Outrigger Port Douglas Questions & Answers

Q What is Outrigger Port Douglas Resort?

A The Outrigger Port Douglas Resort will be a four-star strata titled resort hotel comprising 22
apartments and 34 rooms. It is proposed that the resort will be managed by the world
renowned Outrigger Hotels and Resort group.

Q Where is the Resort located?

A The Outrigger Port Douglas Resort will be located on Macrossan Street Port Douglas. The
Resort will also have street frontage on Wharf Street overlooking Dickson Inlet. The
Outrigger Port Douglas Resort will be the only internationally branded hotel or resort on
Macrossan Street.

Q What type of apartments will be included within the development?

A The Resort will feature 12 one bedroom apartments and 10 two bedroom (dual key)
apartments. All apartments are fully self contained with kitchen and laundry facilities.

Q What is a two bedroom (dual key) apartment?

A Dual key apartments have become increasingly popular throughout the world as they offer
a number of accommodation options. A dual key apartment is essentially a two bedroom
apartment, which can also be let as a one bedroom apartment, and as a studio, with both
having their own entry? hence the name dual keys. This provides the opportunity for dual
income.

Q Who is Outrigger Hotels & Resorts?

A Outrigger is a US company based in Hawaii. Outrigger is the largest hotel group in this
internationally acclaimed tourist destination, controlling one third of the total Hawaiian
market. Outrigger Resorts Australia was established in 1998 and now operates a range of
outstanding tourism properties in Australia and the South Pacific including:

• Cairns Resort by Outrigger, Cairns
• Outrigger Sun City Resort, Surfers Paradise
• Outrigger Coolangatta Beach Resort, Coolangatta
• Outrigger Mooloolaba International Beach Resort, Sunshine Coast

Significantly all of their properties are strata titled resorts.

Q What type of architectural design will be featured?

A The Outrigger Port Douglas Resort has been designed to reflect a strong North Queensland
influence. Its traditional colonial style architecture features high pitched roofs, deep shaded
verandahs, ceiling fans and cool breezeways. The predominately white timber exterior of
the resort will stand in contrast with the stained timber plantation shutters and polished
timber floors. The verandah flooring is also in timber. The Resort will provide a strong
'Raffles' feel.

Q Will there be a swimming pool within the Resort?

A Yes. The Resort will feature a tropical swimming lagoon, which will be heated during the
winter months.

Q What type of air conditioning system has been planned for the apartments?

A Each apartment will have its own split system air conditioner, allowing guests to select a
room temperature that meets their individual requirements.

Q What type of finishes will be in each apartment?

A Apartments will be superbly appointed and will feature stone kitchen benches, polished
timber flooring, wide timber verandahs featuring stainless steel ceiling fans, quality kitchen
appliances, dishwasher, spa and intercom system. Bi?fold timber shutters will be a feature
of the apartment furniture inventory, enabling living areas to be extended to include the
verandahs.

Q What are the occupancy levels of the other properties managed by Outrigger Hotels?

A Occupancy figures for the year 2001 until 30th September, as supplied by Outrigger Resorts
and Hotels are as follows:

Q What occupancy figures are Outrigger projecting at the Outrigger Port Douglas Resort?

A Projections presented by Outrigger are as follows:

• Year 1 60%
• Year 2 65%
• Year 3 70%

These projections are provided by Outrigger as a guide only and does not constitute a
representation as to income or actual occupancy.

Q How much do Outrigger charge to manage the apartments?

A Each owner of an apartment within the Resort may enter into a management agreement with Outrigger Hotels. This agreement provides for a split of revenue for each apartment based on a 60:40 ratio with the apartment owner receiving 60% of the revenue and Outrigger receiving 40%. As a guide, this means that if an apartment was let for $150.00 per night, Outrigger would receive $60 of that income with the owner receiving $90.00. Outrigger's fee is inclusive of all management costs, advertising, marketing, check in and check out, linen and cleaning.

Q How much are the apartments?

A The price of the apartments varies depending on size and location within the Resort. As a guide, prices are as follows:

• One Bedroom apartment:from $247.500
• Two Bedroom apartments: from $368.500

These prices are subject to change and are inclusive of GST.

Q How much are furniture packages for apartments?

A Again furniture prices vary depending on apartment type and size, as follows:

• One Bedroom apartment:from $21,555 to 23,777
• Two Bedroom apartments: $26,777

These prices are subject to change and are inclusive of GST.

Q How much are the body corporate levies?

A Again levies for each apartment vary depending on area of apartment and lot entitlements.
The following can be used as a guide:

• One Bedroom Apartment: from $30.40 per week approx.
• Two Bedroom Apartment: $60.80 per week approx.

You should check the levy schedule in the disclosure statement before you sign a contract to make sure you know the estimated levies for the apartment you intend to buy.

Q How will the body corporate function?

A The Outrigger Port Douglas Resort Body Corporate will function in a typical fashion with
every apartment owner being able to attend meetings, use proxies for voting or stand for
election for Body Corporate executive positions.

Q When will the Resort expected to be completed?

A Construction is expected to be completed mid 2002. This timeframe may vary depending
on construction.

Q If 1 was to own an apartment in a property managed by Outrigger, do I receive any
benefits at their other Resorts?

A Absolutely. Each apartment owner who enters into a management agreement with
Outrigger will receive an Outrigger VIP card which will entitle the recipient to substantial
discounts at Outrigger properties throughout the world.

Q Can I use my apartment for personal use if I let through Outrigger?

A Absolutely. You can use your apartment when you want and for as long as you want,
provided you give Outrigger sufficient notice as outlined in the management agreement.

Q How much will it cost me to use my own apartment?

A The only cost you will incur during your stay will be for room cleaning. Naturally any room
costs such as telephone and room service will be charged to yourself.

Q How will the property be maintained?

A Outrigger Hotels & Resorts will be obligated under the Care taking Agreement to maintain
the common property and carry out day to day maintenance.

Q Can I sell my property at anytime?

A Yes, your Outrigger Port Douglas apartment is your own residential property and you have
the right to sell at any time.

Q Can a foreign investor purchase an apartment in the Outrigger Port Douglas Resort?

A Yes. The Australian Federal Government's Federal Investment Review Board (FIRB)
has approved the sale of up to 50 % of the apartments within the Resort to foreign investors.

Q If I purchase an apartment do I receive a car park?

A A basement car park is to be constructed. A car parking space will be designated to each
apartment and this car park will be issued as an exclusive right.

Q What are the builder's structural warranties in relation to the apartments?

A Apartments are covered by standard structural warranties as required by the Queensland
Building Services Authority. These include a warranty of six years and three months for
structural construction and six months for minor defects.

Q Who is the developer of the Resort?

A The Outrigger Port Douglas Resort is being developed by a leading Queensland property
development company Ray Group. Ray Group has been established for over 25 years and
has constructed a number of quality resorts in Queensland including:

• Calypso Plaza Coolangatta
• Outrigger Coolangatta Beach Resort
• Cairns Resort by Outrigger.

Q Are there tax benefits in buying an apartment in Outrigger Port Douglas Resort?

A There may be considerable tax benefits depending on your income and how you finance
your purchase. These benefits may allow you to reduce your personal or company tax burden
legally. Some or all of these benefits may flow to you but if you do not understand them,
we suggest you contact your taxation adviser. As tax law changes from time to time you
should obtain tax advice from your accountant or tax advisor on the potential tax benefits
to you. Some of these potential tax benefits may be as follows:

• Depreciation: Outrigger Port Douglas Resort is a tourism building designed for the short term holiday market. As such, its current rate of depreciation will be 4%. A schedule of tax deductible depreciation may be obtained from Napier & Blakeley, a national expert recognized by the Australian Taxation Office. The furniture, furnishings and fit out may have substantial depreciation. The detailed depreciation information is available from the selling agent.
• Deductible Interest: Depending on how you use your apartment and the loan, the interest you pay on the amount you borrow may be tax deductible.
• Airfares, Accommodation and Meals: In some cases reasonable travelling costs, airfares, meals and accommodation, may be allowable tax deductions to investors for the purpose of inspecting their properties at least once in each financial year. Again we suggest you seek advice from your accountant or taxation consultant.
• PAYE Tax: If you are entitled to tax savings in relation to the apartment, you may be able to use these savings to reduce your PAYE instalments deducted from your salary. This means you may be able to receive your tax savings weekly. Again, your accountant will be able to assist in this regard and should be consulted.

Important Disclaimer:
Whilst we have attempted to ensure that the information provided in this document is
accurate at the time of printing it cannot be guaranteed. You should not rely upon the information in
this document as the basis for making a decision on whether to buy an apartment. You should seek
professional legal and/or tax advice and make further enquiries. No warranty or representation is
made in respect of whether any amount of income or occupancy in the future will be achieved.
Projections of occupancy rates should not be construed as a representation by Outrigger or Ray
Group as to the future performance of the Resort. You should refer to the Corporations Law
Disclosure Statement supplied with the Sales Contracts. The Australian Securities and Investments
Commission recommends you read the Corporations Law Disclosure Statement fully before signing
a Contract to buy an Apartment. It sets out details of how the apartment complex will be managed
and other important information.