LETTER TO INVESTORS
Thank you for your interest in the Southern Crescent Preferred Equity Fund.
This development site is strategically positioned in one of Sydney’s fastest growing precincts, Austral, within South Western Sydney’s thriving hub, Liverpool, which is predicted to become the third central business district in Sydney, by 2026.
The project, located at 350 Edmondson Avenue is conveniently located near the anticipated Fifteenth Avenue Smart Transit (FAST) providing efficient and accessible transportation options for residents and businesses, and with connecting links to the upcoming Western Sydney international (Nancy-Bird Walton) airport and to Liverpool and Sydney’s CBD.
This project offers wholesale investors the opportunity to invest in a Shariah compliant fund with up to 16.8% p.a. returns with 8% p.a. fixed return paid monthly and a variable return of 5.7%-8.8% p.a. upon maturity, estimated to be a 26 month investment term.
The Developers, a Castle Group company has lodged the Development Application for 44 lots land subdivision with an anticipated approval timeframe for September 2024. Castle Group has a successful track record having completed 23 projects and a current pipeline of 26 projects with a combined gross realisation value of $1.25 billion.
We thank you for your interest and consideration in this project.
13.7%-
16.8% P.A.
ON TARGET
26 MONTH
INVESTMENT TERM
100K MIN.
INVESTMENT
PREF. SHARES
SECURITY TYPE
Shaan Zaidi
Chief Executive Officer
Zain Qureshi
Chief Operating Officer
Offer Information
Target Fund Size
Up to $5,000,000
Expected Investment Term (Project Closure)
26 months
Minimum Investment
$100,000 (unless agreed otherwise by the Investment Manager in writing)
Investment Return
Based on the financial forecast of the project, the profit share is estimated to be between 13.7% p.a. and 16.8% p.a. Of this, 8% p.a. will be paid monthly in arrears, with the remaining profit (between 5.7%-8.8% p.a.) paid on Project Closure. If there are delays to the expected investment term, investors will continue to receive profits as noted above until the actual date of project closure.
Trustee
Guardian Capital Australia Pty Ltd (ABN 78 604 814 593), Australian Financial Services License No. 476816.
Investment Manager
FivePearls Funds Management Pty Ltd, a Corporate Authorised Representative No. 001307320 of Guardian Capital Australia Pty Ltd (AFSL).
Landowner
CGF 101 Pty Ltd ATF CGF 101 Unit Trust (ABN 32 763 962 032)
Fund Type
Wholesale Preferred Equity Fund
Preferential Unit
The Preferential Units issued by the Land Owner will be non-cumulative, irredeemable during the investment term, form part of the capital of the Land Owner and issued on the terms set out in this Supplementary. Preferential Unit holders will have first preference on distribution of the returns. The Land Owner will not be permitted to take out any further encumbrances against the Project, the Land or the Land Owner entity, other than funds required for construction of this project.
Investment
By electing to participate in the Offer described in this Supplementary, Investors will receive Units in the Fund. The only asset in this Fund will be the Investment described in the Supplementary.
Wholesale Investors Only
The offer to invest under this Supplementary (Offer) is available to wholesale investors only. Units in a Fund cannot be issued to you unless we are satisfied you are a professional investor, as this term is defined in the Corporations Act 2001 (the Act) i.e. you invest at least $500,000 into the Fund, you meet the minimum asset ($2.5 million of net assets) or income ($250,000 of gross income for the last two financial years) requirements, or you otherwise satisfy us you are not a retail client for the purposes of Chapter 7 of the Act.
Not Investment Advice. Seek Your Own Financial Advice
We have prepared this Supplementary without taking account of your investment objectives or finances. This Supplementary does not contain investment, legal, tax or immigration advice, nor is it a recommendation on the merits of investing in any Fund. You should seek professional advice and conduct your own investigation and analysis regarding the information contained in this Supplementary.
Investment in any Fund is speculative and may not be appropriate for you. You should consider the appropriateness of investing in any Fund having regard to your objectives, finances and needs.
Not A Product Disclosure Statement (PDS) Or Prospectus
This Fund will be an unregistered managed investment scheme and the regulated fundraising requirements of the Act do not apply to the Offer. This Supplementary is not a PDS within the meaning of the Act. Accordingly, this Supplementary does not contain the level of disclosure required for registered managed investment schemes that issue a PDS. We have prepared this Supplementary on the express basis it does not purport to contain all the information you may require before making an informed decision about whether or not to invest in any Fund.
Before investing in this Fund, you should read the FivePearls Cash Fund IM and this Supplementary carefully in full. You should also read the relevant Fund’s Trust Deed (Trust Deed) for further information about your rights and obligations as an investor in that Fund and our rights and obligations as the Trustee of that Fund. If there are inconsistencies between this Supplementary and the Trust Deed, the Trust Deed will prevail. Statements made in this Supplementary are made at the date of this Supplementary. Under no circumstance does the delivery of this Supplementary at any time or the issue of any Units in any Fund create an implication the information contained in this Supplementary is correct at any other time after such date.
Not Regulated By The Australian Prudential Regulation Authority (APRA)
The Trustee is not authorised under the Banking Act 1959 (Banking Act) and is not supervised by the Australian Prudential Regulation Authority, nor are investments in any Fund covered by the deposit or protection provisions in section 13A of the Banking Act.
Forward Looking Statements
This Supplementary includes forward looking statements that may contain the words believe, intent, likely estimate, expect and words of similar meaning. All statements other than statements of historical facts included in this Supplementary, including, without limitation, those regarding any Fund’s financial position and business or investment strategy, plans and objectives are forward looking statements.
Such forward looking statements involve known and unknown risks and uncertainties. These factors could cause the actual results, performance, or achievements of any Fund to be materially different from results, performance or achievements expressed or implied by such forward looking statements.
Any forward-looking statements in relation to a Fund are based on assumptions regarding that Funds operations, present and future business and investment strategies and the markets in which that Fund will operate. These forward-looking statements are made on the date of this Supplementary. Accordingly, there can be no assurance that such statements, estimates or projections will be realised.
Trustee Limitation Of Liability
Except in certain circumstances (including fraud, negligence or wilful default by the Trustee), the Trustee enters into transactions for each Fund in its capacity as trustee of that Fund only, not in its own capacity, and its liability in relation to those transactions is limited to the assets of that Fund.
Disclosure Of Interests
The Trustee or its related entities may also acquire Units on the same terms and with the same rights as other Investors in any Fund.
Updated Information
The information contained in this Supplementary can change, and the IM may be updated or replaced from time to time. Unless the updated information adversely affects you, the Trustee may not always update or replace this Supplementary to reflect the changed information.
Other Representations
Applicants should read this Supplementary and the relevant IM in full before deciding whether to invest in any Fund.
Confidentiality
This Supplementary is provided on a strictly confidential basis solely for your information and exclusive use to assess an investment in any Fund and may not be used for any other purpose. This Supplementary may not be copied, reproduced, republished, posted, transmitted, distributed, disseminated, or disclosed, in whole or in part, to any other person in any way without our prior written consent, which we may withhold in our absolute discretion. By accepting this Supplementary, you agree you will comply with these confidentiality restrictions and acknowledge your compliance is a material inducement to us providing this Supplementary to you.
Financial Details
All references to dollar amounts are to Australian Dollars (AUD), unless otherwise stated.
Investment Structure
Southwest Sydney’s Fastest
Growing Region – Austral
Growing Region – Austral
The 2023 population forecast for Austral is
13,567 and is forecast to grow to 68,771 by 2041
13,567 and is forecast to grow to 68,771 by 2041
Infrastructure
Significant existing and forthcoming infrastructure and a multibillion-dollar pipeline of projects will result in demand for property and continued price growth.
2 Km
From existing Al-Faisal College, Arrahman College, St Anthony of Padua Catholic College and Austral Public School
From the future Fifteenth Avenue Smart Transit Corridor From the future Austral Town Centre & Retail Commercial Precinct
From the future Austral Industrial Precinct
The Centre will be the largest employment zone in the Precinct and offer residential, commercial and retail space.
From the future Fifteenth Avenue Smart Transit Corridor From the future Austral Town Centre & Retail Commercial Precinct
From the future Austral Industrial Precinct
The Centre will be the largest employment zone in the Precinct and offer residential, commercial and retail space.
5 Km
From existing Leppington Train Station
20 Km
From Existing Liverpool CBD
From Future Liverpool Metro Station to City
From Future Western Sydney Airport
From Future Western Sydney Airport Business Park
From Future Liverpool Metro Station to City
From Future Western Sydney Airport
From Future Western Sydney Airport Business Park
The Housing Market
Austral – Land Sales
Austral – Land Sales
- Between January 2018 and September 2023, the land sale price in increased by 58%.
- Over the same period, Greater Sydney average house prices increased 33.7%.
- Between January 2018 and September 2023, price growth for land in Austral was 72% higher. than the price increase of the average house in Greater Sydney.
- 2,720 sales between January 2018 and September 2023.
- Prices are broadly upward trending from March 2021.
- 58% increase in the average price for land in Austral between January 2018 and September 2023 - 11.6% per annum.
Site Location and Zoning Highlights
Leppington station
7 Min
Future Fifteen Ave Smart Transit Corridor
2 Min
Future Austral Town Centre
2 Min
Future Western Sydney Airport
15 Min
Liverpool CBD
15 Min
Sydney CBD
45 Min
RISK ASSESSMENT
An outline of risks associated with investment in property related projects is contained in the FivePearls Cash Fund Information Memorandum issued on 8 January 2024 and that IM should be considered together with this Supplementary. The following risks are the Investment Manager’s assessment of some of the key risks associated with this particular investment.
The Investment Manager has reviewed the DA and confirms it is current and acceptable. Supply in the Austral precinct is limited and the suburb is highly sought after. The project is well positioned to take advantage of the imminent significant infrastructure to be developed in Austral.
The Investment Manager has assessed the capacity, property skills and financial position of Castle Group and has determined that it is creditworthy for effectively completing this project on time and on budget.
The redemption of the Preferential Units is contingent on the completion of the Project and not on the ensuing sale of all the lots. However, there is a risk that the level of sales of lots in the Project may be susceptible to volatility in the real estate market and therefore delay the completion date and also affect the final profits. The Investment Manager has assessed this risk and notes the following:
- The Sale Prices are reasonable in the current market.
- That confidence has seen Sydney's house prices increase 8.8 percent since bottoming out in January 2023 according to CoreLogic.
- It is in the interest of the Castle Group Company to complete this project as early as possible to maximise profitability.
Economic, supply chain and logistics, technological, political or legal conditions, interest rates and even market sentiment, can (and do) change, and changes in the value of investment markets can affect the value of the investments in the Fund.
The key risk mitigant to any adverse market risk is continued high demand. The Investment Manager notes that during the next 12 months, we will likely experience continuous high level of migration, with a disproportionate amount of migration expected in Sydney’s dedicate Growth Precincts. The Investment Manager is also of the view that interest rate increases have peaked and it is likely that the cash rate will be eased by the RBA in the second half of 2024.
The Investment Manager has assessed this risk and is confident that any Federal, State and Local government changes in law or regulation will be in favour of land developers as it addresses critical supply shortage issues.