Aspen : Proposed Acquisition of Coorong Quays

Aspen Group - Proposed Acquisition

Marina Hindmarsh Island Fund - Coorong Quays SA

onlyuse ersonal24 February 2022

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	Marina Hindmarsh Island Fund (MHIF)	1
		▪	Aspen Group (Aspen) and Mill Hill Capital (MHC) (owned by John Carter and David Dixon) are proposing a merger of Marina Hindmarsh Island Fund (MHIF or Fund) and Aspen for the
			benefit of both groups of shareholders
only	▪	MHIF was established in 2017 by MHC - management of the Fund was delegated to Aspen in early 2019 when the MHC executives joined Aspen
▪	MHIF is unlisted and has 30 shareholders - sophisticated / wholesale investors
▪	The sole purpose of the Fund was to acquire, operate and develop Coorong Quays, Hindmarsh Island SA (CQ) - essentially a "Buy-Fix-Sell" strategy
▪	CQ has Residential, Retirement and Park components - like Aspen
▪	MHIF acquired CQ through a receivership sale - the property was distressed and had several major legacy issues that have been resolved over the past several years
use	▪	CQ has been stabilised, positioned for growth, and materially de-risked - profits are now derived predominantly from collecting rent and developing residential lots and a retirement land
	lease community
		▪	Consideration and Pricing:
			• 162,442 new APZ securities for each MHIF share (total of 16.2 million new APZ securities - 11.6% of existing APZ securities):
ersonal		- MHIF shareholders can elect to receive up to 20% of their consideration in cash (priced at $1.507 per APZ security)

- Aspen executives David Dixon, John Carter and Patrick Maddern will accept all APZ scrip for their 25% interest in MHIF

• Implied value of Coorong Quays: $25 million (assuming APZ securities valued at NAV of $1.507) - Operating component: 8.5% yield (after allowing for expected average annual SIBC)

- Residential and Land Lease Development components: c.$41k per approved site

• Expected first year total Net Operating Income and Development Profits of $2.4 million, equating to 8.8% ROI (including transaction costs and after adjusting for foregone Project Management Fees that Aspen currently earns from the Fund)

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		Marina Hindmarsh Island Fund (MHIF)	1
			▪	Aspen Group Limited has formed an Independent Board Committee (IBC) comprising Clive Appleton and Guy Farrands to oversee the transaction
only		▪	Transaction is conditional on Aspen securityholder approval, MHIF shareholders accepting the offer and entering into agreements, and other conditions (refer page 14)
	▪	IBC has appointed m3 Property to independently value CQ - this firm recently valued Lewis Fields and Wodonga Gardens for Aspen
	▪	IBC intends to appoint Hall Chadwick as Independent Expert - the Independent Expert's report will be included in an Explanatory Memorandum and Notice of Meeting expected to be
		sent to Aspen securityholders by late March
	▪	APZ securityholder meeting expected late April 2022
	▪	Proposal has been put to MHIF shareholders and a large majority have indicated they are supportive
use
ersonal
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Retirement

Communities

20%

Park

Communities

38%

Portfolio Value by Property Type

Residential

42%

Acquisition Outcomes for Aspen - Calendar 2021 Pro Forma Basis3	2

only				Total Approved
	Total Assets	Dwellings /
	+7% to $384m	Sites1
			+18% to 4,264
use		Portfolio Value by State
		NT
		7%
		NSW
		28%
ersonal
		WA
		33%
VIC
2%	QLD
	8%	SA
		22%

1. Excludes CQ's Residential Encumbrances, CQ's Cabin-Van Park (approved for 200 sites - not yet under development)

Equity +11%	Gearing
reduced from	EPS +9%
NAV Neutral
31.5% to 29.9%

Total Dwellings/Sites - Operating v. Development

Leased Land

Sites1

23%

Leased Dwellings

41%

Land Site

Development

Pipeline2

21%

Dwellings Under Refurbishment	Leased Water Sites
10%	5%

and all storage land sites owned by Aspen and CQ. 2. Excludes CQ's Cabin-Van Park and storage sites. 3. Assumes MHIF shareholders elect all APZ scrip

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Coorong Quays (CQ)

Coorong Quays is a fully approved master planned community with about 3,000 dwellings / sites:

only	▪ Residential, retirement and park accommodation at affordable
prices/rents
▪ Lifestyle location at the mouth of the Murray River adjoining the	Highway 1
	Coorong National Park
	▪ 80 minutes to Adelaide CBD and 50 minutes to Mount Barker	Adelaide Caravan Park
	▪ 1,842 sites developed to date - over 90% are occupied and
	income producing
use	▪ 1,098 sites in development pipeline including:
- 254 residential land sites (versus 130 sold last 12 months)	The Ridge
	- 132 retirement sites under a land lease model (versus 8 sold	Mount Barker
	first 18 months)
	- 200 cabin / caravan sites (not commenced)
	- Additional marina and storage sites	Lewis Fields
ersonal	Major Improvements Since MHIF's Acquisition from Receivership:
▪ New main entrance & road / removal of land bridge to open
	residential canal
	▪ Connecting to mains sewer and removing under-sized
	wastewater treatment plant which has enabled further land
	development, and reduced environmental risks
	▪ Changed from operating to leasing most commercial
	components (tavern, marine services)
	▪	Properties owned by Aspen

Significant refurbishment / redevelopment to improve the community (including creating the CQ Club for all residents)

Approved sites are a combination of actual and estimated capacity and subject to change. Encumbrance fees are payable by the owners of all Residential lots from when they acquire the land.

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Approved Sites - #

Commercial,

13

Marina, 600

Residential

Community,

1,465

Storage, 500

Park Community,
200	Retirement Community, 160

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