Anadara

Transaction Summary

Investment Highlights

Fund Overview

The Tumbulgum Tavern Unit Trust has been established to acquire and operate the freehold and going concern of the Tumbulgum Tavern, along with adjacent properties including the Tweed River Church and a site earmarked for motel development. The Trust will hold up to 49.9% of Tumbulgum Syndicate Pty Ltd, with Epochal Hotels holding the majority interest.

The tavern is a fully equipped and trading hospitality business with a 12am licence, 150-person capacity, gaming entitlements, bistro, bar and outdoor facilities. The Syndicate’s strategy is to deliver a stable income to investors via operating profits (with distributions expected from year two), alongside long-term capital growth from property enhancement and expansion.

The $7 million tavern acquisition forms the foundation of a broader $10.3 million property strategy, incorporating wedding, accommodation, and tourism offerings that aim to position the site as a flagship hospitality and lifestyle destination in the Northern Rivers.

The Fund provides Applicants with the opportunity to invest in a fund that’s sole purpose is to invest in the Tumbulgum Syndicate Pty Ltd, the entity that is acquiring the Investment Properties.

Key benefits include: 

• Experienced Team – The team consists of an experienced pub operator, distiller and fund manager. With their combined experience and expertise
• Pub Ownership - The Fund’s provides a cost effective may of investing in the Australian Pub industry.
• Capital Growth – There may be an opportunity to sell the Investment Property as a going concern for a profit in the future
• Income – The Syndicate intends to distribute up to 80% of the Investment Property’s profits on an annual basis. The Investment Manager will pass these on to Unitholders.
• Unitholder Benefit – Unitholders in the Fund will be entitled to discounts at the Investment Property’s bar, restaurant, and proposed accommodation and function facilities.
  
  ORDINARY UNITS There are ordinary units open to Eligible Investors who subscribe for not less than $50,000.00 in a single investment (or other such amount accepted by the Trustee).
  
  FOUNDER UNITS Founder Units are held by members of the Investment Committee; Founder Units have the power to replace the Trustee. Founder Units are not available to Applicants to subscribe for under the Offer.

Investment Properties

Investment Property 1 - Tumbulgum Tavern - Affording stunning views of Mount Warning and the Tweed River, the Tavern has been a popular destination for locals and tourists alike. The property features an indoor bistro, bar, patio dining, fully equipped commercial kitchen and bar, games room with 10 gaming machines, outdoor children's play area and self-contained staff accommodation. Purchase Price - A$7M 

Investment Property 2 - Tweed River Church - Located adjacent to the Tumbulgum Tavern, the Tumbulgum Church is an ideal venue to host a wedding. With a large, grassed yard with views of the Tweed River and a large 3-bedroom house on the property, Investment Property 2 offers an excellent opportunity to add revenue to the syndicate via functions and weddings. Purchase Price - A$2M

Investment Property 3 - Tumbulgum Motel (proposed) - A large block featuring a 4-bedroom house that would provide egress for the tavern and proposed drive-through bottle shop. The investment manager has plans to demolish the house and build an 18 room drive-up motel. For the first 12 months, the Investment Committee intends to lease the house while it focusses on cosmetic improvements to the Tavern. Purchase Price - A$1.3M

Key Information

Investment Syndicate

The Tumbulgum Syndicate Pty Ltd has been formed to acquire the Investment Propertes and manage the opera-ons of the Pub. Operations of the going concern will be managed by Epochal Hotels Pty Ltd.

 
The Syndicate intends to finance the acquisiton of the Investment Properties using capital deposited by its Shareholders and an interest only investment loan with a target LVR of 60% from a Tier One Australian lender. The Syndicate will appoint an Investment Committee, which will include representatives from Anadara and Epochal Hotels.

After 12 months of trading, the Syndicate intends to refinance the Investment Properties to free up the capital required to commence the second round of improvements, which include the second floor of the Pub, which will include the expansion of the large wrap around balcony that faces the Tweed River, and the conversion of the staff accommoda-on into a function area and the church will be u-lised for weddings. Construction of the 20 room drive-up Motel will also commence after 12 months of trading.

Risks of Investing in Managed Investment Schemes

Generally, assets with the potential for the highest long-term returns may also carry the highest level of risk. When investing in a managed investment scheme, it is important to note that the value of assets in the managed investment scheme and the level of returns will vary. No return is guaranteed. Future returns may differ from past returns and Unitholders may lose some or all of their money invested. Additionally, laws (including tax laws) that affect
managed investment schemes may change in the future, which may have an adverse effect on the returns of managed investment schemes. The level of acceptable risk will vary across Unitholders and will depend upon a range of factors such as age, investment timeframe, where other parts of the investor’s wealth is invested and the Unitholder’s level of risk tolerance. Prospective Applicants should carefully consider the risks and uncertainties described in the Investment Memorandum before making an investment in the Fund. This description is not an exhaustive description of all the risks associated with an investment in the Fund and the Fund may be unable to fulfil its payment or other obligations under or in connection with it due to a factor which the Trustee or the Investment Manager did not consider to be a material or significant risk based on information currently available to either of them or which they may not currently be able to anticipate.

 
If any of the risks described below (or an unlisted risk) occurs, the value of the assets in the Fund could decline, and a Unitholder could lose all or part of their investment.

 
Applicants should carefully consider the key risks which are summarised below. Please bear in mind that this is not an exhaustive list of all the risks associated with the Fund.

Syndicate Investment Committee

The Syndicate will appoint an Investment Committee to oversee the operations and upgrade works of the Investment Properties. The Investment Committee also has the power to remove the Trustee. The members of the Investment Committee are: