a5035 otan presentation email-4.2.13
TRANSCRIPT
IMPORTANT INFORMATION
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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
WELCOME
TO OTAN
WELCOME TO OTAN
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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
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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
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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.
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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
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PROCESS OF AN OTAN FUND
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INVESTOR PROCESS
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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
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BOARD OF DIRECTORS
JOHN WELBORN
Director
JOHN NICHOLAS
Chairman
DAVID PRINGLE
Executive Director
MARK BUTLER
Managing Director
WELCOME TO OTAN
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• 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
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• 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
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• 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
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• 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
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Monthly development reports
provided for each project.
KEEPING YOU INFORMED
WELCOME TO OTAN
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Otan Unit Certificate
KEEPING YOU INFORMED
INVESTING
WITH OTAN
INVESTING WITH OTAN
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THE PROCESS
INVESTING WITH OTAN
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WHO INVESTS WITH OTAN
Institutional
INVESTING WITH OTAN
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EXAMPLE LEGAL STRUCTURE: OTAN QUEENS PARK
INVESTING WITH OTAN
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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
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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
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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
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MANAGING RISK
Even 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
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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
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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
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THE PROJECTS
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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
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QUEENS PARKInfill Housing
QUEENS PARKInfill Housing
THE PROJECTS
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South BeachInfill Housing
• Capital $2.96 million
• 20 town houses
• 200m from the beach
• Approvals achieved
ready for pre sales
THE PROJECTS
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South BeachInfill Housing
THE PROJECTS
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South Beach
461 HousingInfill Housing
• Contract $3.0 million
• 24 townhouses
• Estimated return of 22%
per annum
THE PROJECTS
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South Beach 461 Housing
Infill Housing
THE PROJECTS
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North One Subi CentroApartments
• Capital $16 million
• 88 apartments and commercial units
• 80% pre-sold
• Institutional investor (ISPT DOF fund)
• Construction started
THE PROJECTS
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North One Subi CentroApartments
THE PROJECTS
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Otan KarrathaSubdivision
• Capital $10 million
• 330 residential lots
• 100 lots pre sold with houses for $80 million
• Construction started
THE PROJECTS
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Otan KarrathaSubdivision
THE PROJECTS
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191 Great Eastern
Highway BelmontOffice
• 3439 sq m of nettlettable space.
• 10,954 sq m site with dual frontages
PROJECTS
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Otan Nickol Karratha559 Grouped Dwellings
• $1.75 Million capital
• 4,814 sq m site
• 15 homes
• 29% IRR
PROJECTS COMING SOON
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Otan South HedlandGrouped Dwellings
• Otan South Headland
• $2.0 Million capital
• 4,885 sq m site
• 16 homes
• 54% IRR
PROJECTS COMING SOON
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Otan GuilfordGrouped Dwellings
• Located on the banks of the Swan River
• $4.7 Million capital
• 2.16 Hectare site
• 54 homes
• 23% IRR
INVEST IN
THE WEST
INVEST IN THE WEST
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THE WA ECONOMY
Western 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
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THE WA ECONOMY
INVEST IN THE WEST
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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
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GOING FORWARD
INVEST IN THE WEST
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GOING FORWARD
INVEST IN THE WEST
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GOING FORWARD
INVEST IN THE WEST
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GOING FORWARD
INVEST IN THE WEST
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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
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• Pindan Managing Director
• 50% Owner
• Past president of Master Builders Association
of Western Australia
• Member of MBA Council
• Chairman of WorkSafe
George Allingame
PINDAN
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• 400+ employees
• 5 offices statewide
• West Australian owned and operated
• Established 35 years
AN INTEGRATED PROPERTY GROUP
PINDAN
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• 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
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Senior management
PINDAN
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One of WA’s largest
privately owned and
operated commercial
construction companies
CONSTRUCTIONS
PINDAN
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WA’s largest multi-unit
builder and in the top
10 nationally
APARTMENTS
PINDAN
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RESIDENTIAL
Top ten residential
builder in WA
PINDAN
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RESIDENTIAL – APARTMENTS
Location:
Development:
Project Cost:
Project Profit:
Dev. Period:
Equity:
Equity Return:
Beaufort Street, Perth
136 residential apartments
10 commercial tenancies
Extensive common facilities
2 swimming pools and 3 spas
gymnasium and residents lounge.
$32,000,000
$4,000,000
50 months
$6,930,000
16% Equity IRR
BEAUFORT CENTRAL
PINDAN
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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
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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
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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
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INVESTING WITH OTAN IS SIMPLE
AND YOU’RE IN THE FUND – IT’S THAT EASY!
HOW TO INVEST
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AVAILABLE TO INVEST 4/2/2013
Minimum investment $25,000 (AUD)
• Otan Nickol Karratha 559 $1,750,000 29% return Grouped dwellings
• Otan South Beach $168,000 10% return Grouped dwellings
• Otan South Beach 461 $500,000 19% 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
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South Beach
Total capital
$3.95 million
Balance available
$168,000
Return estimate
10% pa
Timing estimate
17 months
21 townhouses
Average Price $880,000
3 bed, 2 bath
Product disclosure
statement available at
www.otan.com.au
THE PROJECTS
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South Beach
461 Housing
Total capital
$3.0 million
Balance available
$500,000
Return estimate
22% pa
Timing estimate
24 months
24 townhouses
Average Price $770,000
3 bed, 2 bath
Product disclosure
statement available at
www.otan.com.au
THE PROJECTS
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Otan Nickol
Karratha Group
Dwelling Site 559
$1.75 Million capital
4,814 sq m site
15 homes
29% IRR
THE PROJECTS
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Otan South HedlandGrouped Dwellings
• Otan South Headland
• $2.0 Million capital
• 4,885 sq m site
• 16 homes
• 54% IRR
HOW TO INVEST
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NON AUSTRALIAN RESIDENTS can easily invest in
Australian residential developments via the Otan fund
THANK YOU
WWW.OTAN.COM.AU
THANK YOU FOR YOUR TIME
For 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
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]