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Residential Property Trust of Australia

Residential Property Trust of Australia
Closing Date CLOSED
Rebate 4.0% as additional units
Minimum Investment $10,000
Investment Term Long term – at least 5-10 years.
Research Aegis Investment Grade

Access to Australia’s prime residential markets for a fraction of the cost...

All the benefits of owning direct residential property
An investment in the Residential Property Trust of Australia provides you with

Greater Diversification
Exposure to the Capital growth and attractive risk adjusted returns from a portfolio of established inner suburban residential properties
Benefit from the experience of Australia’s leading property buyers including Portfolio Management Services and Wakelin Property Advisory
Use of gearing to enhance your returns
Redemption Policy within 90 days
Regular reporting and daily unit pricing

Product Disclosure Statement
Aegis Research Extract
Australian Financial Review - Super Solutions to Affordability (26Jul2007)
Australian Financial Review - Vulture Funds Swoop on Units (15Mar07)
Australian Financial Review - Property is it time to enter the market? (14Jan2007)
Who should invest?
The Residential Property Trust of Australia is open to all investors, but is specifically suited to
 
Investors seeking measured exposure to Australia’s key Residential Property Markets
Investors seeking the long term capital growth potential and diversification benefits from a portfolio of established inner suburban residential properties
Investors with self managed super funds that want to take advantage of the taxation benefits from holding capital growth oriented units in residential property

Residential property — Diversification benefits

An investment in the Residential Property Trust of Australia provides great diversification benefits to a portfolio of traditional asset classes.

Correlation analysis of total returns - Australia (15 years to December 2006)
  Residential (1) Office (2) Retail (3) Industrial (4) LPTs (5) Equities (6) Bonds (7)
Residential 1 - - - - - -
Office 0.19 1 - - - - -
Retail 0.01 0.32 1 - - - -
Industrial 0.30 0.80 0.19 1 - - -
LPTs -0.19 0.06 0.08 -0.18 1 - -
Equities -0.22 -0.03 0.18 -0.13 0.52 1 -
Bonds -0.27 -0.49 -0.36 -0.53 0.51 0.30 1

1

REIA returns by state data weighted by number of dwellings as per ABS 2006 Census, weighted to Houses and Other Dwellings as per ABS 2006 Census
2 Australian CBD Office markets
3 Australian Retail markets
4 Australian Industrial markets
5 ASX S&P/LPT 300
6 All Ordinaries Index
7 All maturities
Source: Perpetual, IDP/Property Council of Australia, Real Estate Institute of Australia

Residential property — Attractive risk adjusted returns

The risk adjusted returns available from an investment in the Residential Property Trust of Australia are comparable to those from shares and listed property

Historical total returns and volatility (%pa) - Australia (15 years to December 2006)
  Residential (1) Office (2) Retail (3) Industrial (4) LPTs (5) Equities (6) Bonds (7)
Return 11.8 6.5 12.3 12.3 14.4 12.6 7.4
Risk 4.1 5.4 2.3 2.9 9.5 10.4 5.6
Reward/Risk Ratio 3.0 1.2 5.3 4.2 1.5 1.2 1.3
Downside Risk (8) 0 4.1 0 2.0 2.4 2.7 2.2

1

REIA returns by state data weighted by number of dwellings as per ABS 2006 Census, weighted to Houses and Other Dwellings as per ABS 2006 Census
2 Australian CBD Office markets
3 Australian Retail markets
4 Australian Industrial markets
5 ASX S&P/LPT 300
6 All Ordinaries Index
7 All maturities
8 Semi-deviation of returns below zero
Source: Perpetual, IDP/Property Council of Australia, Real Estate Institute of Australia

Residential property — Current market opportunities
The rental vacancy rate in some of Australia’s key property markets are at their lowest point in a decade, resulting in improved yields on investment property and increasing demand for property



* Point which usually triggers rental growth
Note: Range represents the lowest vacancy to the highest vacancy since 1980.
Medium vacancy range represents one standard deviation above and below the average over March 1980 to March 2007. Vacancy rate based on samples as collected by REIA.
Source: Real Estate Institute of Australia (March quarter 2007), Perpetual


Important Information: Fortuna Funds Management Limited ACN 104 495 230, AFSL No. 241199 as the responsible entity and issuer of the Residential Property Trust of Australia has printed the above information. This information does not constitute a recommendation nor does it take into account your investment objectives, financial situation nor particular needs. Speak to your financial adviser. Applications for Managed Investments can only be made on an application form attached to a current Product Disclosure Statement available above.

Trust The Trust is an unlisted unit trust registered with ASIC as a managed investment scheme under the Corporations Act.
Offer An invitation to apply for up to 400 million Units in the Trust.
Responsible Entity Fortuna Funds Management Limited
Investment Committee Composed of executive directors of the board of the Responsible Entity and other persons appointed by the board from time to time.
National Real Estate Advisory Panel The Investment Committee may obtain the services of members of the National Real Estate Advisory Panel (Advisory Panel) to assist it from time to time in implementing the Trust's investment strategy.

Members of the Advisory Panel may include estate agents, residential property valuers and property managers.
Investment objective To provide Unitholders with attractive returns over the long-term utilising the residential property asset class.
Investment strategy The investment strategy of the Trust is to utilise Australia's residential property markets by providing Unitholders access to these markets. The Responsible Entity seeks to reduce the Trust's exposure to risk, whilst maximising its capital appreciation, by building a diverse portfolio of established residential properties across a range of geographic and economic categories. To this end the Trust is growth-focused, aiming for long-term gains rather than short-term income yields. The Trust will not hold any property in Western Australia or Queensland until the Trust satisfies certain requirements of the stamp duty legislation in those states. These requirements are set out in more detail in Section 8 of the PDS
Trust assets The Trust seeks to have approximately 90% of its assets invested in established residential property which are selected for capital growth potential. The remaining funds of the Trust will be held in cash, bank bills and money market instruments. During the first 8-12 months, the Trust may be fully invested in cash, bank bills and money market instruments.
Investment timeframe Long term – at least five to ten years.
Minimum application amount $10,000
Additional investments Multiples of $1,000 or $100 per month through the Monthly Investment Plan. Section 9
Unit pricing The Unit price is generally calculated each Business Day.
Issue Price per unit $1.00 per Unit for the first issue of Units, and thereafter a price determined based on the Net Asset Value, plus the Buy Spread.
Cooling Off Period There is a cooling off period for Unitholders.
Redemption Period While the Trust is liquid, Redemption Requests will be processed within 90 Business Days from the end of the month in which the Responsible Entity receives a completed Redemption Request. While the Trust may be liquid for the purposes of the Corporations Act by virtue of the relatively long Redemption Period of 90 Business Days, an investment in the Trust should be considered an illiquid investment which will be held for the long term. Under the Constitution, the Responsible Entity may suspend redemptions in certain circumstances.
Minimum Redemption amount $1,000. If a Unitholder holds less than 5,000 Units after processing a Redemption Request, the Responsible Entity may redeem all the Unitholder's remaining Units.
Redemption Price An amount determined based on the Net Asset Value, less the Sell Spread.
Redemption payment options All payments will be made by direct credit to an Australian Financial Institution only; no cheques will be issued.
Fees and expenses Contribution fee: 5.5% (inclusive of GST) of the application amount. Fortuna may pay up to 4.4% (inclusive of GST, net of any reduced input tax credits) to financial advisors.

Management costs 1.45% p.a. (inclusive of GST, net of reduced input tax credits) of the Gross Asset Value of the Trust, payable quarterly in arrears. Fortuna may pay part of this fee to financial advisors. All expenses incurred in operating the Trust will be paid out of the Trust assets. These include administration and audit costs, property management fees, sales supervision fees and Custodian fees.

Performance fee: A performance fee is payable to Fortuna if any previous underperformance of the Trust, as reflected in the Unit Value, has been recovered and if the total return of the Trust exceeds 10% p.a. during a Performance Fee Period. The Performance Fee is 18.45% (inclusive of GST, net of reduced input tax credits) of the total return of the Trust above 10% during a Performance Fee Period, subject to any losses during previous Performance Fee Periods being recovered. A Performance Fee Period is currently a Financial Year, but can be longer if the Responsible Entity determines.

Disposal Fee: The Responsible Entity is entitled to a fee of 1.1% (inclusive of GST) of the value of each residential property sold from the Trust. This fee will be paid out of the assets of the Trust at the time of sale.

The transaction costs of buying and selling assets of the Trust in connection with applications and redemptions will be reflected in the Issue Price (Buy Spread is currently estimated to be 6.30%) and the Redemption Price (Sell Spread is currently estimated to be 2.33%).
Risks There are risks associated with investing in the Trust. Some of these are described in the PDS.
Tax Under current tax law, any income and capital gains distributed to you by the Trust are assessable to you and taxable in the year to which they relate. The Responsible Entity recommends that you obtain independent tax advice relevant to your personal circumstances as to the taxation consequences of an investment in the Trust.
Income distributions The Responsible Entity does not expect there to be significant income to distribute since the aim of the Trust is to provide capital growth. Unless a Unitholder instructs otherwise, any distributions will be reinvested in the Trust. If a Unitholder does not wish to have their distributions reinvested, then the distributions will be paid by electronic funds transfer to an Australian Financial Institution's account nominated by the Unitholder. If a Unitholder receives its distribution in the form of Units, the Unitholder may have to pay taxes on the distribution from its own sources.

No contribution fees (or commissions on these fees) apply to Units issued as a result of a reinvestment of a distribution. The Responsible Entity may, in its discretion, elect to distribute cash and not issue Units.

Any income not reinvested in the Trust will usually be paid by the 20th Business Day after the end of the Distribution Period.
Complaints The Responsible Entity has established procedures for dealing with complaints and is a member of an external complaints scheme.
Reporting Unitholders will receive information as required by the law. Information is also available on the website at www.fortunafunds.com.au (website is no longer active).


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