MALYSHKA PTY LTD OPPORTUNITY ALERT. Malyshka Cook Street Residence - Townsville.

Transcription

1 MALYSHKA PTY LTD PO Box 497 KINGSCOTE SA 5223 AUSTRALIA OPPORTUNITY ALERT Malyshka Cook Street Residence - Townsville

2 BUILDING FINANCIAL SUCCESS

3 HELLO THERE. After hours of number crunching we re excited to bring you our latest opportunity alert. If you re interested, don t delay. This opportunity alert goes public within 2 weeks from today. makemoney@malyshka.com.au OPPORTUNITY ALERT FAST FACTS AT A GLANCE >> LOCATION: HIGH-END TOWNHOUSE DEVELOPMENT - TOWNSVILLE, QLD, AUSTRALIA >> PIECES OF PIE UP FOR GRABS: 4 (ONE ALREADY SOLD) >> MINIMUM INVESTMENT (ONE PIECE OF PIE): $150,000 >> ROI: A PREDICTED 73.5% ROI IN 12 MONTHS INTERESTED? READ ON...

4 MALYSHKA COOK RESIDENCE SUMMARY a simple document explaining our assumptions, our due diligence and our research on this development This document is designed to allow you to understand the research that was completed as part of the due diligence by the Developer and incorporates the key areas of project viability. This document is designed to allow you to understand the research that was completed as part of the due diligence by the Developer and incorporates the key areas of project viability. This summary does not constitute an offer or a guarantee of financial outcome. Research contained in this document: 1. Market conditions 2. Population and demographics 3. The nation s property experts are increasingly discovering Townsville 4. Land price 5. Construction price and delivery 6. Risk management 7. Key financial assumptions 8. Returns 1. Market Conditions In common with its North Queensland neighbours, Townsville property came under pressure through the GFC due to the slowdown in demand for resources, reduced construction activity, and lower levels of tourism. As a consequence, Townsville property did not reflect the major growth of Australian capital cities through It is therefore lagging in the property cycle, which of course offers potential benefit to astute investors who are looking for investment property alternatives to the major cities. Townsville has been described as one of the hottest property locations in the country after being named the number one regional hot spot in Australia by real estate agency Colliers International. Townsville has experienced near record population growth despite the economic downturn with a remarkable 3.2 per cent growth, compared to the national growth rate of 2.1 per cent. Townsville is the fastest growing major city in North Queensland with around 50 people per week on average arriving in Townsville and this is only going to continue. There are 75 projects on the drawing board for the region, at an estimated cost of $4.5 billion, according to Colliers International. There is also the expected battalion of 800 soldiers accompanied by 700 support staff in which alone will provide as much as a $1 billion boost to construction activity in Townsville. Strong growth paired with a diverse and therefore stable economy and the ongoing major infrastructure projects, brings incredible opportunities for investors. Townsville is already experiencing a rental shortage with the city s vacancy rate dropping to an all time low of just 1 per cent.

5 House prices have softened making this a wonderful time to get into the property market or to build your portfolio. The Australian Property Monitors have recently released statistics forecasting exceptional growth in Townsville property prices for the next 10 years. The statistics show that by 2020, the average price of a home in Mount Louisa would be $1,223,048 - more than three times the 2009 average of $392,000. Boom Town, Sea Change, Government Decisions, Urban Renewal The QLD State Government decision to make Townsville QLD s 2nd capital city; with major property projects including $1.2 billion South Bank, $1billion North Shore, $180 million refurbishment of Stockland shopping centre to include Myer, Townsville Golf Club redevelopment, resources projects such as $1.5 billion Townsville to Mt Isa power line; cruise ship terminal and the economic impact from the major expansion of the relocation of military presence (3 RAR). Terry Ryder, from Hotspotting.com.au, stated that, Townsville ranks in his mind as the sturdiest regional economies in Australia. Malyshka Pty Ltd always seek economic diversity in a property investment location and Townsville has more than any other regional city. It has strong elements of government administration, education, defence, resources, health, tourism and manufacturing. 2. Population and Demographics Townsville is Australia s largest urban centre north of the Sunshine Coast. The former cities of Townsville and Thuringowa amalgamated in March 2008 to form the new Townsville City Council. The 2006 Census recorded a population of 165,300 and it the 2011 Census showed it had grown past a population of 190,000. It has been growing at more than 3% per year since The Townsville population is projected to rise to 219,000 by 2016 and 256,000 by Townsville has a younger population than the Australian and Queensland averages. The city has a high turnover of people, with the army base and government services bringing in many short-to-mediumterm workers. The region is popular with mine workers on fly-in-fly- out contracts. Improvements to lifestyle infrastructure have led to a higher living standard and consequently the population boom. Townsville Chamber of Commerce president John Carey says the fact multi-national companies are investing in Townsville is a good sign for the city. It tells us that national and international players see Townsville as a place of enormous potential and good investment, Carey says. They have confidence in our future.

6 PO Box 497 KINGSCOTE SA 5223 AUSTRALIA

7 PO Box 497 KINGSCOTE SA 5223 AUSTRALIA

8 PO Box 497 KINGSCOTE SA 5223 AUSTRALIA

9 PO Box 497 KINGSCOTE SA 5223 AUSTRALIA

10 3. The Nation s Property Experts Are Increasingly Discovering Townsville Bernard Salt, Australia s leading demographer writes: Townsville is unlike any other city in Australia. No city of comparable size has quite the connection into the future prosperity of the Australian nation as does Townsville. Townsville s next phase of growth is likely to accrue the critical mass in population to transform from regional centre to a metropolitan centre. Michael Matusik says... Townsville as well as having ten economic pillars of support also holds one of Queensland s most strategic assets the Port of Townsville. Did you know that $2.1 billion worth of goods are shipped through the Port of Townsville every year? That is two and a half Instagrams..or to elaborate for us ordinary folks, a billion is one thousand million (yep, that s with nine zeros). The Townsville Airport now supports 95 flights per week and can take any sized aircraft. Combined with both ports, two rail and freeway networks, Townsville is the hub of north Queensland the true CBD of the north if you ask me. In addition, there is $1.25 billion worth of infrastructure projects underway, including 30,000 square metres of new office space. Townsville, outside of Brisbane, holds more government and defence personal than any other place in Queensland. 25,000 tertiary students study at James Cook University or Barrier Reef TAFE and despite cyclones, the high Aussie dollar and the general economic malaise, 850,000 people visited Townsville last year. And to top it all off, Townsville, outside of the capital cities and their immediate surrounds, is the fastest growing urban area (in terms of actual population) in Australia. But, and there is nearly always a but these days, the locals cannot see the forest for the trees. And I am finding this to be a common occurrence across the country these days. Townsville locals will rush off to buy in a nearby one-horse town, but won t give blue-chip assets in their home town the time of day. Strange, indeed.

11 4. Land Price Situated a few hundred meters from this vibrant suburbs cafes, restaurants and shopping centre and Townsville s Strand and beaches. This big flat block (1178 sqm) is brimful of possibilities, the block has a Development Approval for four high-end townhouses, and the establishment costs have been met. All so close to the schools, parks, beach and shopping centres in North Ward, at a price of $450,000, the per townhouse land cost is $112,500. In this area Malyshka believes this is a great buy.

12 5. Construction Price and Delivery Our highly skilled Development Management Team at Malyshka Pty Ltd have under taken developments of this type before and has years of experience with the acquisition and development of property. Projects of this nature, being low-set residential, have the lowest construction risk of any development. The construction industry has been going through considerable contraction over recent years and as such there is an over supply of the resources needed to construct this project e.g. painters, carpenters, plumbers etc. This means that we are unlikely to see supply price spiking during construction. Notwithstanding this, the mineral resource boom is picking up many tradespeople. This is an important point as we need to ensure the conditions are such that the builder can make a reasonable profit from the construction process. This particular project has been thoroughly costed and the builders budget has been viewed and assessed by Malyshka Pty Ltd, including getting tenders from suppliers of the top ten cost centres for the development. The builder, Craig Maindonald from Mainz, has over 25 years experience in this type of construction. The contract is a guaranteed maximum price contract or GMP. This means that under no circumstances can there be any variations to the contract no matter what they find or are required to do. The builders obligation is to build to agreed time frame, make their margin and give us the keys. 6. Risk Management A risk to delivery is the builder not meeting its obligations. We have mitigated this by: 1. Malyshka Pty Ltd. s experience ensuring there is no deviation from the planned construction flow. 2. A quantity surveyor is engaged to certify the costs to complete at each payment stage, as well as ensure each payment is made based on contracted finished works. 3. We have obligated the builder to provide complete company accounts to our accountants for monthly review. 4. We are not using any bank debt to secure the DA approved land. 5. Time for delivery has been dealt with by no debt being used to finance the land and a fixed build price. 6. Though our program has this project being completed in 8 months from start of construction we have allowed for 9 months worth of holding charges and costs (which don t get spent if we finish earlier) 7. Guaranteed Maximum Price Contract (or GMP) from the builder.

13 7. Key Financial Assumptions In preparing the Development cash flow our key assumption and risk on the revenue is the gross realisation. We have completed a thorough examination of recent sales and believe our sales prices are at today s market we have not built in possible growth in the next 12 month of the actual build it is possible to add 10% to these figures and still be conservative with Townsville being at the bottom of the property cycle and poised for substantial growth. The cost risk associated with the cash flow has been mitigated through binding agreements with resource suppliers. 8. Returns This document comes to you from Malyshka Pty Ltd the Developer. The following table incorporates all of our assumptions. Description Total Number of Dwellings 4 Land Acquisition including duty and costs $ 470, Construction Total $ 1,135, Professional Costs Total $ 115, Council Costs $ 62, Land Taxes, Rates, Holding Costs etc. $ 80, Total Development costs inc. GST $ 1,862, Market Estimation $ 2,396, Our marketing price list $ 2,300,000.00

14 Project: 3 Cook Street, North Ward, QLD, Australia. COMMENTS Gross Acquisition $464, % Discount to Estimate Market Value Independent Evaluation Estimated Market Value at Today s Price (July 2012) $575, Estimate based on discussions with local agents and Actual Sales Comparisons Estimated Total Cost for Ordinary Retail $604, % Discount to Ordinary Retail Buyer Buyer COMPARISON TO ORDINARY PURCHASE Estimate Retail Price $575, Stamp Duty $25, % Estimated Legals $4, % Total Cost $604, $140, Total cost saving versus retail purchase INVESTMENT RETURNS SUMMARY Cash Equity Invested $150, Manufactured Equity $110, Return on Investment 73.5% COMPARISON TO ORDINARY PURCHASE Estimated Retail Price $575, Stamp Duty $25, % Estimated Legals $4, % Total Costs $604, $140, Cash Equity Investment $150, % Implied Loan $454, % Property Purchase Price $604, % Malyshka Exclusive Offer Purchase price (Average) $575, Less Manufactured Equity $110, Net Purchase Price $464, Stamp Duty - Estimated Legals $3, % Total Cost $468, Cash Equity Investment $150, Less Project Management Fee/Townhouse $15, Implied Loan Amount $333, % LVR of Loan to Estimated Market Value Property Purchase Price $468, LVR Comparison Chart Data Ordinary Retail Purchase 75.2% Exclusive Malyshka Offer (on Estimated Market Value) 58.0%

15 Project: 3 Cook Street, North Ward, QLD, Australia. COMMENTS Rental Yield Comparisons Calculations Estimated Weekly Rental (Gross) $ Estimate by local Agent Implied Annual Rental $23, Yield on Retail Purchase 4.1% Based on Estimate Market Value Yield on Cost (Malyshka Exclusive Offer) 5.0% Based on Malyshka Exclusive Offer Price Estimated Current Mortgage Rate 6.00% Approx Current Market Rate Implied Weekly Interest Cost $ Year (P&I) Principal and Interest loan Implied Weekly Interest Cost $ Year (IO) Interest Only (weekly) Implied Annual Interest Cost (P&I) $25, Implied Annual Interest Cost (IO) $20, Implied Positive Cash Flow on Gross Rental (P&I) -$2, Holding cost $45.50 per week P & I Implied Positive Cash Flow on Gross Rental (IO) $3, Cash flow positive/neutral day 1 Interest Saving Comparison Estimate Annual Interest on Retail Purchase $35, At Current Mortgage P&I over 25 years on Ordinary Purchase Implied Loan Estimated Annual Interest of Malyshka Exclusive Offer $25, At Current Mortgage P&I over 25 years on Malyshka Exclusive Offer Implied Loan Implied Interest Saving per annum $9, Estimate Annual Interest on Retail Purchase $27, At Current Mortgage IO over 25 years on Ordinary Purchase Implied Loan Estimated Annual Interest of Malyshka Exclusive Offer $20, At Current Mortgage IO over 25 years on Malyshka Exclusive Offer Implied Loan Implied Interest Saving per annum $7,285.23

16 Site Plans...

17 Site Plans...

18 Site Plans...

19 Site Plans...

20 Google Maps -

21 WANT IN? CONTACT US NOW E: QUOTE IN - Cook St