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VALUATION REPORT

Vacant Land

Lot 1 Philip St,

South Gladstone QLD 4680

As At 15 March 2011

Prepared For Gladstone Area Water Board

On Behalf Of Gladstone Area Water Board

Our Ref GDS042892

Gladstone

Herron Todd White

(Central Queensland) Pty Ltd

ABN 80 556 398 008

ACN 010 463 073

Level 3 / 100 Goondoon Street

PO Box 5102

Gladstone Qld 4680

Telephone: (07) 4972 3833

Facsimile: (07) 4972 5005

Email: [email protected]

Web: www.htw.com.au

Mackay Whitsunday

Rockhampton Bundaberg

Emerald Hervey Bay

LOT 1, PHILIP ST, SOUTH GLADSTONE QLD 4680

GDS042892

15 March 2011

1 Introduction

1.1 Brief Description

This is an approximately 354 sqm vacant gently sloping lot which is to amalgamated with an adjoining aggregation with an area of 15,681 sqm.

1.2 Instructions

We have been instructed by Allison Fowler, to assess the market value of the property for purchasing purposes only. The interest to be valued is the unencumbered fee simple on a "vacant possession" basis subject to it being amalgamated with a 15,681 sqm parcel which adjoins.

2 Valuation

Our valuation is as follows: $35,000 (Thirty Five Thousand Dollars)

Chris Roffey

Certified Practising Valuer AAPI/1189

This assessment is GST exclusive. No allowance has been made for realisation expenses.

This report has not been prepared for mortgage security lending purposes.

2.1 Date of Inspection and Valuation

15 March 2011.

3 Property Details

3.1 Title Details

Real Property Description: Lot 1 RP616232

Registered Proprietor: Gladstone Regional Council (as per Property Data Solutions).

Encumbrances: The property is encumbered by an easement for water supply purposes (underground pipeline)

Title Reference: Not available

3.2 Land Area VL

Approximately 354 square metres. sqm


GDS042892

15 March 2011

3.3 Site Identification

The property is identified on the cadastral map below:

Source: Easimaps

3.4 Statutory Land Valuation

The above mentioned information was unavailable.

3.5 Local Authority

Gladstone Regional Council.

3.6 Town Planning

The property is to be amalgamated with Lot 126 613522 RP, Lot 127 RP613529 and Lot 23 CTN 1734, an adjoining aggregation of 15,681 sqm.

3.7 Location

The general location of the subject property is indicated on the map below:

Source: Google Maps


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15 March 2011

3.7 Location Contd

The existing development is a use that is appropriately located within the context of the surrounding development.

Surrounding development comprises established industrial buildings (water treatment plant) and low to medium density residential dwellings.

Source: Google Earth

It is within reasonable proximity of infrastructure such as arterial roads; public transport; schools; local shopping facilities; regional shopping centre.

3.8 Site Description

This is a sloping, rectangular shaped site. It falls moderately from north to south.

Adverse features include an easement of approximately 18 sqm for water pipelines.

The site will require some cut and fill to accommodate a development.

A review of the Local Authority's flood maps, indicate the subject property is not located within a known flood area. Notwithstanding, a formal flood search has not been undertaken and should this be an issue, then this report should be referred back to the valuer for comments.

3.9 Services

Major services including reticulated water, sewerage, telephone and electricity are connected to the property with which the subject is to be amalgamated.

Bruce St is a bitumen sealed, two lane local road, with kerbside parking. It has bitumen verges. Bruce Street provides access to the aggregation with which the subject property is to be amalgamated.

3.10 Environmental

No obvious environmental issues identified (no formal searches undertaken).

3.11 Property Searches

The following searches have not been undertaken: Title, Flood, Land Survey Plan, Environmental Management Register, Contaminated Land Register. Our valuation assumes such searches would identify no issues that may affect the value and/or liquidity of the property. Should any person relying on the contents of this report be aware or become aware of an issue that may affect value and/or liquidity then the searches should be referred to the valuer for comment.


GDS042892

15 March 2011

4 Improvements

There are no improvements apart from industrial security fencing on 2 sides.

5 Occupancy Details

The property is vacant though has been fenced in with the adjoining GAWB land as a lawn area.

6 Sales Evidence

The more relevant sales are summarised in the following schedule.

No Address

Sale Date Sale Price Land Area

(m2) $/m2

Land Area

1. Unit 150, Red Rover Road, Clinton Lot NO 150 SP207289.

01/07/2010 $1,976,000 12,350 $160

Comments: This is a sloping, irregular shaped, inside site that is at road height. It falls gently from front to rear. The site provides a reasonable building contour without significant adverse features and is contained within a Local Industry town planning precinct. The property has a single road frontage to Red Rover Road. Red Rover Road is a bitumen sealed collector road.

Comparative Analysis:

Superior location. Superior position. Superior site attributes. Smaller land area. Superior town planning classification. Overall the subject property would be expected to reflect a much lower rate per square metre of land area.

2. 15 Roseanna St, Clinton Lot 52 Survey Plan 186622.

16/03/2010 $468,202 2,189 $214

Comments: This is an irregular shaped, gently sloping, 2,189 square metre allotment which is above road level. The site is located in a developing industrial estate and is surrounded by newly constructed industrial warehouses and group titled industrial units. The site is free from improvements.



3. 8 Roseanna St, Clinton Lot 61 Survey Plan 186622.

20/11/2009 $670,800 3,354 $200

Comments: This is a near level, slightly irregular shaped 3,354 square metre allotment located in a developing industrial estate in Gladstone. The site is free from improvements.



7 Valuation Analysis

Current market value is the price the property should achieve if sold at the relevant date following an effective marketing campaign of up to 3 - 6 months prior to that date.

As the subject property comprises vacant land only, we have adopted a single direct comparison approach based on a rate per square metre of land area to assist the valuer in forming an opinion of value.

Direct Comparison

The property is an approximately 354 sqm lot which is to be amalgamated with Lot 23 CTN 1734, Lot 126 RP613522 and Lot 127 RP613529 which have a current area of 15,681 sqm to create a total lot area of area of 16,305 sqm. Our valuation is therefore on the basis of what the addition of the subject land is to Lots 23,126 and 127.

Land Area (m2) $PSM Land Total Round

354 $100 $35,400 $35,0000

Adopt $35,000

Contract Of Sale

Not applicable.

Summary

Based on the available evidence and the assumptions and qualifications contained within this report we have assessed the following value for the subject property at $35,000 (Thirty Five Thousand Dollars):


GDS042892

15 March 2011

8 Market Overview

The land is a narrow land locked parcel of about 354 sqm which is to amalgamated with a 15,681 sqm aggregation. The parcel will be zoned “Community Purpose”. There are very few to no sales of properties which have a similar zoning. The aggregation is being used for the Gladstone Water Treatment plant and we consider this use to be most closely aligned to an industrial type use. We have therefore assessed the value of the parcel against sales of vacant industrial lots.

The aggregation, including the subject parcel, has no real exposure to traffic being located at the end of a cul-de-sac. It requires cut/fill to provide a level site. Its location adjoining housing to the south could create issues eg noise, odour etc) in regard to the type of use possible for the property.

9 Risk Assessment

9.1 Cash Flow Performance

• The property is vacant

9.2 Asset Profile

• The site will require some cut and fill to accommodate a development.

• The current use (water treatment plant) is consistent with the highest and best use of the property.

• Planning issues with this property include:

• There are no environmental issues with this property.

Note: Our observations within the Property Risk Assessment of this report provide our opinion of the property as at the date of valuation. Refer Disclaimers and Qualifications.

10 Definitions, Disclaimers and Qualifications

10.1 Disclaimers and Qualifications

Third Party Disclaimer. This valuation report is for the use of and may be relied upon only by the party/parties to whom it is addressed. No other parties are entitled to use or rely upon it and the valuer does not assume any liability or responsibility to any other party who does so rely upon the valuation without the express written authority of Herron Todd White (Central Queensland) Pty Ltd.

If the Lender is not an authorised deposit taking institution within the meaning of The Banking Act 1959, it must comply with the following:

This valuation is prepared on the assumption that the Lender as referred to in the valuation report (and no other) may rely on the valuation for mortgage finance purposes and the lender has complied with its own lending guidelines as well as prudent finance industry lending practices, and has considered all prudent aspects of credit risk for any potential borrower, including the borrower’s ability to service and repay any mortgage loan. Further, the valuation is prepared on the assumption that the lender is providing mortgage financing at a conservative and prudent loan to value ratio.

Currency: This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period, including as a result of general market movements or factors specific to the particular property. We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of this comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three months from the date of the valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.

Supporting Memorandum: This valuation pro-forma is a concise summary made in accordance with the Australian Property Institute Practice Standard currently in force at the time it is made and the instructing party’s Standard Instructions for Valuation Reports for Mortgage Security Purposes.

Currency: This valuation is current as at the date of valuation only. The value assessed herein may change significantly and unexpectedly over a relatively short period, including as a result of general market movements or factors specific to the particular property. We do not accept liability for losses arising from such subsequent changes in value. Without limiting the generality of this comment, we do not assume any responsibility or accept any liability where this valuation is relied upon after the expiration of three months from the date of the valuation, or such earlier date if you become aware of any factors that have any effect on the valuation.

No Conflict of Interest: We confirm that we do not have any conflict of interest with the parties involved, or any other matters in relation to this valuation instruction.

GST: A commercial property will generally be subject to GST unless sold as a going concern. The margin scheme may also be applicable. This valuation assessment is exclusive of GST and has been completed on the basis that should GST be payable on the sale of this property, it would be recovered from the purchaser resulting in the vendor not being financially disadvantaged.

GST: A industrial property will generally be subject to GST unless sold as a going concern. The margin scheme may also be applicable. This valuation assessment is exclusive of GST and has been completed on the basis that should GST be payable on the sale of this property, it would be recovered from the purchaser resulting in the vendor not being financially disadvantaged.

Reliance on Valuation: This valuation report may be relied upon for the stated purpose only. No other party is entitled to use or rely upon it and the valuer shall have no liability to any party who does so.


GDS042892

15 March 2011

10.1 Disclaimers and Qualifications Contd

Land: Whilst we have physically identified the boundaries upon inspection and there do not appear to be any encroachments, we are not surveyors and no warranty can be given without the benefit of an identification survey.

We have not undertaken a search of the Contaminated Land Register.

No title search of the property has been undertaken or sighted. Reliance should not be placed on the valuation report unless or until a title search is undertaken. In the event that the title search reveals any information or discrepancy, which may affect the value of the property, the valuer’s opinion should be obtained before reliance is placed on the valuation.

To the best of the valuer’s knowledge, the subject property is not affected by Heritage, flooding, landslip, pest infestation or resumption matters, however, no searches have been undertaken in this regard.

Contamination: Whilst we did not note any hazardous or toxic material on site, it should be noted that our valuation has been prepared without the benefit of soil test or environmental studies.

Accordingly, our valuation is subject to there being no surface or sub-surface soil problems including instability, toxic or hazardous wastes or building material hazards in or on the property that would adversely affect its existing or potential use or reduce its marketability.

Should any such problem become apparent, we would reserve the right to review our valuation.

Environmental Statement: Whilst we did not note any hazardous or toxic material on site, it should be noted that our valuation has been prepared without the benefit of soil tests or environmental studies. Accordingly, our valuation is subject to there being no surface or sub-surface soil problems including instability, toxic or hazardous wastes or building material hazards in or on the property that would adversely affect its existing or potential use or reduce its marketability. It should be noted that environmental matters are beyond the scope of our expertise and as such, we would recommend that anyone relying on our valuation for investment or finance purposes satisfy themselves in relation to any environmental risks or contamination issues. Should any such problem become apparent, we would reserve the right to review our valuation.

Sales Evidence: Market data has been obtained, in part, from documents at the Department of Environment & Resource Management, or as reported by real estate agents. As well as using such documented and generally reliable evidence of market transactions, it was also necessary to rely on hearsay evidence. Except as noted herein, a reasonable attempt has been made to verify all such information.

All details are expressed exclusive of GST. In some instances, this may have required an adjustment to the sale price recorded in the Department of Environment & Resource Management information.

10.2 Definitions

Market Value: The estimated amount for which an asset should exchange on the date of valuation between a willing buyer and a willing seller in an arms length transaction, after proper marketing, wherein the parties had each acted knowledgeably, prudently and without compulsion.

Highest and Best Use: The most probable use of a property which is physically possible, appropriately justified, legally permissible, financially feasible, and which results in the highest value of the property being valued.

Land Tax: In accordance with the Queensland Office of State Revenue (OSR) land tax calculations, land tax has been calculated relative to (a) the three year unimproved value assessment averaging rule, and (b) on the basis of a single company holding. In instances where land valuations for the preceding two years have not been provided by the Client/Instructing Party, the State Averaging Factor set by OSR is adopted. If the property’s unimproved land value falls below the land tax threshold, then there is no allowance for land tax.

Annexures

1. Map 2. Easement Document 3. Letter of Instruction


GDS042892

15 March 2011

Annexure 1 Map


GDS042892

15 March 2011

Annexure 2 Easement Document


GDS042892

15 March 2011

Annexure 3 Letter of Instruction

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