Otan Property Funds

Management Ltd

January 2012 Perth

Scott StaniforthBusiness Development Manager

Otan Property Funds Management Ltd

Otan is an Opportunity FundOtan Property Funds Management Ltd was established to make the most of a unique

opportunity in the West Australia property industry.

Otan has a retail AFSL licence (Lic No 342911) and it will provide investors with the ability to

participate in property opportunities mainly in Western Australia. (Australian Registered

Scheme Number 142104158)

These will be residential developments of apartments, infill site and broad acre subdivisions.

Commercial opportunities of a passive nature based upon opportunistic acquisitions will be

also sought.

The experience Otan board believe WA has a prime position in the global economy as it

attracts local and foreign investment as well as people that will drive demand for property and

housing like no other Australian state – something which they intend to capitalise onto bring

rewards to savvy investors.

Otan’s philosophy is to use the economic cycle to maximize their investor’s returns with a

strong emphasis on delivery of the product, with the right project and a managed risk profile

and profile.

While Otan is a fresh face in the small WA funds management arena, they are backed by a

wealth of experience among the board members and in-depth knowledge of the WA industry

with Pindan as their builder of choice.

The Otan team pride themselves on their keen eye for lucrative sites – identifying

opportunities that set up each of the investments with healthy and deliverable returns.

Development Properties

The four main types of property development are:-

• Infill residential property, (20- 100 houses in an existing residential area)

• Residential projects including apartments, (30-200 apartments)

• Broad acre residential land subdivision (50-1000 lots subdivisions)

• Commercial projects (pre leased)

The commercial projects may be stand alone or located with residential development. Otan is not limited to these types

of developments as property development is a “deal based” enterprise.

Otan's property development business will be mainly, but not exclusively, located in Western Australia. Otan may look

to invest in other parts of Australia or overseas.

The town planning risk should be minimal although development approvals or town planning permits may not be in

place prior to any purchase. Where development approvals and/or town planning permits are not granted or are granted

but differ to Otan's original application, Otan expects the development to proceed with the similar returns.

Pre sales or pre leasing are achieved to minimize risk.

It is Otan's intension that land will be purchased with no debt and the development construction will be funded by debt.

Any debt will be secured against the land and it will have no recourse to the investors and be covered by pre sales of

the properties.

The return to the investor will vary depending on the current economic climate and the risk of any particular transaction.

Investment returns will be paid once all the debt in respect of the project is paid. Otan will consider making returns to

investors before the debt is repaid if a favourable staging of the development or risk minimization strategy I

s achieved.

The current benchmark for the investors returns for a new project are minimum. 20% IRR

Investment Criteria

Otan Property Funds Management Ltd Investment Strategy

The three main objectives of the fund are to combine these critical factors in the

investment strategy:-

• Maximise the actual returns of the fund.

• Manage the risk of the fund.

• Deliver the returns of the fund.

By using the expertise of Otan.

The two main types of property assets that Otan Property Funds Management Ltd (as

responsible entity of the Otan Property Fund) (Otan) will be purchasing and investing in:-

• Development Properties

• Passive leased properties.

Returns

• The Otan development funds have an minimum

investment benchmark of 20% 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.

Track record of over 30 years delivery by the Otan delivery team

Group Dwellings

Non Australian residents can easily invest in Australian Residential developments

via an Otan Fund.

Risk Management

• 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.

Timing

• In fill housing projects timing 12-16 months

• Apartments projects 20-25 months

• Land subdivision projects 2-6 years

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.

Otan Flow of Funds

1. Investor applies for cash

units in the Otan

Property Fund via Part

A of the Product

Disclosure Statement

2. Investor selects a

project and converts

cash units to project

units in the particular

project via Part B of the

Product Disclosure

Statement

3. Returns issued in cash

units in the Otan

Property Fund

4. At the investor's choice,

returns can be received

(4a) or re-invested (4b)

in part or whole

The Legal structure of Each Otan Project Fund

Part A Features

• Most cases the invested funds pass directly

through part A to a project fund of the

investors choice

• Highly liquid cash Fund, redemptions at any time

• Returns generated by cash deposits

• Strong governance – Monthly development reports on the Otan web

site, 50% of the Otan board are external directors, compliance officer

who has been ASX listed company responsible officer, retail level

AFSL licence.

• Returns are not guaranteed.

• Fees are 10% of interest that the fund generates.

• Ability for the board to access each project to be offered as a Part B

project.

Part B Features

• Each project fund (Project specific part B) is a separate fund and therefore “ring fenced”

financially.

• You as the investor decide which project you invest in.

• Risk minimised by pre-sales of the project product prior to construction.

• Return guidelines, reasoning and time frames established for each project in each project

specific part B.

• Full disclosure of the project feasibility in each part B.

• Project management and construction undertaken by Pindan with 30 years of experience

and performance.

• Otan fees are fully disclosed and mainly based on performance with the performance fee

only applicable as a % (This varies from project to project) of the return in excess of 15%

per annum is returned to the investor.

• Fixed price and term construction contracts.

• Projects are predominantly based upon the “middle ground” of product type and price

which have proven to be the most resilient during the global financial crisis.

• Monthly development & management reports available for each project on the Otan web

site.

• Otan investors are eligible for a 2.5% discount on the purchase of any properties that are

developed by Otan.

• Non recourse debt

Board of Directors

Mark F. Butler

Managing Director

Having spent more than 20 years a Director and Executive

Director of a number of property firms, from start-up to listed

on the Australian Stock Exchange, Mark is a motivated

businessman driven by a vision to uncover the full potential of

any property investment or development. Mark has created

national award winning brands strategies, is an esteemed

capital raiser and with strong analytical skill, is apt at making

the most of complex business problems.

John Nicholas

Chairman

John adds wealth of strategic market experience to the Otan

board, having spent more than two decades as partner of

high-profile consulting firms Ernst & Young and Arthur

Andersen, and today continues to act in the industry as

executive consultant and advisor for a number of

organisations. Actively helping support disadvantaged people

in our community, John also brings his philanthropic passion

to the team

David Pringle

Executive Director

A founding director of Pindan, David has been instrumental in

forging the company’s rapid expansion and renowned

reputation over the past 30 years, responsible for its financial

and development management. David has vast experience in

property development and an intrinsic knowledge of the West

Australian construction industry.

John Welborn

Director

John is a chartered accountant with more than 15 years

experience as a management consultant and investment

banker. A successful company director and executive with a

road business perspective gained through commercial

experience in Australia and France. John is currently the

Managing Director of Equatorial Resources Limited and a

director of Prairie Downs Metals Limited, a Director of Rugby

WA, and holds memberships of the Australian Institute of

Chartered Accountants, The Financial Services Institute of

Australia, and the Australian Institute of Company Directors.

John was the first West Australian to play rugby for the

Wallabies playing six tests for Australian between 1996 and

1999.

Pindan Constructions –Deliverable Returns

Otan’s preferred builder

Largest multi-unit builder in WA*

5th largest commercial builder in WA**

* HIA Housing100 Report 2009/2010

** HIA Construction 100 Report 2009/2010

Pindan Constructions Deliverable Returns

Multi-Award Winning

Specialists in:

Apartments & Grouped Housing

Project Homes

Offices & Commercial

Aged Care

Schools & Institutes

Hotels & Resorts

Shopping Centres

Country Clubs

Sporting Complexes

Transportable Accommodation

Previous fund with capital already raised

North One Subi Centro – An apartment Project partnering with

ISPT (DOF No 2 Fund)

North One Subi Centro – An apartment Project partnering with

ISPT (DOF No 2 Fund)

Otan South Beach – Infill Housing

The Site

Otan South Beach Housing

Otan South

Beach

Otan South

Beach 461

Otan South Beach – Infill Housing

Otan South Beach 461 Housing

Our next projects

• Otan Karratha

24 hectares in Karratha to be developed in approximately

330 residential lots. Capital $13.0 Million. FULLY

SUBSCRIBED

Available to invest 10/1/2012 (AUD)

Minimum Investment $25,000 (AUD)

• Otan Queens Park Full

• Otan Subi Centro (construction) $909,500

• Otan Southbeach $1,527,000

• Otan Southbeach 461 $3,000,000

• Otan Nichol Karratha Full

• Otan Residential land subdivison$40.0 Million

• Otan Box Retail Fund $20.0 Million

• Various projects $45.0 Million

• Core Fund (Office & Retails) TBA

Otan

Thank you for your time

Investments in Otan projects maybe made only by the product disclosure

documents that are available on the Otan web site. www.otan .com.au

Contact

Scott Staniforth

Business Development Manager

154 Abernethy Road Belmont Western Australia 6984

Direct 08 94637227 International +61894637227

Mobile 0415453043

e mail scott.staniforth@otan.com.au