This Enhanced Disclosure Document is issued by Brookfield Capital Management Limited as responsible entity of Multiplex Development and Opportunity Fund (Fund) pursuant to ASIC Regulatory Guide 46 (RG 46): “Unlisted property schemes – improving disclosure for retail investors.” The Regulatory Guide lists eight disclosure principles and six benchmarks that responsible entities of unlisted property schemes are required to apply to their upfront and ongoing disclosures for retail investors. The Fund has applied these guidelines in accordance with the form and content stated in RG 46. Investors should be aware that previous disclosures made by the Fund reflect market standard practices which may be different to the requirements of RG 46. Investors are invited to have reference to the Fund’s Product Disclosure Statement dated 14 September 2005, as supplemented on 28 July 2006 and 30 July 2008 (PDS) and other publicly released materials which are available at www.au.brookfield.com.
The responsible entity is committed to providing investors with timely and balanced disclosure of all material matters concerning the Fund in accordance with its continuous disclosure obligations, including RG 46. Key information in this Enhanced Disclosure Document and any material changes will be updated by the responsible entity as soon as practicable and in any event on at least a semi annual basis and made available at www.au.brookfield.com.
A hard copy of this Enhanced Disclosure Document is available to investors upon request by contacting Brookfield Customer Service on 1800 570 000 or by emailing clientserviceenquiries@brookfield.com.
The information in this Enhanced Disclosure Document is based on the Fund’s financial report for the period 1 July 2019 to 6 March 2020.
The table below contains an overview of ASIC’s description of the eight disclosure principles, the responses of the Fund’s responsible entity to those key risk features and then the practical application of each of the eight disclosure principles to the Fund.
Quick links:
| Risk Feature | What this means |
| Gearing | This indicates the extent to which the Fund’s assets are funded by external liabilities. RG 46 defines gearing ratio as total interest bearing liabilities divided by total assets.
ASIC’s description of this key risk states that “a higher gearing ratio means a higher reliance on external liabilities (primarily borrowings) to fund assets. This exposes the scheme to increased funding costs if interest rates rise. A highly geared scheme has a lower asset buffer to rely upon in times of financial stress.” The gearing ratio represents the percentage of debt compared to the gross assets of the Fund. The gearing ratio can help investors assess risks. It shows how much the Fund owes in debt to its financiers as a proportion of what the Fund owns (assets). The Fund’s Response and Practical Application of the Disclosure Principle and benchmarkThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Interest cover | This indicates the Fund’s ability to meet interest payments from earnings. RG 46 defines interest cover ratio as (EBITDA1 minus unrealised gains plus unrealised losses) divided by interest expense.
ASIC’s description of this key risk states that “interest cover is a key indicator of financial health. The lower the interest cover, the higher the risk that the scheme will not be able to meet its interest payments. A scheme with a low interest cover only needs a small reduction in earnings (or a small increase in interest rates or other expenses) to be unable to meet its interest payments.” The Fund’s Response and Practical Application of the Disclosure Principle and benchmarkThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Interest capitalisation | This relates to whether or not the interest expense of the scheme is capitalised
ASIC’s description of this key risk states that “ when a scheme capitalises interest expense, it is important for investors to understand how the scheme will meet its interest obligations when deciding whether to invest in the scheme”. The Fund’s Response and Practical Application of the Disclosure Principles The Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Scheme borrowing | This relates to the Fund’s borrowing maturity and credit facility expiry and any associated risks
ASIC’s description of this key risk states that “relatively short-term borrowings and credit facilities with short expiry dates are a risk factor if they are used to fund assets intended to be held long term. If the scheme has a significant proportion of its borrowings that mature within a short timeframe, it will need to refinance. There is a risk that the refinancing will be on less favourable terms or not available at all. If the fund cannot refinance, it may need to sell assets on a forced sale basis with the risk that it may realise a capital loss. Breach of a loan covenant may result in penalties being applied, or the loan becoming repayable immediately. This means that the fund may need to refinance on less favourable terms or sell assets. Termination of critical financing could also mean the scheme is no longer viable.” The Fund’s Response and Practical Application of the Disclosure Principle.The Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Portfolio diversification | This information addresses the Fund’s investment practices and direct property investment portfolio risk
ASIC’s description of this key risk states that “generally, the more diversified a portfolio is, the lower the risk that an adverse event affecting one property or one lease will put the overall portfolio at risk.” The Fund’s Response and Practical Application of the Disclosure PrinciplesThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Valuation of real property | This relates to the responsible entity’s approach to valuing real property.
ASIC’s description of this key risk states that “Investors should be able to understand and compare how responsible entities value their … real property assets ..(to) assess the reliability of the valuations”. The Fund’s Response and Practical Application of the Disclosure benchmarkThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Related party transactions | This relates to the responsible entity’s approach to related party transactions
ASIC’s description of this key risk states that “a conflict of interest may arise when property schemes invest in, make loans or provide guarantees to related parties.” The Fund’s Response and Practical Application of the Disclosure Principle and benchmarkThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Distributions | This relates to information on the Fund’s distribution practices.
ASIC’s description of this key risk states that “some property schemes make distributions partly or wholly from unrealised revaluation gains and/or capital rather than solely from realised income. This may not be commercially sustainable over the longer term, particularly where property values are not increasing.” The Fund’s Response and Practical Application of the Disclosure Principle and benchmarkThe Fund paid a return of capital of 0.8233 cents per unit on 5 March 2020. The Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Withdrawal rights | This relates to investors’ withdrawal rights from the Fund
ASIC’s description of this key risk states that “unlisted property schemes often have limited or no withdrawal rights. This means they are usually difficult to exit.” The Fund’s Response and Practical Application of the Disclosure PrincipleThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
| Net tangible assets | The NAV calculation helps investors understand the value of the assets upon which the value of their unit is determined”.
ASIC’s description of this key risk states that “Open-end schemes regularly disclose the NTA for the scheme or a similar measure such as net asset backing or net asset value to support the pricing of units in the scheme. These measures are not generally disclosed for closed-end schemes”. The Fund’s Response and Practical Application of the Disclosure PrinciplesThe Fund was terminated on 6 March 2020 and all units that were on issue have been cancelled. |
Interests in Multiplex Development and Opportunity Fund ARSN 100563488 (Fund) are issued by Brookfield Capital Management Limited ACN 094 936 866 (AFSL 223 809), the responsible entity of the Fund. A Product Disclosure Statement (PDS) for the Fund dated 14 September 2005, as supplemented on 28 July 2006 and 30 July 2008 is available which details the terms of the offer as well as the various assumptions on which forecast financial information is based. Investors who wish to acquire (or continue to hold) an interest in the Fund should first read and consider the PDS and seek their own advice before making any decision about whether to invest. The PDS may be viewed online at www.au.brookfield.com. A paper copy of the PDS is available free of charge to any person in Australia by telephoning 1800 570 000. Applications must be made by completing the application form in or accompanying the PDS. This notice is not intended as personal advice and has been prepared without taking account of any investor’s investment objectives, financial situation or needs. For that reason, an investor should, before acting on this advice, consider the appropriateness of the advice, having regard to their investment objectives, financial situation and needs. Past performance is no indication of likely future performance. Every effort has been made to ensure the accuracy of the financial information herein but it may be based on unaudited figures. This document contains forward looking statements. You should be aware that such statements are only predictions and are subject to inherent risks and uncertainties. Those risks and uncertainties include factors and risks specific to the property industry as well as matters such as general economic conditions and conditions in financial markets. Actual events or results may differ materially from the events or results expressed or implied in any forward looking statement and such deviations are both normal and to be expected. The responsible entity does not make any representation or warranty (either express or implied) as to the accuracy or likelihood of fulfilment of any forward looking statement, or any events or results expressed or implied in any forward looking statement. You are cautioned not to place undue reliance on these statements. The forward looking statements in this document reflects the views held only as at the date of this document.
