Development: Workshop Feasibility page 1 Categorised Profit & Loss Income: Development Sales 2,072,607 Other 22,528 2,095,135 Less Development Costs: Land Purchase Price 825,000 Stamp Duty Fees and Establishment Fees 51,691 Conveyancing Fees (Purchase) 990 Consultants Fees 108,018 Construction 664,070 Rates and Taxes 11,681 Other 2,350 Contingency Amount 24,850 1,688,649 Margin Before Interest 406,486 Less Borrowing Interest 104,481 Profit Margin 302,004 Total Development Cost 1,793,131 Internal Rate of Return 11.12% Margin on Development Cost 16.84% Peak Level of Debt : 1,430,721 (Occurs on Feb 2012) Equity Amount : 337,730 (28.70% IRR on Equity) Margin on Equity : 302,004 (89.42% MoE) Site Area : 610 square metres. Land Purchase Price per square metre : 1,352 Total Development Cost per square metre : 2,940 Development Sales Income per square metre : 3,398 End of Profit and Loss (Categorised) Report
Development: Workshop Feasibility page 2 Sensitivity Analysis for Land Cost Variations Range is -10.00% to +10.00% in 2.00% Increments of $16,500 Land Cost Sale Value Dev. Cost Margin MDC IRR 742,500 2,072,607 1,693,647 401,488 23.71% 15.48% 759,000 2,072,607 1,713,544 381,592 22.27% 14.57% 775,500 2,072,607 1,733,441 361,695 20.87% 13.68% 792,000 2,072,607 1,753,337 341,798 19.49% 12.81% 808,500 2,072,607 1,773,234 321,901 18.15% 11.96% 825,000 2,072,607 1,793,131 302,004 16.84% 11.12% 841,500 2,072,607 1,813,028 282,108 15.56% 10.30% 858,000 2,072,607 1,832,924 262,211 14.31% 9.49% 874,500 2,072,607 1,852,821 242,314 13.08% 8.70% 891,000 2,072,607 1,872,718 222,417 11.88% 7.92% 907,500 2,072,607 1,892,615 202,520 10.70% 7.15% Sensitivity Analysis for Construction Cost Variations Range is -10.00% to +10.00% in 2.00% Increments of $13,281 Cost Sale Value Dev. Cost Margin MDC IRR 597,663 2,072,607 1,725,738 369,397 21.41% 13.42% 610,944 2,072,607 1,739,217 355,918 20.46% 12.97% 624,225 2,072,607 1,752,695 342,440 19.54% 12.51% 637,507 2,072,607 1,766,174 328,961 18.63% 12.05% 650,788 2,072,607 1,779,652 315,483 17.73% 11.59% 664,070 2,072,607 1,793,131 302,004 16.84% 11.12% 677,351 2,072,607 1,806,609 288,526 15.97% 10.65% 690,632 2,072,607 1,820,088 275,047 15.11% 10.18% 703,914 2,072,607 1,833,566 261,569 14.27% 9.71% 717,195 2,072,607 1,847,045 248,090 13.43% 9.24% 730,476 2,072,607 1,860,523 234,612 12.61% 8.76% Sensitivity Reports continue on the next page
Development: Workshop Feasibility page 3 Sensitivity Analysis for Construction Period Variations Range is -3 months to 7 months, in 1 month Increments End - Months Sale Value Dev. Cost Margin MDC IRR 11/2011 -- 23 2,034,227 1,773,024 283,731 16.00% 12.13% 12/2011 -- 24 2,046,941 1,779,690 289,779 16.28% 11.76% 01/2012 -- 25 2,059,734 1,786,366 295,896 16.56% 11.43% 02/2012 -- 26 2,072,607 1,793,131 302,004 16.84% 11.12% 03/2012 -- 27 2,085,561 1,799,835 308,254 17.13% 10.86% 04/2012 -- 28 2,098,596 1,806,570 314,554 17.41% 10.61% 05/2012 -- 29 2,111,712 1,813,281 320,959 17.70% 10.39% 06/2012 -- 30 2,124,910 1,819,889 327,550 18.00% 10.19% 07/2012 -- 31 2,138,191 1,826,637 334,082 18.29% 9.99% 08/2012 -- 32 2,151,555 1,833,414 340,669 18.58% 9.81% 09/2012 -- 33 2,165,002 1,840,172 347,358 18.88% 9.65% Sensitivity Analysis for Borrowing Interest Rate Variations Range is -2.50% to +2.50% in 0.50% Increments Interest Sale Value Dev. Cost Margin MDC IRR 3.75% 2,072,607 1,749,708 345,427 19.74% 12.73% 4.25% 2,072,607 1,758,236 336,899 19.16% 12.41% 4.75% 2,072,607 1,766,842 328,293 18.58% 12.10% 5.25% 2,072,607 1,775,526 319,609 18.00% 11.77% 5.75% 2,072,607 1,784,289 310,847 17.42% 11.45% 6.25% 2,072,607 1,793,131 302,004 16.84% 11.12% 6.75% 2,072,607 1,802,053 293,082 16.26% 10.79% 7.25% 2,072,607 1,811,057 284,078 15.69% 10.46% 7.75% 2,072,607 1,820,143 274,993 15.11% 10.12% 8.25% 2,072,607 1,829,311 265,824 14.53% 9.79% 8.75% 2,072,607 1,838,563 256,572 13.96% 9.44% Sensitivity Reports continue on the next page
Development: Workshop Feasibility page 4 Sensitivity Analysis for Sell-On Income Variations Range is -10.00% to +10.00% in 2.00% Increments of $41,452 Sell-On Income Sale Value Dev. Cost Margin MDC IRR 1,865,347 1,865,347 1,793,131 94,744 5.28% 3.75% 1,906,799 1,906,799 1,793,131 136,196 7.60% 5.31% 1,948,251 1,948,251 1,793,131 177,648 9.91% 6.82% 1,989,703 1,989,703 1,793,131 219,100 12.22% 8.29% 2,031,155 2,031,155 1,793,131 260,552 14.53% 9.73% 2,072,607 2,072,607 1,793,131 302,004 16.84% 11.12% 2,114,059 2,114,059 1,793,131 343,457 19.15% 12.48% 2,155,512 2,155,512 1,793,131 384,909 21.47% 13.81% 2,196,964 2,196,964 1,793,131 426,361 23.78% 15.10% 2,238,416 2,238,416 1,793,131 467,813 26.09% 16.36% 2,279,868 2,279,868 1,793,131 509,265 28.40% 17.59% End of Sensitivity Reports
Development: Workshop Feasibility page 5 Brief Inputs Report Development Settings Development Identification Development Name : Type of Development : Capital City : Description : Location : Prepared By : Workshop Feasibility Residential Melbourne 2 x townhouse Development 17 ABC Street, Bentleigh mmy Development Dates Reference Date : October 2009 Completion Date : March 2012 First month of financial year : July Residual Land Value Calculation Residual Land Value Calculation is NOT required. Equity Equity has been provisionally injected as a percentage of costs before interest : 20.00% Loans and Interest Only Primary Debt Funds apply to any borrowings. Primary Debt interest rate per annum throughout cashflow : 6.25% Primary Debt Finance Establishment Fee : 0.50% Lending interest rate per annum : 0.00% Escalation Rates Construction escalation rate per annum : 3.50% Rent/Land escalation rate per annum : 0.00% Absolute Sell-on escalation rate : 7.50% GST Settings This Developer is NOT registered for GST. Inputs (Brief) Report continues on the next page
Development: Workshop Feasibility page 6 Brief Inputs Report (continued) Other Settings Land Costs Contingency as a percentage of all costs before interest : 1.50% Monetary amounts are shown to the nearest dollar. Total Site Area: 610 Square Metres Plot Ratio Data is not used. Total Land Costs : 825,000 Description Price Settle. Deposit Date 1. LAND 825,000 Jan 2010 82,500 Oct 2009 Construction Costs Total Unescalated Construction Costs : 618,500 Total Construction Escalation : 45,570 Description Amount Quantity Rate Method Start End 1. Pre-rental repairs 1,000 Linear Jan 2010 Jan 2010 2. Demolition 8,500 Linear May 2011 May 2011 3. Unit 1-210 sqm d/sto 304,500 210 1,450 Curve Jun 2011 Feb 2012 4. Unit 2-210 sqm d/sto 304,500 210 1,450 Curve Jun 2011 Feb 2012 Consultants' Fees Total Consultants' Fees : 108,018 Description Amount Method Link Start End 1. Pre Purchase feasibility 22,688 Month Oct 2009 Oct 2009 2. Town planning 19,800 Period Nov 2009 Jan 2010 3. Working drawings 5,500 Month Dec 2010 Dec 2010 4. Engineering 5,500 Month Jan 2011 Jan 2011 5. Soil Test 350 Month Dec 2010 Dec 2010 6. Building Permit 4,000 Month Mar 2011 Mar 2011 7. Survey Sub Division 2,400 Month Jul 2011 Jul 2011 8. Legals Sub division 1,250 Month Feb 2012 Feb 2012 9. Project Management 46,200 Period Nov 2010 Feb 2012 10. Energy Rating Report 330 Month Jan 2011 Jan 2011 Inputs (Brief) Report continues on the next page
Development: Workshop Feasibility page 7 Brief Inputs Report (continued) Rates and Taxes Total Rates and Taxes : 11,681 Description Amount Basis Frequency Method Percentage 1. Council Rates AAV Annual Use Tax Scales 2. Water & Sewer AAV Quarterly Use Tax Scales 3. Land Tax AUV Annual Use Tax Scales Assessed Values for Rates and Taxes Assessed Unimproved Value : 600,000 Assessed Capital Value is calculated as a percentage of Escalated Imputed Capital Value: 100.00% Assessed Annual Value is calculated as a percentage of Assessed Capital Value: 5.00% Stamp Duty on Transfer and Conveyancing Fees Stamp Duty on Transfer is calculated using the tax library. 44,570 Purchaser's Conveyancing Fees : 990 Vendor's Conveyancing Fees : 0 Selling and Leasing Fees Other Costs Selling Fees : 0.00% 0 Leasing Fees : 0.00% 0 Total Other Costs : 2,350 Description Amount Total/Monthly Start End 1. Electricity Contributi 1,850 Total Jun 2011 Jun 2011 2. Drainage Sewerage Con 500 Total Jan 2012 Jan 2012 Inputs (Brief) Report continues on the next page
Development: Workshop Feasibility page 8 Brief Inputs Report (continued) Sell-On Income Items Total Sell-On Income : 2,072,607 Description Amount Method Quantity Rate Start End 1. Unit 1 865,000 LumpSum Mar 2012 2. Unit 2 865,000 LumpSum Mar 2012 Rent Income Items Total Rent Income Received : 0 Description Amount Quantity Link Vacancy Start 1. Rent Income Item 1 0 0.00% Aug 2011 2. Rent Income Item 2 0 0.00% Aug 2011 Other Income Items Total Other Income : 22,528 Description Amount Total/Monthly Start End 1. rent 1,408 Monthly Jan 2010 Apr 2011 End of Inputs (Brief) Report
Development: Workshop Feasibility page 1 Description: 2 x townhouse Development 10:56 Categorised Cashflow Development Length spans 30 months (2 years, 6 months) Development Cashflow begins October 2009 and ends March 2012 Period Number 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 Subtotals 2009 2011 Month Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Remaining Sales Units 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 2 Construction Esc. 1.0000 1.0029 1.0058 1.0088 1.0117 1.0147 1.0176 1.0206 1.0236 1.0266 1.0296 1.0326 1.0356 1.0386 1.0416 1.0447 Rent/Land Esc. 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Absolute Sellon Esc. 1.0000 1.0063 1.0125 1.0189 1.0252 1.0316 1.0381 1.0446 1.0511 1.0577 1.0643 1.0709 1.0776 1.0844 1.0911 1.0980 Ownership Factor 0.0000 0.0000 0.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 AUV 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 ACV 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 643,497 643,497 643,497 643,497 643,497 643,497 643,497 AAV 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 30,000 32,175 32,175 32,175 32,175 32,175 32,175 32,175 Land Purchasing 82,500 795,181 877,681 Consultants' Fees 22,688 6,600 6,600 6,600 2,888 8,738 8,718 62,831 Construction Costs 1,009 1,009 Council Rates 807 807 Water & Sewer 106 106 106 106 422 Land Tax 1,590 1,590 Selling & Conv. 0 Other Costs 0 Contingency Costs 1,578 99 99 11,973 2 2 45 131 131 14,058 COSTS B4 INT. 106,766 6,699 6,699 817,265 107 107 3,038 8,869 8,848 958,398 Sell-On Income 0 Rental Income 0 Other Income -1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-18,304 INCOME B4 INT. -1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-1,408-18,304 Net Outlay 106,766 6,699 6,699 815,857-1,408-1,408-1,408-1,301-1,408-1,408-1,301-1,408-1,408 1,630 7,461 7,440 940,094 Equity Input -106,766-6,699-6,699-217,566-337,730 Cum. Debt B4 Int. 598,291 596,883 595,475 594,067 592,766 591,358 589,950 588,649 587,241 585,833 587,463 594,923 602,364 Interest 3,116 3,125 3,134 3,143 3,153 3,162 3,171 3,180 3,190 3,199 3,224 3,280 3,336 41,412 Cum. Interest 3,116 6,241 9,375 12,518 15,670 18,832 22,003 25,183 28,373 31,572 34,796 38,076 41,412 Cum. Net Debt 601,407 603,124 604,850 606,585 608,436 610,190 611,953 613,832 615,614 617,405 622,259 632,999 643,775 NET FLOW 106,766 6,699 6,699 818,973 1,717 1,726 1,735 1,852 1,754 1,763 1,880 1,782 1,791 4,854 10,740 10,776 981,505 N.P.V. Factors 1.0000 0.9908 0.9817 0.9727 0.9638 0.9549 0.9461 0.9375 0.9289 0.9203 0.9119 0.9035 0.8952 0.8870 0.8788 0.8708 N.P.V. Net Flow -106,766-6,637-6,577-796,617-1,655-1,648-1,641-1,736-1,629-1,622-1,714-1,610-1,603-4,305-9,439-9,383-954,582 Cashflow (Landscape Print) Report continues on the next page
Development: Workshop Feasibility page 2 Description: 2 x townhouse Development 10:56 Categorised Cashflow Development Length spans 30 months (2 years, 6 months) Development Cashflow begins October 2009 and ends March 2012 Period Number 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Totals 2011 2012 Month Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Remaining Sales Units 2 2 2 2 2 2 2 2 2 2 2 2 2 0 Construction Esc. 1.0477 1.0508 1.0538 1.0569 1.0600 1.0631 1.0662 1.0693 1.0724 1.0755 1.0787 1.0818 1.0850 1.0881 Rent/Land Esc. 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 Absolute Sellon Esc. 1.1048 1.1117 1.1187 1.1257 1.1327 1.1398 1.1469 1.1541 1.1613 1.1686 1.1759 1.1832 1.1906 1.1980 Ownership Factor 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 1.0000 0.0000 AUV 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 ACV 643,497 643,497 643,497 643,497 643,497 746,310 746,310 746,310 746,310 746,310 746,310 746,310 746,310 746,310 AAV 32,175 32,175 32,175 32,175 32,175 37,316 37,316 37,316 37,316 37,316 37,316 37,316 37,316 37,316 Land Purchasing 877,681 Consultants' Fees 2,888 6,888 2,888 2,888 2,888 5,288 2,888 2,888 2,888 2,888 2,888 2,888 4,138 108,018 Construction Costs 8,984 9,226 40,536 60,297 83,412 122,296 129,190 96,968 66,693 45,460 664,070 Council Rates 1,731 1,338 3,876 Water & Sewer 106 106 106 106 70 914 Land Tax 3,180 2,120 6,890 Selling & Conv. 0 Other Costs 1,850 500 2,350 Contingency Costs 71 103 91 180 209 687 949 1,294 1,878 1,983 1,498 1,051 765 32 24,850 COSTS B4 INT. 4,795 6,991 6,159 12,156 14,173 46,511 64,239 87,594 127,061 134,166 101,353 71,131 51,771 2,152 1,688,649 Sell-On Income -2,072,607-2,072,607 Rental Income 0 Other Income -1,408-1,408-1,408-22,528 INCOME B4 INT. -1,408-1,408-1,408-2,072,607-2,095,135 Net Outlay 3,387 5,583 4,751 12,156 14,173 46,511 64,239 87,594 127,061 134,166 101,353 71,131 51,771-2,070,455-406,486 Equity Input 639,734 302,004 Cum. Debt B4 Int. 605,751 611,333 616,084 628,240 642,413 688,924 753,163 840,757 967,818 1,101,984 1,203,337 1,274,469 1,326,240-744,216 Interest 3,371 3,417 3,460 3,541 3,633 3,895 4,249 4,728 5,414 6,141 6,701 7,106 7,413 104,481 Cum. Interest 44,782 48,199 51,659 55,200 58,834 62,728 66,978 71,706 77,120 83,261 89,962 97,068 104,481 104,481 Cum. Net Debt 650,533 659,533 667,743 683,441 701,247 751,652 820,141 912,463 1,044,938 1,185,245 1,293,299 1,371,537 1,430,721-639,734 NET FLOW 6,758 9,000 8,210 15,697 17,806 50,406 68,489 92,322 132,475 140,307 108,054 78,238 59,184-2,070,455-302,004 N.P.V. Factors 0.8628 0.8548 0.8470 0.8392 0.8315 0.8239 0.8163 0.8088 0.8014 0.7940 0.7867 0.7795 0.7723 0.7653 N.P.V. Net Flow -5,830-7,694-6,954-13,173-14,806-41,528-55,908-74,670-106,163-111,407-85,009-60,987-45,711 1,584,422 0 End of Cashflow (Landscape Print) Report