Jacaranda - The Financials and Access

The cost of acquiring a 1/13th share in the Jacaranda property will be initially priced at A$94,500, which represents the property acquisition, furnishing / equipment / initial improvements costs and a 12.5% project fee. All these costs are capitalised and form, in conjunction with market value adjustments, the basis for determining the share price. The project fee amounts to A$10,500 per share and covers costs associated with establishing the property, management planning, and legal and accounting support incurred by LeisureNet Properties.

Ongoing property management and maintenance expenses are expected to be around A$3,000/yr per unit share and payable quarterly in advance. There may from time to time be minor capital cash calls to provide for development or upgrades of the property, but these will be limited to $1,000/yr per unit share.

The property offers the potential for solid capital growth. Capital growth in property has averaged 13.2% per annum in the Perth region over the last 10 years, and 19.8% over the last 5 years. Rural areas within a 1-1½ hour drive of Perth appear to have grown at more than 20% over the past 5 years.

Each shareholder will be entitled to access the property for four 1-week periods during the calendar year. These weeks will be allocated fairly (e.g. in Year 1 - Week 1, Week 14, Week 27, Week 40) and “cycle” forwards by 4 weeks each year (e.g. in Year 2, in this example, the allocation would move to Week 5, Week 18, Week 31, Week 44) and so on. This gives each owner a week per season.

If a shareholder does not wish to use a particular week, that week can be offered for rental and hence generate income for that shareholder at a rate expected to exceed A$250 per night. Alternatively, swaps amongst other shareholders can be requested for weeks that may be more convenient. A relationship with a rental agency and local property manager will be established to facilitate rental operations and shareholder / tenant use.

It is not necessary for the shareholders to know each other; however, a maximum of 5 owners may be foreign-resident.

A separate information package is available on request that will typically include the basis for the share pricing, an independent market valuation, and a letter from an independent accountant that confirms the basis for the asset value and legal structure of each property company. Legal documentation will be made available to those parties expressing a keen commitment to acquire shares in Jacaranda.