Cromwell Property Group · ASX:CMW
Cromwell Property — Investor Presentation (June 2019)
34 slides from Cromwell Property's investor presentation, Jun 26, 2019
Slide 1: Equity Raising for Strategic Growth Opportunities
EQUITY RAISING FOR STRATEGIC GROWTH OPPORTUNITIES 26 June 2019 Cromwell – FY18 Results 1 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES
Slide 2: Important Information & Disclaimer
Important Information & Disclaimer Disclaimer This presentation and its appendices (Presentation) is dated 26 June 20 19 and has been p repare d by Cromwell Property Group, which comprises Cromwell Corporation Limited (ACN 001 056 9 80) an d Cromwell Div ersif ied Property Trust (ARSN 102 982 598) (
Slide 3: Important Information & Disclaimer
Important Information & Disclaimer Future Performance This Presentation contains "f orward-looking" statements. Forward-looking statements can generally be identified by the use of f orward-looking words such as "anticipated", "expected", "projections", ‘guidance’, ‘f orecast", "estimates", "could",
Slide 4: Executive Summary
Executive Summary Cromwell Property Group (Cromwell) is undertaking an underwritten $375 million institutional placement (Placement) at a fixed issue price of $1.15 per new security Equity raising Cromwell will also undertake a non-underwritten security purchase plan (SPP) to eligible securityho
Slide 5: Transaction Rationale
Transaction Rationale Continued execution of ‘Invest to Manage’ strategy #1 Strategic growth opportunities continue to Australian ‘Invest to Manage’ Opportunity1 support Cromwell's 'Invest to Manage' strategy High quality core office investment opportunity of >A$0.5 billion that will seed new and
Slide 6: Cromwell Approach to Capital Deployment and Recycling
Cromwell Approach to Capital Deployment and Recycling Cromwell actively focuses on redeploying & recycling capital across its business to drive long-term, sustainable growth Three Primary Sources of Capital Capital Flow Across Cromwell’s Business #1 New equity from Cromwell securityholders #2 Global
Slide 7: Indirect Property Investment – Invest to Manage Strategy
Indirect Property Investment – Invest to Manage Strategy Cromwell continues to successfully execute on its ‘Invest to Manage’ strategy and will use the Placement proceeds to accelerate this growth The ‘Invest to Manage’ strategy involves growing the funds management platform by warehousing assets
Slide 8: European Funds Management – Strategy on Track
European Funds Management – Strategy on Track Path to Securing European FUM1 €8.0 75% €4.0 €3.9 €4.1 €3.5 €3.7 €3.4 Paryseine, Greater Paris, Lenine, Greater Paris, 46% 48% 50% France France 33% Dec-16 Jun-17 Dec-17 Jun-18 Dec-18 Jun-19 Medium term target European FUM (€bn) % recurring FUM Europea
Slide 9: CEREIT's Track Record Since IPO
CEREIT’s Track Record Since IPO 51% growth in portfolio value since IPO 1Q 2019 DPU +5.2% above IPO projection, due to strong underlying performance and accretive acquisitions 103 97 properties 93 properties Portfolio value at 90 properties properties Portfolio value at €2,042 Portfolio value at Por
Slide 10: Direct Property Investment – Value Enhancement Opportunities
Direct Property Investment – Value Enhancement Opportunities Proceeds from the Placement will provide certainty of funding for value-add development opportunities across Cromwell’s existing direct property portfolio Victoria Avenue, 700 Collins Street, Tuggeranong Office Park, Confidential Projects
Slide 11: Property Portfolio – FY19+ Value Enhancement Options
Property Portfolio – FY19+ Value Enhancement Options Victoria Avenue, Chatswood DA approved in March 2019 to construct a new 4 storey mixed use building – A Grade office with hotel and retail Procurement and delivery options to be considered in either a staged or concurrent manner Estimated de
Slide 12: Property Portfolio – FY19+ Value Enhancement Options
Property Portfolio – FY19+ Value Enhancement Options LDK Healthcare In 2018, Cromwell invested in a 50% ownership interest in LDK Healthcare (LDK) with LDK Managing Director Paul Browne LDK’s first project at Cromwell’s Tuggeranong Office Park is well underway to completion of the >350 apartment
Slide 13: Capital Management – Position Improves Further
Capital Management – Position Improves Further Cromwell has continued to reduce gearing over the last 18 months and will now target a 30 – 40% gearing range 60 Including the impact of the Placement, and prior to Warehousing of reinvestment of proceeds in identified opportunities: 55 assets for CER
Slide 14: Sources and Uses of Funds
Sources and Uses of Funds Proceeds from the Placement will initially be used to Sources of funds A$m repay A$366.3 million of bank debt Cromwell will then use the Placement proceeds, along Placement 375.0 with equity from new capital partners and recycled capital from asset sales, to invest in t
Slide 15: Equity Raising Details
Equity Raising Details Underwritten institutional placement to raise A$375 million, representing 14.6% of existing Cromwell securities on Structure issue Non-underwritten SPP to raise up to A$30 million1 Issue price of $1.15 per security represents a: 7.0% discount to the distribution-adjust
Slide 16: Indicative Timetable
Indicative Timetable Event Date1 Record date for SPP 7:00pm Tuesday, 25 June 2019 Trading halt and announcement of Placement Wednesday, 26 June 2019 Institutional Placement bookbuild Wednesday, 26 June 2019 Trading halt lifted – trading of securities resumes on the ASX Thursday, 27 June 2019 Record
Slide 17: Conclusion
Conclusion Over A$1.0 billion of identified acquisition opportunities1 in Australia and Europe to support Cromwell’s 'Invest to Manage' strategy and grow the funds management platform Certainty of funding for over A$1.0 billion of identified value enhancement opportunities across Cromwell's Australi
Slide 18: Appendix A – Additional Information
APPENDIX A Additional Information
Slide 19: Cromwell Strategy Recap
Cromwell Strategy Recap Cromwell is a real estate investor and manager operating on three continents with a global investor base Securityholders benefit from stable long term cash flows, demonstrated asset enhancement capabilities and transactional profits, and low risk exposure to Asian capital
Slide 20: CEREIT's Enlarged Portfolio Post Recent Acquisitions
CEREIT's Enlarged Portfolio Post Recent Acquisitions Properties 103 Finland Occupancy Rate (by lettable area) 90.8% Properties 11 Lettable Area (sqm) 61,980 Valuation1,2 (€) 2,042 million 113.1 Valuation (€ million) WALE / WALB3 4.8 years / 4.0 years % of Portfolio 5.5% % Freehold4 91.6% Average Rev
Slide 21: Appendix B – Pro Forma Balance Sheet
APPENDIX B Pro Forma Balance Sheet
Slide 22: Pro Forma Balance Sheet
Pro Forma Balance Sheet Actual LDK Joint June 2019 Pro Forma $m DRP Placement 31 Dec 2018 Venture revaluations1 31 Dec 2018 Cash and cash equivalents 172.5 10.9 (56.4) 0.9 366.3 494.2 Investment property 2,520.8 (45.0) 36.3 2,512.1 Equity accounted investments 852.8 852.8 Intangible assets 2.9 2.9 O
Slide 23: Pro Forma Balance Sheet – Basis of Preparation
Pro Forma Balance Sheet Basis of preparation of Pro Forma Balance Sheet The Pro Forma Balance Sheet has been prepared in accordance with Australian Accounting Standards (including Australian Accounting Interpretations) adopted by the Australian Accounting Standards Board (AASB) and the accounting po
Slide 24: Appendix C – Key Risks
CROMWELL PROPERTY GROUP APPENDIX C Key Risks
Slide 25: Key Risks
Key Risks General Risks Regulatory issues and changes in law The financial performance of Cromwell may be materially affected by adverse changes in laws or other government regulation. Changes in government policy (including fiscal, monetary and regulatory policies at Federal, State and Local levels
Slide 26: Key Risks
Key Risks General Risks (cont.) Force maj eure event Force majeure is the term generally used to refer to an event beyond the control of a party claiming that the event has occurred, including "acts of God", fire, flood, earthquakes, war, acts of terrorism and labour strikes. Some force majeure risk
Slide 27: Key Risks
Key Risks Cromw ell/industry specific risks Future acquisitions Cromwell Property Group proposes to acquire further properties or other assets in the future. However, it expects only to do so to the extent that such acquisitions are in accordance with its investment strategy and complement its exist
Slide 28: Key Risks
Key Risks Cromw ell/industry specific risks (cont.) Reliance on AFSL and other licences In order to provide fund management services, certain property related services, and certain other services, Cromwell Property Group is required to hold a number of Australian financial services licences (AFSL) i
Slide 29: Key Risks
Key Risks Cromw ell/industry specific risks (cont.) Funds Management Cromwell and certain of its controlled entities act as investment manager for a number of investment funds that are open to investment from third parties. A large portion of Cromwell’s income is derived from these funds management
Slide 30: Key Risks
Key Risks Cromw ell/industry specific risks (cont.) Realisation of assets Property assets are by their nature illiquid investments. This may make it difficult to realise assets in the short term in response to changes in economic or other conditions, which may impact cashflow liquidity. Fixed nature
Slide 31: Appendix D – Foreign Selling Restrictions
APPENDIX D Foreign Selling Restrictions
Slide 32: Foreign Selling Restrictions
Foreign Selling Restrictions This Presentation does not constitute an offer of Cromw ell Property Group stapled securities (New Securities) in any jurisdiction in w hich it w ould be unlaw ful. In particular, this Presentation may not be distributed to any person, and the New Securities may not be o
Slide 33: Foreign Selling Restrictions
Foreign Selling Restrictions Sw itzerland The New Securities may not be distributed in Sw itzerland and w ill not be listed on the SIX Sw iss Exchange (SIX) or on any other stock exchange or regulated trading facility in Sw itzerland. This Presentation has been prepared w ithout regard to the disclo
Slide 34: Cromwell – FY18 Results
Cromwell – FY18 Results 34 NOT FOR RELEASE TO US WIRE SERVICES OR DISTRIBUTION IN THE UNITED STATES
Cromwell Property Group — Investor Presentation (June 2019) on 6ix