R A PURDY & CO. LTD

Registered Valuers and Property Consultants P O Box 87-222, 1C Olive Road Meadowbank, Auckland 5 Penrose, Auckland Central North Shore

(09) 525 3043 (09) 415 8996

Facsimile (09) 571 0735 e.mail: [email protected] West Auckland 0800 478 739

(09) 837 3006 (0800 4 PURDY)

Our ref:

The Directors The xxx P O Box xxxx xxxx City AUCKLAND

2 September 2004

Attention: xxx xxx Dear Sir RE:

VALUATION OF PROPOSED xxx xxxx LIFESTYLE VILLAGE, xxxx ROAD & xxxx STREET, WHANGAREI _____________________________________________________________________ In accordance with your recent instructions, we advise that we inspected the above described property on 1 September 2004 and following the inspection we now present our report, and valuation, below. NATURE OF PROPERTY The subject property comprises a vacant landholding which is comprised in four Certificates of Title, the principal Title containing 10.3795 hectares with three separate access lots of 237 square metres, 236 square metres and 213 square metres from nearby xxx Street. The property has extensive frontage to xxx Road and xxx Street being a quite regular shaped block with open watercourse traversing through part of the northern side of the block. PURPOSE OF VALUATIONS 1.

To establish the current market value of the land in accordance with its existing Residential zoning.

2.

To establish the current market value of the land in accordance with a proposed Resource Consent for retirement village purposes.

____________________________________________________________________________________________________________________________________________________________________

Richard Purdy VPU ANZIV (R.V.Fiji) SNZPI Dana McAuliffe VPU ANZIV SNZPI McLean B. Prop. MNZPI Alice Ng B.Com (VPM) ANZPI

Anthony Long BPA MNZPI Yue Wang B.Prop.

Rene

2

3.

Estimated completed value of proposed xxx development in accordance with plans prepared by xxxx Architecture dated August 2004.

BASIS OF VALUATION The following valuation is based on open market value being the estimated amount for which the property should exchange on the date of valuation between a willing buyer and a willing seller in an "arms length" transaction after proper marketing, wherein the parties each acted knowledgeably, prudently and without compulsion. The value as such excludes any possibility of the property being sold under "forced sale" conditions or under vacant possession. We have prepared this report in compliance with NZIV Code of Ethics and with International Valuation Standards 2003 where applicable. The valuation is made on a GST exclusive basis, if any. While all due care is taken during the course of inspection to note the physical characteristics of the land and buildings, this report does not purport to be in any way a geotechnical or structural survey of the property, and we accept no responsibility in respect of such matters. It is, therefore, assumed that the land provides a stable building platform, all improvements are within the Title boundaries and there is no liability within the terms of the Resource Management Act 1991, Buildings Act 1991 and Building Code. LEGAL DESCRIPTIONS Firstly, an Estate in Fee Simple containing 10.3795 hectares more or less, being Lot 1 on Deposited Plan xxxx. Certificate of Title Volume xxxx Folio xxx. The Title is subject to the following interests: Excepting thereout a one-half share in all mines and minerals in and under the said land excepted by Conveyance xxx; Excepting thereout a one-half share in all mines and metal, coal, lignite, slate, ore and firestone in or under the said land excepted by Conveyance xxx; Subject to a mining easement reserved by Conveyance xxx. Secondly, an Estate in Fee Simple containing 237 square metres more or less, being Lot xxx on Deposited Plan xxx. Certificate of Title Volume xxx Folio xxx.

3

Thirdly, an Estate in Fee Simple containing 236 square metres more or less, being Lot xxx on Deposited Plan xxx. Certificate of Title Volume xxx Folio xxx. Fourthly, an Estate in Fee Simple containing 213 square metres more or less, being Lot xxx on Deposited Plan xxx. Certificate of Title Volume xxx Folio xxx. LOCAL AUTHORITY Whangarei District Council. RESOURCE MANAGEMENT CONSIDERATIONS Under the Proposed District Scheme the land is zoned Living 1 Environment. Permitted Activities in the zone include any activity which is not a commercial or industrial activity involving factory farming, mineral extraction, and/or boarding, panelbeating, metalworking, spray painting, motor vehicle repairs, outdoor storage of motor vehicles, motor vehicle manufacturing or dismantling, fibreglassing or laminating, meat processing and it does not involve food radiation. There is a requirement for a minimum net site area of 500 square metres within the zone for single residential usage. Building height is restricted to eight metres and building coverage is not permitted to exceed 35% of the site area. Building setbacks of 4.5 metres from road boundaries are required, 3.0 metres from other boundaries with one setback only of 1.5 metres. We have sighted the subdivision requirements for the zone and emphasise again that subdivision is a Controlled Activity in the zone with a minimum site area of 500 square metres for allotments connected to a reticulated sewerage system. Each site must be able to contain an area of 100 square metres where a residential unit can be built. We note that an existing Resource Consent is in place for the site to develop the land for retirement village purposes. However, we are also aware that it is proposed to vary this scheme to make better utilisation of a retirement village proposal and we will outline details relating to this later in the report. We particularly note that the existing open watercourse is to be realigned to allow better utilisation of the overall site area for village purposes.

4

SITUATION AND LOCALITY The subject development is located in the north-eastern periphery of the developed residential area of Whangarei City proper. It lies in the suburb of xxxx approximately xxx kilometres north of the Whangarei City Centre. xxx Road is an important secondary road which leads off the northern side of xxx Road, an important arterial road which links the Whangarei City with xxx lying xx kilometres north-east of the property on the Northland coastline. xxx Road also links through to xxx Road in the north which provides direct access to the xxx Township. The subject land block is situated on the north-eastern side of the xxx Road and xxx Street intersection approximately 400 metres north of xxx Road. Local shopping is situated relatively close at hand at the xxx Shopping Centre with the main commercial heart of Whangarei lying 4.5 kilometres to the south. Public transport operates along Xxx Road and a complete range of schools are found very close at hand including the Xxx High School located nearby in Xxx Road. The Whangarei Falls Scenic Reserve lies within one kilometre of the property and the Xxx Sports Park adjoins the rear part of the property. All City infrastructural services are provided to the road frontages to the land block and we understand that these are readily accessible. Development within the immediate locality comprises mainly lower to medium cost single residential properties ranging in value from approximately $140,000 for smaller two-bedroom cottages and units up to $350,000 for larger, superior quality residential property. The area is now almost fully developed with only limited landholdings having similar zoning to the subject block available for purchase. Nearby recent subdivisions of residential lots indicate average lot values in the immediate area of Xxx Road of between $55,000 and $80,000 for sites ranging in size from approximately 550 square metres to 850 square metres. Good demand currently exists for sites available for new development. SITE DESCRIPTION The main block comprising 10.3795 hectares is a quite regular shaped block of land which has extensive frontage to Xxx Road of approximately xxx metres interrupted by one small separate Title (not forming part of this landholding) located near the front north-western corner boundary. The property also has considerable frontage to Xxx Street initially for a distance of approximately 70.46 metres at which point a further residential lot (not forming part of this assessment) interrupts the boundary. Approximately 50% only of the Xxx Street frontage boundary has been formed with the balance identified as a “paper road.”

5

In general terms, the land has an easy fall from the intersection of Xxx Road and Xxx Street towards the north, also falling from Xxx Road proper to the open watercourse which is located approximately two-thirds in from the Xxx Street boundary. After approximately 80 metres the land rises easily toward the more central part of the block falling again from this point toward the extreme rear. The block has a predominant south to north crossfall from the Xxx Street frontage and “paper road” frontage to the open watercourse area. The northern side of the property rises again from the watercourse to the boundary. The rear part of the site approximating 1.6 hectares is relatively lowlying and we understand it is susceptible to flooding in extreme weather conditions. This area of site is restricted in terms of development prospects. The property is currently being farmed and is in pasture. It is subdivided into several smaller paddocks with post and wire mesh fencing to side and internal paddock boundaries. The property enjoys an open urban/rural outlook towards the north-west and north-east over existing residential subdivisions located nearby and toward the rural zoned land located to the opposite side of the xxx Stream. An adjacent property has been developed for horse trekking and provides pleasant rural aspect from much of the site. The Xxx Sports Park is located adjacent to the southern boundary of the property, this area being provided with substantial playing field areas with pleasant park-like landscaping surrounds. Two smaller access strips are provided from the xxx Street frontage with a third access strip provided from xxx Place. These all link with the northern boundary to the main block providing access to the easily sloping land to the northern side of the open watercourse. We understand that the land is not serviced, however, all City infrastructural servicing is available to the street frontages adjacent. RATING VALUATION (as at 1st September 2003) Main Block: Value of Improvements

$ 10,000

Land Value

$365,000

Capital Value

$375,000

___________

========

6

Lot xxx - xxx Place Ingress: Value of Improvements

Nil

Land Value

$

1,000

Capital Value

$

1,000

___________

========

Lot xxx – xxx Street: Value of Improvements

Nil

Land Value

$

1,000

Capital Value

$

1,000

___________

========

Lot xxx – xxx Street: Value of Improvements

Nil

Land Value

$

1,000

Capital Value

$

1,000

___________

========

GENERAL DESCRIPTION OF RETIREMENT VILLAGE PROPOSALS We have been provided with copies of schematic plans prepared by xxx Architecture dated August 2004. These plans indicate a proposal to establish a comprehensive Retirement Village to contain the following: •

10 three-bedroom villas with garage (149 sqm each);

•

21 two-bedroom villas with detached or garage nearby (88 sqm each);

•

111 two-bedroom villas with garage (114 sqm each);

•

Three blocks of apartments containing 10 two-bedroom apartments of 88 sqm each with 14 sqm decks and 46 one-bedroom apartments of 61 sqm each containing decks of 9 sqm each; Further proposals are to include a comprehensive retirement village centre which is to contain a two-level development including indoor heated swimming pool and changing facilities, craft centre and storage rooms to a lower level opening onto a bowling green with the main level to provide for entry canopy, administration office, village lounge, dining and kitchen amenities and a village theatre.

7 A later stage proposal is to include a hospital and rest home development including 36 rest home beds and 10 hospital beds. Rear land comprising 1.6 hectares is currently set aside for further proposals subject to Council approval. This land is low lying and susceptible to flooding and may require special provisions to develop further. The scheme plans indicate a superior quality village development built of permanent materials including clay brick claddings, limited areas of plaster cladding, powder-coated alloy joinery and concrete tile roof. We understand that the site will be provided with secure, quality 1.8 metre high boundary fencing to allow not only for security but also privacy conditions. Lockable gates will be provided to the principal entry to the village after hours. An extensive roading network is planned to service proposed units and apartment blocks while open car parking spaces are provided at various points on site to allow for casual visitor parking. The plans provided are consistent with other recent developments known to the writer and the proposal indicates a quality development which should meet ready favour in the market place. We note that a Resource Consent is held for the site to develop a retirement village but on a significantly different basis to that described earlier. The valuations provided later in this report have been established utilising the revised scheme subject to Consent in terms of the valuation provided for the land on a fully consented Resource basis. In this regard we have been furnished also with a copy of the comprehensive land use consent application which we understand has been lodged with the Whangarei District Council. The revised application notes that a consent was first granted in December 2002 to allow the establishment of a retirement village comprising 142 residential units, 36 apartments, a community building, manager’s residence, caretaker’s cottage, a workshop, three amenity buildings and a private hospital. A subsequent variation application was lodged to allow the site to accommodate an extra four residential units, 14 additional apartments and a second community building. This application apparently was granted in December 2002.

8

Current consent exists for the following: • • • • • • • •

146 residential units 50 apartments 46-bed hospital 2 community buildings manager’s residence caretaker’s cottage workshop 3 amenity buildings

The recent application currently before Council has been varied to meet forecast demand for the development of the site. The revised format indicates a total of 142 villas proposed and 56 apartments. It also allows for the community buildings, bowling green and a 46-bed hospital/rest home. The overall design and layout has been significantly altered although the total licence number has hardly changed. The design has been orientated to allow maximum sun to most villas and apartments in a significantly enhanced design. The apartment designs have been varied to only rise to two storeys instead of the former three storeys, this providing for a less imposing building format. We are advised that the proposal includes the main community lodge building to be developed as soon as practicable but no later than a stage when the first 50 villas are constructed. The scheme requires the open watercourse on site to be relocated closer to the northern side boundary of the property to allow access only from Xxx Street through a single entry point. The three access ways fronting Xxx Street and Xxx Place are understood to be surplus to requirements. Access is also available from Xxx Road toward the rear northern side of the main site. A significant change to the proposal from the consented plan allows for access from Xxx Street with no access proposed from Xxx Road apart from access to the rest home and hospital at a later stage. The revised proposal will also provide for the open watercourse, once relocated, to be provided with attractive landscaping and pathways and the northern boundary to be provided with screen planting to eliminate the overlooking of the residential properties with frontage to Xxx Street and Xxx Place. Having regard to the revised proposal it is my opinion that the recent scheme plan and current application proposal significantly enhances the benefits provided by the site and most certainly enhances potential values of the licences to occupy proposed.

9

COMPETITION Competition within the Whangarei City precinct is restricted to only one other significant retirement village. This is located nearby at the Whangarei Falls within one kilometre of the subject site. The Whangarei Falls Lifestyle Village - Eighty five completed villas/apartments to date ranging from smaller single bedroom developments to substantial three-bedroom homes. The current range in values in this village lies between approximately $180,000 for the smaller villas up to $340,000 for the larger three-bedroom villas. The first of a number of apartment blocks is currently under construction and we understand that the initial block of approximately 12 apartments has been virtually pre-sold. We are informed that a waiting list for villas has been established for the Whangarei Falls Village. Other developments include the Kamo Home and Village Charitable Trust property at Kamo, this property providing principally for rest home and dementia care and containing only 22 independent units. The Northland District Masonic Village is located in central Whangarei while Selwyn Park Village operated by the Selwyn Foundation is located in the southern suburb of Maunu near the Public Hospital. This development also provides for mainly rest home and hospital care and contains approximately 12 lower cost retirement units. We are unaware of any other developments either planned or under construction within the general locality with the nearest alternative competition located at Kerikeri in the north or the Hibiscus Coast approximately one hour’s drive to the south. According to the 2001 Census of Population, the Whangarei District had a total population of 68,094 people, of which 9567 people were aged 65+. This represents 14.05% of the total population for the district and this compares with the New Zealand national average of 12.05%. According to recent statistics from the Retirement Villages Association approximately 4% of the population only currently reside in retirement villages, however, this percentage is rising rapidly and has done so for approximately five years now. Statistics also indicate that approximately 5% of the population is anticipated to be housed in this form of facility by 2012 and possibly up to 10% of the population aged 65+ by the year 2025. MARKET LAND SALES EVIDENCE In determining the current market value of the land block as a vacant site, consideration has been given to the current zoning of the property that being Living 1 Environment. Details have been explained earlier in this report in terms of the requirements for subdivision or potential subdivision under the zone.

10

Regard has been taken to recent land sales evidence within the immediate vicinity of the subject and we note in particular that recent land sales in the nearby Xxx Road subdivision for typical sites of 545 square metres to 872 square metres have been selling during 2004 for between $55,000 and $80,000. The sites vary considerably in terms of aspect and contour. Other land sales evidence within the immediate locality is relatively limited, however, more recent sales would suggest values for typical sites ranging from $65,000 to $80,000 in this locality. We have also had regard to land block sales evidence and once again this evidence is relatively limited. Of particular note is a recent sale in nearby Boundary Road, Xxx where a 3.5220 hectare block sold in December 2003 for $170,000. The block adjoins the Whangarei Falls Village and is currently utilised as a large lifestyle site. Potential exists for subdivision of this property into one or perhaps two further blocks. The per hectare rate in respect of this sale represented $48,268. A further sale, now very dated, in xxx Street comprising 16.15 hectares sold in November 1999 for $940,000. This property is located in a slightly elevated position and considered superior to the subject. After allowing for existing improvements on site, a per hectare rate of $48,200 was forthcoming. We are aware of a recent agreement, although not a sale, of a property at the intersection of Xxx Road and xxx Hill Road where a 4.4 hectare block of land was subject to a ground lease renewal. We understand that the value was agxxx at $200,000 for this purpose representing a per hectare rate of $45,455. As mentioned this block lies very close to the subject. Block land sales further afield in Whangarei include a land block at xxx Street, Onerahi where a 2.4913 hectare block sold in October 2003 for $147,500. The property has extensive frontage to xx Street and an adjoining road allowing for ease of subdivision similar to the subject block. Part of the site has steep contour and is not suited for residential development. The sale represents an overall rate of $59,200 per hectare. A further land block at xxx Road, Onerahi comprising 1.0117 hectares sold in late 2003 for $75,000. The block is a low lying block which has been acquired by the Whangarei District Council as part of a local walkway restoration project. This sale indicates a rate per hectare equivalent to $74,132. A land block of 4.1467 hectares in xxx Street, Onerahi sold in October 2002 for $145,000. The property has similar zoning to the subject, however, the block is predominantly low lying with cover comprising a variety of rough vegetation, gorse and noxious weeds. This sale analyses to $34,968 per hectare.

11

Although the land block sales evidence is relatively limited, it indicates a quite consistent pattern of average per hectare rates. After considering all the foregoing, we advise that we have established the value of the land as a block on a per hectare basis as follows: 10.4481 hectares @ $55,000/hectare allowing for extensive road frontage

$574,646

say: FIVE HUNDRED AND SEVENTY FIVE THOUSAND DOLLARS ($575,000). Alternatively, we have valued the block adopting a hypothetical subdivision approach in accordance with current zoning requirements. Firstly, we have determined the usable land area of the site after deducting an area of 1.6 hectares representing the rear land which is subject to flood plain restrictions. This reduces the gross land area to 8.3481 hectares after allowing for an area (approximate) of 5000 square metres for the physical area of the watercourse. From this point we have allowed a usable land area equivalent to 80% of the above reducing the land area which would be suitable for residential development to approximately 6.6700 hectares. Bearing in mind the irregular pattern of the watercourse as it traverses the site, we have allowed an average lot size of 750 square metres to compensate for this impediment. This produces a potential of 88 single residential sites by way of hypothetical subdivision. In line with market sales evidence we have adopted an average lot value for the sites of $70,000. Our hypothetical subdivision valuation follows: Gross realisation 88 residential sites @ $70,000 average per site Less allowance for GST Less allowance for selling expenses including agency and legal expenses Less allowance for profit and risk of subdivision and development Outlay

$6,160,000 $ 685,000

_____________

$5,475,000 $ 456,000

_____________

$5,019,000 $1,158,000

_____________

$3,861,000

Less allowance for development costs - these include holding costs established on the basis of a 6-month development programme and selling period of 2.5 years

$ 281,000

Reserve contribution based on 6% of newly created lots less one lot

$ 325,000

12 Advertising expenses estimated

$

80,000

Rates during development period (estimated)

$

20,000

Surveying expenses based on $500/lot

$

44,000

Engineering and earthwork expenses – average $3000 per lot

$ 264,000

Servicing of sites including electrical reticulation, water reticulation, stormwater, telephone, gas, sewage services (allow $23,000 per lot)

$2,024,000

Roading and accessways

$

Allowance for professional fees (est.)

$ 100,000

Allowance for contingencies (est.)

$ 100,000

Total Development Cost

60,000

$3,298,000

This indicates a cost per lot for development expenses of $37,477. Net Block Value $ 563,000 Less allowance for legal expenses of purchase $ 23,000 _____________

Net Block Value

$ 540,000

To this we have added a nominal value for the rear land of 1.6 hectares taken at one-third rate of the established value for the main block established above. Take 1.6 hectares @ $20,000/hectare

say

Total Value of Block in accordance with existing Living 1 Environment zone without regard to Resource Consent for retirement village purposes (excl. GST)

$

30,000

_____________

$ 570,000 ========

Having regard to the two outlined approaches, we advise that we assess the present value of the land based on its existing zoning without regard to the Resource Consent at FIVE HUNDRED AND SEVENTY THOUSAND DOLLARS ($570,000).

13

VALUATION BASED ON RESOURCE CONSENT APPROVAL BEING GIVEN TO PROPOSED SCHEME AS OUTLINED PREVIOUSLY This valuation has been established after having regard to a residual assessment in terms of the landholding after considering estimated selling values of the licences to occupy once created. We have also had regard to sales evidence relating to sites acquired for other retirement villages, these all located within the Auckland area. xxx Way, xxx Land area Sale price Sale date

9.180 hectares $8,000,000 March 2002 however negotiations 2 years prior

The sale represents a square metre rate of $87.14 per square metre or $871,000 per hectare. The site is currently occupied by “xxx xxx”. The site has been sold to a retirement village operator. The site is a filled quarry with approximately two-thirds being mixed fill and one-third original contour. We understand the site has some flooding and gas emission problems. The site has good access to both xxx Way and xxx Street. xx xxx xxx Drive: Land area Sale price Sale date

2.5596 hectares $4,675,000 September 2002

The sale represents a rate of $182 per square metre or $1,826,000 per hectares. The site is currently in the process of being developed with a comprehensive retirement village known as xx xxx. The development will comprise 203 retirement apartments. The sale price reflects a per unit value of $23,000 on an undeveloped basis. xxx xxx Road: Land area Sale price Sale date

8.4601 hectares $12,000,000 April 2002

The sale price represents a square metre rate of $141 of a rate of $1,418,000 per hectare. The land currently has a rural zoning, however, is on the fringe of the developing area and may be subject to future development.

14

xx xx Drive: Land area Sale price

2.1812 hectares $3,800,000

The property has been developed with an apartment style retirement village providing 297 Licenses to Occupy. The development is known at xxx xx and the sale price reflects a rate of $12,795 per apartment or $174 per square metre. xxx xxx, Avondale: Land area Sale price

1.08 hectares $1,687,000

The property has been developed with twenty eight villas and twenty eight serviced apartments, known as xxx xxx Village. The sale price represents an overall rate of $30,000 for each villa and apartment and square metre rate of $156 per square metre. This evidence is provided as a guide only as we are unaware of any directly comparable land sales which could be utilised in the Whangarei or Northland areas. Utilising a land residual technique we have determined sale values as follows for the various types of licence to occupy to be created: Average Value 3 bedroom villas

$286,000

2 bedroom villas with semi-detached or garages nearby

$220,000

2 bedroom villas with attached garage

$250,000

2 bedroom apartments

$215,000

Single bedroom apartments

$185,000

From this point we have deducted for anticipated costs of the development in terms of the building and fit-out establishing estimated completed values for the land as if it were fully serviced and ready for the licence to occupy to be created. A further allowance has been made by way of deduction for the fact that the land is not serviced and ready for development.

15 We have established average values for the land in its undeveloped state for the various types of accommodation as follows: 3 bedroom villas Average undeveloped land value $17,000 x 10 villas 2 bedroom villas with semidetached or nearby garage Average undeveloped land value $13,250 x 21 villas, say

$ 170,000

$ 278,000

2 bedroom villa with garage attached Average undeveloped land value $15,000 x 111 villas

$ 1,665,000

2 bedroom apartments Average undeveloped land value $11,750 x 10 villas

$ 117,000

1 bedroom apartments Average undeveloped land value $10,250 x 46 villas, say

$ 470,000

Additional Value for rest home and hospital development (undeveloped value) $ 160,000 _____________

Current Market Value of Land in accordance with Resource Consent for proposed Retirement Village subject to full consent approvals being given in accordance with scheme plans provided $2,860,000 ======== ESTIMATED COMPLETED VALUE OF TOTAL VILLAGE DEVELOPMENT PROPOSAL For the purposes of establishing the estimated completed value of the proposal, consideration has been given to other competing facilities in the xxx area to determine anticipated market values of the proposed licences to occupy. In particular we have had regard to prices being achieved for similar licences to occupy in the xx xxx Village, these currently ranging from approximately $175,000 for smaller apartment-style villas up to $330,000 for the larger three-bedroom villas. It is our opinion that this village provides a reliable guide as to anticipated sale values of the licences once created. It is physically located very close to the subject and in our view offers a slightly lower standard than that envisaged in the subject development. There are no other known developments in the Whangarei area which would be able to be utilised to provide a reliable guide as to licence to occupy potential. We are also aware that at the xxx xxx Village being developed in xxx, approximately one hour’s drive north of the subject, two-bedroom units are fetching between $245,000 and $325,000 while the single bedroom villas have achieved $225,000 to $235,000 during early 2004. In our view this village in xxx is considered slightly superior in terms of location to that of the subject.

16 We have had regard also to sales of licences to occupy in villages further afield such as on Auckland’s North Shore and the Hibiscus Coast areas, and generally speaking, sale levels established for most villages in that region are slightly higher than that anticipated in the subject development. This has resulted from higher demand generally in those areas and strong competition. After considering all relevant market evidence in terms of licence to occupy sales for competing villages, we have determined individual values for the proposed licences to occupy in the subject. Three-bedroom Villas: We have established anticipated sale values for the licences to occupy for the proposed threebedroom villas ranging between $275,000 and $300,000. The gross sale value potential represents $2,860,000 for these villas. Similarly, we have established values for the proposed two-bedroom villas with separate garaging or nearby garaging in a range between $215,000 and $230,000. It is proposed to develop 21 of this type of villa and the gross potential sale value of licences to occupy would represent $4,635,000. Two-bedroom Villas with Garage: 111 proposed villas of this style. Depending on the position on site we have established a range in values for these villas of between $240,000 and $265,000 with one villa valued at $275,000 representing a standalone development. The collective sale value potentially of the licences to occupy represents $27,835,000. In terms of the two-bedroom apartments we have established an average value for these of $215,000 each and a value of $185,000 each potentially for the one-bedroom apartments proposed.

17

In summary we have established the estimated completed value for the entire development as follows: Three-bedroom villas (10)

$ 2,860,000

Two-bedroom villas with detached garages (21)

$ 4,635,000

Two-bedroom villas with garage (111)

$27,835,000

Two-bedroom apartments (10)

$ 2,150,000

One-bedroom apartments (46)

$ 8,510,000

Gross Estimated Completed Value of Proposed Village Licences to Occupy

_______________

$45,990,000 =========

In addition to this value we have also included a value for the proposed hospital and rest home land comprising 36 rest home beds and 10 hospital beds. This land has an additional value as established earlier in this report of $160,000. We have also allowed an additional value for the rear 1.6 hectare block of land subject to flood plain restrictions. This value was established earlier in the report at $50,000. The total estimated completed value of the development including all licences to occupy developments and land associated for the proposed hospital and rest home represents FORTY SIX MILLION TWO HUNDRED THOUSAND DOLLARS ($46,200,000). The above assessment represents the anticipated total sale value of the licences to occupy before any deduction for selling, agency or holding expenses. We have made no additional assessment for the value of the Lodge building which is to be constructed or any of the other amenities indicated. The value of these facilities is shared between the potential licence to occupy residents and the potential values to be achieved in the sale of a licences to occupy incorporates a share of the cost/value of such facilities. MORTGAGE RECOMMENDATIONS 1.

Mortgage Recommendation based on Existing Value of Land in accordance with Residential zoning without regard to Resource Consent for Village purposes It is hereby certified that this property has been valued impartially of the owner and accordingly we recommend a maximum advance by way of mortgage up to TWO HUNDRED AND EIGHTY FIVE THOUSAND DOLLARS ($285,000) this representing 50% of the assessed value of the vacant land.

18

2.

Mortgage Recommendation based on Block Land Value but Incorporating Full Resource Consent for the Proposed Retirement Village In Accordance with the Scheme Plans prepared by XxxParrot Architecture It is hereby certified that this property has been valued impartially of the owner and accordingly we recommend a maximum advance by way of mortgage up to ONE MILLION FOUR HUNDRED AND THIRTY THOUSAND DOLLARS ($1,430,000) this representing 50% of the assessed value subject to full Resource Consent approvals from the Whangarei District Council. We would further recommend that any security funding in terms of the village development be based on a stage development approach to be agxxx between the Funders and the Applicants. The valuations and mortgage recommendations are also made subject to the following: We have not been provided with a Land Information Memorandum for the subject property, and it is recommended that such a search be carried out prior to any dealings with the property. All sales evidence contained in this report has been carefully obtained. However, as individual Titles and Lease documents have not always been sighted, and the comparable premises not physically measured, the complete accuracy of the evidence cannot be fully guaranteed. Notwithstanding this, the information is believed to be reliable, but no responsibility is accepted if this should prove not to be the case. The valuation on the basis of full Resource Consent being obtained is made subject to schematic plans prepared by xxx xxx Architecture being fully approved by the Whangarei District Council in all respects. The valuation is also made subject to appropriate approvals being obtained to realign the watercourse which runs through the site and subject to all densities anticipated in the overall scheme development. The valuation based on the Resource Consent approval represents the highest and best use for the land. The estimated completed valuation has been prepared for the specific purpose of providing advice on the ultimate realisation of the individual villas and apartments resulting from the development. The assessment should not, therefore, be utilised for any other purpose. This statement forms an integral part of our report because in the event of the sale of the overall block as a single entity, the achievable price may be significantly less than the sum of the individual parts. This report is relevant as at the date of preparation and to circumstances prevailing at that time. However, within a changing economic environment, returns on investment and values can be susceptible to variation - sometimes over a relatively short time scale. We, therefore, strongly recommend that before any action is taken involving acquisition, disposal, borrowing, restructuring or any other transaction that you consult us.

19 We advise further that the valuation has been prepared by a Registered Valuer who has had significant experience in the valuation of retirement villages, hospitals and rest homes. The valuer is also knowledgeable of other developments within the Whangarei and Northland location. STATEMENT OF GENERAL VALUATION POLICY We advise that this report has been prepared independently of the owner or applicant. The report is restricted to the sole use of the addressee and/or client and we will accept no responsibility or liability to any third party. Neither the whole nor any part of any valuation report, or any reference to the same may be included in any published document, circular or statement without our written approval as to the form and context in which it may appear. We thank you for the instruction. Yours faithfully R A PURDY & CO. LIMITED

RICHARD A PURDY Registered Valuer - ANZIV, SNZPI

RAP/MN

TITLES would normally follow with plan layout etcetera.