This project is fully funded and under construction. See below for details of the original offer and refer to the updates section for the status of the project.

Original Offer

Megara are pleased to invite you to participate in a property development investment opportunity in the suburb of Doubleview, Perth, Western Australia.

Megara Eleven Pty Ltd (ACN 163 482 399) (“Megara Eleven”) has secured the property located at 14 Beatrice Street, Doubleview and are now providing the opportunity for a select group of investors to participate in a short term investment (estimated 12 months) for the development of eight (8) residential units.

Megara Eleven purchased the property on 25th March 2014.

Development Approval for the unit development was received from the City of Stirling on 20th June 2014 and expires on 20th June 2016.

Currently, National Australia Bank has a first registered mortgage on the property, however, it is anticipated that this will be shortly replaced by an ANZ mortgage now that construction has commenced in relation to the development.

Megara Eleven was incorporated and registered by ASIC as Megara Eleven Pty Ltd ABN 60 163 482 399. It’s only business activities have been to acquire the Subject Landholding, and engage Megara Construction Pty Ltd ABN 55 138 294 185 (Builder) to develop the Site.

The only significant asset is the land at 14 Beatrice Street, Doubleview and the 8 unit development once it is completed. Once the Units are complete and sold, it is expected that the company will be wound up.

Megara Eleven currently owns the subject land and has received development approval for the construction of a two level, 8 unit residential complex.

Construction will be undertaken by Megara Constructions Pty Ltd and will include all relevant site works.

Apartments will be completed to a ‘turnkey’ level in line with the plans and specifications outlined in Annexure B of this projects IM.

All construction is subject to a fixed price contract in line with the project feasibility outlined in Annexure C of this project's IM.

Megara has completed over $200 million worth of projects for a variety of Government and Private Sector clients. Be it building a custom design home for a private client, a workers camp, or assisting the Government with an affordable housing project, their best practice procedures have delivered projects on time and on budget, time and time again.

Project Experience:

* Custom

* Turnkey Investment Projects

* Land Development

* Apartment & Unit Development

* Commercial Construction

* Workers Accommodation

* Government Regional Officer Housing

* Department of Defence

* Government Affordable Housing Projects

Megara Constructions Pty Ltd has been trading profitably since inception in 2009 and has a proven ability and financial capacity to deliver a range of Government and Private Sector projects.

Megara will be responsible for every facet of the Development process, including:

(i) Appointment and Management of the activities of all consultants during the planning, design and approval stages;

(ii) Managing the development and construction program;

(iii) Managing the sales and settlement program.

All costs for development and construction are fixed at rates outlined in the project feasibility as outlined in Annexure C of this project's IM.

Location

The Project is ideally located at 14 Beatrice Street, Doubleview, which is in an established neighbourhood just 8.9 kilometres North West of the Perth CBD, 2.4 kilometers from Scarborough Beach, and 1.5 kilometers from Westfield Innaloo regional shopping centre.

Doubleview is a well-established suburb with a high percentage of families and couples. Four Primary schools are located within 1.5 kilometers of the property.

Capital Structure

Investors will purchase Redeemable Preference Shares in Megara Eleven. Redeemable Preference Shares will have a capped 11% fixed return. (I.e. an investment of $100,000 in principal will receive repayment of the principal plus interest of $11,000).

Investors’ full return is subordinated to the Senior (Bank) Debt of $2,461,000 which will be repaid in full prior to any distribution to Investors.

Once the Senior (Bank) Debt has been repaid in full, net proceeds will be accumulated from the sales of the remaining units until there are sufficient funds (i.e. $555,000) to return to the Investors in one payment. In any event, this payment is guaranteed to be paid within four (4) months of the issue of certificates of titles for the individual units.

Offer

This opportunity comprises the issue of Redeemable Preference Shares with a capped 11% fixed return, payable once settlement of funds totaling $555,000 in excess of the senior (bank) debt of the project occurs or four (4) months from issue of titles for the subject units, whichever is earlier. Megara Eleven estimates this will occur in approximately 12 months as construction of the Units has already commenced.

The Redeemable Preference Shares will give the holder the right to the return of all paid up capital plus the 11% fixed return prior to any other distribution to the holders of any other shares in the Company. Once the capital and 11% return is paid to the Redeemable Preference Shareholders in the Company, they will have no further interest or claim against the Company.

Megara Eleven identifies the following as the biggest risks to the project:

(i) Additional development in the surrounding area creating competition for the sale of remaining 3 units and forcing a reduction in projected sales prices;

(ii) Macroeconomic forces creating a downturn in general residential house prices across Perth and or Australia, meaning that anticipated returns are not generated and/or significantly delayed;

(iii) Unforeseen delays to the construction timeline could delay completion of the project and delivery of titles;

(iv) A change to the Plans or similar occurring which results in a notifiable variation to purchase of Units of the Plan which would render the contracts avoidable by the purchasers;

(v) Inability of a purchaser or purchasers to complete the settlement of their purchase of a Unit due to unforeseen circumstances / falling market causing their financier to withdraw funding, where Megara Eleven is also unable to reach a timely / cost effective legal solution to the repudiation by the Buyer;

(vi) A change in laws, such as taxation, planning or construction which negatively impacts the project or the company, or Megara Constructions Pty Ltd;

(vii) a successful claim against Megara Constructions or another major sub-contractor rendering that company insolvent or similar so that they may not be able to perform contracted services in relation to the development, or otherwise a frustration of the construction contract or any of the major sub-contracts;

(viii) Changes in the property market causing the registered mortgage holder choose to enforce some or all of its securities;

(ix) A sudden increase in interest rates.

If any further information is required regarding this investment opportunity please contact Craig Spence on (08) 9230 3600.

Attachments

Team

Rebecca Watkins

Office Manager/Development Co-ordinator Beck has a Finance/Accounts Management background and has 8 years experience in the building/construction indu...

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Jamie Clarke

Jamie has extensive experience in best practice project management and operations in a variety of environments. He spent 10 years working internationa...

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Matthew Pickford

BEng (hons), BComm, MBA Matt has substantial finance and strategy experience with a strong network of Pilbara contacts. His work history includes role...

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Chad Scott

BSc, MBA (hons) Chad has significant experience in business development, senior management and finance. His work history includes several years as Gen...

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