SafeGuard Brisbane Credit Opportunity

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AUS Dollars

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SafeGuard Brisbane Credit Opportunity

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short description

Stable yield fund with monthly distributions, backed by First mortgages in Australia and New Zealand

SafeGuard Brisbane Credit Opportunity key take aways

Security Property located at 44 O’Connell Street, Kangaroo Point QLD, 4169.

The proposed development will consist of 14 whole-floor strata titled Residences with basement car parking for about 43 vehicles. All Residences will be provided with expansive riverfront living, 3-4 bedrooms, kitchen, dining, and substantial private open space amenity. *Note: Fortis have lodged a DA amendment application for an additional level which we expect will be approved in mid 2024 – all numbers in this IM are based on a 14 level development.

The Developer has entered into Put and Call Options with the various vendors in December 2022 and will settle the purchase of the Property in about January 2024 for a consideration of $16 million.

The Developer has received a development consent from council in Q4 2023 and Off the-plan sales of the Residences have commenced in Dec 2023.

The Developer will appoint an experienced and reputable builder for the construction works. It is expected that the successful builder will commence construction in about February/March 2024 and complete these works in about November 2025.

The issuer plans to redeem the units around November 2025, giving an investment term of about 23 months and the maturity date is December 31, 2025, with a possible extension of up to nine months if there are delays in the project.

The updated Feasibility Analysis as of Dec 2023, indicates a total Gross Realisable sales value of the completed residences will be ~$113 million (up from $106.45 m), with a total Development Profit before distributions to Preference Equity investors estimated at $12.15 million (down from $14.5m) .

The project is shaping up well given the market for whole floor luxury apartments is very strong in Brisbane. Kangaroo Point has delivered some of the strongest of these results and the O’Connell Street development will benefit from these new sales precedents.

SafeGuard Brisbane Credit Opportunity

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Subscription Date

01 Dec 2023

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Subscription End Date

31 Dec 2023

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Capital to Raise

AUD 6m

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18.0% p.a.

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Issue Price

1 per share

About Pallas Capital

Pallas Capital is a specialist commercial real estate financier and investment manager. It arranges relatively short-term loans for its experienced and successful client borrowers and then offers financial Investments in those loans to its investors. These investors are actively seeking superior risk adjusted fixed income returns backed by real estate assets and company and/or personal guarantees. The Pallas Capital team has direct investment and development experience across market cycles and across the asset classes in which the Fund will invest. This knowledge, combined with its structured lending experience, is a unique combination that sets the group aside from other lenders. Pallas Capital’s highly experienced executive team possess decades of Australian and global financial markets and real estate debt and equity experience including funds and asset management, law, investment banking, development and valuation, corporate finance, private equity, technology and accounting. The business strives to attract and retain talent that embody its values of integrity, transparency, agility and reliability, and that possess diverse backgrounds and skill sets that are complementary to the team as a whole.

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