It has been the Fadl Group’s long-term vision to establish a World Best Practice ‘Concrete Building Elements and Building Systems’ in Australia. To achieve the objective The Fadl Group over the last four years undertook extensive international technology research and collaboration with experts to acquire the knowledge and contacts to establish the leading edge facility.

It will produce the full range of building and construction industry products and materials. Modeling shows that the combination World Best Practice technologies and methodologies will reduce costs, cut timelines, introduce new efficiencies into the building and construction industries and provide improved climatic durability in terms of cyclone proofing, cooling and heating. The highest level of energy efficiency and sustainability will be achieved.

The Fadl Group has a strong leadership and proven management team committed to delivering the vision.

“COMPLETE SOLUTION”

The Fadl Group met with Queensland’s Coordinator General Mr Ken Smith to update the Queensland Government on progress with Plan Approval by the Gold Coast City Council of the proposed Concrete Building Elements and Building Systems facility at Yatala and to discuss its capability to supply additional public and private housing/unit stock to meet the increasing demand for affordable dwellings in Queensland’s fast-growing south-east corner.

In Mr Smith’s words the proposed Yatala facility offered a “cost effective” and “complete solution” providing innovative building systems and sustainable and innovative precast products for the building and construction industries.

POINT OF DIFFERENCE

Mr Smith noted that the proposed Yatala facility’s automation, leading edge technologies, innovative building processes and management practices set it apart from existing Australian precast factories.

The proposed Yatala facility’s operations will be globally competitive and equal to the best in the world. It has the potential to deliver a complete package - for example a dwelling, - from manufacture and delivery of a highly durable and quality innovative product complete with inserts (windows and surface finishes) in a minimum time of 2-3 weeks at less than 75% of price per square metre than conventional methods.

The proposed Yatala facility through leading-edge technical and sustainable innovations and superior output capability addresses current problems associated with the supplies of affordable housing for both the private and public sectors and cost effective innovative precast products for the heavy building and construction industries. Automation of the concrete elements and building systems will provide high productivity and substantially minimise construction costs; material cost; product waste and inefficiencies.

Consumer risk has the potential to be reduced by the delivery of a complete package not subjected to the delays and systems of conventional building methodologies and technologies.

BACKGROUND ON FADL GROUP

The Fadl Group have been developers since 1988, moving to Queensland in 2002. A current project is the development and construction of a 353 apartment block “H2o Southport” at Marine Parade, Southport.

In depth research into building innovations and methodologies has been undertaken for several years involving extensive worldwide travel to 8 countries and viewing over 30 pre-cast factories.

The Fadl Group are in the implementation phase of establishing an approximately $200 million World Best Practice ‘Concrete Building Elements and Building Systems’ on 8.4 hectares land at the Yatala Enterprise Area. It aims to provide holistic Facility to Site building service.

MANUFACTURING FACILITY - CONCRETE BUILDING ELEMENTS AND BUILDING SYSTEMS

The first factory will be established at Burnside Rd, Yatala. Research showed that the site was logistically suitable to service the Tweed to Caboolture through to the Western corridor including Ipswich. The adjacent rail and road networks enable the products required to build a complete house to be containerized for transport to other areas.

The factory will be over 30,000m² undercover on 8.4hectares of land.

Total output per shift will produce equivalent of 21 houses. Automation, leading edge technological equipment and efficient processes will produce a throughput of 5,616 m² of paneling, roofing etc and 1,800 m² of hollowcore/columns or beams per shift.

PRODUCTS

Products from the Concrete Building Elements and Building Systems include:

o Concrete Elements – manufactured from predetermined specifications and formula with wide variety of applications in all areas of construction including residential housing (low, medium and high rise), commercial and industrial applications;

o Hollowcore - 10 x 150m hollowcore lines, currently no supplier to QLD except Carole Park online as of September, 2006 (already has 6 month waiting list);

o Columns and Beams – using the same beds as the hollow core, columns and beams for use in large scale projects from high rise to bridges and tunnels;

o uPVC double glazed windows – 400 windows will be produced per shift, 160 of which will go straight into wall panels, the remainder to be sold directly to the commercial market;

o Innovative Sheet Linning – Applied like Gypsum plasterboard which provides an insulation rating of greater than 5 star (R 6.5). Also to be sold to the commercial market directly;

o Twinson (uPVC/Wood Combination) – Has a 25 years guarantee and is produced in many profiles and colours. To be sold directly to the commercial market with plans for plans to manufacture outdoor furniture;

o Modular Kitchens, Tiles, Sanitary-ware and Appliances – Fadl have researched various partners/suppliers to provide modular kitchens and tiles; and

o Pre Manufactured Bathrooms (2009) – Complete bathroom sections to be made in factory and delivered to site. Versace was built this way in the 90’s and it has become increasingly used throughout Europe.

USE OF PRODUCTS

Products from the Concrete Building Elements and Building Systems will be used in:

o residential housing; walls, roofing, flooring, fences and architectural finishes;

o buildings of all types; low, medium and high rise residential, commercial and industrial; and

o major works; all major and public works requiring concrete elements.

COST IMPACT OF CONCRETE BUILDING ELEMENTS AND BUILDING SYSTEMS

The Fadl philosophy encompasses development of systems that reduces inefficiency and waste in the building and construction industry; contributes to more affordable housing without sacrificing quality and which may be applied towards humanitarian needs.

• For example: Financial analysis shows that building inputs for similar stand alone housing can be reduced significantly. Savings of up to 60% savings can be achieved for comparable residential low rise buildings. A complete high quality masonry building with up to 3m ceiling height, double glazed uPVC windows, heat pump for hot water, granite benches and high level of finishes throughout can be erected in under 4 weeks from under $1,000 per square metre, compared to $2,500 and $4,000 per square metre for a similar product and taking up to 5 times as long to complete using conventional building methods. This high quality product is produced at under brick veneer pricing.

• The concrete building element system by virtue of it’s simplicity and prefabrication lends itself to the full gambit of housing, including the development of low-cost housing, entry level housing, remote area housing and through the range to include top end applications.

MARKET

The total value of the aggregated market (supply & install) in Australia is approximately $16 billion for residential and non-residential building. A 5% penetration of the aggregated market would yield $800 million in annual sales over the next 7 years (Fadl Business Plan 2006:4). This revenue growth will correlate to a forecasted market share for Fadl Manufacturing of 5 percent by 2012.

The Queensland Government’s South East Queensland Regional Plan 2005-2026 shows that an estimated 575,000 new dwellings and 255,000 infill dwellings will be required to accommodate population changes in the region. The Department of Housing Annual Report 2005 shows that there are 36,000 households on the waiting list for public sector dwellings in Queensland.

The principal market for the concrete building Elements potentially is through direct sales to government, large-scale developers and builders demonstrated through Fadl Group’s developments as a marketing tool.

From the outset, Industry commentary has been promising:

· “Completing the winning combination is a realistic expectation of what the Australian residential market wants.” (Greg Killen, Associate OVE ARUP);

· “We believe that the Fadl Group’s proposal, and the potential savings in time and cost which the system is able to deliver, represents one of the most exciting means of addressing the housing market’s current affordability crisis.” (Myles Campbell, Director of Resolution Research); and

· “This is an exciting venture that has the potential to materially affect the way housing is constructed, particularly regarding modular design, timing for the completion, reduction of waste, and the reduction of overall cost.” – (Gregg Purcell, Director of PMM (Pike Merle McNaulty - surveyors and town planners).

The Fadl Group is surprised by the global, national and local interest in the proposed Yatala Concrete Building Elements and Building Systems facility’s operational timeline for first orders.

BENEFITS

The benefits of the products from the Concrete Building Elements and Building Systems include:

o Elements can be manufactured to achieve a range of characteristics, including: fire proof, termite resistant, water resistant, load bearing, thermal barrier, acoustic barrier;

o High cyclone rating as roof ties into piers, can increase the reinforcement for areas that are cyclone prone;

o Reduced building time;

§ Houses - from piers to lock up in 3-4 days work for a standard 200sqm house, then finishing trades and completed in under 4 weeks;

§ High Rise – using precast Elements should achieve a floor from as little as 3-4 days (currently 5-6 is considered good in Australia);

o Creates certainty for building industry;

o Reduce stress on skilled labor shortage;

o High durability, robust and hearty product with a long life cycle; and

o High quality control due to off site controlled environment.

LABOUR

To overcome the skills shortage, the Fadl Group will implement a specially devised onsite training/apprentice multi-skilling scheme in conjunction with nationally and state recognized training providers. The proposed Yatala facility will employ approximately upwards of 350 personnel.

SUPPLIERS

The proposed Yatala facility will incorporate leading edge equipment from substantial multi-national suppliers with proven operational records in the area of;

• Circulating pallet line equipment;
• Window factory complete equipment;
• Steel cutting and welding equipment
• Polyurethane products
• uPVC extruders; and
• Smart wiring electrical products.

Suppliers providing the technology, as part of the commissioning of the equipment, will provide expert training to Fadl employees to ensure a high level of technical competency. All equipment is tried and proven.

AFFORDABILITY

Recent reports show that housing affordability and supply of dwellings for the social and private sector markets are major issues. The Urban Development Institute of Australia (Queensland) in its March 2007 Is “Housing Affordability” just Hype? analysis said: “Affordability of houses: it’s the talk on the street, in the boardrooms and in policy arenas across Queensland. Yet little has been done thus far to address it.”

The Residential Development Council’s February 2007 wide-ranging discussion paper Boulevard of Broken Dreams addresses the “affordability crisis in Australia”. It states:

“Almost every available measure of housing affordability shows a worsening problem in Australia. Typically, Australian families now devote more than 30% of their household income to housing costs - past the point of what has traditionally been called 'affordable'. … . As affordability worsens, the prospects are not healthy for a growing nation which will demand 4.6 million new dwellings between 2001 and 2031. The question of how people will afford to live in these dwellings is one of considerable concern. .’ (Page 1)

Housing Industry Association’s Executive Director of Housing and Economics, Mr Simon Tennent, said, "The case for a rethink on housing affordability and a targeted all-of government approach to address the problem has never been more compelling." (Ibid P.5)

The Gold Coast City Council’s “Housing Needs Assessment for Gold Coast City” shows the extent of the need for social housing in the Gold Coast Region. The total number of people on the wait list at August 2006 in the Gold Coast Local Government Authority (LGA) numbered 4,874. ( P. 86)

Planned social housing construction and acquisition in the Gold Coast LGA for the year 2006-2007 in total is around 41 dwellings to be built or acquired. This represents less than one percent of the additional dwellings required, according to the public housing wait list. (Ibid. P.87) In 2006, the number of people on the Department of Housing’s wait list for the Gold Coast region exceeded the total number of public housing dwellings. (Ibid P. 83)

As the population of Gold Coast City continues to expand up to 2026 and beyond, demand for additional housing will also grow. The Queensland Government’s South East Queensland Regional Plan 2005-2026 states (P.7) that the projected population increase, combined with the continuing trend towards smaller households, will require an estimated 575,000 new dwellings.

By 2026, one-and-two person households are expected to account for around 60 per cent of all households. The changing household structure and resulting reduction in average household size will mean the percentage growth in housing demand will continue to be higher than the population growth. (Ibid)

As stated in the Housing Needs Assessment for Gold Coast City, 2007 (p.102)

“How to meet ongoing demand for housing while also addressing housing need presents a challenge for policy makers, planners and housing providers.”

A Solution… FADL affordable housing models

One means of addressing housing need is by providing a more diverse range of dwelling types, thereby increasing the range of options available to consumers. (Ibid.P.102)

FADL, due to manufacturing innovations will have the capability to offer a diverse range of affordable dwelling types supported by unique affordable funding models for the social and private housing markets with the potential to make a difference to the affordable housing crisis.

To achieve these outcomes FADL seeks Government assistance in the provision of the usual incentives offered and the fast tracking of approval processes. The models are:

Rental Assistance

Currently the Government provides funds to investors to build low rental accommodation for a variety of needy groups. In an attempt to satisfy the shortage of housing, developers are being approached to offer dwellings for this purpose. The developer fully funds and retains the property for 10 years and offers it to the department at 70% of market rental for a period of 10 years. In return the developer will receive various incentives including increased density, various monetary benefits via tax deductions and GST exemption.

FADL proposal

Based on these principles, FADL offers to build unlimited numbers of dwellings. FADL has the capability to offer these models as it will be the Developer, Project Manager, Builder, and Manufacturer. FADL will offer the Department of Housing an arrangement to build an unlimited number of dwellings retained for a period up to 30 years and will expand this model to include an option to give the tenant an option to purchase at any time during this period.

Family Assistance

There are a large number of individuals who have previously owned their own home but through unfortunate happenings have been forced to sell and to rent. They have an income but are unable to raise sufficient funds for a deposit to purchase a home.

FADL proposal

FADL will offer those who qualify in this category, a home or unit to suit their needs. Competitive bank finance will be arranged at 70% of valuation and FADL will provide the remaining 30% interest free on a second mortgage for the term of the loan being 25 or 30 years. The purchaser would pay the bank finance with principal and interest and the interest free FADL portion will be paid as principal only across the term of the loan. This significantly reduces the payments relative to a full principal and interest loan. In addition, the loan will have a 2 year payment buffer built in whereby the purchaser will not be required to make payments for a cumulative 2 year period where illness or loss of job may occur which will effect the family income.

Youth Start

Youth today are unable to purchase a home because the entry point has become out of reach.

FADL proposal

FADL proposes to provide one and two bedroom medium density dwellings with optional furniture package and small car to youth who qualify. To qualify the youth would need to have been working for 2 years and have a good work reference from their employer. They must not own or be purchasing a dwelling. Competitive bank finance will be arranged at 80% of valuation and the balance of 20% would be funded by FADL. The youth would only be required to pay the bank’s 80% portion with principle and interest. The youth would be expected to retain the property for a period of 7 years. If the property is sold within 7 years then 20% of the market price plus 5% per annum interest on the FADL funded portion will be paid to FADL.

If the youth makes payments on time for 4 years then half of the FADL funded portion (10%) will be forgiven and if the premises is retained for 7 years then the remaining half (10%) will be forgiven. The youth has effectively gained 20% of the original value plus the capital gain over the period. The youth will have gained an excellent financial start in life.

TIMELINE OF EVENTS

The Concrete Building Elements and Building Systems facility at Burnside Rd, Yatala is on track to be fully operational in the 3rd Quarter of 2008.

PLANS FOR THE FUTURE

The Fadl Group’s immediate and future plan involves:

o The completion and operation of the first Concrete Building Elements and Building Systems’ factory at Burnside Rd at Yatala;

o Construction of 22 display homes to be built close to Yatala, 7 to be entry level homes, 7 to be up market canal style homes and 7 to be very futuristic and include features that showcase the capability of the product. The 22^nd house will comprise a 30 seat theatre room which will be used to provide a comprehensive presentation for national and international market.

o The development of H2o @ Southport, with up to 353 residential apartments and including retail and commercial space. This building will be used to showcase our products by comparing savings in labor, time and cost of conventional in-situ construction VS off site in high rise construction.

BEYOND

It is the goal to expand the Concrete Building Elements and Building Systems throughout Australia and overseas. FADL have researched and established a requirement for its construction methodology to be exported to specific countries. Variants of mixtures and applications have been identified to suit differing climates and environmental factors such as cyclone rated dwellings for prone areas and for cold climates that prevent concrete from curing for many months of the year. Off-site manufacture allows for products to be created in a controlled environment.

SUPPORT

The Fadl Group has wide support generally, from the building and construction industry including the Queensland Government and organizations responsibility for affordable housing and skilled labour shortages.