otan property fund presentation 4.2.13
DESCRIPTION
An introduction to the Otan Property FundTRANSCRIPT
IMPORTANT INFORMATION
WWW.OTAN.COM.AU
This presentation has been prepared without taking account of the objectives, financial situation or needs of any particular individual.
Before acting on the information in this presentation, you should consider its appropriateness to your circumstances and, if necessary, seek appropriate professional advice.
AFSL Licence: 342911
Registered Scheme: 142104158
IMPORTANT INFORMATION
WWW.OTAN.COM.AU
• 50% of the Otan board is independent
• Yearly independent audit of fund finance
• Yearly independent audit of the fund’s compliance procedures
• Otan as the responsible entity must retain a minimum of $500,000 of cash
• Proven track record managing funds and property
• Strict processes for conflicts of interest
Requirements for Otan to have a Retail Australian Financial Securities Licence
IMPORTANT INFORMATION
WWW.OTAN.COM.AU
• These are lodged with the Australian Securities and Investments Commission
• Complete transparency and disclosure
• All statements must be supported
• Tax
• Legal
• Valuation
• Cost
• Revenues
• Financial
Otan Product Disclosure Statements
Signed off by experts and supported by facts
WELCOMETO OTAN
WELCOME TO OTAN
WWW.OTAN.COM.AU
Otan was established to make the most of a unique opportunity in the West Australian property industry.
Otan has a retail AFSL licence (Lic No 342911) and it will provide investors with the ability to participate in property opportunities across Western Australia. (Australian Registered Scheme Number 142104158)
Queens Park | North 1 Subi Centro | South Beach
South Beach 461 Housing | Karratha | Belmont
South Headland | Karratha Infill
OTAN IS AN OPPORTUNITY FUND
WELCOME TO OTAN
WWW.OTAN.COM.AU
OTAN FUNDS UNDER MANAGEMENTApril 2010 to October 2012:-
• $53,000,000 plus
• $1.104 Million raised on average per
month
• Average investment $1,177,000 per
investor
WELCOME TO OTAN
WWW.OTAN.COM.AU
THE OTAN INVESTMENT STRATEGYThe three main objectives of the fund are to combine these critical factors in the investment strategy:-
• Maximise the actual returns of the fund.• Cost down • Revenue up
• Project brought forward
• Manage the risk of the fund.• Non recourse debt• Land mainly owned outright at settlement.• Pre sales of the properties to be developed will normally cover any development
debt by 120%.• The prices of the individual properties are very “middle ground” which was the
most resilient in the GFC.
• Deliver the returns of the fund.
WELCOME TO OTAN
WWW.OTAN.COM.AU
THE FOUR MAIN TYPES OF PROPERTY DEVELOPMENT ARE:
Infill residential property
(20-100 houses in an existing residential area)
Residential projects incl. apartments
(30-200 apartments)
Broad acre residential land subdivision
(50-1000 lots subdivisions)
Commercial projects
(pre leased)
The current benchmark for minimum investors returns on a new project is 20% IRR
WELCOME TO OTAN
WWW.OTAN.COM.AU
PROCESS OF AN OTAN FUND
WELCOME TO OTAN
WWW.OTAN.COM.AU
INVESTOR PROCESS
WELCOME TO OTAN
WWW.OTAN.COM.AU
The acquisition team is equipped with specialised skills, up to date market
knowledge/information and current planning contacts.
SITE IDENTIFICATION
The past knowledge of the delivery of $100s of millions of projects
as well as the experience to know when to say NO.
FEASIBILITY
Experience and knowledge.
CONTRACT
WELCOME TO OTAN
WWW.OTAN.COM.AU
BOARD OF DIRECTORS
JOHN WELBORNDirector
JOHN NICHOLASChairman
DAVID PRINGLEExecutive Director
MARK BUTLERManaging Director
WELCOME TO OTAN
WWW.OTAN.COM.AU
• 50% shareholder and fulltime director of the Pindan group of companies since 1981
• In these 30 years Pindan has grown to one of the largest builders in Western Australia
• annual turnover exceeding $500 million and employing a staff in excess of 350.
• David’s responsibilities for the Pindan group including over seeing all the accounting and financing functions
• Pindan has been active as a developer
• David was also the managing director of Axiom Properties Ltd from 1991 until September 1997. The company listed on the Australian Stock exchange in early 1997.
DAVID PRINGLE EXECUTIVE DIRECTOR
WELCOME TO OTAN
WWW.OTAN.COM.AU
• 20 years as Director and Executive Director of a number of property firms
• Director of firms from start-up to listed on the Australian Stock Exchange
• Created national award winning brand strategies and
• Proven track record as a capital raiser.
• Founder of Butler & Company (in Victoria) undertaking commercial, residential and rural sales, acquisition and management.
• Raised $500,000,000 of capital and the acquisition of over a billion dollars of properties across Australia.
• Extensive property project experience including “Royal Domain Tower” in St Kilda Road Melbourne, “Flinders Wharf” in Docklands Victoria and “Hidden Valley”, a 950 lot residential golf community.
MARK BUTLER MANAGING DIRECTOR
WELCOME TO OTAN
WWW.OTAN.COM.AU
• Fellow of the Institute of Chartered Accountants
• 35 years experience in accounting and corporate advisory work
• Partner in Ernst and Young ( 12years )
• Arthur Andersen ( 8 years )
• Nicholas and Stedman ( 6 years )
• Commercial Director - Wunan Foundation Inc - 11years
• Chairman of Noahs Ark (WA ) Inc.
JOHN NICHOLAS EXTERNAL CHAIRMAN
WELCOME TO OTAN
WWW.OTAN.COM.AU
• Chartered accountant
• More than 15 years experience as an investment banker
• Currently the Managing Director of Equatorial Resources Limited
• Director of Prairie Downs Metals Limited
• Director of Rugby WA
• Member of the Australian Institute of Chartered Accountants, The Financial Services Institute of Australia, and the Australian Institute of Company Directors.
• First West Australian to play rugby for the Wallabies playing six tests for Australian between 1996 and 1999.
JOHN WELBORN EXTERNAL DIRECTOR
WELCOME TO OTAN
WWW.OTAN.COM.AU
Monthly development reports
provided for each project.
KEEPING YOU INFORMED
WELCOME TO OTAN
WWW.OTAN.COM.AU
Otan Unit Certificate
KEEPING YOU INFORMED
INVESTINGWITH OTAN
INVESTING WITH OTAN
WWW.OTAN.COM.AU
THE PROCESS
INVESTING WITH OTAN
WWW.OTAN.COM.AU
WHO INVESTS WITH OTAN
Institutional
Overseas funds
High nett worth
Others
Super Fu
nds
INVESTING WITH OTAN
WWW.OTAN.COM.AU
EXAMPLE LEGAL STRUCTURE: OTAN QUEENS PARK
INVESTING WITH OTAN
WWW.OTAN.COM.AU
HOW LONG IS MY INVESTMENT
This is a guide of the time frames of each type of residential projects that Otan undertakes, however there will be specific time frames in each product disclosure statement for each project.
INVESTING WITH OTAN
WWW.OTAN.COM.AU
SELF MANAGED SUPER FUNDS
Otan, like most SMSFs is designed for high capital growth. It’s as easy as filling in
one simple application form and you are invested in the project of your choice.
• No special structures required other than your fund.
• No lengthy professional consultation.
• Debt is handled in accordance with SMSF rules (no guarantees required).
• It is normally very hard to undertake property development of any type in your
SMSF, not with Otan.
Otan advises that you seek your own advice before investing
INVESTING WITH OTAN
WWW.OTAN.COM.AU
THE CHOICE IS YOURS
• The investor selects how much they wish to invest in which Otan project.
• You are able to spread your investment across a number of Otan projects.
• Each project fund (Project specific part B) is a separate fund and therefore
“ring fenced” financially.
• Risk minimised by pre-sales of the project product prior to construction.
INVESTING WITH OTAN
WWW.OTAN.COM.AU
MANAGING RISKEven if a project is unable to proceed, the land is owned with no or very little debt. In most cases the sale price of the land (valued by an independent property valuer) is increased by obtaining the statutory approvals to develop the land.
OPTION ONE
Sell the land with the development approvals and return the money to the investors. Depending on the lands sale price the returns for example may vary from 70-110% of the invested capital.
OPTION TWO
Delay the development until circumstances change in favour of the development. As the site has little or no debt the fund has the ability to not develop the site.
If this situation was to happen these two options (or others) would be discussed with the investors and the appropriate action would be undertaken.
INVESTING WITH OTAN
WWW.OTAN.COM.AU
RETURNS
• The Otan development funds have an minimum investment benchmark of
15% internal rate of return (annual) nett to the investor. Funds are projected
to exceed this.
• The returns are NOT guaranteed.
• Returns can be increased by Otan working with cost, revenues and
time management.
• There are no partial returns only those paid at the completion of the project.
INVESTING WITH OTAN
WWW.OTAN.COM.AU
FEES
All fees are set out exactly in each project’s Product Disclosure Statement
Acquisition fee buy the right project (3% of purchase price)
Capital raising fee the cost to raise the capital (4% of the
capital)
Funds management fees cost to maintain the fund (2% of funds per
year)
Performance bonus The bonus paid once a result is achieved by
Otan at the end of the project. (A
percentage of the top end of the return
in excess of 15% per annum)
Note: Refer to your Product Disclosure Statement for the exact fees,
the above are to be seen as a guide only.
THE PROJECTS
THE PROJECTS
WWW.OTAN.COM.AU
THE PROJECTS
WWW.OTAN.COM.AU
FULLY
SUBSCRIB
ED
QUEENS PARKInfill Housing
• Capital $2.96 million
• 48 houses and apartments
• Opposite train station and just 15 minutes to the city
• Construction and settlements started
THE PROJECTS
WWW.OTAN.COM.AU
QUEENS PARKInfill HousingQUEENS PARKInfill Housing
FULLY
SUBSCRIB
ED
THE PROJECTS
WWW.OTAN.COM.AU
South BeachInfill Housing
• Capital $2.96 million
• 20 town houses
• 200m from the beach
• Approvals achieved ready for pre sales
THE PROJECTS
WWW.OTAN.COM.AU
South BeachInfill Housing
THE PROJECTS
WWW.OTAN.COM.AU
South Beach 461 HousingInfill Housing
• Contract $3.0 million
• 24 townhouses
• Estimated return of 22% per annum
THE PROJECTS
WWW.OTAN.COM.AU
South Beach 461
HousingInfill Housing
THE PROJECTS
WWW.OTAN.COM.AU
North One Subi CentroApartments
• Capital $16 million
• 88 apartments and commercial units
• 80% pre-sold
• Institutional investor (ISPT DOF fund)
• Construction started
FULLY
SUBSCRIB
ED
THE PROJECTS
WWW.OTAN.COM.AU
North One Subi CentroApartments FULLY
SUBSCRIB
ED
THE PROJECTS
WWW.OTAN.COM.AU
Otan KarrathaSubdivision
• Capital $10 million
• 330 residential lots
• 100 lots pre sold with houses for $80 million
• Construction started
FULLY
SUBSCRIB
ED
THE PROJECTS
WWW.OTAN.COM.AU
Otan KarrathaSubdivision
FULLY
SUBSCRIB
ED
THE PROJECTS
WWW.OTAN.COM.AU
191 Great Eastern Highway BelmontOffice
• 3439 sq m of nett lettable space.
• 10,954 sq m site with dual frontages
FULLY
SUBSCRIB
ED
PROJECTS
WWW.OTAN.COM.AU
Otan Nickol Karratha 559 Grouped Dwellings
• $1.75 Million capital
• 4,814 sq m site
• 15 homes
• 29% IRR
PROJECTS COMING SOON
WWW.OTAN.COM.AU
Otan South HedlandGrouped Dwellings
• Otan South Headland
• $2.0 Million capital
• 4,885 sq m site
• 16 homes
• 54% IRR
PROJECTS COMING SOON
WWW.OTAN.COM.AU
Otan GuilfordGrouped Dwellings
• Located on the banks of the Swan River
• $4.7 Million capital
• 2.16 Hectare site
• 54 homes
• 23% IRR
INVEST INTHE WEST
INVEST IN THE WEST
WWW.OTAN.COM.AU
THE WA ECONOMYWestern Australia’s economy was
valued at $217 billion in 2010-11. It
grew 3.5% in real terms in
2010‑11, below its annual average
of 4.4% over the past five years.
Growth in 2010-11 was mainly
driven by increased business
investment, household
consumption and mining activity.
The State had the highest per
capita gross state product of
$93,593, 50% higher than the
national average of $62,424.
INVEST IN THE WEST
WWW.OTAN.COM.AU
THE WA ECONOMY
INVEST IN THE WEST
WWW.OTAN.COM.AU
THE WA ECONOMY
While nuclear power is diminishing globally WA’s Gorgon project alone supplies 20% of the world’s LNG (Liquid Natural Gas)
INVEST IN THE WEST
WWW.OTAN.COM.AU
GOING FORWARD
INVEST IN THE WEST
WWW.OTAN.COM.AU
GOING FORWARD
INVEST IN THE WEST
WWW.OTAN.COM.AU
GOING FORWARD
INVEST IN THE WEST
WWW.OTAN.COM.AU
GOING FORWARD
INVEST IN THE WEST
WWW.OTAN.COM.AU
SUMMARY
• $160 billion (AUD) of capital expenditure in Western Australia
• Strong population growth
• Very low vacancy rates for both residential and commercial markets
• Sales volume increasing
• Various strong commercial drivers for the state
• Diminishing supply of apartment projects
• Undersupply of residential property
PREFERRED BUILDER:PINDAN
PINDAN
WWW.OTAN.COM.AU
• Pindan Managing Director
• 50% Owner
• Past president of Master Builders Association of Western Australia
• Member of MBA Council
• Chairman of WorkSafe
George Allingame
PINDAN
WWW.OTAN.COM.AU
• 400+ employees
• 5 offices statewide
• West Australian owned and operated
• Established 35 years
AN INTEGRATED PROPERTY GROUP
PINDAN
WWW.OTAN.COM.AU
• 2 national awards for Best Multi-Unit Dwelling in Australia
• 7 state awards for Best Multi-Unit Dwelling in WA in 8 years
• 3 state awards for Best Aged Care Facility in WA in 5 years
• 2 state awards for Best Commercial Alterations and Additions in 4 years
• Master Builders Association Overall Winner
VOTED BEST IN WA FOR MULTI UNIT DWELLINGS
SEVEN TIMES IN EIGHT YEARS
PINDAN
WWW.OTAN.COM.AU
Senior management
PINDAN
WWW.OTAN.COM.AU
One of WA’s largest privately owned and operated commercial construction companies
CONSTRUCTIONS
PINDAN
WWW.OTAN.COM.AU
WA’s largest multi-unit builder and in the top 10 nationally
APARTMENTS
PINDAN
WWW.OTAN.COM.AU
RESIDENTIAL
Top ten residential builder in WA
PINDAN
WWW.OTAN.COM.AU
RESIDENTIAL – APARTMENTS
Location:
Development:
Project Cost:
Project Profit:
Dev. Period:
Equity:
Equity Return:
Beaufort Street, Perth
136 residential apartments10 commercial tenanciesExtensive common facilities2 swimming pools and 3 spasgymnasium and residents lounge.
$32,000,000
$4,000,000
50 months
$6,930,000
16% Equity IRR
BEAUFORT CENTRAL
PINDAN
WWW.OTAN.COM.AU
RESIDENTIAL – GROUPED DWELLINGS
Location:
Development:
Project Cost:
Project Profit:
Dev. Period:
Equity:
Equity Return:
Frederick Street, Perth
65 survey-strata combination of villas, loft homes and townhouses. Communal facilities including a pool, gymnasium, spas and BBQ pavilion
$6,200,000
$800,000
30 months
$1,480,000
28% Equity IRR
MORETON BAY COURT
PINDAN
WWW.OTAN.COM.AU
RESIDENTIAL – GROUPED DWELLINGS
Location:
Development:
Project Cost:
Project Profit:
Dev. Period:
Equity:
Equity Return:
Fisher Street, Belmont
54 medium density homes comprising 34 townhouses, 11 villas and 9 loft houses, plus common pool, gymnasium and recreation facilities.
$5,500,000
$1,400,000
36 months
$1,600,000
29% Equity IRR
ALEXANDER PLACE
PINDAN
WWW.OTAN.COM.AU
RESIDENTIAL – GROUPED DWELLINGS
Location:
Development:
Project Cost:
Project Profit:
Dev. Period:
Equity:
Equity Return:
Sydenham Street, Belmont
A grouped dwelling development of 22 townhouses sold as house and land packages.
$2,980,000
$955,000
15 months
$1,013,000
59.4% Equity IRR
SYDENHAM MEWS
HOW TO INVEST
HOW TO INVEST
WWW.OTAN.COM.AU
INVESTING WITH OTAN IS SIMPLE
AND YOU’RE IN THE FUND – IT’S THAT EASY!
HOW TO INVEST
WWW.OTAN.COM.AU
AVAILABLE TO INVEST 4/2/2013Minimum investment $25,000 (AUD)
• Otan Nickol Karratha 559 $1,750,000 29% returnGrouped dwellings
• Otan South Beach $168,000 10% return Grouped dwellings
• Otan South Beach 461 $500,00019% return Grouped dwellings
• Otan South Headland $2,000,000 54% return Grouped dwelling
COMING SOON
• Otan Residential (land subdivision) $40.0 Million
• Otan Office Fund $10.0 Million
• • Apartments $30.0 Million
• Infill projects Karratha
THE PROJECTS
WWW.OTAN.COM.AU
South Beach
Total capital$3.95 million
Balance available$168,000
Return estimate10% pa
Timing estimate17 months
21 townhouses
Average Price $880,000
3 bed, 2 bath
Product disclosure statement available at www.otan.com.au
THE PROJECTS
WWW.OTAN.COM.AU
South Beach 461 Housing
Total capital$3.0 million
Balance available$500,000
Return estimate22% pa
Timing estimate24 months
24 townhouses
Average Price $770,000
3 bed, 2 bath
Product disclosure statement available at www.otan.com.au
THE PROJECTS
WWW.OTAN.COM.AU
Otan Nickol Karratha Group Dwelling Site 559
$1.75 Million capital
4,814 sq m site
15 homes
29% IRR
THE PROJECTS
WWW.OTAN.COM.AU
Otan South HedlandGrouped Dwellings
• Otan South Headland
• $2.0 Million capital
• 4,885 sq m site
• 16 homes
• 54% IRR
HOW TO INVEST
WWW.OTAN.COM.AU
NON AUSTRALIAN RESIDENTS can easily invest in
Australian residential developments via the Otan fund
THANK YOU
WWW.OTAN.COM.AU
THANK YOU FOR YOUR TIMEFor more information and to download the Product Disclosure Statements please visit the Otan website at www.otan.com.au
Contact
Mark Butler
Managing Director
154 Abernethy Road Belmont Western Australia 6984
Phone +61 8 9463 7177
Mobile +61 400 771 636
email [email protected]
Skype markfbutler
Scott Staniforth
Business Development Manager
154 Abernethy Road Belmont Western Australia 6984
Phone +61 8 9463 7227
Mobile +61 415 453 043
email [email protected]