APN Funds Management Limited

Transcription

1 PRODUCT DISCLOSURE STATEMENT ARSN Building income on property APN Funds Management Limited ABN AFSL No ISSUE DATE: 19 JANUARY 2009 property

2 Contents Building income o Key Features 1 Fund Details 2 About the Manager, APN Funds Management 4 Our Investment Style 5 Fees and Other Costs 17 Taxation 22 Additional Information 24 Establishing and Transacting on your Account 27 Our Directors and Key Executives 6 How to Complete the Application Form 28 Our Investment Management Team 8 Application Form Checklist 30 Benefits 10 Application Form 31 Risks 11 Glossary 47 Investing in the Fund 13 Corporate Directory 48 Before you invest This Product Disclosure Statement ( PDS ) is for the offer of units in APN AREIT Fund ARSN ( Fund ). This PDS is dated 19 January You should read this PDS in its entirety before making a decision about whether to invest in the Fund. Investment in the Fund is offered and managed by APN Funds Management Limited ABN , AFSL No (referred to in this PDS as APN FM, the responsible entity, we, us or the Manager ). APN FM is the issuer of this PDS and of units in the Fund. APN FM is a wholly owned subsidiary of APN Property Group Limited ACN ( APD ), a company listed on the ASX (ASX Code APD). However, APD is not the issuer of this PDS. The information contained in this PDS is general information only and does not take into account your individual objectives, financial situation, needs or circumstances. APN FM recommends that you obtain professional advice from a licensed financial adviser before investing in the Fund. Certain information in this PDS is subject to change and may be updated from time to time without the need to notify investors, if not materially adverse. APN FM will notify investors of any changes that may have a material adverse impact on investors or any other significant event that affects the information in this PDS. APN FM may also provide updated information on its website at or on request, at no charge. Current information on, and performance details of the Fund can be obtained from: Investor Services: (toll free) Adviser Services: Website: Postal Address: PO Box 18011, Melbourne Collins Street East VIC APN FM does not guarantee the success of the Fund, the repayment of capital invested in the Fund or any particular rate of return on an investment in the Fund. An investment in the Fund does not represent a deposit with or a liability of APN FM, APD or any member of the APN Property Group. An investment is subject to investment risk, including possible delays in repayment and loss of income or capital invested. None of APN FM, APD and any member of the APN Property Group or any of their officers, advisers, agents or associates in any way guarantee the performance of the Fund nor any return of capital. PDS Availability This PDS is available in electronic format, including via APN FM s website. If you receive this PDS electronically, you should ensure that you have received the complete Application Form and PDS. If you are unsure whether the electronic document is complete, you should contact APN FM. A printed copy is available free of charge. Selling restrictions This PDS does not constitute an offer or invitation in any place where, or to any person to whom, it would not be lawful to make such an offer or invitation. No action has been taken to register or qualify the Fund or the Offer or otherwise to permit a public offering of the units in the Fund in any jurisdiction outside Australia. Accordingly, the distribution of this PDS in jurisdictions outside Australia is limited and may be restricted by law. Persons holding copies of this PDS who are not in Australia should familiarise themselves with and observe any such restrictions. Any failure to comply with these restrictions may constitute a violation of securities law. Units in the Fund may be offered to professional and sophisticated investors in certain jurisdictions outside Australia if that offer is made in accordance with the laws of that jurisdiction. Unless otherwise determined by APN FM, units in the Fund to which this PDS relates will only be issued on receipt of an Application Form available from APN FM. Currency All amounts quoted in this PDS are in Australian dollars unless stated otherwise. Photographs The assets depicted in photographs in this PDS may not be assets in which the Fund or its controlled entities has an interest. Investing through an IDPS or IDPS-like service (such as a master trust or wrap account) APN FM proposes to make investments in the Fund available to clients and prospective clients of an IDPS, IDPS-like service such as a master trust or wrap account or a nominee or custody service. If you invest in the Fund through an IDPS, IDPS-like service or nominee or custody service, you should note that the operator or Custodian of the service will be recorded in the register as the Unitholder in the Fund and will have the rights attaching to Units. APN FM is not responsible for the operation of any of these services through which you invest. Therefore, certain rights of Unitholders in the Fund will not apply to you if you are investing through any of these services, such as the right to receive reports and statements from APN FM, the right to attend meetings, and the right to make a complaint to APN FM. If you invest through an IDPS, IDPS-like service or nominee or custody service, you should also take into account the fees and charges of the operator of the service.

3 Building income on property Building income on property Our investment philosophy is simple. A regular income stream derived from high quality commercial property has the potential to deliver financial security over the long term. APN Funds Management Limited (APN FM) is a specialist Australian and international property funds manager offering a broad range of property funds. A resolute focus on generating consistent income returns combined with an active investment management approach and an unwavering focus on property fundamentals lies at the heart of APN FM's philosophy. Our success is driven by our people. By choosing APN FM you are choosing to invest with a fund manager who is a leader in Australian and global real estate investment and management. Our team s expert knowledge of property markets and research capability allows us to deliver reliable income streams and capital growth aligned to CPI to help you achieve your long term investment objectives. Specialist property fund manager Income focus Active investment Key Features APN Funds Management Limited (APN FM) as responsible entity and manager, is delighted to present an opportunity to invest in the APN AREIT Fund (Fund). The Fund has some clear points of difference when compared with many other property securities funds such as: a significant focus on income returns paying monthly distributions limiting exposure to any one security limiting exposure to foreign assets predominantly index unaware APN AREIT Fund Investment objective (page 2) Investment class Investment strategy (page 2) Suggested investment time horizon Income distributions* (page 14) Distribution reinvestment (page 14) Consistent, relatively high levels of income combined with some capital growth Primarily Australian listed property securities The Fund will invest in a wide range of underlying listed property securities 5 to 7 years Monthly Available Minimum initial, monthly and additional investment Initial investments - $1,000 amounts* (page 13) Additional investment - $500 Regular savings plan - $100 per month Minimum withdrawal amount and period* (page 15) Application (establishment) and withdrawal fees (page 18) Contribution fee (page 18) Management costs (page 18) Unit pricing (page 14) Buy spread (page 19) 0.25% Sell spread (page 19) 0.25% Borrowing $1,000, usually paid within 3 Business Days Nil Nil Up to 1.05% p.a. of the Net Asset Value of the Fund (this will be reduced to an effective rate of 0.85% p.a. where no adviser remuneration is paid) Each Melbourne Business Day Nil *Subject to variation at APN FM s discretion Note: You should read the entire PDS to make an informed decision about whether to invest in the Fund. APN AREIT FUND 1

4 Fund Details The APN AREIT Fund ( Fund ) is an unlisted public unit trust. The Fund was established to enable investors to gain exposure to a spread of primarily Australian listed income earning property securities (i.e. companies and trusts) and cash/fixed interest. Investment Objective The Fund s investment objective is to provide investors with a consistent, relatively high level of income combined with some capital growth, sourced from an appropriately wide spread of Australian listed property securities. The Fund aims to: have a gross annual income yield (before management fees and expenses) that equates to at least 110% of the average yield of the S&P/ASX 200 Property Trusts Dividend Yield series; have a tax advantaged income component of distributed income (see pages for further details about taxation); provide investors with a level of capital growth which at least matches increases in CPI over a 5-7 year time horizon; and provide lower than market volatility. Investment Strategy The Fund will invest in Australian listed property securities and cash/fixed interest. The Fund will invest in property securities but not direct property. We will continually review and, if appropriate, reweight the Fund s investments with the object of optimising the Fund s distributable income. The Fund has some clear points of difference from many other property securities funds such as: Income returns A significant focus for the management of the Fund is on generating sustainable and regular income returns. This typically means that the Fund targets those listed property securities it believes can achieve relatively higher and sustainable income returns than would be achieved by investing on an index weighted basis. Monthly distributions Consistent with the focus on income returns for investors, the Fund provides for the payment of monthly distributions which provides investors with a more regular and consistent return and can also enhance the compound returns to investors. Limiting exposure to any one security Limiting exposure to higher risk earnings Non index weightings Unlike many property securities funds which invest significantly on the basis of the weighting of a particular property security in an index, the Fund will invest on the basis of APN FM s determination of the relative value and attractiveness of each property security. Lower risk APN FM believes that these points of difference, leads to a lower risk profile of the Fund relative to many other property securities funds. Underlying Assets and Asset Allocation We intend that the long term asset allocation ranges and indicative asset allocations of the Fund will be: Assets Long term asset Indicative asset allocation ranges allocation Units or shares % 98% in listed property securities Cash/fixed interest 0-10% 2% 2 APN AREIT FUND

5 Underlying Asset Limits The Fund will not invest directly in: real property or mortgages; or unlisted property securities. The Fund will generally endeavour to limit: earnings from underlying investments in international property to no more than 50% of the total level of international assets held within the securities comprising the S&P/ASX 300 Property Index.* earnings from investments in companies and trusts whose returns are principally sourced from corporate or business type earning streams (such as property development and property management) to no more than 15% of the total income derived by the Fund.* any single investment to no more than 20% of the portfolio.* *These limits may be increased in limited circumstances at our discretion Investment Performance and Asset Allocation We will provide you with a paper copy of investment performance and asset allocation information upon request or alternatively this information can be accessed by visiting our website. It is important to note that performance returns may be volatile and that past performance is not a reliable indicator of future performance. Liquidity We aim to maintain the level of liquid assets in the Fund at 100% of Net Asset Value. Please refer to page 15 for information about your withdrawal rights in relation to the Fund. Borrowing The Constitution allows us to borrow on behalf of the Fund. It is our current intention that the Fund will not undertake direct borrowing. The funds or companies in which the Fund will invest may borrow. Derivatives It is not our current policy to use derivatives for gearing purposes or for speculative activities within the Fund. We will inform you if this policy changes. The funds in which the Fund will invest may use derivatives. APN AREIT FUND 3

6 About the Manager, APN Funds Management APN Funds Management Limited (APN FM) is the manager and responsible entity of the Fund. APN FM was established in 1998 and is wholly owned by APN Property Group Limited which is listed on the Australian Stock Exchange (ASX code APD). APN FM is a successful international specialist property funds management company, currently managing 16 property funds with $3.4 billion of funds under management as at 30 November It currently has 67 employees based in its offices in Australia and Europe. As APN FM is a specialist property funds management company, the entire focus of the business is investing in property and property securities both in Australia and overseas. Our approach is to offer specialist, relatively low risk and differentiated property funds with well considered investment strategies. Particular focus is placed by us on generating sustainable and growing income returns for investors. The directors and senior executives of APN FM have broad experience in property funds management and property development in Australia and internationally, including experience gained from the establishment and management of numerous listed and unlisted property funds. APN FM s 16 property funds are managed for more than 13,000 direct clients (not including clients investing through investment platforms such as wrap accounts and master trusts). APN FM has developed a strong track record over a sustained period in the management of its various property funds which has been widely recognised in the property funds management industry, as evidenced by awards such as: AFR Smart Investor Blue Ribbon Award Australian Listed Property; Morningstar Fund Manager of the Year Listed Property; PIR - Property Securities Fund Manager of the Year Award 2005, 2006 and 2008; Macquarie Skilled Manager of the Year - Property Securities 2003 and 2004; Investor Web Research Six Star Award (Property) , 2003 and 2004; and Monitor Money Skilled Manager of the Year - Property Securities APN FM holds an Australian Financial Services Licence (No ) issued by ASIC which authorises APN FM to operate and manage the Fund. *Income Focus *Active Investment Management *Specialist Property Funds Manager 4 APN AREIT FUND

7 Our Investment Style We are an active fund manager with a focus on value investing. Through the experience of our executives in the Australian and international property markets and our investment processes (including on-going research and portfolio risk management), we are able to seek out property-based investments that we consider to be of high quality. Our focus on value emanates from a fundamental characteristic of Australian and international investment property, namely, the level of sustainable earnings largely determines the market value of the property. In seeking the best value investments we aim to identify those property investments that are expected to provide a higher total return over a five to ten year period than comparable property investments with a similar risk profile. While the capital values of all categories of income producing assets will fluctuate, the least volatile investments are those that are assessed by the market as having sound long term revenue streams as they will be the investments most sought after by the wider investment community. We aim to provide portfolio diversification (and hence minimise risk) through exposing the Fund to a weighted mix of property-based income streams generated by a large number of properties in a variety of property categories and situated in different geographic locations. Assessment criteria for listed property funds includes: appraising the skills and fees of underlying property fund managers, including their: ability, through research, to identify the changes in the environment in which the assets they administer are located that will impact on investment performance; capacity to manage upgrades, extensions and re-leasing programs, particularly for major retail assets where shoppers expect an evolving physical environment; debt management skills and experience; and commitment to growing the rate of distributable income generated by the assets they manage; and having a detailed understanding of: the quantum and terms of any borrowing arrangements that the entity may have entered into, including interest rates, hedging, roll over and repayment provisions; lease expiry profiles; rent review provisions; and quality of tenant covenant. Building income on property property APN AREIT FUND 5

8 Our Directors and Key Executives John Harvey Independent Chairman A director since John s early career was in tax law and accounting, including senior management roles with Price Waterhouse from 1989 to 1996 and Country Senior Partner of Pricewaterhouse Coopers from 1996 to From 2001 to 2004 John was the Chief Executive of the Mt Eliza Business School. John is currently an independent director of David Jones Limited, Australian Infrastructure Fund Limited and Templeton Global Growth Fund Limited. David Blight Managing Director A director since David joined APN Property Group in November 2008 as Managing Director after a distinguished career with ING Group encompassing domestic and extensive global responsibilities. Since 2005, he was Chairman and CEO of ING Real Estate Investment Management and Vice Chairman, ING Real Estate based in The Hague, overseeing a portfolio of over $200b in 22 countries around the world. Prior to this, David was Managing Director of ING Real Estate Investment Management Australia Pty Limited. David has also held senior positions with Armstrong Jones Management Ltd (ING Real Estate s predecessor in Australia) and the Mirvac Group. He holds a Bachelor of Applied Science in Property Resource Management (Valuation). Christopher Aylward Executive Director A director since Chris has been involved in the Australian property and construction industry for over 30 years. Chris is the founding chairman of the APN Property Group and has overseen its transition from a property developer to a specialist property funds management company since its listing in Prior to joining APN FM, Chris was a founding director and major shareholder of Grocon Pty Limited and was responsible for overseeing the construction of commercial and retail properties with a total value of over $2 billion. These included Governor Philip and Governor Macquarie Towers in Sydney, 120 Collins Street and The World Congress Centre in Melbourne. 6 APN AREIT FUND

9 Clive Appleton Executive Director A director since Clive joined the APN Property Group as Managing Director in 2004, the continuation of a long career in property and property funds management. Before joining APN FM, Clive held the positions of Managing Director of the Gandel Group, one of Australia s foremost shopping centre developers and managers and Managing Director of Centro Properties Limited, a listed property developer, manager and owner. Clive has considerable experience in property development having been involved with major expansions and refurbishments, including the Chadstone Shopping Centre in Melbourne and the Myer Centre in Brisbane. Howard Brenchley Executive Director and Chief Investment Officer A director since Howard has a high profile in the property trust industry as an investor, researcher and commentator for over 20 years. Prior to joining APN FM in 1998, Howard was co-founder and research director of Property Investment Research Pty Limited, an independent Australian research company, specialising in the property trust sector. Howard was responsible for the origination and development of APN FM s funds management business and as Chief Investment Officer, continues to oversee all investment management and product development. Michael Butler Independent Non-Executive Director A director since Michael has more than 20 years experience in the financial services sector, having enjoyed a long career at Bankers Trust Australia following periods at AMP Society and Hill Samuel Australia (the predecessor to Macquarie Bank). Since 1999, Michael has also acted as a professional director. He is currently a director of AXA Asia Pacific Holdings Limited. Andrew Cruickshank Non-Executive Director A director since Andrew has nearly 30 years experience in the Australian, British and Hong Kong property markets and co-founded APN FM s development business in Prior to joining APN FM, Andrew was General Manager of Grocon Pty Limited, during which time he was extensively involved in the financing and development management of Grocon projects at 120 and 161 Collins Street, the SECV headquarters in Melbourne and the Penrith Taxation Office in Sydney. APN AREIT FUND 7

10 Our Investment Management Team In addition to the day to day involvement of the Executive Directors in investment management, the investment team is supported by the senior executives described below. Michael Doble Deputy Chief Investment Officer Michael joined APN FM in 2003 and is responsible for the portfolio management of APN FM s property securities and direct property funds for the retail market. Michael has a total of 21 years experience in property valuation, consultancy and funds management. Before joining APN FM, Michael was Head of Property at ANZ Funds Management Limited. Michael is a Fellow of both the Australian Property Institute and the Financial Services Institute of Australasia. Andrew Smith Fund Manager, Property Securities Andrew joined APN Funds Management in November 2008, and is responsible for managing the International Property for Income Fund and for Australian and global real estate security research. Andrew has more than 12 years financial markets experience. Prior to joining APN Funds Management, Andrew was an Executive Director of Real Estate at Goldman Sachs JB Were. Andrew is a Fellow of the Financial Services Institute of Australasia and holds a Bachelor or Commerce and Bachelor of Science from Deakin University. Pete Morrissey Fund Manager, Property Securities Pete joined the group in 2006 as manager of the APN International Property for Income Fund. Pete has extensive experience having worked as a senior analyst at Lonsec and prior to Lonsec spent several years as an analyst in the UK finance industry. Pete holds a Bachelor of Commerce, a Masters in Valuation and Property Management and a Masters of Applied Finance. 8 APN AREIT FUND

11 Damian Diamantopoulos Fund Manager, Property Securities Damian is responsible for managing APN FM s flagship APN Property for Income Fund. A graduate of Monash University with a Bachelor of Commerce, Damian also holds a Graduate Diploma in Applied Finance and Investment through the Securities Institute of Australia (now the Financial Services Institute of Australasia). Prior to joining APN Funds Management Limited in 2002 Damian was involved in the superannuation industry. Cheng Yeoh Analyst, Property Securities Cheng is responsible for the property securities funds and diversified property fund performance reporting, as well as analytical support to the Funds Management team. Cheng joined APN FM in 2007 and is a qualified CFA and CPA. He has 12 years experience in the IT, accounting and banking industries. APN AREIT FUND 9

12 Benefits There are a number of potential benefits of investing in the Fund. These include: Managed funds investment opportunity The relatively large amounts of money which may be invested by the Fund allows access to investment opportunities, markets and diversity which may not be available to individual investors. Managed funds can also often invest at a lower cost and are often able to access investment and risk management techniques not available to individual investors. Diversification Unlike investing in a single investment property, by investing in a property securities fund, you enjoy the benefits of a wide spread of properties owned by the underlying property fund. This provides you with geographic, sectoral (retail, office and industrial) and tenant diversification. Low capital commitment Generally, a large capital commitment is required when directly purchasing a commercial property investment. In comparison, a relatively low upfront capital commitment is required to participate in this investment with a minimum investment in the Fund of $1,000. Low cost exposure to real estate Investing in the APN AREIT Fund provides access to the commercial property market with professional investment management at a relatively low cost. You will not be charged any entry fee for investing in the Fund or withdrawing an investment from the Fund (see pages for further details about fees and expenses). Investment in a regular income stream Investment in commercial property through property securities is predominantly an income investment. We aim to achieve a relatively high income stream distributed monthly as well as providing some capital growth over a 5-7 year time horizon (see page 2 for further details about the investment objective of the Fund). Tax deferred income Part of the Fund s income received may be tax deferred. This is a feature of property securities investments and means you don t pay tax on this portion of income until your holding in the property trust is sold (see pages for further details on income distributions). Flexibility You can withdraw or top up your investment with additional contributions at any time, subject to the respective minimum withdrawal and additional investment amounts. Investment specialists The Fund will be actively managed by APN FM, a specialist funds manager with significant experience and specialist expertise in property investment markets (see page 4 for further details about us). 10 APN AREIT FUND

13 Risks Risk and Return All investments are subject to risks. Investments may go down as well as up in value and investors can experience investment gains and investment losses. Changes in value can be significant and they can happen quickly. Different types of investments perform differently at different times and have different risk characteristics and volatility. One way of managing risk is by investing in different types of investments (often called diversification). The underlying assets of the Fund offer some diversification across different types of property investment. We urge you to speak to your financial adviser about diversification. Risks and Risk Management Investors in most market sectors are exposed to a number of risks. It is APN FM s aim to invest in such a way that these normal market risks are minimised, while at the same time endeavouring to achieve the investment objectives of the Fund. A number of specific risk management strategies have been incorporated into the Fund which are indicated on pages The income and potential growth components of the Fund s returns on assets are likely to be subject to fluctuation and as such, the Fund is not considered suitable for those investing for only a short period of time. We aim to provide volatility in returns that is lower than the market. However, there may be periods when returns are negative. Our investment strategy and the authorised investments of the Fund are specifically designed to reduce the impact of the significant risks faced by investors. The significant risks of investing in the Fund and the ways in which we aim to manage them are discussed below. We cannot eliminate all risks and cannot guarantee that the ways in which we manage them will always be successful. The significant risks for the Fund may include: Individual investment risk The underlying investments of the Fund may fall in value for many reasons, such as changes in an investee entity s internal operations or management, or in the business environment in which the investee entity operates. We aim to reduce individual investment risk associated with choosing underlying securities investments in the Fund by limiting exposure to any one investment and with careful analysis and research of the investment manager of the underlying securities investments and its associated investment vehicle prior to investing on behalf of the Fund. We will also implement regular, programmed meetings with investment managers (where applicable) to ensure that the underlying investments and investment process remains consistent with the investment objective of the Fund. Market risk Economic, technological, political or legal conditions and even market sentiment can (and do) change, which can lead to changes in the value of property investment markets. This can affect the value of the investments of the Fund. We will use research and analysis to form a view on the market as best we can. We may then rebalance the Fund s investment mix to reduce the impact of downturns in particular property markets. Interest rate risk Changes in interest rates can have a positive or negative impact directly or indirectly on the Fund s investment values or returns. For example, as a result of interest rate changes, the cost of the borrowings of the investee entities in which the Fund invests can decrease or increase or the income return on a fixed interest security can become more or less favourable. In respect of the Fund we intend to reduce interest rate risk by not borrowing on behalf of the Fund so that the Fund is not directly exposed to interest rate risk. Currency risk The Fund may invest in securities which hold underlying investments in countries other than Australia. If the value of overseas currencies change relative to the Australian dollar, the value of the investments of the Fund can change. We will take into account an investment manager s currency management strategy when selecting investments for the Fund. Refer also to the Derivatives Risk on the following page. APN AREIT FUND 11

14 Fund risk These are risks specific to funds. These risks include that the Fund could terminate, the fees and expenses of the Fund could change, we may be replaced as responsible entity and manager and our investment team may change. There is also a risk that investing in the Fund may lead to a different result than investing in the market personally because of income or capital gains accrued in the Fund and the consequences of investment by and withdrawal of other investors. We aim to keep fund risk to a minimum by monitoring the Fund and the investments of the Fund at all times and acting in what we believe to be investors best interests. Liquidity risk Liquidity risk is the risk of being unable to transact in a market for a particular asset within a reasonable period of time. Given that all the investments of the Fund will be listed and therefore liquid, the risk of liquidity will be very low. Derivative risk Derivatives can be used to reduce risk or gain exposure to other types of investments. Risks associated with investing in derivatives may include the value of the derivative failing to move in line with an underlying asset, potential illiquidity of the derivative, the Fund not being able to meet payment obligations as they arise and counterparty risk (that is, where the counterparty to the derivative contract cannot meet its obligations under the contract). It is not our current policy to use derivatives for gearing purposes or for speculative activities. Information risk Information risk is the risk of local investors not being fully informed of pertinent, price sensitive information about offshore investments or markets. Information risk relates to political, town planning, business or even cultural issues. We intend to only invest in offshore invested entities that can demonstrate satisfactorily to us their ability to manage information risk. We also maintain direct relationship with independent global property securities experts to assist in verifying information where necessary. Underlying fund risk We will invest assets of the Fund in other funds managed by other fund managers. Those other funds may be subject to each of the risks outlined above, as well as other risks specific to those funds and the jurisdictions in which they operate. We aim to manage this risk by investing in reputable funds with investment strategies consistent with the investment objectives of the Fund and to closely monitor the performance of those funds. Key personnel risk This is the risk that key individuals are no longer able to fulfil their obligations in respect of the investment and administrative process of either the Fund or in other funds in which the Fund may invest. The performance of the Fund may be dependent on the management skill of a particular individual. We aim to ensure that managers have adequately qualified and capable teams to mitigate individual key personnel risk. We will ensure that we have sufficient resources to enable the Fund to continue unaffected should any member of our team leave. Regulatory risk This is the risk that domestic or international laws or regulations are changed adversely or that regulatory supervision of transactions and reporting is performed by managers and their Custodians at less than an appropriate standard. These risks are managed by us by regularly and closely reviewing changes in the law. 12 APN AREIT FUND

15 Investing in the Fund Applying and Paying for Units Applications for units may be made by lodging a completed Application Form and sending it to APN Funds Management Limited, PO Box 18011, Melbourne Collins St East, Victoria, 8003 together with a cheque made payable to APN FM as described in the table below or a completed direct debit request form. Cheque payable to Minimum initial Minimum additional Minimum monthly investment amount* investment amount* investment through regular savings plan* APN FM - Application Monies Trust Account $1,000 $500 $100 per month *All minimum, monthly and additional investment amounts are subject to variation at our discretion Initial Investment The minimum initial investment amounts for the Fund are set out in the table above. We can only process an application when we receive a completed current Application Form and a cheque or direct debit request for the initial investment amount. An Application Form and the initial amount must be received at our registered office by 4 p.m. Melbourne time on a Business Day for you to receive the issue price effective for that day. If the Application Form and initial amount are received after 4 p.m, you will receive an issue price effective for the next Business Day. Additional Investments Additional investments in the Fund must be for at least the amount set out in the table above (subject to variation at our discretion). Additional investments may be made by either: instructing us in writing (including by facsimile and - refer to page 26) at any time; BPAY ; investing under the regular savings plan; or you may nominate that the amount of the additional investment be directly debited from your bank account, subject to completion of a direct debit request form. Additional investments are made on the terms and conditions set out in a PDS current at the time the investment is made. Registered to BPAY Pty Ltd ABN Regular Savings Plan The regular savings plan provides you with the opportunity to regularly invest in the Fund. The minimum regular savings amounts are as set out in the table above (subject to variation at our discretion) and can be made without having to complete a current Application Form each time. To invest under the regular savings plan, an investor must nominate to participate in the regular savings plan option on the current Application Form and nominate the amount to be invested under the plan. In order to invest under the regular savings plan, you must complete a direct debit request form accompanying this PDS and nominate an account from which to draw the relevant amount. We will arrange for the amount to be automatically drawn from your bank, building society or credit union account, normally on the 21 st day of each month or the next Business Day if the 21 st day of the month is a weekend or public holiday. You can make changes to the regular savings amount and your account information at any time by notifying us in writing at least 14 Business Days before the next investment is due. Normal management costs and transaction costs will apply to investments made through the regular savings plan (see pages 17-21). In addition, bank transaction fees and government charges may apply. We may change or terminate the regular savings plan by providing you with prior written notice. Whilst you invest under the regular savings plan, we will provide you with a copy of any updated PDS for the Fund and any other updates as required by the law. APN AREIT FUND 13

16 Confirmation Confirmation of the number of units to be issued to you will be forwarded to you and any financial adviser whose stamp is affixed to the Application Form as soon as is reasonably practicable, which will usually be within three Business Days of units being issued. Unit Pricing The unit price for the Fund is calculated as at the close of business every Melbourne Business Day. The unit price is an amount equal to the Net Asset Value of the Fund divided by the total number of units on issue. The issue price and the withdrawal price are adjusted to take account of transaction costs (please see page 19 for further details about transaction costs). Issue Price - Applications for units received and accepted by us by 4 p.m. on a Melbourne Business Day will be processed at the issue price to be determined at the next Business Day. The issue price is an amount equal to the Net Asset Value per unit, plus any transaction costs. Withdrawal Price - Withdrawal requests received and accepted by us by 4 p.m. on a Melbourne Business Day will be processed at the withdrawal price to be determined at the next Business Day. The withdrawal price is an amount equal to the Net Asset Value per unit, less any transaction costs. Information on unit prices (including issue prices and withdrawal prices) is available by calling us on , or by accessing our website at For a copy of our unit pricing policy please refer to our website. Valuation of the Fund s Assets APN FM may determine valuation methods and policies for each category of Assets held within the Fund. Unless APN FM determines otherwise, the value of Assets for the purpose of calculating Net Asset Value will be its market value. Where APN FM values an Asset at other than its Market Value, or where there is no market value, the valuation methods and policies applied by APN FM will be capable of resulting in a calculation of the Issue Price or Withdrawal Price that is independently verifiable by the Fund's auditor in accordance with ASIC policy. Unit Pricing Policy The unit price for the Fund may vary and may increase or decrease depending on the performance of the Fund. We have adopted a unit pricing policy which sets out how we make certain decisions in calculating the unit price. A copy of the unit pricing policy with any discretions exercised by us in respect of the Fund (and any departures from the policy) is available free of charge on request and is also available on our website. Income Distributions The Fund will earn income from its various investments, which may include dividends and distributions. The Fund may also make gains and incur losses from the sale of its investments. Generally, net income is accrued and distributed at the end of each distribution period. The distribution period is intended to be monthly. Income distributions are usually paid within 10 days following the end of a distribution period. If the 10 th day falls on a non-business Day, then payment will be made by the next Business Day. The Fund s income distributions are based on the distributable amount per unit set by us at the end of the period multiplied by the number of units held by each Unitholder in the Fund on the last day of the period. In determining the distributable amount per unit our current distribution policy is to maintain, as far as possible, a stable and sustainable level of distributions over the course of a financial year. Consequently, the distributable amount for a period may be either more or less than the taxable income of the Fund for that quarter. However, under the Constitution we must ensure that the total income distributions for a financial year at least equal the taxable income for that financial year. The distributions made during each financial year (12 months to 30 June) will include the taxable portion of any capital gains earned by the Fund for that year. The amount of the income distribution attributed to taxable capital gains will be notified to you in your annual taxation statement. You may elect (see section 5 of the Application Form) to have your income distributions: paid by electronic funds transfer into your nominated Australian bank, building society, or credit union account; or reinvested in additional units in the Fund to which the income distribution relates at the issue price current as at the commencement of the next distribution period following the distribution period for which the distribution is made; or a combination of the above. 14 APN AREIT FUND

17 You may change your distribution instructions by notifying us in writing at least 30 days before the end of the relevant distribution period. Distributions will not be made by cheque. If after three attempts at paying any distribution into your nominated account the payment, for whatever reason, is not able to be effected, we will reinvest the amount of the distribution in additional units at the current issue price and credit them to your investment account. If your income entitlement is less than $50, we may at our discretion decide to reinvest all of your distribution entitlement. Withdrawing from the Fund You can withdraw some or all of your investment in the Fund at any time by providing us with a written withdrawal request and your bank details (including by facsimile, and internet - refer to page 26) signed by the appropriate signatories. The minimum withdrawal amount is $1,000 (subject to change at our discretion). If a withdrawal request is received which would result in you holding less than the minimum withdrawal amount, we may redeem your entire investment. Withdrawal proceeds will only be paid to a nominated bank account. Cheque withdrawals are not available to investors. A withdrawal request must be received at our registered office by 4 p.m. on a Business Day for you to receive the redemption price effective for that day. If your withdrawal request is received after 4 p.m. you will receive the withdrawal price effective for the next Business Day. Withdrawal proceeds will normally be paid within three Business Days of receipt of a withdrawal request. The Constitution permits a 30 day period, which may be extended in certain circumstances such as if, despite taking reasonable steps, we are unable to realise sufficient assets to satisfy a withdrawal request and where we believe that it is in the best interests of unitholders. The withdrawal of investments is governed by the Constitution and the Corporations Act. If the Fund is illiquid (within the meaning of the Corporations Act) you will not have an automatic right to request a redemption of your units in the Fund and we may (but we are not obliged to) offer withdrawals from the Fund on a periodic basis in accordance with the Corporations Act. Switching between Funds You can switch your investments from the Fund to a range of other APN funds by withdrawing all or part of your investment in the Fund and applying for units in other APN funds (subject to the funds being open to new applications and minimum investment and holding amounts). The withdrawal price and issue price of units redeemed and issued when switching between funds will be calculated on the same basis as withdrawals and applications for units in the funds generally (including transaction charges). To switch your investments, you will need to put your withdrawal request in writing (including electronically) and also complete an Application Form from a current PDS for the other APN FM fund that you are switching into. You will not be charged a switching fee for switching your investment from one APN FM fund to another. Please note that switching between funds could make you liable for tax on any capital gain on disposal of units withdrawn. We recommend that you consult your financial adviser before requesting a switch. Investor Communications You will receive the following acknowledgments, statements and reports relating to your investment in the Fund: a transaction statement for each application for units or withdrawal request made by you. A copy of each transaction statement will be forwarded to the financial adviser whose stamp is affixed to the Application Form (if any); a quarterly distribution statement including income distributions paid to you or reinvested in additional units in the Fund and the balance of your investment at the end of the distribution period; an annual taxation statement showing the detail of the distributed income and its components for the last financial year; an annual report including our report to investors and the Fund s audited financial statements; half yearly 'Rooftop' investor newsletter; and any other information that is required by legislation. Some information will be available via our website at APN AREIT FUND 15

18 If you are investing through an IDPS, an IDPS like service such as a master trust or wrap account, or a nominee or custody service, reports on your investment will come from the operator of that service, not from us. Privacy When you make an application to invest in the Fund, we will collect personal information from you in the Application Form. We may also collect additional personal information from you by other means in the future. If you have any questions about the personal information collected you should contact us. You can request access to or change your personal information held by us by writing to us. We will assess your request in accordance with the National Privacy Principles. The personal information that you supply to us will be used for the primary purpose of establishing your investment in the Fund and to verify your identity. Your personal information will also be used for the purposes of processing your application, administering your investment, complying with applicable laws and regulations for purposes related to our product and service development. We will also use your personal information to forward to you, from time to time (including by ), details of other investment opportunities available to you from us or any member of the APN Property Group. However, if you request, no information of that nature will be sent to you. We will take reasonable steps to protect your personal information that we collect and ensure that the information is accurate and up-to-date. Investor information is held on secure servers or in storage locked in controlled environments. Our employees are required to maintain the confidentiality of any personal information held by us. We will take reasonable steps to destroy or permanently de-identify personal information no longer required for any purpose for which it was provided. If you do not supply us with all the information we need, we may be unable to establish your investment in the Fund, process your application and administer your investment. The types of organisations to which we may disclose the information provided by you include: with your consent, your adviser and dealer group; any third party service provider we may engage to provide custody, administration, technology, auditing, mailing, printing or other services; government authorities when, and to the extent, required by law; and our professional advisers (including legal and accounting firms, auditors, consultants and other advisers). You can update or change your personal information by notifying us in writing at any time (including by facsimile, and internet - see page 26 for more details on electronic instructions) or by phone, subject to passing our security checks. Cooling Off If you invest directly in the Fund, you will be entitled to a 14 day cooling off period commencing from the earlier of: the date you receive confirmation of your investment; or 5 days after the issue of units to you as per your application. If, during this 14-day period, you decide that you no longer wish to invest in the Fund, you should notify us in writing (by letter, including your signature). Upon receipt of your notification, we will cancel your investment and return the application monies to you. In accordance with the Corporations Act, the amount returned to you will be adjusted to account for any increase or decrease in the unit price from the time we issued the units to you to the time we receive your request to cancel the investment as well as any tax or duty paid or payable by you. You may also be charged any administrative costs incurred by us in relation to the acquisition and cancellation of your investment. Please note that this cooling off period does not apply to you if you choose to exercise your rights or powers as a Unitholder in the Fund during the 14 days (in relation to that Fund). This could include selling units. Your right to cool off does not apply to an investment made by way of a distribution reinvestment plan or additional investment in the Fund. If you invest in the Fund through an IDPS or an IDPS like service such as a master trust or wrap account, or a nominee or custody service, you should refer to the relevant guide or offer document provided by the operator of that service for details of your rights to a cooling off period. Further Details About your Investment(s) If you wish to ascertain the current value of your units or to discuss any aspect of your investment in the Fund please contact us. Free Call APN AREIT FUND

19 Fees and Other Costs CONSUMER ADVISORY WARNING 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 fund 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 shows fees and other costs that you may be charged. These fees and other costs may be deducted from your application money, directly from the returns on your investment in the Fund or from the Fund s assets as a whole. Information on taxation is set out on pages The Fund s reporting year is the financial year. References to p.a. relate to the financial year. You should read all of the information about fees and other costs before making a decision to invest in the Fund, as it is important to understand their impact on your investment. All amounts are GST inclusive less any reduced input tax credits and stamp duty unless otherwise stated. APN AREIT FUND 17

20 Fees and Other Costs Table Type of Fee or Cost APN AREIT Fund Amount How and When Paid Fees when your money moves in or out of the Fund (1) Establishment fee Nil Not applicable This is the fee to open your investment. Contribution fee Nil Not applicable This is the fee on each amount contributed to the Fund. Withdrawal fee Nil Not applicable This is the fee for withdrawals from the Fund (including any installment payments and final payments). Termination fee Nil Not applicable This is the fee when you finally close your investment. Management Costs The fees and costs for managing your investment (2) Up to 1.05% p.a. of the Net Asset Value of the Fund (this will be reduced to an effective rate of 0.85% p.a. where no adviser remuneration is paid) (3) Adviser remuneration We may pay ongoing adviser remuneration of 0.20% p.a. of the value of your investment in the Fund to your adviser which forms part of the management costs. Please note that you do not pay adviser remuneration separately, as it forms part of the Fund s management costs. See Adviser remuneration under the heading Additional explanation of Fees and Other costs on page 20. You and your financial adviser may agree to rebate the adviser remuneration which will have the effect of reducing the overall management costs. The management costs are made up of: Investment management fee Payable monthly out of the assets of the Fund. Custody fee Payable quarterly in arrears, calculated each quarter and deducted from the Fund s assets. Expense recoveries estimate of up to 0.10% p.a. (4) Payable as incurred and deducted from the Fund s assets. Service Fees Switching fee Nil Not applicable This is the fee for when you switch between investment options. 1. You may also incur a buy-sell spread when your money moves in or out of the Fund. See item 1 in the Additional Explanation of Fees and other Costs on page 19 for an explanation of the buy/sell spread. 2. This fee may include an amount payable to an adviser. See item 2 in the Additional Explanation of Fees and other Costs on page 20 for an explanation of the adviser remuneration. 3. See item 3 in the Additional Explanation of Fees and other Costs section on page 20 for an explanation of management costs. 4. See item 6 in the Additional Explanation of Fees and other Costs section on page 21 for an explanation of the expense recoveries. 18 APN AREIT FUND

21 Example of annual fees and costs The table below gives an example of how the fees and costs of the Fund can affect your investment over a one year period. You should use this table to compare the Fund with other managed investment products. Example: APN AREIT Fund Contribution 0% Nil Fees PLUS 1.05% p.a.* AND, for every $50,000 Management (effectively you have in the Fund, you Costs 0.85% p.a. will be charged up to where no $525 each year ($425 when adviser no adviser remuneration is paid). remuneration is paid) EQUALS Cost of Fund Balance of $50,000 with a contribution of $5,000 during a year. If you had an investment of $50,000 at the beginning of the year and you put in an additional $5,000* that year, you would be charged fees up to $525 ($425 when no adviser remuneration is paid). *See item 3 in the Additional Explanation of Fees and other Costs on page 20. This example assumes that the additional contribution of $5,000 is contributed at the end of the year after the payment of all management costs. Please see item 3 of the Additional Explanation of Fees and other Costs. Please note that this is an example only. Actual fees and expenses are based on the value of the Fund which fluctuates. The amount assumes a constant investment of $50,000 throughout the year. Management costs are also charged in relation to additional contributions. Additional Explanation of Fees and other Costs 1. Buy/sell spread and transaction costs Investments in, and withdrawals from, managed funds such as this Fund are commonly subject to a buy/sell spread, which is a reflection of the transaction costs incurred by us as responsible entity of the Fund in buying and selling assets when units in the Fund are issued or redeemed. These costs are additional costs to you. The application of the buy/sell spread aims to ensure that each investor bears the same proportion of transaction costs associated with their entry to, or exit from the Fund. The buy/ sell spread is charged because entering or exiting the Fund may necessitate the purchase or disposal of assets by the Fund. We will not receive any part of the buy/sell spread. The amount of the buy/sell spread represents an estimate by us, as the responsible entity, of the transaction costs that are likely to be incurred when buying or selling assets, such as brokerage, government charges, taxes (including stamp duty), commissions, underlying investment s buy/sell spread and like costs. Such costs are incurred in the day-to-day management of the Fund and are paid directly from the Fund. The expected buy/sell spread of the Fund is set out in the table below. The buy/sell spread will be deducted from application monies on the issue of units and the sell spread will be deducted from the withdrawal proceeds on the redemption of units. APN AREIT Fund Buy/Sell Spread 0.50% Buy Spread 0.25% Sell Spread 0.25% APN AREIT FUND 19

22 Example of buy/sell spread The following illustrates in dollar terms the amount you are likely to pay by way of buy and sell spreads in respect of your investment. The examples are based on investments in or withdrawal from the Fund valued at $50,000: $50,000 x 0.25% = $125 when you invest in the Fund $50,000 x 0.25% = $125 when you withdraw from the Fund However, APN FM may increase or decrease the buy and sell spreads from time to time to reflect increases or decreases in the costs and expenses associated with the acquisition and disposal of assets by the Fund. All investors will be provided with at least 30 days notice of any changes and updated issue prices and withdrawal prices will be available to be obtained from our website ( or by contacting us directly. 2. Adviser Remuneration We may pay from our investment management fee, adviser remuneration of 0.20% p.a. of the value of your investment in the Fund to your adviser until such time as your units are redeemed or you or your adviser advise us in writing that the adviser is no longer acting for you. Your financial adviser may decide not to take the ongoing adviser remuneration although there is no obligation for your adviser to do so. Where this occurs, the amount of the adviser remuneration will be paid into your account as a rebate in the form of additional units each quarter. Depending on when you withdraw your entire investment in the Fund, the final quarter s rebate may not be paid. An adviser may also charge you an adviser service fee directly (that is, a fee which is not levied through the Fund) for additional advice or other services which the adviser provides to you. Details of such service fees should be outlined in the financial services guide or statement of advice that the adviser must give to you. The adviser service fee may be negotiated with your financial planner. Example of ongoing adviser remuneration The following illustrates in dollar terms the amount that we will pay to an adviser (if any) as ongoing adviser remuneration in respect of your investment in the Fund per quarter. The example is based on an investment in the Fund valued at $50,000 with the applicable adviser remuneration being 0.20% p.a.. Please note that you do not pay this amount separately, but that it forms part of the Fund s management costs: $50,000 x 0.20% = $ p.a. or $25.00 per quarter 3. Management costs The management costs outlined in the fees and other costs table on page 18 include amounts payable for expense recoveries (discussed at item 6 over page) for administering the Fund, custodian fees, investment management fees payable to us and the costs and fees relating to the management and administration of underlying investments of the funds through which the Fund invests. They do not include buy/sell spreads, transaction costs and costs (related to a specific asset or activity to produce income) that an investor would incur if the investor invested directly in the asset. When ongoing adviser remuneration is not paid, the management costs will effectively be reduced to 0.85% p.a. of the Net Asset Value of the Fund by the rebate of 0.20% p.a. in the form of additional units in the Fund at the end of each quarter. Depending on when you withdraw your entire investment in the Fund, the final quarter's rebate may not be paid. The benefit of any tax deductions in respect of the management fees will not be passed on to you in the form of a reduced fee or cost. The management costs set out in the table on page 18 are an estimate only and the actual management costs could vary. Example of management costs The following illustrates in dollar terms the amounts you are likely to pay by way of management costs in respect of an investment, p.a., inclusive of GST net of input tax credits, based on an investment in the Fund valued at $50,000: $50, % p.a. = $525 p.a. (Where ongoing adviser remuneration is not paid the management cost in this example will effectively be reduced to $425 or 0.85% p.a. of the value of your investment in the Fund). 4. Winding up fee Under the Constitution, we are permitted to charge a winding up fee of up to 1% of the net proceeds from the sale of the assets of the Fund upon the winding up of the Fund. Example of winding up fee The following illustrates in dollar terms the amounts you are likely to pay by way of winding up fee upon winding up of the Fund, based on your net realised proceeds on winding up of the Fund being valued at $50,000. $50,000 x 1% = $ APN AREIT FUND

23 5. Fee increases and alterations Fees and charges are current at the date of this PDS. We may increase fees up to the maximum amounts permitted under the Constitution or by amending the Constitution (subject to Unitholder approval) to increase the current permitted maximums. Under the Constitution, we may also change the frequency in which management costs are calculated and paid. However, we will provide investors with at least 30 days notice of any increase in fees before they take effect, to allow investors to make other arrangements if they wish. We do not currently intend to increase the fees and charges set out in this PDS to the extent that the fees and charges described in this PDS are determined by us. Under the Constitution, we may accept lower fees than we are entitled to receive or may defer payment for such period and on such terms as we determine. We do not intend to alter the fees described in this PDS during the life of this PDS. 6. Expense recoveries We are entitled under the Constitution to be reimbursed out of the assets of the Fund for a broad range of costs and expenses properly incurred in relation to the Fund. These expenses typically include costs incurred in connection with the establishment of the Fund, unit registry and custodial services, investor communications, unit pricing, auditors fees, compliance costs associated with being included on various IDPS lists and PDS preparation. A list of expenses that may be reimbursed to us out of the Fund is set out in the Constitution A copy of the Constitution may be obtained from us on request. We are also entitled to be indemnified out of the Fund for any liability properly incurred by us in operating the Fund. An estimate of the expense recoveries in the Fund is included in the management costs set out in the fees and costs table on page GST All fees stated in this PDS are inclusive of GST less any input tax credits, unless otherwise stated. Where the Fund is entitled to input tax credits under the GST legislation for GST paid in respect of goods or services provided to it (generally 75% of the GST paid), the cost to the Fund of paying GST will be reduced proportionally. 8. Different fees for different investors Subject to the Corporations Act and the Constitution, we may negotiate lower or different fees in certain circumstances, with certain investors, including with respect to wholesale clients as defined in the Corporations Act. 9. Working out fee structures If you wish to work out your own fee structure and the impact this has on your investment, you should ask your financial adviser or visit where ASIC offers a fee calculator to help investors compare the fees and costs of different financial products. APN AREIT FUND 21

24 Taxation All legislative references are to the Income Tax Assessment Act 1936 (1936 Act) unless otherwise stated. The following is a discussion of taxation issues relevant to an investment by you in the Fund. This summary assumes that an investor is an Australian resident (unless otherwise stated) and holds the investment on capital account. Tax payable by you in respect of investment in the Fund will depend upon your particular circumstances. You should seek your own professional tax advice. The net income of the Fund for a financial year will be distributed to investors each financial year. We may also distribute certain other amounts not included in the net income of the Fund. Under the existing taxation legislation the trustee of the Fund will generally not be subject to tax on the net income as defined under section 95 of the 1936 Act to which resident investors are assessed for the financial year. Investors should note that the existing law relating to the taxation of trusts, and a beneficiary's interest in them, is under review. The Board of Tax is undertaking the Review of the Tax Arrangements Applying to Managed Investment Trusts (MITs). The discussion paper raises a number of issues around the current taxation arrangements of MITs with a view to recommending changes to the existing treatment of MITs. Further, there is the potential to extend relevant aspects of any recommended changes to the tax arrangements for other trusts more generally. We are not able to comment on what changes, if any, will ultimately be implemented nor on the impact any changes will have on the taxation of the Fund nor on the taxation of investments that the Fund may make in other managed investment trusts. The following comments are made subject to these potential changes. Income The net income of the Fund (a tax law concept) is the taxable income of the Fund calculated as if the trustee is a resident taxpayer. The trust income may differ from the net income. You will be assessed on your share of the net income of the Fund as defined under section 95 of the 1936 Act. Your share of net income is determined by reference to your share of the income of the Fund which is determined on a present entitlement basis. An investor in the Fund will generally have a present entitlement to a share of the trust income if they have been paid or received that share of trust income, or have a present right to demand payment of that trust income or a "vested and indefeasible" interest in that income. This means you may be assessed on amounts that you are presently entitled to but do not actually receive in the current year, for example income reinvested in the Fund. Capital Gains Tax We will generally distribute the Fund s capital gains that have been realised throughout the financial year. Taxable capital gains that you become entitled to should be included as part of your assessable income. The capital gains distributed to you can be offset by capital losses incurred by you from other sources. If you are an individual, trustee or superannuation fund, who has held units in the Fund for more than 12 months, you may be entitled to reduce the net capital gain by applying the discount capital gains tax concession. To the extent that capital gains to which you become entitled are not assessable as a result of the discount capital gains tax concession, no adjustment to the cost base of your units will be required. Disposal of Units Under the capital gains tax provisions, any taxable capital gain arising from the redemption of your units may form part of your assessable income. You may be eligible for the discount capital gains tax concession if the units are held for 12 months or more. You should consult your tax adviser about the capital gains tax implications of a redemption of units in the Fund. Foreign Tax Credits Where the Fund pays foreign tax in respect of a foreign investment, you may be entitled to receive a foreign tax credit. The amount of foreign tax credits received will be detailed in the tax report provided to you for inclusion in your assessable income. To the extent that the Fund invests in international funds or securities, the Foreign Investment Fund (FIF) regime may apply. Under FIF legislation, unrealised gains and/or income, arising from investments in overseas entities, may be subject to Australian tax in certain circumstances. 22 APN AREIT FUND

25 Tax Deferred Components of Income A portion of the Fund s distributed income may include non-assessable amounts that are derived from the Fund s investment in units in property trusts or property syndicates. These include, for example, certain distributions in respect of capital allowances and non-assessable capital gains. Certain non-assessable distributions to you will reduce the cost base of your units in the Fund. This will be relevant when calculating the capital gain or loss (for capital gains tax purposes) on a subsequent redemption of units on the withdrawal of the investment. For example, non-assessable distributions of amounts attributed to building allowances will reduce the cost base of your units. In addition, if these non-assessable distributions exceed the cost base of your units in the Fund, the investor will realise a separate capital gain. The Fund aims to provide a tax advantaged income component (from capital allowances and non-assessable capital gains) of more than 20% of distributed income of the Fund. GST Where the Fund is entitled to input tax credits under the GST legislation for GST paid in respect of services provided to it (generally limited to 75% of the GST paid in respect of certain acquisitions), the cost to the Fund of paying GST will be reduced proportionately. Tax File Number (TFN) and Australian Business Number (ABN) It is not compulsory for you to quote your TFN or ABN. If you are making an investment in the Fund in the course of a business or enterprise carried on by you, you may quote an ABN instead of a TFN. Failure by you to quote an ABN or TFN or claim an exemption may oblige us to withhold tax at the top marginal rate (including Medicare levy) on gross payments (including distributions of income) to you. Non-Resident Investors Appropriate statutory deductions of Australian tax will be made from income distributed to non-resident investors. The trustee of the Fund is liable to be assessed for tax in respect of a non-resident investor under section 98 of the 1936 Act on Australian sourced income. Further, Division 840 and Subdivision 840-M of the Income Tax Assessment Act 1997 implement a new withholding tax regime in respect of certain distributions (fund payments) from managed investment trusts to foreign residents. A 'fund payment' is, broadly, a component of a payment made by a managed investment trust that represents a distribution of Australian source net income, typically Australian sourced rent and capital gains from Taxable Australian Property (and excluding dividends, interest and royalties) of the Fund. The rate of withholding is determined with regard to the place of payment or address of the recipient (or, in some cases, the residency of the recipient). If the place, address or country of residence is in a jurisdiction with which Australia has effective exchange of information on tax matters, withholding will be required at the following rate: 22.5% for fund payments in relation to the first income year following Royal Assent; 15% for fund payments in relation to the second income year; and 7.5% for fund payments in relation to later income years. In any other case, withholding will be required at the rate of 30%. We recommend that non resident investors obtain independent tax advice before investing in the Fund. Capital gains realised upon the disposal or redemption of units owned by non-resident investors will only be subject to Australian capital gains tax if the units are taxable Australian property. This will generally be the case where the relevant non-resident investor has a non-portfolio interest in the Fund (i.e. greater than 10% interest) and more than 50% of the market value of the Fund s assets are attributable to Australian real property. Also, special rules apply to exempt non-resident investors in Australian resident managed funds from capital gains tax. We strongly suggest non-resident investors obtain their own professional tax advice. APN AREIT FUND 23

26 Additional Information Custody RBC Dexia Investor Services Trust ABN ("RBC") is the Custodian of the Fund assets under a custody agreement. RBC s role as Custodian is limited to holding assets of this Fund as agent of APN FM. RBC has no supervisory role in relation to the operation of this Fund and is not responsible for protecting investors interests. The custody agreement between APN FM and RBC provides that RBC will have no liability or responsibility to investors for any act done by, or omission of, APN FM. RBC was not involved in preparing, nor takes any responsibility, for this PDS. RBC does not guarantee the success of the Fund, the repayment of capital invested in this Fund or any particular rate of return on investments in this Fund. Constitution The Fund has a Constitution that complies with the Corporations Act. Some of the provisions of the Fund s Constitution have been summarised below. Copies of the Constitution are available free of charge from our offices during normal business hours. Retirement and Removal of Responsible Entity We may retire or may be removed by Unitholders in accordance with the law. Investments We are permitted to invest in a wide range of assets including investing in a broad range of property-related assets. Rights of an Investor Unitholders rights are governed by the Constitution, the Corporations Act and general law. Under the Constitution, the rights of investors include the right to receive income, to request redemption of units and to requisition and attend investor meetings. Termination of the Fund The Fund will terminate 80 years after the Fund s commencement unless terminated earlier by us following notification to investors or in accordance with the Corporations Act. Following termination, we are required to sell and realise the assets of the Fund and distribute the proceeds, less expenses, to investors in proportion to their respective unitholdings at the time of termination. Amending the Constitution or any contract with Unitholders We may amend the Constitution where we reasonably consider that the changes will not adversely affect Unitholders rights. Otherwise, we must obtain Unitholder approval prior to making the amendments. To the extent that any contract or obligation arises in connection with acceptance of an Application or reliance upon this PDS by a Unitholder, any amendment to the Constitution may vary or cancel that contract or obligation. The contract or obligation may also be varied or cancelled by a deed executed by the Responsible Entity with the approval of a special resolution of Unitholders, or without that approval if the Responsible Entity reasonably considers the variation or cancellation will not materially and adversely affect Unitholders. Unitholders Liability The Constitution provides that the liability of investors is limited to their investment in the Fund and any unpaid amounts in relation to the investor s units in the Fund. However, such a limitation has not been fully tested in the courts and therefore no absolute assurance can be given that the liability of Unitholders will be so limited. Investors are liable to indemnify the Responsible Entity for any taxation amount not already deducted from payments made to investors. APN FM s Liabilities We are entitled to be indemnified out of the assets of the Fund for any liability incurred by us in properly performing our duties in relation to the Fund. Subject to the Constitution and the Law, this indemnity will also apply to any liability incurred as a result of any act or omission of a delegate or agent appointed by APN FM. 24 APN AREIT FUND

27 Compliance Committee and Compliance Plans We have established a compliance committee for the Fund, as required by the Corporations Act. A majority of the members of the compliance committee are independent of APN FM. The compliance committee for the Fund is required to monitor our compliance with the Fund s Constitution, compliance plan and the Corporations Act, to report on its findings and to assess at regular intervals the adequacy of the relevant compliance plan. Under the Constitution, compliance committee members are indemnified out of the assets of the Fund if the compliance committee member incurs a liability in good faith (to the extent permitted by the Corporations Act). Fees and expenses of the Fund s compliance committee will be met out of the assets of the Fund. A compliance plan has been lodged with ASIC for the Fund. An external auditor has been appointed to audit the compliance plan for the Fund at least once a year. The external auditor will report to the compliance committee of the Fund. Related Party Transactions The Constitution does not prevent APN FM from: dealing with itself, as the Responsible Entity for the Fund or in any other capacity, an associate or any Member; being interested in any contract or transaction with itself, as the Responsible Entity for the Fund or in any other capacity, an associate or Member or retaining profits or benefits derived from any such contract or transaction, but those persons must act, in connection with those contracts or transactions, in a fiduciary relationship to all Members; or acting in the same or similar capacity in relation to any other managed investment scheme. The Fund may transact with other funds managed by us and/ or members of the APN Property Group (including APN FM in its own right). Such dealings may include: holding a nominal number of units which we or a related entity hold as a result of establishing the Fund; the remuneration to which we are entitled in our capacity as responsible entity, which is described in the Fees and other Costs section on pages 17-21; investing in other funds managed by us (if the Fund invests in other funds managed or promoted by us, we may receive fees in relation to those funds); acquiring and disposing of interests in the Fund from or to another fund managed by us or a member of the APN Property Group; voting as a Unitholder at Unitholder meetings held by funds managed by us in which the Fund invests; borrowing from the APN Property Group; provision of accounting and registry operations; and other transactions. APN FM has a conflict of interest and related party transactions policy which ensures that all transactions engaged in by APN FM are assessed for any conflict of interest and to ensure they are reasonable arm s length transactions based on appropriate commercial terms. Investors should note that this policy does not require APN FM to avoid conflicts of interest. Complaints The Constitution contains procedures for the handling of complaints from investors. If you have a complaint, you may write to us (including name, address and investor number). We are required to acknowledge receipt of a written complaint as soon as practicable, and in any event within 14 days. We must give proper consideration to the complaint and must act in good faith to deal with a complaint. The determination relating to the complaint, the remedies (if any) available to the investor and information regarding any further avenue for complaint must be communicated within 45 days of receipt of the complaint. We are a member of the Financial Ombudsman Service Limited ( FOS ). FOS is authorised to deal with complaints that cannot be resolved with us. You can contact FOS on ; or GPO Box 3, Melbourne, Victoria 3001 If you are investing through an IDPS, IDPS like service such as a master trust or wrap account or nominee and custody service then enquiries and complaints should be directed to the operator of that service, not APN FM. APN AREIT FUND 25

28 Appointment of an Agent You may appoint (in writing) an agent to act on your behalf in respect of your investment in the Fund. If an agent is appointed, we will act in accordance with the instructions of the appointed agent until the appointment is revoked in writing by you. Consents RBC Dexia Investor Services Trust has given and not withdrawn its consent to be named as Custodian in the form and context in which it was named. It has not authorised or caused the issue of this PDS other than the reference to its name and the information contained on page 24 in relation to its role as Custodian of the Fund. Hall and Wilcox has given and not withdrawn its consent to be named in this PDS in the form and context in which it was named. It has not authorised or caused the issue of this PDS other than the reference to its name. Deloitte Touche Tohmatsu, ABN (the external auditor of the Fund) has given and not withdrawn its consent to be named in this PDS in the form and context in which it is named. It has not authorised or caused the issue of this PDS other than the reference to its name. Statement regarding labour standards, and environmental, social or ethical considerations We do not take into account labour standards and environmental, social or ethical considerations in the context of making investment decisions relating to the Fund, except to the extent that we consider these issues when they have the potential to materially impact investments. This means that should the sustainability of the value of the investments of the Fund be adversely affected due to unacceptable environmental, social or ethical factors, we may choose not to invest further or choose to dispose of the investment. Continuous Disclosure Depending on the number of Unitholders in the Fund, the Fund may be a disclosing entity under the Corporations Act. If this is the case, the Fund will be subject to regular reporting and disclosure obligations. These will require the Fund to lodge annual and half yearly reports and notice of other important events to ASIC. All of this information may be obtained from, or inspected at, any ASIC office or it may be obtained free of charge by contacting us. Electronic Instructions If you instruct us by electronic means, such as facsimile, or internet you release us from and indemnify us against, all losses and liabilities arising from any payment or action we make based on any instruction (even if not genuine) that we receive by an electronic communication bearing your investor code and which appears to indicate to us that the communication has been provided by you e.g. a signature which is apparently yours and that of an authorised signatory for the investment or an address which is apparently yours. You also agree that neither you nor anyone claiming through you has any claim against us or the Fund in relation to such payments or actions. There is a risk that a fraudulent withdrawal request can be made by someone who has access to your investor code and a copy of your signature or your address. Please take care. Application Form If you wish to invest in the Fund you should complete an Application Form for the Fund issued by APN FM which is at the end of this PDS. Anti-Money Laundering Regulations By applying for units in the Fund you are taken to agree to the following terms: you warrant that you comply with all applicable anti-money laundering laws and regulations, including but not limited to the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth) and associated rules and regulations (in force from time to time); you are not aware and have no reason to suspect that: the money used to fund your investment in the Fund has been or will be derived from or related to any money laundering or other activities deemed illegal under applicable laws or regulations or otherwise prohibited under any international convention or agreement ( illegal activities ); the proceeds of your investment in the Fund will be used to finance illegal activities; and you agree to promptly provide us with all information that we reasonably request in order to comply with all applicable laws and regulations relating to anti-money laundering. We are required to obtain certain identification and verification information from you in respect of the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Cth). This information is requested in the Application Form. 26 APN AREIT FUND

29 Establishing and Transacting on your Account Whether you prefer the internet, telephone, or fax, managing your investment is easy. To make it easy for you to keep up-to-date and transact on your investment, we provide your with a number of transaction options: Internet Telephone Fax apnfm@apngroup.com.au (03) Direct credit and BPAY Mail Telephone and internet banking - BPAY APN Funds Management Contact your bank or financial institution to make PO Box 18011, this payment from your cheque, savings, debit card or Melbourne Collins Street East, transaction account. More info: Victoria, 8003 ) How do I... Information I need to know Transaction options Things to be aware of Set up an account? A minimum amount of $1,000 applies. Applications for units received and accepted by us by 4p.m. on a Melbourne Business Day will be processed at the issue price to be determined at the next Business Day. Mailed Application Form Complete the Application Form on page 31 of this document and send to us. Make additional investments to my account? Additional investments in the Fund must be for at least $500 (unless investing under a regular savings plan where the minimum monthly investment is $100). BPAY; Cheque payment; Investing under the regular savings plan; or By direct debit or direct credit from your bank account, subject to completion of a direct debit request form. Additional investments may be made by instructing us in writing (including by fax and ) by completing an Additional Investment Application Form available in this PDS and downloadable from Additional investments are made on the terms and conditions set out in the PDS current at the time the investment is made. BPAY Biller code: Reference number: Contact us on to obtain your unique reference number. Cheque payment Please make cheques payable to APN FM Application Moneys Trust Account and forward cheque(s) to: APN Funds Management Limited PO Box 18011, Melbourne Collins Street East, Vic 8003 Direct debit Complete the Direct Debit Request form on page 43 of this PDS or call us on Direct credit Branch number (BSB) Account number Please provide your account name and investor number as a reference. Obtain online access to my investment account? The easiest way to track your investment is with APN Online, where you can securely and conveniently access and manage your investment at anytime. With APN Online you can: Access your account details; View your investment value; View transaction history and generate your own transaction statements; and View your statements. To apply for APN Online: Complete section 8 in the Application Form of this PDS on page 32 Download an application form from by clicking on Investor Relations then Investor Forms. APN AREIT FUND 27

30 How to Complete the Application Form Please complete the Application Form and relevant Annexure(s) using BLACK INK in CAPITAL LETTERS and write clearly within the boxes and sign where indicated. The following guidelines should be read to assist with completing the Application Form. 1. Investment Details It is important that the applicant's name is entered correctly. Annexures A-D Depending on the type of investor you are, please complete Annexures A-D, as applicable. A summary is provided for your easy reference on page 30. Tax File Number Please provide your Tax File Number (TFN) or Australian Business Number (ABN) or give the appropriate exemption details where provided in the Annexures. You are not obliged to supply a TFN or ABN but if you do not, tax may be withheld from distribution entitlements at the top marginal rate (including Medicare levy). Collection of TFNs and ABNs are authorised by taxation laws. 2. Contact Details Please ensure that an address for correspondence and a day time telephone number are provided. 3. Investment Allocation The minimum initial investment is $1,000 with minimum additional investments of $500. If you nominate to invest under the regular savings plan, you will be required to complete a direct debit request form attached to this PDS. 4. Payment Details Please note the payment instructions and if making payment by cheque, please make cheques payable as noted. 5. Income Distributions Distributions will not be made by cheque, but by direct transfer into your nominated bank account. You should provide full bank account details. You should nominate whether you wish to reinvest distributions or have them paid into your nominated bank account. 6. Account Signing Authority Complete this section to nominate your account signing authorities for transactions and payment instructions. 7. Annual Financial Report Please indicate if you would like to be mailed a copy of the Fund's annual report. 8. APN Online You can manage your investment(s) online by requesting access to APN Online. 9. Nominated Representative or Agent If you wish to appoint an agent to act for you in relation to your investment in a Fund, complete this section. 10. Adviser Nomination Please provide details of your nominated adviser. 11. Adviser Remuneration Please select the preferred adviser remuneration rebate option. 12. Declaration Please read and note relevant declarations pertaining to acceptance of applications. 13. Signature(s) Joint applications must be signed by all parties. Subject to the law, joint applicants are treated as joint tenants. Corporate applications must be signed in accordance with the applicant company's constitution. Applicants made by those under the age of 18 must be signed by the parent/guardian under whose name the application is made. If signed under Power of Attorney, please attach a certified copy of the original Power of Attorney. A Justice of the Peace, Solicitor or Notary Public must certify each page of the Power of Attorney. You also need to provide the same type of information requested for an individual account as it relates to the Attorney named in the application. Should the Power of Attorney document not contain a sample of the Attorney's signature, please also provide a certified copy of identification documents for the Attorney, containing a sample of their signature, e.g. Driver's Licence, Passport, etc. 28 APN AREIT FUND

31 Lodging your Application Please complete the Application Form and relevant Annexure(s) in accordance with the instructions provided in this PDS and forward the Application Form to: APN Funds Management Limited, PO Box 18011, Melbourne Collins St East, Victoria, 8003 together with either: your completed direct debit request; or a cheque made payable to "APN FM Application Monies Trust Account" and crossed "not negotiable". Application Form If you wish to invest in the Fund you should complete an Application Form accompanying this PDS. Direct Debit Request Form If you wish to invest by way of direct debit from a nominated bank account you should complete a Direct Debit Request Form accompanying this PDS. Incomplete Applications There may be instances where we do not receive sufficient information from you. Where this happens, we will contact you to request the necessary information. Any delay in providing the necessary information may result in you receiving a different unit price than you expected. We recommend you carefully complete the Application Form and use the 'How to complete the Application Form' on page 28 and 'Application Form Checklist' on page 30 to ensure that you provide all of the required information. If you require assistance with completing the Application Form, please call investor services on If your application is incomplete and if the additional information is not provided on request, we may return the application and your application monies to you. APN AREIT FUND 29

32 Application Form Checklist Applying for different types of investment accounts Type of investor Your account must be TFN(s) and Signature(s) Application in the name of: ABN(s) or required Form exceptions to requirements be submitted Individual The Individual TFN for the The individual Section 1-12 Example: John Smith applicant Sign Section 13 Annexure A Joint Investors All joint applicants TFN for each All joint applicants Section 1-12 Example: John Smith and Anna Smith applicant Sign Section 13 Annexure A Partnership All partners TFN and ABN Each partner Section 1-12 Example: John Smith and Anna Smith for the partnership Sign Section 13 IPF Smith Partnership Annexure A and D Company or The name of the company TFN and ABN for Two directors; or Section 1-12 Custodian Example: XYZ Company Pty Ltd the company or A director and a Sign Section 13 Example: XYZ Pty Ltd ACF John Smith Custodian company secretary; or Annexure B If there is only one director, that director Superannuation The trustee(s) of the fund and the TFN and ABN for Each trustee as Section 1-12 Fund with name of the trust or Superannuation the superannuation trustee(s) for... Sign Section 13 individual trustees Fund or trust fund Annexure A and C or an Individual Trust Example: John and Anna Smith ATF the Smith Superannuation Fund Example: John Smith ATF the Smith Family Trust Superannuation The trustee(s) of the fund and the TFN or ABN for Two directors; or Section 1-12 Fund with name of the trust or Superannuation the superannuation A director and a Sign Section 13 corporate trustee Fund or trust fund company secretary; or Annexure B and C or a Corporate Example: XYZ Pty Ltd ATF the Smith If there is only one Trust Superannuation Fund director, that director Example: XYZ Pty Ltd ATF the Smith Family Trust Minor (a person The adult(s) on behalf of the TFN for each adult All adults investing on Section 1-12 under 18 years minor s name behalf of the minor Sign Section 13 of age) Example: John Smith on behalf of Annexure A John Smith Jr 30 APN AREIT FUND

33 AREIT S ABN AFSL APN AREIT Fund Application Form This Application Form relates to the offer of units in the APN AREIT Fund (ARSN ), made under the PDS for this Fund dated 19 January 2009 (PDS). Please complete this form using BLACK INK and write clearly within the boxes in CAPITAL LETTERS. Mark appropriate answer boxes with a cross as indicated. 1. Investment Details Investor name Trust name Company registered name Partnership name Place a cross ( ) below to indicate your investment type: Individual Joint Investors - Complete Annexure A Company - Complete Annexure B Superannuation Fund Trust (Individual Trustees) - Complete Annexure A & C Superannuation Fund Trust (Corporate Trustee) - Complete Annexure B & C Formal Partnership - Complete Annexure A & D To make an additional investment please complete an ' APN AREIT Fund Additional Investment Application Form' available on page 45 of the PDS. 2. Contact Details Postal address (PO Box address is acceptable) Contact name Suburb/City/Town Occupation State Postcode Country (if outside Australia) Mobile number Work number Home number Fax number ( ) ( ) ( ) address for electronic correspondence Place a cross ( ) in one of the options below to indicate your preferred method of correspondence: 1. all 2. all, mail Distribution Statements 3. Mail all 3. Investment Please specify the amount you wish to invest in the Fund. The total minimum initial investment is $1,000 and the minimum regular savings plan (RSP) amount is $100 per month for this Fund. If you nominate to invest with RSP you must complete a Direct Debit Request Form on page 43. Fund name Minimum investment Initial investment Regular savings plan (RSP) APN AREIT Fund $1,000 $ $ NB. All investment amounts to be quoted in Australian dollars. 4. Payment Details Select ONE of the following payment options below Option 1 Direct Debit Please complete the attached Direct Debit Request form on page 43 of this PDS. Option 2 Direct Credit Branch number (BSB) Account number Please provide your account name as a reference. Option 3 Cheque Please make cheques payable to APN FM Application Monies Trust Account and crossed not negotiable. Forward cheque(s) to: APN Funds Management Limited PO Box 18011, Melbourne Collins Street East, Vic 8003 NB. A fee may be charged for payments made by cheque and/or direct debit which are dishonoured. APN AREIT FUND APPLICATION FORM Page 1 of 4 APN AREIT FUND 31

34 5. Income Distribution Election Select ONE of the following distribution options below Option 1 Reinvested in the fund Option 2 Credited to nominated bank account please complete your bank account details below Name of financial institution Account name Branch number (BSB) - Account number Option 3 Combination of Option 1 and Option 2 enter amount (AUD) or percentage Maximum reinvested in the fund remainder will be paid into your nominated bank account $ or % Maximum paid to nominated bank account remainder will be reinvested in the fund $ or % total = 100% Name of financial institution Account name Branch number (BSB) - Account number NB. If no election is made your distribution will automatically be reinvested in the Fund. 6. Account Signing Authority Joint (non-corporate) investors only complete this section of the Application Form to nominate the account signing authority for payment instructions. Please note: if no option is nominated, all instructions will require both investors to sign. Either Investor A or B Investor A only Investor B only NB. Please provide a written instruction if more than two investors are required. 7. Annual Financial Reports An electronic copy of the annual financial report is available for download from our website Please cross ( ) this box if you would like to be posted the APN AREIT Fund s annual financial report each year. 8. APN Online APN Online provides investors with web-based access to view your account balances, account history, account details and account statements. APN Online also allows investors who hold multiple accounts with APN to link these accounts providing a simple, single point of access. Please cross ( ) this box if you would like to apply for APN Online. NB. Please supply your address in section 2 of Contact Details and your APN Online ID will be ed and your password will be mailed to you. NB. An APN Online ID will be provided to the first named individual on this form. If additional investors/trustees wish to apply for online access for this investment, each must complete a separate APN Online Application Form. Each investor/trustee must read and agree to the terms and conditions found on our website at before signing the declaration on page 4 of this Application Form. 9. Nominated Representative or Agent (optional) This may or may not be your financial adviser or custodian I / We nominate the following person as my/our nominated representative to act for me/us in relation to my/our investment(s) described in Section 3 of this Application Form, including (without limitation) investing and withdrawing from a Fund. Name of nominated representative (please print) Signature of nominated representative X Address Date State Postcode continue over page APN AREIT FUND APN AREIT FUND APPLICATION FORM Page 2 of 4

35 9. Nominated Representative or Agent...continued Name of Investor A Trustee Company Director (please print) Name of Investor B Trustee Company Director/Secretary (please print) Signature of Investor A Trustee Company Director X Signature of Investor B Trustee Company Director/Secretary X Date Date 10. Adviser Nomination Adviser name Representative no. Dealer/Adviser stamp - Dealer group name Company name AFSL no. - New advisers ONLY - complete the following details Company address (PO Box address is not acceptable) Postal address (if different from company address) Suburb/City/Town Suburb/City/Town State Postcode State Postcode Company main number Direct number ( ) ( ) Mobile number address for electronic correspondence Fax number ( ) Web address 11. Adviser Remuneration Adviser to complete Please nominate the amount of adviser remuneration (0.20% p.a.) you would like to rebate to the investor in the form of additional units in the Fund: 100% 0% NB. if no option is selected, 100% of the adviser remuneration will be rebated to the investor which reduces the effective management cost to 0.85% p.a. Before proceeding to Section 12 & 13 of Application Form, please ensure you have completed the following: Individuals Joint Investors Complete Annexure A Company Complete Annexure B Superannuation Fund Trust (with individual trustees) Complete Annexure A & C Superannuation Fund Trust (with corporate trustee) Complete Annexure B & C Formal Partnership Complete Annexure A & D APN AREIT FUND APPLICATION FORM Page 3 of 4 APN AREIT FUND 33

36 12. Declaration I/we declare and agree that: I/we have read the PDS dated 19 January 2009 for the APN AREIT Fund (ARSN ) to which this application applies and have received and accepted the offer in it, in Australia. My/our application is true and correct. I/we am/are bound by any terms and conditions contained in the PDS, the provisions of the Constitution of the Fund as amended from time to time and this Application Form. I/we have legal power to invest. My/our adviser whose stamp appears on this Application Form will receive the payments detailed in the PDS and this Application Form. I/we authorise APN FM to give information relating to my/our account and investment in that account to my/our adviser. If I/we have received the PDS from the internet or other electronic means that I/we received it personally or a printout of it, accompanied by or attached to this Application Form. If this is a joint application, each of us agrees, unless otherwise indicated on this application, that our investment is as joint tenants. Each of us is able to operate the account and bind the other(s) to any transaction including investments, switches or withdrawals by any available method. This application is not the result of an unsolicited meeting with or telephone call from another person. Future investments will be made in line with the most recent investment or transfer transaction (excluding regular investment plan) unless I/we instruct you otherwise. If investing as trustee on behalf of a superannuation fund or trust I/we confirm that I/we am/are acting in accordance with my/our designated powers and authority under the trust deed. In the case of superannuation funds, I/we also confirm that it is a complying fund under the Superannuation Industry (Supervision) Act. I/we acknowledge that an investment in the Fund does not represent an investment in or a deposit or other liability of APN Funds Management Limited, APN Property Group Limited or any member of the APN Property Group. I/we acknowledge that none of APN FM, APD, any member of the APN Property Group or any of their officers, advisers, agents or associates in any way guarantee the performance of any of the Funds nor any return of capital. I/we acknowledge that APN FM and its related bodies corporate may disclose and use personal information as contemplated on page 16 of the PDS under the heading Privacy. I/we acknowledge and agree that electronic instructions will be treated as contemplated on page 26 of the PDS under the heading Electronic Instructions. I/we will provide to APN FM or its nominee any information that APN FM reasonably requires in order to enable APN FM to comply with all its obligations under the Anti-Money Laundering and Counter-Terrorism Financing Act 2006 and its associated rules and regulations (in force from time to time). I/we acknowledge that investments in the Fund are subject to the risks outlined on pages of the PDS under the heading "Risks". I/we acknowledge that if I/we have elected to apply for APN Online, that I/we have read and agree to be bound by the terms and conditions set out at I/we acknowledge that the information collected by APN FM (including in this application form) may be used for identification purposes, including via a third party verification service, to enable APN FM to comply with all its customer identification obligations under the Act and associated rules and regulations referred to above. 13. Signature(s) Joint applicants must both sign If this application is signed under Power of Attorney, the Attorney declares that he/she has not received notice of revocation of that power (a certified copy of the Power of Attorney must be submitted with this application unless APN FM have already sighted it). Sole signatories signing on behalf of a company confirm that they are signing as a Sole Director and Sole Secretary of the company by ticking the relevant box. Two Directors or a Director and a Company Secretary must sign unless the company has a Sole Director and Sole Secretary. Name of Investor A Trustee Company Director (please print) Name of Investor B Trustee Company Director/Secretary (please print) Signature of Investor A Trustee Company Director X Signature of Investor B Trustee Company Director/Secretary X Director Sole Director Sole Secretary Date Director Secretary Date Company seal (if company or trust) Please forward this completed Application Form to: APN Funds Management Limited PO Box 18011, Melbourne Collins Street East, Victoria 8003 Investor Services Adviser Services apnfm@apngroup.com.au Fax (03) Website 34 APN AREIT FUND APN AREIT FUND APPLICATION FORM Page 4 of 4

37 1. General Information Individual Joint Investor A Individual Trustee Joint Investor Partner Mr/Mrs/Miss/Ms/Other ABN AFSL Surname APN AREIT Fund Annexure A ARSN Individuals Joint Investors Individual Trustees Partners First name Second name Male Female Date of birth TFN or exemption code Residential address (PO Box address is not acceptable) ABN or exemption code Suburb/City/Town Aust. Drivers Licence (for Anti Money Laundering AML verification - refer to page 26 of PDS) State Postcode Country of residence (only required if you are a foreign resident for tax purposes) Joint Investor B Joint Trustee Partner Mr/Mrs/Miss/Ms/Other Surname First name Second name Male Female Date of birth TFN or exemption code Residential address (PO Box address is not acceptable) ABN or exemption code Suburb/City/Town Aust. Drivers Licence (for Anti Money Laundering AML verification - refer to page 26 of PDS) State Postcode Country of residence (only required if you are a foreign resident for tax purposes) Joint Investor C Joint Trustee Partner Mr/Mrs/Miss/Ms/Other Surname First name Second name Male Female Date of birth TFN or exemption code Residential address (PO Box address is not acceptable) ABN or exemption code Suburb/City/Town Aust. Drivers Licence (for Anti Money Laundering AML verification - refer to page 26 of PDS) State Postcode Country of residence (only required if you are a foreign resident for tax purposes) APN AREIT FUND ANNEXURE A Page 1 of 2 continue over page... APN AREIT FUND 35

38 1. General Information...continued Joint Investor D Joint Trustee Partner Mr/Mrs/Miss/Ms/Other Surname First name Second name Male Female Date of birth TFN or exemption code Residential address (PO Box address is not acceptable) ABN or exemption code Suburb/City/Town Aust. Drivers Licence (for Anti Money Laundering AML verification - refer to page 26 of PDS) State Postcode Country of residence (only required if you are a foreign resident for tax purposes) NB. If there are more than four investors, trustees or partners, please provide details on a separate sheet. Individuals Joint Investors Individual Trustees Partners Return to page 1 section 2 of Application Form Complete Annexure C before returning to page 1 Section 2 of Application Form Complete Annexure D before returning to page 1 Section 2 of Application Form 36 APN AREIT FUND APN AREIT FUND ANNEXURE A Page 2 of 2

39 1. General Information Registered name ABN AFSL APN AREIT Fund Annexure B ARSN Australian and Foreign Companies Country where established (if outside Australia) ABN (for Anti Money Laundering AML verification - refer to page 26 of PDS) TFN or exemption code Registered office address (PO Box address is not acceptable) (PO Box address is not acceptable) Principal place of business (if different from registered office address) (PO Box address is not acceptable) Suburb/City/Town Suburb/City/Town State Postcode Country (if outside Australia) State Postcode Country (if outside Australia) Web address 2. Company Type Select only ONE of the following categories Proprietary Public Proceed to Section 3 below Name of market/exchange Proceed to page 1 Section 2 of Application Form 3. Directors Only needs to be completed for proprietary companies This section does NOT need to be completed for public and listed companies. Please state the number of directors in this box and provide full name of each director below. Director 1 Given name(s) Surname Director 2 Given name(s) Surname Director 3 Given name(s) Surname Director 4 Given name(s) Surname NB. If there are more than four directors, please provide details on a separate sheet. 4. Shareholders Only needs to be completed for proprietary companies Please provide details of ALL individuals who are beneficial owners through one or more shareholdings of more than 25% of the company s issued capital. Shareholder 1 Full name Residential address (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence (only required if you are a foreign resident for tax purposes) APN AREIT FUND ANNEXURE B Page 1 of 3 APN AREIT FUND 37

40 4. Shareholders...continued Shareholder 2 Full name Residential address (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence Shareholder 3 Full name (only required if you are a foreign resident for tax purposes) Residential address (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence Shareholder 4 Full name (only required if you are a foreign resident for tax purposes) Residential address (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence (only required if you are a foreign resident for tax purposes) Foreign Companies Proceed to section 5 of this Annexure before returning to page 1 Section 2 of Application Form Foreign Corporate Trustees Proceed to section 5 of this Annexure and complete Annexure C before returning to page 1 Section 2 of Application Form Companies Return to page 1 Section 2 of Application Form Corporate Trustees Complete Annexure C before returning to page 1 Section 2 of Application Form 38 APN AREIT FUND APN AREIT FUND ANNEXURE B Page 2 of 3

41 5. Foreign Companies ONLY Is the foreign company registered with ASIC? YES Provide ARBN and complete details below Select ONE of the following: Principle place of business address in Australia Local agent name and address details ARBN Name of local agent in Australia Address (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence NO Provide Company ID and complete details below Principle place of business in the company s country of formation or incorporation (PO Box address is not acceptable) Suburb/City/Town State Postcode Country of residence Registered address of company Provide the registered address as registered with ASIC. If the company is NOT registered with ASIC, provide the registered address in the country of formation, incorporation or registration (if any). Suburb/City/Town State Postcode Country of residence Regulatory Listing Details Select the following categories which apply to the company and provide the information requested Regulatory company (licensed by an Australian Commonwealth, State or Territory statutory regulator) Regulatory name Licence details Listed as defined in the IFSA FPA Guidelines Name of market/exchange Majority-owned subsidiary of an Australian listed company Australian listed company name Name of market/exchange Foreign company verification Standard verification procedure for foreign companies registered with ASIC: Verify the full name of the company as registered with ASIC, the ARBN issued by the company, whether it is registered by a foreign registration body and if so whether it is registered as a private company or a public company. Attach an original or certified copy of the certification or registration issued by ASIC or by the relevant foreign registration body. Standard verification procedure for foreign companies NOT registered with ASIC: Verify the full name of the company, whether it is registered by a foreign registration body and if so whether it is registered as a private or a public company and the identification number issued to the company. Attach an original or certified copy of the certification of registration issued by the relevant foreign registration body or a disclosure certificate from the company given by an individual acting as agent of the company (where the agent has been verified). See your licensee for other disclosure certificate requirements. APN AREIT FUND ANNEXURE B Page 3 of 3 APN AREIT FUND 39

42 Building income on e on property 40 APN AREIT FUND

43 ABN AFSL General Information APN AREIT Fund Annexure C ARSN Superannuation Funds Trusts Registered name Country where established (if outside Australia) ABN (for Anti Money Laundering AML verification - refer to page 26 of PDS) TFN or exemption code 2. Type of Trust Select ONE relevant entity type Registered managed investment scheme Provide Australian Registered Scheme Number (ARSN) Regulated trust (e.g. an SMSF) Provide name of the regulator (e.g. ASIC, APRA, ATO) Provide the trust s ABN or registration/licensing details ARSN Name of regulator Registration/licensing details Other trust type Trust description (e.g. Family, unit, charitable, estate) Trust description 3. Beneficiary Details Only complete if Other trust type is selected in section 2 above Do the terms of the trust identify the beneficiaries by reference to membership of a class? YES Provide details of the membership class(es) (e.g. unit holders, family members of named person, charitable purpose) NO Please state the number of beneficiaries in this box and provide full name of each beneficiary below. Beneficiary 1 Given name(s) Surname Beneficiary 2 Given name(s) Surname Beneficiary 3 Given name(s) Surname Beneficiary 4 Given name(s) Surname NB. If there are more than four beneficiaries, please provide details on a separate sheet. 4. Verification Please attach an original certified copy of either the trust deed, a notice issued by the Australian Taxation Office within the last 12 months (e.g. a Notice of Assessment - block out the TFN before scanning, copying or storing this document) or a letter from a solicitor or qualified accountant that confirms the name of the trust, or the trust deed. Individual Trustees Ensure Annexure A is completed before returning to page 1 Section 2 of Application Form Corporate Trustees Ensure Annexure B is completed before returning to page 1 Section 2 of Application Form APN AREIT FUND ANNEXURE C Page 1 of 1 APN AREIT FUND 41

44 ABN AFSL General Information APN AREIT Fund Annexure D ARSN Partnerships Registered name Country where established (if outside Australia) ABN (for Anti Money Laundering AML verification - refer to page 26 of PDS) TFN or exemption code 2. Type of Partnership Is the partnership regulated by a professional association? YES Provide name of association Provide membership details (attach proof of membership) Name of association Membership details NO Please state the number of partners 3. Verification Please attach a certified copy of either the partnership agreement, minutes of a partnership meeting, a notice issued by the Australian Taxation Office within the last 12 months (e.g. notice of assessment - it is advised to block out the TFN before copying this document), a registration of business name issued by a government or government agency in Australia. Ensure Annexure A for ALL partners is completed before returning to page 1 Section 2 of Application Form 42 APN AREIT FUND APN AREIT FUND ANNEXURE D Page 1 of 1

45 ABN AFSL APN AREIT Fund Direct Debit Request Form ARSN Investor Name(s) Giving Direct Debit Request I/We authorise APN Funds Management Limited ABN with User ID Number: to arrange for funds to be debited from my/our account, held with the Financial Institution identified above, as described in Section 3 below. Investor residential address Suburb/City /Town State Postcode 2. Payment Details Select ONE of the following payment options Direct debit to be deducted at the time of application and at the time of any additional investment. Regular monthly direct debits of $ to commence from 2 1 as set out in Section 3 of the application form. 3. Details of Account to be Debited Name of financial institution Account held in the name(s) of Branch number (BSB) - Account number NB. Please check with your Financial Institution to ensure the account nominated will facilitate direct debiting. See attached Service Agreement Clause Direct Debit Request Authorisation This is to be signed by the holder of the bank account debited I/we have read and understood the terms and conditions of the attached Service Agreement overleaf and acknowledge and agree to it. I/we request this arrangement remain in force in accordance with Section 3 above and in compliance with the terms and conditions of the Service Agreement. Sole signatories signing on behalf of a company confirm that they are signing as a Sole Director and Sole Secretary of the company by ticking the relevant box. Two Directors or a Director and a Company Secretary must sign unless the company has a Sole Director and Sole Secretary. Name of Investor A Trustee Company Director (please print) Name of Investor B Trustee Company Director/Secretary (please print) Signature of Investor A Trustee Company Director X Signature of Investor B Trustee Company Director/Secretary X Director Sole Director Sole Secretary Date Director Secretary Date Company seal (if company or trust) Please forward this completed Application Form to: APN Funds Management Limited PO Box 18011, Melbourne Collins Street East, Victoria 8003 Investor Services Adviser Services apnfm@apngroup.com.au Fax (03) Website APN AREIT FUND DIRECT DEBIT REQUEST FORM Page 1 of 2 APN AREIT FUND 43

46 Direct Debit Request Service Agreement 1. APN Funds Management Limited (the Debit User ) will debit the BSB/Account nominated in Section 3 of this Direct Debit Request as specified. 2. APN Funds Management Limited will give not less than 14 days written notice to the investor should it propose to vary the arrangements of this Direct Debit Request. 3. The investor(s) may request APN Funds Management Limited to defer or alter the payment amount specified in Section 3 of this Direct Debit Request. Requests authorising these changes may be made by phoning or providing written advice to APN Funds Management Limited. Investor(s) may change the: Due date of payment; Payment amount; and Frequency of payment. Investor(s) wishing to vary the drawing account details specified in Section 3 of this Direct Debit Request must provide signed authority for such changes to be effected. 4. In compliance with the Industry s Direct Debit Claims Process, APN Funds Management Limited will assist investor(s) disputing any payment amount drawn on the nominated BSB/Account in Section 3 of this Direct Debit Request. APN Funds Management Limited will endeavour to resolve this matter within the Industry agreed time frames. Investor(s) may visit any branch of their financial institution and complete a Direct Debit System Claim Request form to initiate the process. 5. APN Funds Management Limited advises that some Financial Institution accounts do not facilitate direct debits and as such the investor(s) must check with their Financial Institution to ensure the account nominated in Section 3 of this Direct Debit Request enables direct debiting. 6. It is the investor(s) responsibility to ensure at all times there is sufficient cleared funds available, at the due date of the debit drawing, to enable payment from the BSB/Account as nominated in Section 3 of this Direct Debit Request. 7. APN Funds Management Limited advises that the debit drawing will be made on the agreed due date as nominated in the payment details of this Direct Debit Request. When the due date is a closed Melbourne business day, APN Funds Management Limited will initiate the debit drawing on the next open business date. Investor(s) may direct processing inquiries to their Financial Institution. The funds will be processed as an application on the following business day. A closed business day is defined as any calendar day on which the investor(s) financial institution is not open for direct debit processing. That is: Weekends; Public Holiday - State; and Public Holiday - National. 8. Where an unpaid debit item is returned by the investor(s) financial institution, APN Funds Management Limited may apply an outward dishonour fee to the investor(s) account. 9. Investor(s) who wish to cancel this Direct Debit Request must notify APN Funds Management Limited in writing not less than 14 days before the next scheduled debit drawing. This request may be directed to APN Funds Management Limited or to an investor(s) financial institution. 10. APN Funds Management Limited requests the investor(s) to direct all inquiries, disputes requests for payment changes or cancellation directly to them. 11. APN Funds Management Limited agrees to keep confidential all investor(s) records and account details contained in Section 3 of this Direct Debit Request unless authorised to release such information pursuant to a debit item dispute or similar event where the investor(s) has provided prior consent to do so. 44 APN AREIT FUND APN AREIT FUND DIRECT DEBIT REQUEST FORM Page 2 of 2

47 ABN AFSL APN AREIT Fund Additional Investment Application Form ARSN Investment Details APN Fund name (the Fund) A P N A R E I T F U N D Investor name Trust name Company registered name Partnership name Investor number 2. Investment Please specify the amount you wish to invest in the Fund. The total minimum initial investment is $1,000 and the minimum regular savings plan (RSP) amount is $100 per month for this Fund. If you nominate to invest with RSP you must complete a Direct Debit Request Form on page 43. Fund name Minimum investment Initial investment Regular savings plan (RSP) APN AREIT Fund $1,000 $ $ NB. All investment amounts to be quoted in Australian dollars. 3. Payment Details Select ONE of the following payment options below Option 1 Direct Debit Please complete the attached Direct Debit Request form on page 43 of this PDS. Option 2 Direct Credit Branch number (BSB) Account number Please provide your account name as a reference. Option 3 Cheque Please make cheques payable to APN FM Application Monies Trust Account and crossed not negotiable. Forward cheque(s) to: APN Funds Management Limited, PO Box 18011, Melbourne Collins Street East, Vic 8003 NB. A fee may be charged for payments made by cheque and/or direct debit which are dishonoured. 4. Adviser Details (if applicable) Adviser name Representative no. Dealer/Adviser stamp - Dealer group name Company name AFSL no. - NB. If you have had a change of adviser you must complete a change of adviser form found on the website 5. Adviser Remuneration Adviser to complete Please nominate the amount of adviser remuneration (0.20% p.a.) you would like to rebate to the investor in the form of additional units in the Fund: 100% 0% NB. if no option is selected, 100% of the adviser remuneration will be rebated to the investor which reduces the effective management cost to 0.85%. 6. Declaration and Signature(s) I/we have read and understood the current Product Disclosure Statement (PDS) for the Fund and agree to be bound by the provisions of the Fund s constitution (as amended) and any other additional obligations or restrictions contained in the PDS. I/we acknowledge that APN FM and its related bodies corporate may disclose and use personal information as contemplated in the PDS under the heading Privacy. Sole signatories signing on behalf of a company confirm that they are signing as a Sole Director and Sole Secretary of the company by ticking the relevant box. Two Directors or a Director and a Company Secretary must sign unless the company has a Sole Director and Sole Secretary. Name of Investor A Trustee Company Director (please print) Name of Investor B Trustee Company Director/Secretary (please print) Signature of Investor A Trustee Company Director X Signature of Investor B Trustee Company Director/Secretary X Director Sole Director Sole Secretary Date Director Secretary Date NB. If any of your investment details have changed please complete the relevant form(s) found on the website Company seal (if company or trust) Please forward this completed Application Form to: APN Funds Management Limited PO Box 18011, Melbourne Collins Street East, Victoria 8003 Investor Services Adviser Services apnfm@apngroup.com.au Fax (03) Website APN AREIT FUND 45

48 Building income on me on property 46 APN AREIT FUND

49 Glossary ABN ASX Australian Business Number. The official list of the Australian Securities Exchange Limited. APN FM APN Funds Management Limited ABN APD APN Property Group Limited ABN APN Property Group APD and its wholly owned subsidiaries (including APN FM ). Application Form ASIC Business Day Constitution Corporations Act CPI The Application Form within this PDS. Australian Securities and Investments Commission. Any day excluding a Saturday or Sunday on which Australian banks are open for business in Melbourne. The constitution of the Fund registered with ASIC. The Corporations Act 2001 (Cth). Consumer Price Index. Fund APN AREIT Fund ARSN IDPS Investor directed portfolio service. GST As defined in A New Tax System (Goods and Services Tax) Act Net Asset Value PDS Securities or securities TFN Unitholder The value of the Fund s assets less the Fund s liabilities as calculated under the Constitution. This product disclosure statement. Securities as defined in section 761A of the Corporations Act and interests in managed investment schemes. Tax File Number. The registered holder of a unit in the Fund. APN AREIT FUND 47

50 Corporate Directory Responsible Entity APN Funds Management Limited ABN Registered Office Level Collins Street Melbourne Victoria 3000 Telephone: (03) Facsimile: (03) Freecall: Web: Directors of the Responsible Entity John Harvey, Independent Chairman David Blight, Managing Director Christopher Aylward, Executive Director Clive Appleton, Executive Director Howard Brenchley, Executive Director and Chief Investment Officer Michael Butler, Independent Non-Executive Director Andrew Cruickshank, Non-Executive Director Lawyers to the Responsible Entity Hall and Wilcox Level 30 Bourke Place 600 Bourke Street Melbourne Victoria 3000 Custodian RBC Dexia Investor Services Trust ABN Level 17 2 Park Street Sydney NSW 2000 External Auditor to the Fund Deloitte Touche Tohmatsu ABN Lonsdale Street Melbourne Victoria APN AREIT FUND

51 Building income on property property