lounge Expected completion: Oct 2017 • Podium terrace with stunning pool • Gymnasium • Private dining facilities • Business lounge for the exclusive use of residents • Concierge services

Shadow Play situated amidst the Southbank cultural hub leaving little to wonder as to why the location achieves a near perfect Walk Score of 98 out of 100 making this an absolute walker’s paradise and ideal for the inner city executive lifestyle: • 25m to the nearest tram station which runs straight into the CBD • 300m to Australia’s premier and internationally renowned Crown Shadow Play, Southbank • 300m to Southbank and an incredible array of Shadow Play by BPM coffee shops, restaurants and cultural amenity 105 Claredon Street, Southbank, Victoria • 400m to the Melbourne Convention and Apartment 1102 Exhibition Centre 1-bed 1-bath • 500m to Woolworths & Aldi in South Melbourne $422,000 (excluding stamp duty and other with Coles just another 100m down the road costs) • 1.4km to the Royal Botanic Gardens Architect: Elenberg Fraser • 1.5km to Albert Park Interiors: Hecker Guthrie • 1.6km to the Melbourne Sports & Aquatic Centre Total apartments: 388 apartments • 1.8km to Melbourne CBD Key amenity: Incredible rooftop sky lounge, • 2.5km to the Melbourne Sports and Entertainment podium terrace, pool, gymnasium, concierge Precinct (home to the and MCG)

9 This stunning 1-bed 1-bath apartment is located on significant premium and a high percentage of their level 11 of this world-class development and is perfect already high incomes towards rent. for the inner city professional lifestyle. We have targeted suburbs with higher-than- Priced at $408,000 this well designed 49m2 apartment average income profiles, generally with younger features floor-to-ceiling glass that wraps the frontage demographics more inclined towards renting and of both the bedroom and living room. The luxurious with key attributes such as a high percentage of internal finishes include stone bench tops, timber floors lone-person and couple-only households that are in the living areas and plush carpeted bedrooms. attracted to 1-and-2 bedroom apartment living. We Residents at Shadow Play are spoilt with impeccable have carefully matched portfolio property type to finishes and incredible in-house facilities that are these and other attributes such as car ownership and second-to-none. means of transport to work. We have also sought to address any identifiable imbalance between Expected completion: May 2018 available stock in the suburbs and where demand is heading. Portfolio suburbs Brunswick West Brunswick West is located just 4 km to the Melbourne CBD and has been designated as one of the Major Activity Centres in the Melbourne 2030 Metropolitan strategy. It’s eclectic inner-Melbourne community presents a desirable and exciting place for people to live with great access to employment, entertainment, dining and public facilities.

The suburb has started undergoing rapid gentrification off the back of the success of the process in adjacent suburbs between it and the CBD such as Carlton and South Melbourne Parkville which are increasingly tightly held, enjoying South Melbourne benefits from excellent road strong price growth in recent years. Masses of white connections to the CBD and other nearby activity collar residents are moving into Brunswick West which hubs (via Clarendon Street, Kings Way, City Road and presents an affordable option so close to the CBD. Princes Highway). The area is also well serviced by

Melbourne’s tram network, further supporting high Advancing signs of gentrification are evident in the levels of accessibility. Moving forward, the Melbourne suburb with excellent bars, restaurants and cafes Metro Rail tunnel plan is set to further enhance the opening up in the area. This will pave the way for north-south accessibility of the local area, particularly further gentrification in the short term, by attracting to the CBD and northern parts of the city. more young professionals based on the new and cool lifestyle offerings. Brunswick West now has a Melbourne’s arts precinct, which contains the very similar feel to Collingwood three to four years National Gallery of Victoria, the Arts Centre ago, with bars, cafes and restaurants popping up in Melbourne and a range of theatres, galleries and volume. arts schools is located nearby along St Kilda Road.

Residents of South Melbourne are also within 10 As set out in the ABS statistics summary below minutes of the Crown Casino Complex which offers a Brunswick residents already earn around 20% more multitude of entertainment options. The proximity of income than the national average, with family the CBD also provides for easy access to an array of income is circa 22% higher than national average. entertainment and retail amenity including Emporium, Lone-person households are at 29%. More than 15% Melbourne Central and . of residents pay more than 30% of their (higher- The Albert Park precinct lies to the south of South than-average) income to rent. This is an incredibly Melbourne and comprises Albert Park Lake, Albert important factor showing a willingness to pay a

10 Park Golf Course, and the Melbourne Sports and Set along the , Southbank Boulevard Aquatics Centre. It is also the location of the contains over 30 restaurants and cafés and Australia’s Melbourne Formula 1 Grand Prix. To the east of largest casino and entertainment complex, Crown St Kilda Rd is further park and recreation space, Casino. Moreover Southbank inhabits Melbourne’s headlined by Melbourne’s Royal Botanic Gardens, arts precinct with numerous galleries and education which contains the Sidney Music bowl, the facilities. The area also borders the Melbourne and popular running tracks. Convention and Exhibition Centre to the west, which In total, these parks include over 240 hectares hosts concerts, conferences, lectures and exhibitions. of green space. As well as having access to the And in addition due to its location and great Clarendon Street retail strip, to the east is one of walkability its residents can enjoy all the offerings of Melbourne’s largest retail strips; Chapel Street, which Melbourne CBD and neighbouring suburbs such as offers a range of fashion and boutique stores coupled South Melbourne. with cafes, restaurants and bars. To the south of Albert Park is the suburb of St Kilda, which is home to Southbank is also excellently connected to key a number of popular entertainment venues including arterial roads of Melbourne which provide vital Luna Park and the . connections to the CBD, major outer retail precincts such as Chapel Street, sporting facilities such as the In terms of Education, there are several prestigious Melbourne Cricket Ground (MCG) and Rod Laver Melbourne schools located in the area, including Arena, as well as access to the CityLink Motorway South Yarra Primary School, Melbourne High, Wesley and West Gate Freeway. In terms of public transport, College and Melbourne Grammar School. The Southbank benefits from Melbourne’s extensive tram University of Melbourne and RMIT University, both of network. which can be accessed via direct tram along St Kilda Road, provide globally renowned tertiary education As a key employment sector itself with commercial options. offices and hotels along the river and its proximity to Melbourne’s CBD as being the hub of employment As the ABS summary data tables show 36.7% of for Greater Melbourne, Southbank is attracting suburb Households are Lone Person Households with especially young professionals desiring a place of a further 28.6% are couple-only households making residence closer to employment and the city. Over our inclusion of 1-bed and 2-bed apartments in the the past decade Southbank has experienced robust suburb ideal to meet the market demand. population growth measuring 120%.

The younger age demographic is reflected in the composition of households primarily consisting of lone person, group and couples households as well as in the higher ratio of apartments to houses. Therefore the proportion of households renting in Southbank was 59% at the time of the Australian Bureau of Statistics (ABS) census survey in 2011.

The rental demand for Southbank has thus been increasing. This can be highlighted in the growth of rental contracts, with the volume more than doubling in the past 10 years. The increase in the volume of Southbank rental contracts is indicative of the increasing supply on the market over this period and highlights the Located on the Southern side of the Yarra River, sustained demand for low-maintenance living within Southbank is just a short 1.5km walk to Melbourne proximity to work, study, and key lifestyle amenity. As CBD. Several footbridges overpassing the Yarra a result the apartment rental market in Southbank provide direct access to the city. The Southbank achieves a premium over the apartment rental area itself offers some of the best retail, dining, markets of South Melbourne and Melbourne. entertainment and leisure amenity in Melbourne.

11 Key ABS Statistic by Portfolio Suburbs

Source ABS 2011 Quick Stats National South Southbank Brunswick Melbourne West Median Individual Weekly Income $577 $920 $983 $651 Median Household Weekly Income $1,234 1,668 $1,837 $1,233 Median Family Weekly Income $1,481 $2,450 $2,230 $1,233 Population aged above 65 13.2% 12.7% 4.9% 12.3% Lone Person Households 24.3% 36.7% 33.9% 34.1% Couple Only Household 27.0% 28.6% 30.7% 3.4% Population in full-time employment 59.7% 68.2% 73.1% 61% Population Unemployed 5.6% 5.0% 5.8% 6% Population renting 33.2% 53% 58.4% 45.4% Median weekly rent $285 $399 $496 $277 Households without a car 8.6% 21.8% 27.1% 18.4% Walk-to-work 3.7% 16.7% 33.9% 2.6% Public transport to work (all types) 10.4% 25.9% 24.4% 27.6% Rent greater than 30% household income 10.4% 15.9% 10.4% 15.4% Dwelling type - studio or 1-bed 5.2% 16.5% 22.0% 17.4% Dwelling type - 2-bed 19.1% 45.9 % 54.7% 39.5%

12 Portfolio Developers At Spring FG we consider that developer “due diligence” is central to the successful selection of any property whether for a one-off investment or in building a portfolio like this one. The emphasis is amplified when selecting apartment developments Blue Earth Group off-the-plan as we have here to ensure we are able The included portfolio properties at Gravity Towers are to maximise depreciation benefits and create a being developed by the Blue Earth Group - one of portfolio of properties that meet the latest trends the largest and most successful private developers in in our chosen suburbs. We need a high level of the country. Since the inception of Blue Earth Group confidence that each project will be completed on- more than 20-years ago in 1993, the principals of Blue time and on-budget to a high standard. Earth Group, Omran & Michael Dib have built up an outstanding, record of success as specialists in the We have worked extensively with each of the development of residential real estate in and around developers selected to participate in our Domacom Melbourne. portfolios and summarise below why they have been included. Today, Blue Earth Group features a compilation of a growing 2,000 apartment $1+ billion portfolio. Recent significant projects by Blue Earth Group that are either completed or under construction include: Amne Apartments in Essendon (completed); Mayada Apartments in Camberwell (completed); Erantis Apartments in Essendon (completed); BPM Imex Apartments in Essendon (completed); G1 The included portfolio properties at Black Fold, in Sandringham (completed); Art @ Essendon in Night Fall, Shadow Play and The Standard are being Essendon (completed); C100 in Carlton (completed); developed by BPM Corporation. BPM was founded Mink Apartments in Essendon (completed); Geox by Jonathan Hallinan in 1996. BPM established itself Apartments in Brunswick (completed); Stratus early on as a high-end house and land developer in Apartments in Brunswick (completed); Joulia the most upmarket suburbs of Melbourne forging itself Apartments in Brunswick (completed); The Islington as a brand-name in designer living. Silos in Collingwood (completed); A Apartments In more recent years BPM is one of the most in Richmond (under construction); Lantern in respected developers in Australia and has Collingwood (under construction); Play House broadened its horizons by delivering fantastic Apartments in Abbotsford (under construction); and residential apartment developments in Melbourne United in Richmond (under construction). including the: Willim Apartments in Carnegie; Elske Apartments in Caulfied; Walter in Carnegie; Collins & Queen in Essendon; Church Street Hill in Brighton; and Graphite in North Fitzroy. In Brisbane BPM has focused on core CBD fringe suburbs and is quickly emerging as a specialist in this market with the delivery of the Escent and the Onyx developments in West End.

Their experience, design and delivery quality give us no hesitation in including them in our portfolios.

13 Why an off-the-plan portfolio either increase the holding cost of property through From a practical perspective assembling a portfolio further taxes or remove the tax deductibility of some of multiple properties for fractional ownership through expenses in holding property. the Domacom Fund would be all-but impossible without the benefit of time-to-completion offered by Interest Rates - Interest rates could rise over the period selecting off-the-plan. of holding this property and thus increase the holding costs if you have borrowed money to invest. Beyond this practical consideration buying new maximises tax deductions through depreciation Your income reduces - You could thus have difficulty allowances improving portfolio returns. The best funding the ongoing costs. developments sell-out off the plan so gaining access to the best opportunities means being in early. Whilst Specific risks associated with purchasing off the plan we discourage property speculation, insisting that a There are specific risks associated with an off-the-plan 7-year+ view be taken on selecting investments, the property purchase that also need to be considered. prospect of exchanging contracts at today’s price They can be summarised as follows: and settling at yesterday’s price is attractive, and can work in favour of investors, particularly from a rental Legislative changes – there is a risk that there could yield perspective. be legislative changes which make holding property in the chosen manner less attractive. Of course, we revert to due diligence on the developer. In buying off-the-plan the need for Completion Risk – There is a risk that the developer confidence in the track record of the developer is and/or builder could face unforseen circumstances paramount. that delay completion or that the completed product does not meet the indicated specifications. The General Risks of Property Investment As with any investment you need to consider the risks Property Value - The property value could drop from associated with property investment. A summary of the time of exchange to settlement. these key risks is as follows: Finding the right property! Property is not just property! General Risks of property investment - There are In addition to the specific issues to be addressed general risks associated with investment property such when investing in there are many general issues that as fire, flood, tenant damage or other unforeseen need to be considered. Just like the share market damage to your property. has different sectors, there are markets within the property market. It is essential that a comprehensive Market Risks - There are risks that could impact on assessment occurs when considering residential the demand for rental property, such as a surplus in investment property. For example: property stock, population decrease or other market factors. This could mean your property stagnates or • Should the purchase be a house or an drops in value, or that your rental income stagnates, apartment? decreases or remains untenanted for a period of • In what area should you purchase? time. • What are the differences between buying a new or old property? Tenant Risks - There is the risk that the tenant could damage the property, non-payment of rent, or other Just as with any other type of investment, quality and problems. appropriateness are paramount. There are many different factors that can influence the performance of an investment property. There are also different Landlord Liability - As a landlord you have a duty types of property available i.e. apartments, town of care to provide premises that are safe for houses, freestanding homes, land, commercial occupation. property and industrial property. If you have any doubts you should consult an adviser. Taxation - There is a risk that legislative changes

14 Conclusion Disclaimer and Fees The Melbourne Portfolio has been designed to offer Any advice and commentary contained in this not just a portfolio of sound investments to produce Information Memorandum is general market advice superior return-on-investment but to include great only and is provided for information purposes. It does pieces of real estate. not represent financial advice. It has been provided without taking into account your objectives, financial This is a balancing act that is too often forgotten situation or needs. Before acting on any advice or when investing in residential real estate. It is easy to information in this Information Memorandum, Spring find investment properties that make sense on paper. FG Realty recommends that you consider whether it It is also relatively easy to find quality real estate. is appropriate for your circumstances and consult a The challenge is balancing these things to achieve professional financial, legal and/or tax adviser. both; in particular across multi-property portfolios. The Melbourne Portfolio achieves that balance. Spring FG Realty is a licensed real estate agent. If you invest in portfolios assembled by it Spring FG Realty In summary the portfolio: we will be entitled to an agents’ commission from the • Is assembled across one of Australia’s fastest vendor/s of the properties. growing cities with strong state economies, high wages and significant room to the upside in Such payments do not change the cost of the terms of current affordability properties. If they do we are obligated to tell you and • Includes four landmark developments by you must agree. experienced world-renowned developers . • Offers a mix of mid-to-high-yielding assets that will all attract quality tenants prepared to pay a premium • Features developments that will all attract high numbers of owner-occupiers in the longer term, resulting in strong bodies corporate that will maintain buildings to a high standard to ensure rental yields remain high and capital prices are maximised in future years • Offers a total of 5 specific apartments each with a unique “edge” that will provide for advantage in retaining long term and quality tenants and on exit if/when the assets are disposed of in future years • Represents excellent value against the broader market

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