39
Assumptions Net Income
Total Costs (pages 37 - 38)
For the purposes of the financial summaries on pages 22 – 32 and the
These costs are nonrecoverable operating expenses for running the Five Mile
financial models on pages 38 – 40 these are based on the contractual net
Centre and development programme. These costs are charged by QG Ltd and
rental under the leases, known rent reviews and specified underwrites
payable by 5MQ LP and forecast at $787,097 in year 1 and rising to $885,885 at
mentioned in this Information Memorandum.
year 5. These costs cover all property, facility, asset management and building
For the purposes of the JLL valuations on page 11, these numbers vary slightly
maintenance costs.
from the contract net income due to adjustments made by JLL in regard to
Management (page 36)
OPEX.
Management fee charged by Mackersy Property set at 0.15% of total value of
Underwrites
the property being managed by Mackersy Property. This is set at $100,000 in
Any vacant space within Building 7 at completion is to be underwritten by
year 1 and includes accounting and directors insurance costs.
the vendor for 24 months from completion at market rates to a maximum of
Accounting
$1,531,000 per annum (inclusive of OPEX). Any construction cost increases or
$6,500 per annum payable by M5M LP, fixed for 5 years.
variations is also to be covered by the vendor. Interest Rate Cost Average cost of funds estimated to be 2.85% for years 1 to 5 on a mixture
Directors Insurance $2,350 per annum payable by M5M LP, fixed for 5 years.
of fixed and floating rates. Interest rates yet to be confirmed and subject to
Depreciation
change.
The tax benefit associated with building depreciation is based on our best
Loan-to-value ratio Based on 54% lending of the contracted purchase price of $217,850,000. Loan to value ratio not to exceed 60% during any development phase. Development Modelling completed for development forecasts has used actual development costs incurred by QG Ltd on its current buildings with an additional contingency of 10%. Capital growth is assumed at 2.5% per annum. Assumed
estimate at depreciation rates for buildings under construction, and our understanding of current tax depreciation rules, but could be subject to change. Car Parking We have forecast the construction of a multi-level car park building as part of the Southern Precinct development. The exact number of parks required is subject to council resource consent and meeting tenant covenants in place.
development process is for the outlet centre to be completed in year 2, the
No Guarantee
office building in year 3, the food and beverage in year 4 and the cinema in
No guarantee can be given in respect of the returns payable or any capital
year 5.
expenditure increased.
