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Peet Point Cook Kingsford Syndicate

No Current Peet Projects Available
Peet Point Cook Kingsford Syndicate
Cash Rebate 3.00%
Closing Date CLOSED
Minimum Investment $5,000 (thereafter increments of 1,000 units)
Investment Term Approximately 6.5 years
Research Lonsec  Recommended (Upper End)

CHAIRMAN’S LETTER

Dear Investor

   
Product Disclosure Statement
Quarterly Report June 2010
 

 

Peet Limited has a long and successful track record in land syndication and development and I am pleased to offer you the opportunity to invest in a new project in Point Cook, Victoria. Those who invested in Peet & Co Point Cook Land Syndicate Ltd will be familiar with Point Cook, Peet’s development expertise in the locality and the excellent returns they received.

Peet Point Cook Kingsford Syndicate (‘Syndicate’) proposes the development and sale of approximately 567 residential lots in a locality that has experienced significant population growth in recent years.

THE PROJECT
The Property is located at the south-eastern corner of Sneydes and Hacketts Roads in Point Cook, some 25 kilometres from Melbourne’s Central Business District. Point Cook enjoys good access to the city and the eastern suburbs via the Princes Freeway, and to the northern and western suburbs via the Western Ring Road.

The Property is already zoned for residential development and planning of the residential estate is well underway. The Project will be known as Kingsford and development is forecast to commence in March 2010.

Kingsford is immediately south of Peet’s Innisfail Estate where more than 1,590 of the 1,825 lots have now been sold. It is anticipated that the remaining lots will be sold by late 2010. Peet also developed and marketed the nearby Point Cook Gardens estate which finished sales in 2007, and the almost complete Point Cook Junction.

DISCOUNT TO VALUATION
The Responsible Entity has the right to purchase the Property from the Vendor, a wholly owned subsidiary of Peet Limited, on deferred payment terms, at a 9% discount to valuation.

THE MELBOURNE PROPERTY MARKET
The Melbourne property market is experiencing strong underlying demand for dwellings, which is expected to continue, with more than 26,000 new households to be formed annually through to 2014. This demand is expected to drive house price growth, with the Consulting Economist forecasting 5% per annum growth through to 2015.

THE OFFER
The Syndicate will be structured as a registered managed investment scheme, with Peet Limited as the Responsible Entity. It is intended that the Syndicate will operate as a trading trust for income tax purposes.

The Offer is for 22 million Units at an issue price of $1.00 per Unit, payable as $0.50 on application and $0.50 in November 2010. The offer of Units will raise equity toward the cost of acquiring the Property and the cost of the Issue.

MANAGEMENT
Peet Development Management Pty Ltd, a wholly owned subsidiary of Peet, will be the development, marketing and sales manager of Kingsford.

Peet is one of Australia’s largest residential land syndicators. It currently manages 25 syndicates, which own properties around the country, on behalf of its many investors.

Peet is committed to environmental excellence and sustainability and is recognised as setting benchmarks within these fields. The industry recognition and awards Peet has received in recent years are testament to the quality of the land estates and communities it creates.

RETURNS
It is intended that, as profits emerge from the settlement of lot sales, fully franked distributions will be paid to Unitholders. Distributions and capital will be returned progressively as available funds, taxation legislation and the Corporations Act permit.

The Responsible Entity is forecasting an average compound return to investors of 16.0% per annum before tax. The first capital return is expected in April 2011 and the first distribution expected to be paid in January 2013. Please refer to the Profit Forecast Assumptions and Profit Forecasts in section 6.

RISKS
Whilst Peet has managed many similar projects, there are risks associated with land development which may adversely impact on the Syndicate. Please refer to the risks highlighted in section 8.

The constitution of the Syndicate provides that the liability of Unitholders is limited to their investment in the Syndicate, including any unpaid portion of their Units.

The PDS contains important information about the Offer and it should be read in its entirety. The forecast financial information is presented in section 6 along with the risks and sensitivity analysis. I recommend that you consult your financial advisor before making an investment decision.

The Syndicate provides an excellent opportunity to invest in the development, marketing and sale of a residential land estate in Melbourne’s Point Cook growth area. The Syndicate offers the prospect of strong profit performance and distributions under proven management.

I commend this Offer to you and invite you to become a Unitholder of Peet Point Cook Kingsford Syndicate.

Yours faithfully
Tony Lennon
Chairman
Peet Limited

INVESTMENT SUMMARY
 
Offer This is an offer for 22 million $1.00 Units, payable in instalments, in Peet Point Cook Kingsford Syndicate.
First Instalment The First Instalment of $0.50 per Unit is payable on application.
Final Instalment The Final Instalment of $0.50 per Unit is due on 15 November 2010.
Minimum Investment  All applications must be for a minimum of 5,000 Units (first payment of $2,500) and thereafter in increments of 1,000 Units.
Asset The Responsible Entity, on behalf of the Syndicate, will purchase the Property, known as 295 and 305 Sneydes Road Point Cook, from a Peet Limited wholly owned subsidiary at a 9% discount to valuation, on deferred payment terms.
Forecast IRR The Responsible Entity is forecasting an Investor IRR of 16.0% before tax, including franking credits and after payment of all fees and expenses.
Investment Risks There are risks associated with investment in the Syndicate – refer to section 8 of the PDS.
Taxation Implications General information about the taxation implications of investing in the Syndicate is set out in section 11.1.10 of the PDS.
Responsible Entity Peet Limited is the Responsible Entity. It is a public company listed on the Australian Securities Exchange having a market capitalisation of approximately $500 million. Peet is an experienced fund manager and is currently managing 25 syndicates with a gross development value of more than $3.5 billion (if sold at today’s prices). Additional information on the Responsible Entity and its Directors is detailed in section 9 of the PDS.
Development Manager Peet Development Management Pty Ltd is a wholly owned subsidiary of Peet Limited and is the Development, Marketing and Sales Manager (Development Manager) for Kingsford. Peet is Australia’s largest ASX-listed specialist residential land developer, and is currently developing 75 projects throughout Australia with potential for approximately 34,400 lots with an estimated on-completion value of $6.9 billion (if sold at today’s prices).
Syndicate Strategy The Property will be developed into residential lots for sale.
Distribution Policy It is intended that distributions will be paid once the Syndicate has declared its maiden taxable profit and that all distributions will be fully franked, with the exception of the final distribution which will be franked to the extent of available franking credits.
Capital Return Policy The Responsible Entity will return capital to Unitholders regularly once settlements commence. The proceeds from the settlement of each lot contain a portion of Unitholders’ original capital enabling regular returns of capital to be made.

Distributions and capital returns will vary from period to period depending on the lot settlements achieved, annual profits generated, available franking credits and working capital requirements.
Redemptions No redemption or liquidity facility is offered by the Responsible Entity.
Term of the Syndicate The life of the Syndicate is estimated to be six years. Following the settlement of all subdivided lots within the Property, the Responsible Entity will seek to wind up the Syndicate in accordance with the Corporations Act with any remaining profits and capital returned to Unitholders.
Minimum Subscription Condition The Responsible Entity reserves the right not to proceed with the Offer if it does not receive valid applications for 10 million Units by the Closing Date. If the Responsible Entity exercises this right or the Debt Facility Condition is not satisfied, the Responsible Entity will return the subscription monies to subscribers as soon as practicable after the Closing Date. Interest will be payable on the subscription monies refunded - please refer to section 11.1.4 of the PDS.
Debt Facility Condition The Offer is conditional on the Responsible Entity obtaining a debt facility on substantially similar terms to those set out in section 11.1.9, prior to the Closing Date. Should this not eventuate or the Minimum Subscription Condition is not satisfied or waived by the Responsible Entity, the Offer will not proceed. If the Offer does not proceed then the Responsible Entity will return the subscription monies to subscribers as soon as practicable. Interest will be payable on the subscription monies refunded - please refer to section 11.1.4 of the PDS.
Underwritten Subject to satisfaction or waiver of the Minimum Subscription Condition by the Responsible Entity and the satisfaction of the Debt Facility Condition, the Offer will be underwritten by Peet Limited, the terms of which are summarised in section 10, and the Syndicate will proceed.
Liquidity It is not intended that Units be listed on a securities exchange, therefore Units should be considered illiquid. Investors do not have any withdrawal rights as the Syndicate is not a liquid managed investment scheme. Investors may, subject to the laws of Australia and the Constitution, sell or transfer their Units.
Cooling Off Period There is no cooling off period for this investment as the Syndicate is not a liquid managed investment scheme.
Tax Status The Syndicate is a managed investment scheme that is intended to operate as a trading trust. Accordingly, the Syndicate will pay tax at the corporate rate (currently 30%) on taxable profits derived. The Responsible Entity will not pay distributions prior to the Syndicate’s first payment of tax following its first taxable profit. All distributions, with the exception of the final distribution and returns of capital, will be fully franked.
Borrowing Strategy It is intended to partially debt fund the acquisition of the Property and to fully debt fund the development of Stage 1. Development of future stages will be funded through a combination of working capital and debt. The debt facility will be repaid progressively during the life of the Project from proceeds received from the sale of the residential lots.
Debt Facility The Responsible Entity has received an Indicative Terms Sheet for a three-year debt facility of $20 million which will be used to fund the balance of the purchase price and to fund development of the Property. The maximum permitted loan-to-value ratio in the Indicative Terms Sheet is 50%. It is intended to finalise the loan documentation and have the loan facility in place prior to the Closing Date.
Valuation Policy Under the terms of the proposed debt facility, the Responsible Entity will be required to have the property independently valued annually. Valuers will be instructed to undertake their valuation in accordance with industry standards and to outline their valuation methodology within the valuation report.
Voting Rights At a meeting of Unitholders, each Unitholder may cast one vote on a show of hands and one vote for each Unit held on a poll.
Complaints The Responsible Entity has a complaints resolution procedure - please refer to section 9.5 of the PDS.

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