Product Disclosure Statement. Part 2 Glenvale Development Unit Class. SMSF Property Fund ARSN

Transcription

1 SMSF Property Fund ARSN Replacement Product Disclosure Statement Part Two Glenvale Development Class of Units Issue Date: 19 December 2017 An SMSF Property Australia Pty Ltd development Replacement Product Disclosure Statement Part 2 Glenvale Development Unit Class Responsible Entity and Issuer Guardian Securities Limited ACN AFS Licence Suite 7, 211 Ron Penhaligon Way Robina QLD 4226 PH: FX Toll Free:

2 P a r t T w o P a g e 2 Table of Contents 1. Important Information for this Class of Units Proposed Change to this Class of Unit Proposed Offer at a Glance Development Offer The Development Total Development Costs ASIC Benchmarks and Disclosure Principles The Development Income Fund Fees and Other Costs Material Agreements Specific Risks of the Offer DIF Preference Shares priority over this Class of Units Valuation Report Assurance Report for the Offer Development Manager Civil Work Contractor The Authorised Representative Our Disclaimer Steps to Invest How Do I Invest in this Offer... 41

3 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 3 1. Important Information for this Class of Units Other information that also applies to this Class of Unit is contained in the Important Information section in Part 1 of the Product Disclosure Statement dated 11 September This Offer This document is the Replacement Part 2 Product Disclosure Statement (PDS) for the Glenvale Development Class of Unit which is a sub fund of the SMSF Property Fund ARSN (Fund). This replacement Part 2 Product Disclosure Statement (PDS) dated 19 December 2017 replaces in its entirety any previous Part 2 PDS issued for this Class of Unit. This Part 2 PDS relates to the Offer of Units in the Glenvale Development Class of Units, and provides information on the rights, obligations and restrictions attaching to the Units and their underlying assets, and contains advice on completing the online Application Form. The Part 1 PDS for the Fund provides general information about the Fund and is dated 11 September Part 1 and Part 2 together make up the PDS for the issue of Units (Units) in the Fund. Each Part of this PDS must be read in conjunction with the other Part. Neither Part of the PDS must be distributed without the other part. Responsible Entity and Issuer Guardian Securities Limited ACN (RE, us, we and our) is the issuer of this PDS. We hold AFSL No , issued by ASIC, which authorises us to act as the responsible entity of the Fund. Additional Information on the Offer The Development selected for the Offer in this Part 2 PDS may have property specific and market information available to the Development Manager which is separate to, and does not form part of, this Part 2 PDS. Any relevant additional information relating to this Development may be requested free of charge from the Development Manager on 1300 SMSF GO ( ). Consents The entities listed below have given, and have not withdrawn, their consent to be named in the PDS in the form and context in which they are named. Other than statements explicitly attributed to an entity listed below, they do not make any statement, actual or implied, in this PDS, nor is a statement in this PDS based on a statement made by them. They have not authorised or caused the issue of any part of this PDS and take no responsibility for any part of this PDS other than statements explicitly attributed to them: SMSF Property Australia Pty Ltd SMSF Property Capital Pty Ltd Advanced Accountants RTM Pty Ltd Homecorp Property Group Pty Ltd Adams Sparkes Town Planning and Development Investments of the Fund The Fund seeks to provide Investors with a choice of risk and return profiles from investing in selected property developments. See section 5 Organisational and Fund Details in the Part 1 PDS. This Part 2 PDS details a specific Offer in the Fund. This Part 2 PDS details the Offer to invest in a specific property development, including details of the Development, benefits and risks, fees and costs, ASIC Benchmarks and Disclosure Principles, and other relevant information. Property Holding Special Purpose Vehicle Until the reconfiguration of lots and individual titles are issued by a local authority for the Property in the Development, the Glenvale Development Class of Units are the ultimate beneficiaries of the Property held by Glenvale Devine Road Development Pty Ltd, a Special Purpose Vehicle which will own the Property and is a party to various agreements set out in section 9 of this Part 2 PDS. When individual lot titles are issued and until all lots are sold, the Glenvale Development Class of Units will continue to be the ultimate beneficiaries of the balance of the unsettled lots. No Financial Product Advice The information contained in this PDS is general advice only and not financial product advice as the PDS does not take into account your individual objectives, financial situation or needs. We recommend you obtain advice from a financial adviser or professional adviser before making an investment decision. Investors should consider the prospects of the Fund in light of their own individual objectives, circumstances or needs.

4 P a r t T w o P a g e 4 2. Proposed Change to this Class of Unit A Part 2 Product Disclosure Statement for the Glenvale Development Class of Unit was issued by us on 18 August 2017 to raise up to $12,000,000 to undertake development of a large land subdivision of 314 lots at Glenvale Toowoomba Qld. The proposed change in this Replacement Part 2 PDS for this Class of Unit is the reduction of the minimum subscription amount in the original Part 2 PDS from $4,000,000 to $3,000,000. This change has been requested by SMSF Property Australia (the Development Manager) as the revised minimum subscription amount of $3,000,000 is sufficient to settle the purchase of the first land purchase for $2,463,376 plus costs required to commence work on the development. Capital raising will continue over the coming months to settle the remaining two parcels of land as set out in the original Part 2 PDS. The timelines and profit forecasts as set out in the original Part 2 PDS remain unchanged as well as any other information provided to Investors. We are of a view that altering the Minimum Subscription amount to $3,000,000 will not have any adverse impact on Investors in this Class of Unit and will assist with construction of the development as originally proposed. As stated in the original Part 2 PDS, the Toowoomba Regional Council approved the revised subdivisional plan on 10 November The Development Manager, after settlement of the first land component, can progress to Operational Works approval to enable the development works to commence on the development.

5 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 5 3. Proposed Offer at a Glance Purpose of the Offer and Investment Details The Fund is seeking to raise capital for the purpose of acquiring residential land situated at Lot 12 on RP Drayton Wellcamp Road Toowoomba Qld for $8,500,000 purchased as a going concern (Property). We are completing an initial subdivision to produce three (3) separate titles to purchase over three (3) stages. This will enable the Fund to commence works on the first stage while still raising capital for the other two (2) titles of the Property. On completion, the three titles will accommodate 314 freehold blocks of land, including the provisions of town water and sewer to each developed lot (Development). The Development has a Development Approval (DA) issued from local authorities to undertake the required works. Operational works for the Development have not yet been issued. Homecorp Property Group Pty Ltd (HPG) will be engaged by the Development Manager as the Sales, Marketing and Home Construction Manager. Development Capital raised from Investors will be used to: Purchase the Property; and Assist with costs of completing the initial civil works of the Development. Balance of capital required to complete the Development will be from short term funding provided by the Development Income Fund. The revenue to the Fund and this Class of Units will be from the net sale proceeds (less GST and selling costs) of the 314 completed residential lots and after redemption of any Preference Shares issued to the Development Income Fund by Glenvale Devine Road Development Pty Ltd, the Special Purpose Vehicle (SPV) established for this Development. The first 90 lots built and registered in the whole Development have been presold via a put and call option agreement with HPG. This means HPG have an entitlement to demand to be sold the land upon registration of the individual lots at an agreed price (which is in line with the feasibility for the Development). If they do not exercise that entitlement, the Fund through the SPV is able to exercise its entitlement to demand HPG to enter into contracts to buy these 90 individual lots at the agreed price. See section 4 of this Part 2 PDS for more information. The next 124 lots are to be sold using HPG and their distribution and sales networks to third party buyers that have not yet been identified. The final 100 lots are initially being reserved for investors in this Fund to purchase via Hybrid house and land packages. Distributions Interim distributions may be made during the Term of the Development at the discretion of the RE and subject to the cash flow requirements of the SPV. However Investors should consider their investment in the Fund and this Class of Units as being illiquid for the Term of the Development. Investment Term Upon reaching Minimum Subscription for this Class of Units, the Investment Term is forty-eight (48) months from the Issue date of the Units to Investors. The Development is scheduled for completion by October 2021 and Distributions are dependent on satisfactory completion of the Development and the sale of all of the completed lots. Offer Open Date 18 August 2017 being the date of the Part 2 PDS for this Class of Units. Offer Close Date Up to 12 months from the date of this Part 2 PDS. The closing date is indicative only. We reserve the right to close off the Offer early, extend the closing date, or withdraw the Offer without prior notice. Issue Price $1.00 per Unit Minimum Investment 5,000 Units per investor Number of Units on Offer 12,000,000 Units in total are available under this Class of Units Minimum Subscription Amount $3,000,000 Maximum Subscription Amount (before acceptance of any Oversubscriptions) $12,000,000 Projected Net Development Profit $8,625,117 (before tax). See section 5 of this Part 2 PDS for more details and disclaimers regarding the projected pre-tax profit.

6 P a r t T w o P a g e 6 4. Development Offer This section provides an overview of the details of the Offer, however intending Investors should read both parts of this PDS in full to gain a better appreciation of the Offer and the risks involved. Structure of the Fund The SMSF Property Fund (Fund) is structured into Classes of Units that invests into a Special Purpose Vehicle (SPV) to acquire land for development. The SPV then acquires land for development and investment details for each Class of Units are set out in a Part 2 PDS. Each development is allocated a separate Unit Class. On completion of the development, net sale proceeds are made from the SPV to the Fund and the relevant Class of Units and in turn to Investors in that Class. The Glenvale Development Class of Units is a Class of Units in the Fund which is a registered managed investment scheme in Australia. Classes of Units provide segregation of assets and liabilities from other Classes of Units in the Fund. The Glenvale Development Class of Units ultimate beneficiaries are the holders of Units in this Class. The effect of the structure is to isolate this Class of Units from other classes of units in the Fund and contagion from other classes of units. See section 5 of the Part 1 PDS for the SMSF Property Fund dated 11 September 2015 for more details on the structure of the Fund and the rights of investors. This Offer The SPV, called Glenvale Devine Road Development Pty Ltd ACN , has been established by the RE to undertake the Development, including purchasing the Properties. The SPV is wholly owned by the Fund and the ordinary shares in the SPV are held by the Custodian and correspond to the Glenvale Development Class of Units. Funds raised under this Offer will be provided to the SPV for the purposes of purchasing the Property and undertaking the Development. Who may invest in this Offer? Issue Price Minimum Investment Number of Units in this Class on Offer Purpose of the Offer Offer Open Date Offer Close Date This offer is open to all types of investors including Self-Managed Superannuation Funds, individuals, companies and trusts. This offer is available only to persons receiving it in Australia. $1.00 per Unit Five thousand (5,000) Units per investor and in increments of 5,000 Units thereafter. The Offer is seeking to raise $12,000,000 in total and there are 12,000,000 Units available under this Offer. At our sole discretion, we may close subscriptions for a lesser amount or accept Oversubscriptions up to a total amount of 500,000 Units at $1.00 per Unit during the Term of the Offer. The Fund is seeking to raise capital for the purpose of acquiring the Property situated at Drayton Wellcamp Road, Glenvale, Toowoomba QLD, described as Lot 12 on RP Glenvale (Property) for $8,500,000 inc. GST being purchased as a going concern and to assist with the development costs to construct 314 freehold residential blocks of land for sale to third party purchasers on completion of the Development (Development). 18 August 2017 being the date of the original Part 2 PDS for this Class of Units. Twelve (12) months from the date of the original Part 2 PDS. The closing date is indicative only. We reserve the right to close off the Offer early, extend the closing date, or withdraw the Offer without prior notice.

7 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 7 Minimum Subscription Amount Maximum Subscription Amount (before Oversubscriptions) Distributions to Investors in this Class of Units Oversubscription Amount Development Income Fund (DIF) Development The revised Offer is seeking to raise $3,000,000 as the Minimum Subscription Amount. These funds will be used to purchase the Stage 1 lot for $2,463,376 plus meet initial set up costs of the Fund and the Development. The offer will remain open until the Maximum Subscription Amount is reached. If the Minimum Subscription Amount is not achieved within four (4) months of the date of the original Part 2 PDS, all Application Money will be returned in full. Once the Minimum Subscription is reached, Investors will receive a Certificate of Investment in the Fund and Units in the Glenvale Development Class of Units noting their investment details. 12,000,000 units at $1.00 per Unit to achieve a Maximum Subscription Amount of $12,000,000. Once the Maximum Subscription Amount is reached and after acceptance of oversubscriptions (if any), no further Units will be offered in this Class of Units. The balance of the Total Development Costs (TDC) through to completion of the Development will be obtained by the SPV issuing Preference Shares to a separate fund called the Development Income Fund (DIF). DIF is designed to provide short term funding to various developments undertaken by the Development Manager. Distributions will only be made from receipt of net sale proceeds of the residential lots on completion of the Development and after redemption of Preference Shares issued by the SPV to the Development Income Fund. Any capital distribution or profit distribution available after redemption of the Preference Shares and any outstanding creditors of the SPV will be distributed proportionally to Investors holding the Glenvale Development Class of Units and based from the time Units were issued to Investors in this Class. See section 6 of this Part 2 PDS for more details. At our sole discretion, we may accept oversubscriptions up to a total amount of Five hundred thousand dollars ($500,000) representing 500,000 Units at $1.00 per Unit. The SPV will issue Preference Shares to DIF to provide the balance of funding required to complete the Development. The Development Manager has estimated that 3,535,540 Preference Shares at $1.00 per share will be issued to DIF. Refer to Section 7 of this Part 2 PDS for more details on DIF. Capital raised from investors in this Class of Units will be used to: Purchase the Property in three (3) stages for $8,500,000 inc. GST as a going concern plus acquisition costs; Commence the civil works necessary to construct 314 residential lots; Assist in meeting DA conditions; Meet consultants fees, council and infrastructure charges; Meet set up costs of the Development and our fees; and Meet costs for marketing and sale of the initial lots. Sales proceeds from the initial lots (less GST and selling costs) will be used to: Meet the civil works requirements necessary to complete the remaining lots; Costs for marketing and sales of the remaining lots; Redemption of any Preference Shares issued to DIF; and Meet ongoing consultants fees, council and infrastructure charges, our fees and fees payable to the Development Manager.

8 P a r t T w o P a g e 8 Development (cont d) Hybrid House and Land Offer (HHLO) The entire Development will be completed in 10 stages with three (3) individual titles being issued on a progressive basis by the vendor to the SPV. In Stage 1 HPG has entered into a put and call option agreement with the SPV to acquire the initial ninety (90) individual lots. The next 124 lots will be developed and sold via normal marketing activity with HPG appointed as the Sales, Marketing and Residential Construction Manager. The remaining 100 lots are reserved for Investors who wish to take up the Hybrid house and land offer. Investors should note that any return of capital or distributions from this Class of Units will be after redemption of the Preference Shares issued by the SPV to the Development Income Fund. Further details about the Property, the area and the proposed Development are contained in section 4 of this Part 2 PDS. An Investor in the Fund can enter into a purchase contract to acquire a developed lot in the Development on completion for the net price which is shown in the Certified Net Price List in section 4 of this Part 2 PDS. This sale price is the net revenue to the Fund and does not include marketing and sales commissions payable to HPG or other parties. Any investor who makes an investment of a minimum of Fifty thousand Dollars ($50,000) in the Fund and this Class of Units can choose to use this investment as a deposit on their chosen lot and house package, subject to availability. The Investors who choose to make an investment in the Fund subject to this offer are able to use at settlement of their chosen lot their equity investment in the Fund plus their proportionate share of the profits (if any) from the Development and this Class of Units. However, the investor will still be bound to make up any shortfall later if the Fund fails to distribute the forecast distribution on redemption of Units in this Class. This offer is only available from the last one hundred lots in the Development as most of the costs would have been completed including infrastructure and civil costs to the Development. The HHLO is based on 100 sales with Investors investing a minimum of $50,000 in the Fund which seeks to raise Five million dollars ($5,000,000) of Investor capital. We may close this HHLO offer at any time subject to demand. The Certified Net Price list for all lots may change over the period of the Development however Investors that commit to the HHLO offer will be able to purchase their chosen lots at the agreed purchase price of the Certified Net Price List set out this Part 2 PDS. If partial distributions are made during the Term of the Development they will be made equally to Investors in this Class. Investors in the HHLO offer will then be required to automatically reinvest their distributions to allow for completion of the intended purchase of their chosen lot.

9 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 9 Homecorp Property Group Pty Ltd Investment Term Homecorp Property Group Pty Ltd (HPG) is an established leader in residential urban property development and master planned communities. Founded in 2004, HPG has grown to be one of Australia s most dynamic developers. From humble beginnings creating new homes in regional Australia, the company has now delivered new addresses in almost every State and Territory of Australia. In its first ten years, HPG has developed, sold and completed 18 major residential housing projects, grossing more than $800 million in sales. With a current development pipeline of over 4,000 residential lots, HPG is committed to the creation of continued economic growth, prosperity and job creation in all of the regions it operates in throughout Australia. HPG is driven by its entrepreneurial spirit which is reflected in its values and culture. More information on HPG can be found on their website: homecorpgroup.com.au Glenvale Development Class of Units will be issued with an investment Term of forty-eight (48) months, commencing on the date Units are issued to Investors and subject to the Minimum Subscription Amount being achieved. However, the Responsible Entity has the right to reduce the Term to completion and sale of the Development. Prior to termination of the Units in this Class, all blocks of land will be sold and the net sale proceeds (selling costs and all related Development expenses, and redemption of Preference Shares) are distributed to Investors in proportion to their Investment in the Glenvale Development Class of Units. In the event the Development is not completed or all the completed lots are not sold within the Term, the Term will be extended by us for as long as is required to sell the remaining blocks and final distribution of the net sale proceeds from the Development is made proportionally to Investors in this Class of Units. The projected returns are calculated from the date Units are issued to Investors to compensate the earlier Investors in this Class in recognition of the higher risk associated with a Development of this size in its initial stages. See section 6 of this Part 2 PDS for more details on how payments are calculated based from the time Units are issued until redemption of the Units by the Fund.

10 P a r t T w o P a g e The Development Development Overview Glenvale Development Class of Units is a large sized land subdivision in Toowoomba, bringing 314 house size blocks to market. The project will be completed in 3 separate titles over ten (10) continuous stages. The Property is described as Lot 12 on RP with a land area of 29.2 ha and upon completion will accommodate 314 blocks, with the average size of 550m 2, the largest being 1,409m2 and the smallest being 360m 2. These lot sizes are exclusive of dedicated areas for parks and internal roads in the Development. The entire Property will have all services connected including town water and power and is close to transport, schools, sporting facilities and shopping. The Civil Contractor to be appointed by the SPV will complete the entire civil works and landscaping for the Development, including 2 large landscaped parks, one in Stage 1A of 3,836m and another in Stage 5A of 4,599m and internal roads. The original Development Approval (DA) MCU/2015/1868 & RAL/2015/1869 was obtained in 2015 by the vendor of the Property. The town planner, Adams + Sparkes applied for a revised DA with a few minor conditions after discussion with Toowoomba Regional Council. On 10 November, the council approved the revised application. The Development Manager will lodge the necessary documents with the Toowoomba Regional Council for the approval of Operational Works once the Property has settled and potentially before Maximum Subscription has been reached. Proposed Construction Timetable Scope of Works Description Month Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING - STAGE 1 Feb 2018 May 2018 Sales SALE OF STAGE 1 Aug 2018 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 2 Jun 2018 Aug 2018 Sales SALE OF STAGE 2 Nov 2018 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 3 Sep 2018 Nov 2018 Sales SALE OF STAGE 3 Feb 2019 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 4 Dec 2018 Feb 2019 Sales SALE OF STAGE 4 May 2019 Aug 2019 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 5 Mar 2019 Jun 2019 Sales SALE OF STAGE 5 Sep 2019 Dec 2019 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 6 Jul 2019 Oct 2019 Sales SALE OF STAGE 6 Jan 2020 Apr 2020 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 7 Nov 2019 Feb 2020 Sales SALE OF STAGE 7 May 2020 Aug 2020 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 8 Mar 2020 Jun 2020 Sales SALE OF STAGE 8 Sep 2020 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 9 Jul 2020 Oct 2020 Sales SALE OF STAGE 9 Jan 2021 Feb 2021 Construction CIVIL WORKS AND COMPLETION OF LANDSCAPING STAGE 10 Oct 2020 Jan 2021 Sales SALE OF STAGE 10 Apr 2021 Contingency TIME CONTINGENCY ALLOWANCE 6 months

11 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 1 1 Note: This timetable is indicative only. We reserve the right to vary the times and dates of the Development and circumstances outside the control of the Development Manager and the SPV may delay completion of the Development as set out above. The Development Manager has already conducted due diligence on the Development. Site Plan The proposed site plan for the Development at Lot 12 Drayton Wellcamp Road Glenvale is as follows: Purchase Price The purchase price of the Development is as follows: Parcel 1 - $2,463,376 Parcel 2 - $3,221,330 Parcel 3 - $2,815,294 Approvals Status The following plan shows the reconfiguration of three (3) titles to purchase the Property in three (3) parts being Lots 10, 11 and 12 on the revised subdivisional plan:

12 P a r t T w o P a g e 12 The revised Development Approval as shown was approved on 10 November A new Operational Works application will be required prior to commencement of civil works on the Property. Development Manager SMSF Property Australia Pty Ltd ACN (Development Manager) has been appointed by us to manage the Development on behalf of Investors in this Class of Units. The Development Manager has over 20 years experience in Value Stream Management, and property development activities. The Development Manager started managing developments in this format, with no bank debt, four (4) years ago. This will be the ninth development undertaken by us and the Development Manager using a similar funding model. The Development Manager advises that some of their previous developments were construction heavy or luxury medium to high-end developments, and with that experience the Development Manager considers those types of development are more at risk of being delayed using the no bank debt funding model. As a consequence, some of these previous construction developments have experienced cost overruns and/or exceeded projected timelines which may have a detrimental impact on returns to Investors in those Classes of Units. The Development Manager is currently managing two land subdivisions under this funding model and considers these developments are more easily able to be completed on time and within budget. Based on their past experience and the scale of this Development, the Development Manager has engaged HPG to build, manage and sell the residential construction on this Development. Market Value of the Property as is and as if complete An independent valuation report dated 3 July 2017 from CSA Valuers has valued the Property as is at Eight million, four hundred and sixty five thousand dollars ($8,465,000 inc. GST) based on the Development Approval being finalised as shown above. Based on the existing DA and on current market conditions, CSA Valuers have used a valuation at current market value of fifty-six million, three hundred and forty thousand dollars ($56,340,000 inc. GST). The valuer has also commented that an escalation rate may be applicable to the 124 lots in Stage 2 which are not part of the pre-sales to neither HPG nor the HHLO. The Development Manager has assumed a 3% escalation rate for these 124 lots for the purpose of the feasibility and the calculations shown in this Part 2 PDS. This as if complete valuation has been used to undertake the feasibility of the Development as set out in this Part 2 PDS however circumstances may change during the Term of the Development. See section 10 Specific Risks of the Offer of this Part 2 PDS for more details.

13 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 1 3 HHLO Certified Net Price List Lot description Net price Lot description Net price Lot description Net price 94 $179, $182, $184, $179, $182, $184, $183, $182, $172, $216, $167, $184, $197, $157, $174, $174, $157, $174, $174, $157, $174, $184, $157, $157, $184, $157, $157, $174, $157, $174, $174, $169, $174, $174, $187, $174, $157, $177, $174, $157, $182, $184, $174, $192, $194, $174, $221, $184, $184, $182, $184, $184, $192, $184, $184, $192, $184, $184, $192, $174, $179, $192, $174, $179, $192, $157, $179, $187, $157, $179, $182, $174, $184, $182, $174, $189, $182, $174, $179, $182, $184, $174, $182, $226, $174, $194, $211, $174, $231, $194, $191, $184, $184, $192, $174, $184, $182, $174, $182, $177,300

14 P a r t T w o P a g e 14 Planning The Development Approval (DA) required to undertake construction of the Development has previously been obtained by the option holder of the Property. The town planner has advised that the final Development Approval with all agreed negotiated decisions as set out in this Part 2 PDS was approved on 10 November The Property is zoned Emerging Community but will be changed to Small Lot Density and the proposed Development is a permitted use under the current town planning guidelines. Operational Works approvals are required prior to the commencement of the civil works and these will be lodged by the Development Manager with the local Council as soon as possible after settlement of the Property. Location maps GLENVALE BRISBANE SUBJECT PROPERTY

15 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 1 5 Sales and Sensitivity The as if complete Gross Realisation (i.e. before GST and selling costs) of the Development outlined in this Part 2 PDS are based on estimates provided by CSA Valuers in the current market at the present date. The Development Manager has provided the following table showing the impact of the following: 1. An increase of 5% in net sale proceeds (after GST and selling costs to local agents); 2. A drop of 5% in net sale proceeds (after GST and selling costs to local agents); 3. An increase of 5% in civil construction costs (inc. contingency) for the Development. Net Sale Proceeds % Change Civil Costs % Change Est. Surplus % Return on Investment $57,069,957 +5% $20,068,280 0 $11,342, % $54,352,340 0 $20,068,280 0 $8,625, % (this Offer) $54,352,340 0 $21,071,694 +5% $7,621, % $51,634,723-5% $20,068,280 0 $5,907, % $51,634,723-5% $21,071,694 +5% $4,904, % The table above assumes that the Development will be completed and sold within the time frame set out in this Part 2 PDS and there are no other major cost overruns during construction of the Development. All estimated returns are shown are on a pre-tax basis. SPV may have to pay tax at company rates on any taxable profit it generates prior to the Redemption of Units in this Class. If the SPV has to pay tax on taxable profits, then Distributions to Investors in this Class of Units may be on a partly or fully franked basis, depending on the amount of franking credits generated by the SPV. See Taxation in section 10 of the Part 1 PDS for more details. Please note that these estimates are a guide only and may not reflect the actual Return on Investment on completion of the Development. Estimated Return on Investment is NOT an annual return but shown as a % return on investment over the Term of the Development. Please read section 10 Specific Risks of the Offer in this Part 2 PDS for more information.

16 P a r t T w o P a g e Total Development Costs The SPV will be acquiring the Property on behalf of the Fund and undertaking the Development. The SPV will engage HPG and the Development Manager and other professionals to complete and sell the Development. The following short form statement is taken from a Feasibility Analysis prepared by the Development Manager. The table sets out the expected income and expenses of the Development through to completion and sale of the developed lots. Civil works and Total Development Cost estimations have been provided by the Development Manager based upon their previous experience and available information as at the date of this Part 2 PDS. Total Development Costs (TDC) includes the purchase price of the Property, acquisition costs, civil works for the Development, council fees, Development Management fees payable to the Development Manager and HPG, and marketing expenses associated with the sale of the Development are estimated and outlined in the table below. EXPECTED INCOME FROM THE DEVELOPMENT AMOUNT Sale of 314 blocks of land as if complete at $183,878 average per lot $57,746,044 Plus interest on funds held at bank until utilised by the SPV $283,890 (Less GST paid on income at 1/11 th of as if complete sale prices) ($5,249,640) (Less selling costs, legal and Fund management costs) ($2,238,783) Less marketing costs payable to HPG ($1,154,921) Net Sale Proceeds after GST and selling costs $49,386,590 ESTIMATED TOTAL DEVELOPMENT COSTS (TDC) Purchase price of Property $8,500,000 Acquisition costs inc. stamp duty and due diligence $946,774 Civil construction costs (Note 2) $19,112,648 5% of civil construction costs $955,632 Dividends payable at 12% on Preference Shares issued to DIF* $222,594 Engagement fee payable at 1% to DIF $35,371 Professional consultants costs (inc. fees payable to the Development Manager) $6,468,812 Additional capital raising costs for Stages 2 & 3 during the term of the Development $392,500 Property holding costs $380,000 Council fees (statutory contributions/infrastructure charges) $6,789,936 Investor update & communication costs payable to SMSF Property Capital Pty Ltd $450,000 (Less estimated GST input credits during construction) ($3,492,794) Total Development Costs (TDC) after GST (Note 1) $40,761,473 ESTIMATED DEVELOPMENT PROFIT Net sale proceeds after GST and selling costs as shown above $49,386,590 (Less estimated acquisition and construction costs as shown above) ($40,761,473) Estimated Net Development Profit before tax (Note 3) $8,625,117

17 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 1 7 * Preference Shares issued by the SPV to the Development Income Fund Total Development Costs are based upon a number of key assumptions as detailed below. Whilst these assumptions have been based on information available as at the date of this Part 2 PDS, and due care and attention has been exercised in preparing the summary, they may not reflect actual future events as market conditions may change during the Term of the Development. (Note 1) Based on quotes received from an independent civil engineer (2 reports received to date) and estimates of costs of similar developments undertaken by the Development Manager. (Note 2) A Quantity Surveyor or Engineer will confirm all construction costs in a format approved by the Development Manager and us prior to commencement of the civil works for the Development. (Note 3) Estimated Net Development Profit assumes the SPV will issue approx. 3,535,540 Preference Shares to DIF to complete the Development and before acceptance of any Oversubscriptions. Refer to section 10 Specific Risks of the Offer in this Part 2 PDS for further assumptions and see assumptions and risks factors as disclosed in Parts 1 & 2 of this PDS. Refer to Section 7 of this Part 2 PDS. This section summarises how funds raised under this Offer will be utilised by the SPV. Figures shown above are based on best estimates provided by the Development Manager based on current market conditions. Past performance is not an indication of future events and circumstances may change during the term of the Development. Actual returns may be less than the estimated Net Development Profit set out above. We recommend that Investors obtain independent advice as to how the financial information set out above may influence their investment and financial position.

18 P a r t T w o P a g e ASIC Benchmarks and Disclosure Principles ASIC has developed a set of six Benchmarks and eight Disclosure Principles in RG 46 for unlisted property schemes to assist investors understand and assess the risk and returns of the Offer, and whether an investment is suitable for them. For more information on Benchmark and Disclosures Principles and an explanation of these terms, please refer to section 4 of Part 1 PDS for the SMSF Property Fund. The information in this Part 2 PDS below relates to SPV and the Glenvale Development Class of Units Unlisted Property Schemes ASIC Benchmarks Benchmark 1 Gearing Policy Benchmark 2 Interest Cover Policy Benchmark 3 Interest Capitalisation If not, why not This Benchmark is MET We maintain and comply with a written policy that governs the level of gearing for each individual Offer. The funds raised by the issue of Units in the Fund will be used by the SPV to purchase the Property and meet the initial set up costs and civil works for the Development. The balance of funds required to complete the Development will be from the issue of Preference Shares to the Development Income Fund. See section 7 of this Part 2 PDS for more information on the Development Income Fund. If not, why not This Benchmark is NOT MET We maintain and comply with a written policy that governs the level of interest cover for each individual offer. The SPV does not meet this Benchmark as the Development during construction will not produce sufficient income to meet the dividends to the Development Income Fund. The SPV will not be subject to the Interest Cover Ratio for the Development although funding is sourced against the entire Development as disclosed in this Part 2 PDS. This Part 2 PDS contains a summary of the Development timetable and the risks associated with the Development for this Class of Units. If not, why not This Benchmark is MET The SPV meets this Benchmark as it intends to issue Preference Shares to the Development Income Fund which incurs payment of a monthly dividend. Costs incurred for this type of debt funding will be paid monthly in arrears from the cash reserves of the SPV to the Development Income Fund but will not be added to the total amount of issued Preference Shares to DIF by the SPV.

19 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 1 9 Benchmark 4 Valuation Policy Benchmark 5 Related Transactions Benchmark 6 Distributions Party If not, why not This Benchmark is MET We maintain and comply with a written policy that governs the requirement to engage an independent valuer to value the Development on an as is and as if complete basis. A valuation from an independent valuer that complies with our written policy valuing the Development on an as is and as if complete basis has been obtained and an executive summary of the report is included in section 11 of this Part 2 PDS. A full copy of this report and our valuation policy can be sent to Investors by contacting us on , or SMSF Property Capital Pty Ltd on If not, why not This Benchmark is MET We maintain and comply with a written policy on Related Party Transactions including management of conflicts of interest and approval of Related Party transactions. Where proposed Related Party transactions go beyond the scope of the Conflict of Interest policy, these will be reviewed by Guardian s directors and may require approval of Investors in this Class of Unit. If not, why not This Benchmark is MET Distributions will only be made from receipt of net sale proceeds of the 314 residential lots on completion of the Development and after redemption of Preference Shares (if any) issued by the SPV to the Development Income Fund. A final distribution will be made to Investors after the sale of all the residential lots and payment of any fees or expenses including selling and marketing costs. In the event that the lots have not been sold and net proceeds distributed prior to expiration of the Term, the Term may be automatically extended by us in order for all lots to be sold and net proceeds distributed to Investors. Any capital distribution or profit distribution available after redemption of the Preference Shares and any outstanding creditors of the SPV will be distributed proportionally to Investors holding the Glenvale Development Class of Units and based from the time Units were issued to Investors based on the following formula: Where: Dis = P x (UO x D) A Dis = Distributions paid to Unitholders. P = Distributable income available for the Distribution Period less initial capital invested. UO = Units Owned by each Unitholder at end of the Distribution Period. D = Days each Unitholder has held Units since the last Distribution Period. A = Sum of number of Units held by each Unitholder multiplied by the number of days each Unit, held by that Unitholder, has been on issue during the Distribution Period.

20 P a r t T w o P a g e 20 The following example shows the calculations of distributions based on the number of days invested: Unit Holder Units Owned by each Unit Holder Start Date End Date Days Invested Distributable Income Original Investment Amount Total Funds Returned A $100, /03/ /03/ $33, $100, $133, B $100, /05/ /03/ $27, $100, $127, C $100, /07/ /03/ $22, $100, $122, D $100, /09/ /03/ $16, $100, $116, E $100, /11/ /03/ $11, $100, $111, F $100, /12/ /03/ $8, $100, $108, $600, $120, $600, $720, This is an example only of how distributions will be calculated by us and is not intended to be a reflection of the offer (including timetable and the amount of profit distribution) as set out in this Part 2 PDS Unlisted Property Schemes ASIC Disclosure Principles Disclosure Principle 1 Gearing Ratio Gearing Based on estimated values as if complete supplied by the Valuer, the Gearing Ratio for this Class of Units for the issue of Preference Shares to DIF is 6.12% calculated as follows: Total Liability to DIF ($3, 535, 540) = Gearing Ratio Total Assets on completion ($57, 746, 044) Disclosure Principle 2 Interest Cover Ratio Disclosure Principle 3 Scheme Borrowing Interest Cover The scheme does not have an interest cover ratio as described in ASIC Benchmark 2 in section 6.1 above. Borrowings The Fund has no debt and does not intend to borrow. It is proposed that the SPV will enter into an interest-bearing arrangement with the Development Income Fund by issuing Preference Shares that have some of the elements of debt to allow completion of the Development. The issue of Preference Shares by the SPV cannot exceed 45% of Total Development Costs (TDC) of the Development. These Preference Shares will have a maximum term of twelve (12) months from the date of issue by the SPV. This may be extended by the RE and will be redeemed from the receipt of net sale proceeds from the developed lots. The Preference Shares issued by the SPV will have preference for the return of capital and the return of any unpaid dividends to the Preference Shareholders, being the Development Income Fund, ahead of ordinary shareholders in the SPV being the Investors in this Class of Units.

21 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 2 1 Disclosure Principle 4 Portfolio Diversification Portfolio Diversification Funds raised from this Offer will be used to purchase land situated at Lot 12 Drayton Wellcamp Road, Glenvale, Qld 4350 described as Lot 12 on RP Purchase price of the Property is Eight million, five hundred thousand dollars ($8,500,000 inc. GST) as a going concern. The SPV proposes to subdivide the Property into three hundred and fourteen (314) residential allotments for resale to third party buyers. See section 4 of this Part 2 PDS for more information. This Class of Units will invest in the Development and they are not diversified across other developments. Investors therefore have a greater exposure to any adverse events during the Development than if the underlying assets of the SPV comprised of more than one development. We will obtain periodic independent valuations on the Development on an as is and as if complete basis. These valuations will provide a Net Tangible Asset value for this Class of Units at various milestones during the Development. An updated Net Tangible Asset value will be provided to Investors as they become available. There are no tenants or other income available to the Fund and this Class of Units until completion and sale of the completed lots within the Development. Investors will not have any rights to any other assets or income of the Fund or from other Classes of Units issued by the Fund. Section 5 of this Part 2 PDS contains a summary of the development timetable and profit forecasts. Disclosure Principle 5 Related Party Transactions Related Parties Corporate Authorised Representative - SMSF Property Capital Pty Ltd is not a related party of the Responsible Entity. The Development Manager SMSF Property Australia Pty Ltd is a related party of the Corporate Authorised Representative. Any contracts or dealings between the Corporate Authorised Representative and the Development Manager will be on an arm s length and transparent basis on normal commercial terms. Development Manager - SMSF Property Australia Pty Ltd is not a related party of the Responsible Entity. The Development Manager will receive remuneration from the Fund which is managed in the Conflict of Interest policy, and reviewed by us as part of the Compliance Plan lodged with ASIC. Civil Contractor Integrated Civil Pty Ltd is a related party of the Development Manager and the Corporate Authorised Representative. They are a preferred contractor of the Development Manager, as they have undertaken works on previous developments to a high standard. Homecorp Property Group (HPG) is not a related party of us, the Development Manager or the Authorised Representative.

22 P a r t T w o P a g e The Development Income Fund Background From recent experience over the past three years with other developments managed by SMSF Property Australia Pty Ltd and Guardian Securities Limited acting as the Responsible Entity for the SMSF Property Fund, it became apparent that investor funds and the SPV to which the development relates were not being fully invested. Funds raised for each SPV in the SMSF Property Fund are designed so that all of the funds required to purchase the land, meet construction and civil costs and all other fees associated with a particular development is raised from investors in that SPV prior to settlement of the land. This required a substantial amount of equity lying idle in bank accounts earning a low interest rate until the funds were required by that SPV to meet various costs associated with the development. Because of the misalignment of investor funds and their return expectations, we developed a product called the Development Income Fund (DIF). DIF is designed to operate on the LIFO (Last in First Out) basis. This means that DIF will be engaged by a SPV towards the end of a development (or each stage) to meet the last two or three construction draws and will be paid out from the initial sales of the completed product, be they townhouses, vacant land, apartments etc. Structure The SPV will issue redeemable Preference Shares to DIF to allow the SPV to complete the Development. The issue of Preference Shares by the SPV cannot exceed 45% of Total Development Costs (TDC) of the Development. These Preference Shares require payment of a dividend currently set at 12.0% per annum monthly in arrears plus a 1.0% engagement fee payable by the SPV to the Development Income Fund. These costs are included in the Total Development Costs as set out in section 5 of this Part 2 PDS. The Development Income Fund (DIF) is a sub fund of The Guardian Investment Fund ARSN (TGIF). Guardian is the Responsible Manager for the TGIF. Guardian receives a Contribution Fee of 1.1% (inc. GST) of issued Interests in the Fund and a Management Fee of 1.1 % (inc. GST) per annum. These fees are paid from TGIF and the Development Income Fund Class of Interests not by the SPV. The Preference Shares issued by that SPV will have preference for the return of capital and the return of any unpaid dividends to the preference shareholders, being the Development Income Fund, ahead of ordinary shareholders in the SPV being the investors in that SPV. However, the Preference Shares and DIF do not have the same rights as an external lender such as entering into possession of the property, appointing receivers, selling the asset or otherwise having control of the Development which remains with the SPV Investors and the Responsible Entity acting on their behalf. This Offer This Part 2 PDS is seeking to raise $12,000,000 (before Oversubscriptions) to purchase the Property and commence construction of the Development. As at the date of this PDS, we propose to continue to raise funds from Investors progressively over the next few months to enable the works to commence as previously outlined in this Part 2 PDS. We may accept Oversubscriptions up to a total amount of $500,000 to meet any unforeseen costs that may occur during the Term of the Development. Once the Maximum Subscription Amount has been reached, the SPV will require additional short term funding to complete the Development. We will utilise the Development Income Fund by allowing the SPV to issue Preference Shares to the Development Income Fund to meet these costs. Based on cash flows provided by the Development Manager, tabled below are the projected different rates of return using a fully invested model as has been done in the past using all of the investor funds compared to utilising DIF for the final months of the Glenvale Development Class of Units:

23 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 2 3 Offer Open Date Fully Invested This Offer Using DIF Development as if complete after GST & selling costs $49,637,223 $49,386,590 Total Development Costs (after GST) as per feasibility $40,539,591 $40,761,474 (2,3) Net Development profit (b) $9,097,632 $8,625,115 Equity raised from Investors (a) $15,400,000 $12,000,000 Preference shares issued by the SPV to DIF Nil $3,535,540 Projected pre-tax margin on funds invested (b/a as a %) 59.08% 71.88% (7) Assumptions (1) Total construction time, including estimated sales time for Stage one of the Development, is fortyeight (48) months commencing from November (2) The actual construction costs for both models are identical, however the DIF costings includes payments of dividends at 12% per annum for twelve (12) months as part of the TDC. (3) The current dividends at 12% per annum and the 1.0% engagement fee payable to DIF have been fully costed into the Total Development Costs for this Development. See section 5 of this Part 2 PDS. (4) Net sale proceeds (after GST & selling costs) from the first ninety (90) vacant blocks will be used to redeem the Preference Shares issued to DIF and/or used to meet ongoing civil costs of the Development. (5) On completion of the Development, final distributions will then be disbursed proportionally to Investors in the Glenvale Development Class of Units. (6) There are a maximum of six (6) months of delays and 5% construction cost overruns during completion of the civil works of the Development. (7) Projected return on investment is not an annual rate of return and is based on the Development being completed and sold within the forty-eight (48) month feasibility timeframe as set out in this Part 2 PDS. The returns shown above are before acceptance of Oversubscriptions (if any) that may occur during the Term of the Development. Should the Development take longer than expected and/or the as if complete estimates are not be achieved, then the projected Return on Investment will alter accordingly. See section 10 Specific Risks of the Offer of this Part 2 PDS for more details. More details and a copy of the PDS for the Development Income Fund may be obtained by contacting us on or contacting the Authorised Representative SMSF Property Capital Pty Ltd on

24 P a r t T w o P a g e Fees and Other Costs The Corporations Act requires the Responsible Entity to include the following standard consumer advisory warning in this Document. The information in the consumer advisory warning is standard across Product Disclosure Statements and is not specific to information on fees and other costs associated with an investment in this Class of Interest. DID YOU KNOW? Small differences in both investment performance and fees and costs can have a substantial impact on your long term returns. For example, total annual fees and costs of 2% of your account balance rather than 1% could reduce your final return by up to 20% over a 30 year period (for example, reduce it from $100,000 to $80,000). You should consider whether features such as superior investment performance or the provision of better member services justify higher fees and costs. You may be able to negotiate to pay lower contribution fees and management costs where applicable. Ask the fund or your financial adviser. TO FIND OUT MORE If you would like to find out more, or see the impact of the fees based on your own circumstances, the Australian Securities and Investments Commission (ASIC) website ( has a managed investment fee calculator to help you check out different fee options. This section 8 shows the specific fees and other costs that you may be charged with this Offer. These fees and costs may be deducted from your Application Money, from the returns on your investment, or from the Assets of your Class of Unit. It is important that you read all the information about fees and costs to understand their impact on your investment. The Glenvale Development Class of Units are structured as Unit Classes of the SMSF Property Fund. This Fund structure provides an efficiency of operations and cost savings in administration, custody and other services. It is not a fund of funds, and has only one set of Management Costs described in this section. Amounts shown below are inclusive of GST and stamp duty, and net of expected reduced input tax credits. See Part 1 PDS section 8 for warning statements and other information on fees and costs. Type of Fee or Cost Amount (incl. GST) How and When Paid Establishment Fee: NIL Not Applicable Contribution Fee: Payable when Units are issued We will be entitled to a Contribution Fee of 1.65% (inc. GST) of the total value for this Class of Units issued by the Fund (before Oversubscriptions). This fee is payable from funds raised for this offer and upon the issue of Units in the Fund. Refer to sections 8.2 and 8.3 of the Part 1 PDS for SMSF Property Fund for further information. $198,000 assuming a total value for this Class of Units of $12,000,000. Withdrawal Fee: NIL Not Applicable Exit Fee: NIL Not Applicable

25 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 2 5 Management Fee Fund Expenses We will be entitled to an annual management fee equal to 1.85% (inc. GST) of the total value for this Class of Units issued by the Fund (before Oversubscriptions). This fee is payable monthly in arrears from the assets of this Class of Units for the Term of the Offer. This fee will manage and maintain the compliance of the Fund including costs associated with establishment of the Investor register, back office administration, ASIC reporting, statutory obligations and investor services. All costs associated with this Class of Units including audit and Custodian costs and accounting fees, PI insurance, any due diligence costs and any other costs outside of those discussed in the Management and Contribution Fee above. Refer to Section 8.3 Fund Operating Expenses in Part 1 PDS for more details. This fee is an estimate only and is payable upon receipt of approved invoices from the Responsible Entity. It also excludes any abnormal expenses that may be incurred by the Fund and this Class of Units in the performance of its obligations. $222,000 per annum, assuming a total value for this Class of Units of $12,000,000. Estimated at 0.35% ($42,000) per annum inc. GST of the total value for this Class of Units of 12,000,000. Type of Fee or Cost Amount (incl. GST) How and When Paid Adviser Fee: If you authorise and direct us to, we will pay an adviser fee out of your application money to appropriately qualified financial advisers and agents who introduce Investors to the Fund and whose details appear on the Application Form. This fee is negotiated by you with your nominated agent or financial adviser and you authorise us to pay that amount to your agent or financial adviser out of your application money upon the issue of Units for this Class. This fee is not paid by the Responsible Entity. For example, where we receive an Application Form for $20,000 and you direct us to pay an Adviser fee of 3.3% (inc. GST) per Unit the maximum adviser fee that we can pay to your nominated agent or financial adviser from the Application Money is $ (inc. GST). Adviser remuneration may be deducted from the Application Money and will reduce the number of Units issued by the Fund to you less the amount of the Adviser Fee as shown above. The amount of this fee (if any) is up to a maximum of 3.3% (inc. GST) of the application money paid by you for Units in this Class.

26 P a r t T w o P a g e 26 Transfer Fee The Management Fee quoted above has been provided by us at a discount to this Class of Units on the basis that we remain as the Responsible Entity for this Class of Units for the Term of the Development. Should we be removed as the Responsible Entity at the instigation of Unitholders other than fraud wilful negligence or cancellation of our Australian Financial Services Licence, or we had not been operating as the RE within six (6) months of being removed, then the Transfer Fee will be due owing and payable to us on the date of the transfer to the new Responsible Entity. 5.0% of the Gross Asset Value of this Class of Units. Example of Annual Fees and Costs for the Offer The example in the table below describes the fees and costs you will be charged specifically with this Offer. The same example in also shown in section 8.4, Example of Annual Fees and Costs, in Part 1 PDS, and describes the maximum fees and costs permitted under the Constitution. Example Balance of $50,000 with total contributions of $5,000 during year 1 Contribution Fee 1.65% FOR every additional $5,000 you put in you will be charged $82.50 each year. PLUS Management Costs 2 2.2% AND for every $50,000 you have in the Fund, you will be charged up to $1,100 each year. EQUALS Cost of Fund 3 If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000 during that year, you would be charged fees of up to $1, Note 1: It is a requirement of the Corporations Regulations 2001 (Cwth) that the above example assumes a balance of $50,000 and a total of additional contribution of $5,000 in a year. Note 2: The Management Costs disclosed in this example includes the Management Fee and estimated Fund expenses with no Adviser Fee. Note 3: You may agree to pay an Adviser Fee to your financial adviser, and instruct us to pay this fee from your Application Money on the Application Form. Adviser Fees (if any) are not shown in this Cost of Fund example. See section 8.3 Additional Explanation of Fees and Costs in the Part 1 PDS. Management Fee This is the fee payable to us for managing and operating the Glenvale Development Class of Units, and is calculated separately for each Unit Class. The Management Fee is calculated daily, and payable monthly in arrears from the assets corresponding to that Unit Class. This fee is not a fixed fee and remains in force until all Units in this Class are redeemed by us. Fund Expenses A list of the typical Fund Expenses is included in section 8.3 Additional Explanation of Fees and Costs in the Part 1 PDS. However, this is not an exhaustive list, and there may be other expenses including Development costs outside the estimates provided by the Development Manager.

27 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e Key Financial Assumptions The following information provides a further breakdown of the Total Development Costs (TDC) shown in section 5 of this Part 2 PDS and the assumptions underlying these costings. Property Purchase The purchase price of $8,500,000 inc. GST is specified in the Property purchase contracts entered into by the SPV. Acquisition Costs This includes stamp duty and registration fees based on current rates and the legal fees for the drafting, review and execution of all agreements between the SPV and Development Manager, Civil Contractor and any other supplier of services for the Development. Due Diligence A due diligence and sourcing fee of 5.5% inc. GST ($467,499) of the purchase price of the Property is payable progressively to the Development Manager. This fee will be payable within seven (7) days of the issue of Units once the Minimum Subscription Amount is reached and upon settlement of each parcel of the Property, from cash held at bank for this Class of Units. Civil Construction Costs The civil works cost estimate as shown in this Part 2 PDS is the estimated contract amount agreed to with the Civil works contractor and the SPV for the entire works package of the Development. The contract will be an AS4300 Civil Design and Construct contract for these works. Development Management Costs Development Management costs represents the amount payable to the Development Manager for delivering the Development to completion, being $2,936,940 inc. GST or 7.7% of the actual Total Development Costs. This fee is based on Total Development Costs, but excludes Fund Management, distribution fees and marketing expenses from the TDC shown in section 5 of this Part 2 PDS. Actual Development Management costs may be higher or lower depending upon TDC actually incurred by the Development. This amount will be payable to the Development Manager as the Development progresses based on invoices approved by the Quantity Surveyor/Civil Engineer and the RE. The amount payable to, and rights and obligations of, the Development Manager will be contained in the Consultancy & Agency Agreement to be entered into by the SPV and the Development Manager, a description of which is contained in section 11.4 of the Part 1 PDS. Consultants The costs payable for other professional consultants required for the Development, such as landscape designers, surveyors, quantity surveyors and the like. The professional costs estimate has been determined by the Development Manager based on its previous experience and have been included in the AS4300 Design and Construct scope. Investor Update and Communication Costs SMSF Property Capital Pty Ltd, on behalf of each element of the development value stream, provide monthly written reports and updates to investors in this Class about the details of the Development, including approvals progress, civil works contractor programs, investor questions and asset sales. This is a cost of $450,000 over the lifetime of the Development. Video Updates are provided monthly on the Development, including discussion of progress, dealing with issues that arise, delays, program adjustments etc. These videos tracking the Development s progress are uploaded regularly to the website These monthly updates will also include material changes that occur during the Term of the Development. Council Fees (Statutory Contributions) Statutory fees and contributions are based on the current contributions for the Property as advised by the local authorities.

28 P a r t T w o P a g e 28 Property Holding Costs Property holding costs are based on current rates notices from the local council and the most recent land tax assessment notice. Fund Management (assuming the Maximum Subscription Amount is achieved) These fees comprise our Contribution Fee of $198,000 paid on the issue of Units, and a Management Fee of $222,000 per annum plus any general Fund expenses as incurred. Development Income Fund Additional funding will be required to complete the Development, which will be sourced from the Development Income Fund. See section 7 of this Part 2 PDS for more information on DIF. This involves the issue of Preference Shares by the SPV to DIF for a short period of time towards the end of Stage 1 of the Development. These Preference Shares receive a current dividend payment of 12% per annum payable monthly in arrears from the SPV to DIF plus a one off engagement fee of 1.0% of the face value of the Preference Shares issued by the SPV. Payment of these dividends and the engagement fee has been fully costed into the TDC for this Development and will be dependent on the number of Preference Shares issued by the SPV to DIF Authorised Representatives SMSF Property Capital Pty Ltd ACN has been appointed by Guardian Securities Limited as a Corporate Authorised Representative No to promote the Offer to prospective Investors. Guardian or its appointed Corporate Authorised Representative (SMSF Property Capital Pty Ltd and others) will only accept applications from licensed or authorised financial advisers. Applications made through the SMSF Property Capital Pty Ltd website are included in this authorisation. Those investors who invest in the Fund on the recommendation of their financial adviser will determine with their financial adviser the advice fee. For these investors there are two options: Option 1: You will determine with your adviser a fee that you will pay, that will be paid separate from and outside of the amount you submit to us for your investment in the SMSF Property Fund ARSN In this case, the application money sent to us will be reflected in the amount in the Unit Certificate. (e.g. if you send in application money of $20,000, the Unit Certificate will be issued for the full amount of $20,000). Option 2: You will determine with your adviser an agreed percentage fee up to 3.3% (inclusive of GST) of your application money. This fee will be deducted from the application money sent to us and reflected in the Unit Certificate. (e.g. if you send in application money of $20,000 we will issue you 19,340 units at $1.00 per Unit in the Fund ($20,000 - $660 = $19,340). We will forward this fee to your authorised financial adviser or Authorised Representative as noted on your Application Form No Cooling Off Period There is no cooling off period in relation to issue of Units under the Offer due to the illiquid nature of the Fund and this Class of Units. Therefore, as we will issue Units, there is no obligation on us to accept a request by an Applicant to withdraw their application once received Continuous Disclosure The key investor information contained in this Part 2 PDS will be updated from time to time. Our Continuous Disclosure obligations and regular Investor updates will be available on the website Where there is a material change to the key investor information contained in this Part 2 PDS we may issue a supplementary PDS or a new PDS.

29 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e Material Agreements Material Agreements Specific to this Offer We, on behalf of the Fund, will arrange for the SPV to purchase the Property in three (3) parcels, and will enter into the following agreements relating to the Development: Contracts of sale; Consultancy & Agency agreement with the Development Manager; Sales and marketing agreements; Civil works contracts for the Property and subsequent subdivision; Put and call option agreements between the SPV & HPG; and Marketing and residential builder management agreement between the SPV & HPG. Refer to section 11 of the Part 1 PDS for a summary of material agreements applicable to the Fund generally. Contracts of sale The SPV will enter a conditional contract of sale with the vendor of the Property and will settle the Property in three different parcels. The Fund will only purchase the first parcel of land once minimum subscription has been reached and the conditions of the purchase contract satisfied. Consultancy & Agency Agreement It is proposed that, prior to the initial settlement of the Property, the SPV and Development Manager will enter into a Consultancy & Agency agreement pursuant to which the Development Manager will be engaged to manage the Development and deliver it in accordance with the TDC summarised in section 5 of this Part 2 PDS. The agreement will also recognise the Development Manager s role in sourcing the Property, undertaking due diligence on the Development and negotiating with council on obtaining the necessary approvals for the Development. The other terms of the Consultancy & Agency agreement, including the circumstances in which the agreement can be terminated, will be on commercial arm s length terms for an agreement of this nature. A copy of the agreement, when executed by the SPV and the Development Manager, will be available from us on request at info@guardiansecurities.com.au to any Investor in this Class of Units. Sales and Marketing Agreements No sales and marketing agreements have been entered into as at the date of this Part 2 PDS. Sales and marketing agreements are intended to be entered into appointing marketing groups, external real estate agents and or SMSF Property Capital Pty Ltd to facilitate the sale of the completed blocks on or before completion of the Development. The Development Manager will be responsible for appointing these agents on behalf of the SPV. AS4300 Standard Civil Design and Construct contract Prior to commence of civil works on the Property and after receiving relevant approvals from the local Council, the SPV will enter into a AS4300 standard design and construct contract with Integrated Civil Pty Ltd ACN (Civil Contractor). The contract will require the Civil Contractor to complete the relevant works for an amount which reflects the known information as at the date of this Part 2 PDS. The contract will be in the form of an AS4300 design and construct contract which may include provision for any delay payments to the Civil Contractor by the SPV during construction and liquidated damages payable by the Civil Contractor to the SPV should the Development not be completed within the time specified in the contract. The contract will entitle the SPV to expend funds during construction of the Development in line with the certifications from an independent quantity surveyor, engineer or valuer appointed by us on a cost expensed and a cost to complete basis. The design component of the AS4300 allows for improvements in design and any variations will be valued by the independent Quantity Surveyor at the time. We will be required to approve any material changes to design and variations. The Development Manager is satisfied the proposed Civil Contractor has the experience necessary to meet its obligations under these proposed contracts.

30 P a r t T w o P a g e Specific Risks of the Offer General risks of the Fund are described in section 7, Benefits and Risks of Investing, in the Part 1 PDS. In addition, you should give special consideration to the risks specific to the Offer in this section, and in section 6 ASIC Benchmarks and Disclosure Principles in this Part 2 PDS. These may not be all the risks of the Fund and the Offer. All investments involve varying degrees of risk. While there are many factors that may impact upon the performance of any investment, the section below summarises some of the major risks that Investors should be aware of when deciding whether to invest in this Offer. Before investing, prospective Investors should consider whether this Offer is a suitable investment, having regard to their personal investment objectives, financial position, and particular needs and circumstances. Investors should also consider and take into account the level of risk with which they are comfortable, the level of returns they require, as well as the frequency and nature of those returns, and their investment time horizon. Investors should seek professional advice in setting their investment objectives and strategies. The risks described below are not exhaustive and, whether a risk is specifically referred to in this section or not, that risk may have a material effect upon the performance and value of this Class of Units. Importantly, Investors should note that the value of an investment in the Offer, and income received by Investors, may rise or fall and, consequently, Investors may suffer losses (including the loss of all of their capital investment in the Offer). Approvals Risk The Development will require various Council approvals such as Development Approval and Operational Works approval. A condition of the purchase for Stage 1 is for a variation of the existing DA prior to settlement of the Property on terms and conditions satisfactory to us and the Development Manager. Delays in obtaining subsequent approvals or any changes required by Council for the Development may adversely impact on the profitability of the Development and cause delays in completing the Development within the time frames set out in this Part 2 PDS. Such delays or changes to approvals may impact on the performance of the Development and an investment in the Glenvale Development Class of Units. Development Risk There is a risk that the Development will take longer or cost more than budgeted for as set out in section 4 of this Part 2 PDS which could adversely affect the performance of the investment in this Class of Units. Default risk by HPG The marketing and residential builder management agreement with HPG will contain certain default provisions should HPG default under the Contract. HPG are committed to purchase 90 lots of the 314 developed lots under the agreement plus assist with the sales and marketing of the balance lots in the Development. Should HPG default then the sales process of the Development will be impacted and delays of redemption of Units will most likely be a result. The Development Manager will seek to engage another home builder to take over the role of house construction and sales manager as the Property is suited for first and second home buyers in the area. Valuation Risk There is a risk that the independent valuation obtained by us for the Development does not accurately reflect the true value on an as is and as if complete basis at the time the valuation is completed. This could result in the SPV purchasing the Property for more than its current value or the value of the individual lots as if complete being less than anticipated. Such circumstances may adversely affect the value of your investment in the Glenvale Development Class of Units and may result in reduced returns or a capital loss. Civil Works Risk An AS4300 civil design and construct contract will be entered into for the total civil construction works required to complete the Development as set out in this Part 2 PDS. However, there remains a risk that the costs may be higher than anticipated which would adversely impact the profitability of the Development and any investment returns paid to Investors in this Class.

31 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e 3 1 Further, if the AS4300 civil design and construct contract was terminated, for example due to default by the Civil Contractor, another civil contractor would need to be appointed to undertake the applicable civil works and the civil works price negotiated with a replacement contractor may be higher than currently budgeted for in the costings set out in section 5 of this Part 2 PDS. Additionally, increased civil works costs would also result in higher Development Management costs, as these costs are calculated as a percentage of Total Development Costs. The Development Manager believes, however, the risk of a construction cost blow out will be mitigated by the AS4300 civil design and construct contract and the certification of each claim by an independent Quantity Surveyor or Civil Engineer. In addition, the proposed Civil Contractor carrying out the civil works will be employing standard construction techniques. Environmental Risk Land contamination or the presence of hazardous materials or other contaminants may be found on the Property and may have an adverse impact on the performance of the Glenvale Development Class of Units. Sales Risk There is a risk that the value of the individual blocks as if complete may be less than shown in this Part 2 PDS due to market demand or other factors. In addition, if the rate of sales of the completed lots takes longer than the Development Manager anticipates it may adversely affect the performance of an investment in this Class of Units and the returns achieved for Investors in this Class may be less than as shown in this Part 2 PDS. Competition from other land subdivisions in the area is also a risk insofar that the Development may take longer to complete due to increased competition for house and land packages in Toowoomba. Litigation Risk While a DA may be granted as proposed, there is no safeguard against common neighbour disputes that may challenge further approvals including issues such as easements, encroachment etc. In addition, the SPV may become involved in unforeseen litigious action from parties where it has contractual rights and obligations, which could result in a material adverse effect on the development. Maximum Subscription Amount is not achieved If the Responsible Entity considers there is a risk of the SPV losing its entitlements to proceed with purchase of Stage 1 of the Property and after the Minimum Subscription Amount of $3,000,000 has been reached, we will issue Units to those Investors who have lodged Application Forms acceptable to us. These funds will be transferred to the SPV to settle the Property, pay acquisition costs, initial professional costs and due diligence fees, meet capital raising costs and clearing costs associated with the initial construction of Stage 1 of the Development as set out in section 4 of this Part 2 PDS. Should additional subscriptions under this Part 2 PDS up to the Maximum Subscription Amount not be achieved, the Development Manager in conjunction with us will consider one or more of the following options: Choose not to proceed with the other purchase of the remaining two parcels; Issue additional Preference Shares to the Development Income Fund (DIF) for a short period on its normal terms and conditions; or Enter into a joint venture with a third party to subscribe additional capital; or Retain the Property as holding costs are minimal; or Sell the Property with the revised DA at the highest price offered by third party buyers. Should any of the above options not be achievable and in the best interest of Investors in this Class of Units, the SPV may be required to enter into a non-recourse bank debt facility with a recognised Construction Lender in order to complete the Development. Should this occur, we will advise Investors in this Class of Units under our Continuous Disclosure obligations including updated ASIC Benchmark & Disclosure Principles.

32 P a r t T w o P a g e DIF Preference Shares priority over this Class of Units Subject to the cash flow requirements of the SPV, we will issue Preference Shares to the Development Income Fund to enable the SPV to complete the Development after funds raised from the issue of Units in this Class of Units have been fully employed by the SPV in the Glenvale Development Class of Units. Preference shares issued by the SPV to the Development Income Fund rank: Equally among themselves; Ahead of ordinary shares (and existing investors) in the SPV with respect to the payment of dividends; Ahead of ordinary shares (and existing investors) in the SPV with respect to a return of capital on winding up of the SPV. Because of these rights, preference shareholders have restricted voting rights in the SPV, which is controlled in its day-to-day operations by its directors, who are also directors of the Responsible Entity. The shares will be redeemed at face value by the SPV at or prior to the Redemption Date, which is generally twelve (12) months after the date of issue of the Preference Shares by the SPV or upon sale of the completed lots in the Development, whichever occurs earlier. In the event that the SPV is wound up for any reason the preference shareholders will be entitled to redeem their Preference Shares at face value and receive any outstanding cumulative dividends payable by the SPV ahead of ordinary shareholders and Investors in this Class of Units. In the case of a winding up of a SPV for any reason, returns to investors in this Class of Units may be substantially reduced after redemption of these Preference Shares and there is a risk of loss of some or all of the initial investor capital in this Class of Units. Delays in raising sufficient funds in the Development Income Fund Should there be any delays in raising DIF to fund the completion of any stages, the Project completion date may be adversely effected and it may adversely affect the performance of an investment in this Class of Units and the returns achieved for Investors in this Class may be less than as shown in this Part 2 PDS.

33 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e Valuation Report An independent valuation has been undertaken and the full report is available upon request from us or the Authorised Representative. Below is the Executive Summary of the as is and as if complete valuation of the Property and the Development:

34 P a r t T w o P a g e 34

35 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e Assurance Report for the Offer The benefits and returns forecast in this PDS are heavily reliant on the feasibility model prepared by the Development Manager as shown in this Part 2 PDS. We have therefore obtained the following independent assurance report on the reliability of this model:

36 P a r t T w o P a g e 36

37 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e Development Manager SMSF Property Australia Pty Ltd Darren Tasker Director Darren, until recently, held the position of Chief Operating Officer at WesTrac, spending 16 years at the leading Caterpillar dealership that is a key part of Kerry Stokes' Seven Group Holdings. He has spent significant time in both Perth and Sydney in executive roles and has a strong network in the construction and mining industries. Darren's wealth of experience and education, studying Engineering (UNSW) and Business at Harvard Business School (Alumni) where he studied lean business systems, bodes well for the operational discipline and future growth of SMSF Property Australia. Lee Phethean Development Manager Lee has been working in the architectural and built environment sectors for ten years. His eye for detail and strong design principles allow SMSF Property Australia to complete high quality developments, whilst ensuring targets are achieved and value is maintained. Lee s architectural degrees and previous experience working alongside other disciplines both in Australia and the UK, enable SMSF Property Australia to source, undertake and optimise the most sought after development projects. Lee has a multifaceted skill set which has allowed him to be involved in a variety of high level projects. He has considerable experience in site identification, project conceptualisation, feasibility, approvals and funding and has developed these skills through value-adding and optimisation of a range of projects. Grant Dutton Development Manager - Civil Grant has worked in the civil and building construction industry in South East Qld for the last 15 years, the last 10 years as a Senior Civil Engineer. Grant has been involved in a diverse range of projects from commercial developments through to large residential subdivisions. He is committed to a high level of service throughout each project from conception through to completion. Grant has gained extensive experience in local council requirements, ensuring projects are completed on time and to all stakeholders expectations.

38 P a r t T w o P a g e Civil Work Contractor Integrated Civil Pty Ltd Integrated Civil Pty Ltd (formerly Development Delivery Constructions Pty Ltd) is the Civil Contractor that will be completing the Development on behalf of the SPV. Integrated Civil Pty Ltd (Civil Contractor) has a close working relationship with the Development Manager ensuring that construction of all developments are managed professionally, with seamless processes and excellent channels of communication. This collaboration also assists the Civil Contractor to complete each development to the highest standard. The Civil Contractor s primary objective in completing investment projects is to create high quality, practical builds that will complement any investment portfolio. Integrated Civil has successfully executed on four (4) previous contracts for the SMSF Property Fund, being Park Avenue Residences Pty Ltd being a 66 lot subdivision, Burrell Avenue Residences Pty Ltd being a 25 lot subdivision and is on track to complete Bryna Parade Residences Pty Ltd (a 58 lot residential subdivision) and has recently commenced Fernvale Developments Pty Ltd being a 45 lot subdivision under the Development Managers instructions, and has been prompt, generally on time, and so far their work has been of high quality. Russell Bailey Civil Works Manager Russell has been in Civil Construction for approximately 20 years and has been involved in a variety of projects and positions, working from the ground up from plant operator supervisor to superintendent. He draws experience from owning his own Civil and Drainage business as well as driving Business Development. Russell has worked on a number of projects in the New South Wales and Queensland from industrial to commercial buildings. This includes high rise up to eight (8) stories, State and Federal works including flood remediation works, rebuilding the whole main street in Airlie Beach and heavy haul highway works throughout Queensland. Russell loves to walk away at the end of a project, knowing that the works will be there for 50 years into the future, and that it was done and done well. It s this quality and care about the job that makes him want to be associated with the organisation and to achieve a great outcome at the best possible reduced cost.

39 G L E N V A L E D E V I N E R O A D D E V E L O P M E N T P a r t T w o P a g e The Authorised Representative SMSF Property Capital Pty Ltd SMSF Property Capital Pty Ltd is authorised by the Responsible Entity to provide general financial product advice for this Fund to potential investors in the Fund. It is not authorised to provide personal financial product advice or advice in establishing a Self-Managed Super Fund. SMSF Property Capital Pty Ltd holds a Corporate Authorised Representative Agreement license # with the Responsible Entity, Guardian Securities Limited AFSL # Rebekah Blake Communication and Investor Update Manager Rebekah has been in the financial services industry for the past 11 years, in various customer-facing roles. However, bank based financial services businesses do not resonate with her and she has always sought out small or growing business where she can add value. My SMSF education helps this, as well as her BA in Theatre. When the GFC hit, viewing the amount of control that the banks had over developers just seemed completely unfair. Manufacturing assets makes much more sense to Rebekah than passively hoping for long-term growth. She also believes in having control over her financial future and SMSF s are one way that she can work within the system to get the best outcome. Susanne Keene Director SMSF Property Capital Pty Ltd Susanne has been working in the property industry for 15 years. Various positions over this time have given her a broad platform of understanding from conveyancing to construction, sales, compliance and finance. Susanne holds her REIQ Sales Licence and Diploma of Financial Planning. Susanne is the first point of contact for international clients and the person to call if any questions arise. She understands the SMSF Property Australia business structure, investment models and the importance for investors to see their investments grow and serve them well.