Investors Benefit from Golden
Gold Coast Investment

The Elderslie Group has generated a $3 million profit for investors following the sale of a fully leased commercial property at Bundall on Queensland’s Gold Coast for $8.85 million to a private investor.

The Trendwest Building, located at 130 Bundall Road, formed part of Elderslie Property Syndicate No 3 which was offered to investors in June 2002. The syndicate also includes a Melbourne based property at 1183 Toorak Road, Camberwell. The decision to sell the Trendwest Building was based on favourable market conditions including a strong recent valuation, significant new leasing commitments and capital growth of around 60 per cent achieved over the last two years.

A current market value of $8.3 million was approved on the property following a valuation by Landmark White in September.

Low vacancy rates in the Gold Coast commercial property market, a commitment to new leases from two key tenants coupled with improvements to the building have made it an attractive proposition to the purchaser particularly with commercial vacancy in Bundall dropping 4 per cent in the past two years and no new development undertaken in the immediate area.

Following the sale, Elderslie has returned $5.4 million in cash to investors.

The projected annual return for Elderslie Property Syndicate No 3 has increased from 9.5 per cent to an anticipated 12.6 per cent distribution for 2005 based on rental income from the syndicate’s remaining Camberwell asset.

As a result of EPS No 3s success, more than 50 per cent of investor funds have been rolled into other Elderslie syndicates.

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Investment Ratings

A rating is an evaluation of the relative safety of an investment.

Basically, it scrutinises the issuer's ability to repay principal and make interest payments. A rating therefore is an assessment of risk and liquidity. There are several organisations that provide this service. Currently Elderslie’s investment products are rated by Property Investment Research (“PIR”). PIR has provided the investment community with independent research since 1989.

PIR’s seven published Investment Ratings from lowest to highest are: A- / A / A+ / AA- / AA / AA+ / AAA.

Products with ratings below A- are not considered investment grade and such reports are generally not published.

For a more detailed discussion on the PIR Investment Rating process please visit the PIR website at www.pir.com.au

Investment Asset Classes -
What Are They?

A popular risk management concept with investment managers is to spread investments across various asset classes. To assist you in understanding what asset classes are available, we have provided a general overview of each asset class.

Cash Investments: Cash investments usually refer to term deposits, cash management trusts, bank bills and other cash managed funds. They are a relatively low-risk asset class. These investments are generally issued, guaranteed or supported by state, or Federal governments, banks or large well-regarded companies.

Fixed Interest/Bonds: Bonds are securities that enable governments, government departments and large companies to borrow money. If you invest in a bond, you are in essence lending a specific sum of money to the bond issuer.

Property and Listed Property Trusts: Ownership of investment properties, separate to the home you live in is common. An alternative to direct property investment is investment in property via a listed property trust. This has similar characteristics to a share investment and is also listed on the Australian stock exchange.

Shares (National and International): Shares represent part ownership in a public corporation. If the company prospers, you share in its profits (usually in the form of dividends) and benefit from any rise in the market value of its shares. Conversely, if the company runs into problems, the value of your investment could decline.

Useful Finance and Investment Websites
www.ninemsn.com.au/money – Money Magazine Online
www.asic.gov.au – Australian Securities and Investment Commission
www.afr.com.au – The Australian Financial Review Online
www.asx.com.au – The Australian Stock Exchange Online
www.personalinvestor.com.au – Personal Investor Magazine
www.myrisktolerance.com – Questionnaire to Identify Your Risk Profile.

To find out the latest news from Elderslie Finance Corporation, visit our website at www.efc.com.au

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Cribb's Corner

Robert Cribb,
Director, Elderslie Property

Despite pundits predicting the death of residential property investment, there is scope for enterprising investors to enter the residential market and make sound investment choices.

While inner-city residential investment has cooled significantly, particularly on the Eastern Seaboard, there are pockets around each capital city that will deliver strong investment returns.

Investment in future growth areas has been integral to the strategy of Elderslie, particularly with our joint venture in Mernda, around 30 minutes north of Melbourne.

Currently a semi-rural location, the Mernda Strategy Plan before the Victorian Department of Planning is likely to see major redevelopment in this growth corridor.

Infrastructure is already in place with the nearby Hume Freeway linking the area to the city. Infrastructure and transportation access is a significant key to the future prospects of any geographic location.

South of Perth, the Kwinana Freeway has opened up Fremantle and Rockingham to the Perth CBD.

In Sydney, the M7 orbital will link outlying areas including the south western satellite city of Campbelltown and the north-western districts of Richmond and the Hills Shire.

In Brisbane, the Gateway Motorway and train infrastructure has already opened up semi-rural suburbs surrounding the airport, the Gold Coast to the south via the South East Freeway, the CBD and Brisbane’s beachside districts to the north.

The bottom line with residential investment in the current economic climate is that there are still great opportunities to be found, it is a case of locating residential opportunities with a medium to long-term future rather than look at spectacular immediate returns experienced nationally over the past 3 to 5 years.

In each issue of Your Interest we will introduce you to one of Elderslie’s team members, this quarter the spotlight is on Elderslie’s Pennie Teh.

Position at Elderslie:
Executive, Investment Management Division

Experience and qualifications:
Masters of Commerce
2 years with the Elderslie Group
Currently studying Chartered Financial Analyst,
Level 3 Candidate

Most rewarding aspect of your role at Elderslie:
The satisfaction of overcoming each challenge especially when you are given a task that is a bit different and knowing that you have found a solution.

Toughest part of the job: Some of the unexpected challenges thrown my way!

How do you unwind after a bad day: 8 hours of sleep.

If you had a spare $10,000 you would invest it in:
I would invest in life and cultural experience by way of a round the world trip.

Best piece of financial advice you have ever received: Start saving and if possibly investing at a young age. Also, if you feel the need to purchase another pair of shoes, sit on your decision for another day.

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