Australian Unity Ltd · ASX:AYUPA
Australian Unity — Investor Presentation (October 2022)
44 slides from Australian Unity's investor presentation, October 2022
Slide 1: Childcare Property Fund
Australian Unity Childcare Property Fund October 2022 Mark Delaney | Fund Manager Fletcher Bubb | Portfolio Analyst Images used are real estate assets owned by the Fund, due for settlement or currently under exclusive due diligence (including artistic impressions of assets in, and proposed for, deve
Slide 2: Contents
Contents 1 Executive Summary 2 About Australian Unity 3 Childcare Sector Investment Thematic 4 Fund Attributes & Forecast Financials 5 Opportunity for Investment 6 Appendix 2
Slide 3: Executive Summary
Executive Summary 156 Aberdeen Street, Northbridge, Perth WA 3
Slide 4: Fund Snapshot
Fund Snapshot A fund focused on stable secure income, capital growth and social impact to the wellbeing of Australians through direct investment into childcare real estate Purpose Financial: To provide investors with stable and secure income with capital growth predominantly through direct investmen
Slide 5: Portfolio Summary
Portfolio Summary Assets settled, exchanged and in exclusive due diligence Portfolio parameters WALE 14.3 years Total value ($m)1 $97.7 NT Forecast Weighted Average Cap. Rate 5.53% QLD 3 Number of centres 17 Sunshine WA Coast Number of operators 6 2 3 Toowoomba Pittsworth Number of child places 1,58
Slide 6: Why Invest?
Why Invest? Childcare is a defensive investment supported by the Government, providing stable social infrastructure returns Stable, Strong Quality Strong predictable Government tenant covenants and diversified geographies underlying real estate value returns support through economic cycles with Long
Slide 7: Key Fund Details
Key Fund Details Purpose Financial: To provide investors with stable and secure income with capital growth predominantly through direct investment into childcare real estate of established centres and delivery of new assets Non-financial: To enhance the wellbeing of Australians through contribution
Slide 8: Key Fund Details
Key Fund Details Target fund size (AUM) $250 million within 3 years. No cap on growth. Portfolio WALE 14.3 years Target Gearing 30%–45% Debt CBA has approved a $20.0 million facility with the ability to grow Target equity raise (fully paid units) $25.0 million Investment type and amount Wholesale In
Slide 9: Forecast Financials
Forecast Financials Projected financial returns on assets settled, exchanged, in exclusive due diligence and maintaining conservative gearing and debt levels* Projected cash and distribution yields Projected portfolio gearing 60% on minimum equity raising $160m 7.0% 1st Liquidity 2nd Liquidity Optio
Slide 10: Portfolio Growth Approach
Portfolio Growth Approach Investor Value Creation through • Optimal Capital Efficiency Preliminary Asset Procurement • Reduced Investor Dilution • Active Portfolio Curation • Sensitive use of Debt Secure Pipeline of Actively Manage Investment Grade Portfolio and Assets Under Grow Earnings Exclusivit
Slide 11: Portfolio Growth Approach
Portfolio Growth Approach Value of Properties Under Preliminary Review $185 million Properties in Exclusive Due Diligence 6 properties $37.2 million Current Portfolio 11 properties $60.5 million Notes: • Dollar values reflect the sum of the estimated as if complete valuation of assets • Current Port
Slide 12: About Australian Unity
About Australian Unity 260 Margaret Street, Toowoomba City QLD 12
Slide 13: Australian Unity at a glance
Australian Unity at a glance Mutual with a commitment to members, customers and community Employs more than Delivers over 3m 260,000 7,000 people across episodes of care per members & operations; over annum Services in Health, 700,000 2,300 outside major (in addition to residential Wealth & Care cus
Slide 14: Australian Unity Real Estate Investment
Australian Unity Real Estate Investment A deeper perspective, delivered straight Select Income Fund AREIT Fund • A comprehensive real estate platform, established 1998 $277.2 $104.6 Social Infrastructure • $5.4 billion of real estate funds under management (FUM) as at 31 $267.1 Healthcare Property T
Slide 15: Childcare Sector Investment Thematic
Childcare Sector Investment Thematic 156 Aberdeen Street, Northbridge, Perth WA 15
Slide 16: Childcare Industry Overview
Childcare Industry Overview Core social infrastructure, with stable growth 8,550 total national long day $13.8 billion p.a. 3.4% p.a. care centres3 industry revenue (average growth of 2.2% p.a. FY17 to FY22)1 forecast annual revenue growth 2020-252 24.1 million hours of long day care per week3 Quali
Slide 17: Early Learning Demand Drivers Summarised
Early Learning Demand Drivers Summarised Core social infrastructure, with stable growth Population growth Family Childcare usage of 0-5 year olds is forecast to participation continues to grow continue but we are still behind OECD Peers continues to increase Australia is Childcare Government behind
Slide 18: Participating in LDC
Early Learning Demand Drivers Stable socio-economic fundamentals support long-term growth Actual and forecast population 0-4 year olds (2001-2038) 0–4 child population (M) 2.0 • By 2030 it is forecast there will be 220,000 more pre-school 1.8 children (0–4 year olds) growing at a rate of ~1.0% annua
Slide 19: Early Learning Demand Drivers: OECD comparison
less than our OECD peers household income for childcare Australia is improving its early childhood education has been historically less than our OECD peers standing in the OECD context • Australian Government expenditure on • Australian Families pay a greater share of • Australian enrolment rates ar
Slide 20: Government support for economic and social dividends
Early Learning Demand Drivers Government support for economic and social dividends • The benefits of quality early learning are well documented with Government expenditure – childcare subsidy the Federal Government recognising this and progressively 12.0 11.0 Actual Budget Forward Estimate contribut
Slide 21: Operator and Asset Owner Market Share
Operator and Asset Owner Market Share Highly fragmented sub-sector of social infrastructure Childcare operators Operator share of approved services • 35% of approved services are operated by large providers, while 65% of services are operated by small-to-medium providers1 • The industry is split ~50
Slide 22: Property Investment Drivers
Property Investment Drivers Growing sector of Social Infrastructure Long WALE, typically triple net leases, providing stable income Sustainable, industry standard lease terms to ensure operator success and flexibility Solid yielding, low terminal risk, liquid asset type and multiple exit strategies
Slide 23: Fund Attributes & Forecast Financials
Fund Attributes & Forecast Financials 18 & 20 Pine Street, Runcorn Brisbane QLD 23
Slide 24: Key Attributes
Key Attributes Australian Unity is uniquely positioned to lever its institutional social infrastructure platform to be a leading participant in childcare Childcare attributes Property attributes Stable, Minimal Institutional predictable Increasing participation rates ongoing Platform returns capex a
Slide 25: Defensive investment
Defensive investment Childcare is a defensive investment supported by the Government, providing stable social infrastructure returns Downside factor Childcare market Economic downturn • Childcare sector is relatively less volatile than other property sectors, such as office • Childcare rental paymen
Slide 26: Forecast Financials
Forecast Financials Projected financial returns on assets settled, exchanged and in exclusive due diligence* Actual Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast Forecast FY222 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31 Cash on cash return Distributions paid1 $'000 703 1,
Slide 27: Opportunity for Investment
Opportunity for Investment 255 Herries Street, Newtown, Toowoomba QLD 27
Slide 28: Opportunity for Investment
Opportunity for Investment Investment commitments are now being filled Equity raise $25.0 million (fully paid units) Investment type and amount Wholesale investors $50,000 minimum investment amount Estimated Application Price $1.02 per one unit in the Fund (including buy spread) Capital raise period
Slide 29: Appendix
Appendix 156 Aberdeen Street, Northbridge, Perth WA 29
Slide 30: Childcare Investment and Social Impact
Childcare Investment and Social Impact Investing Credentials 18 & 20 Pine Street, Runcorn Brisbane WA 30
Slide 31: Childcare Impact Investing Credentials
Childcare Impact Investing Credentials Social Impact Investing Mandate Increased economic activity Early childhood through female workforce education Environmentally participation during the most friendly Promotion Sustainable and economic influential developmental design of good health design, busi
Slide 32: Fund ESG Roadmap and Actions
Fund ESG Roadmap and Actions We are investing in better environmental outcomes for the Fund, addressing climate change adaptation and resilience, health and well-being, and governance Deliver positive Establish best- environmental Sustainable Tenant engagement, Climate change, practice asset outcome
Slide 33: Asset Acquisition Process
Asset Acquisition Process 10 Evans 156 Street, Aberdeen Pittsworth Street, QLD Perth WA Northbridge, 33
Slide 34: Asset Acquisition Process & Competitive Advantage
Asset Acquisition Process & Competitive Advantage Advanced Catchment Due Diligence Assessment including Socio-demographic and detailed Geo-mapping of Forecast community profiles to assess the future demand of childcare Catchment analysis - Supply : Demand Forecast ratio of 0–4 year olds to licensed
Slide 35: Key Personnel
Key Personnel 18 & 20 Pine Street, Runcorn Brisbane QLD 35
Slide 36: Key Personnel
Key Personnel Mark Delaney, Fund Manager – Childcare Property Fund Mark is a senior member within the Social Infrastructure team and Fund Manager overseeing the growth of the Childcare Property Fund. Prior to joining Australian Unity, Mark was a director of a property advisory firm focusing on acqui
Slide 37: Key Personnel
Key Personnel Fletcher Bubb, Portfolio Analyst – Childcare Property Fund Fletcher's experience covers institutional and corporate structured property investment, banking and funds management, working across the full debt – equity spectrum in connection with asset acquisition, development and constru
Slide 38: Key Personnel
Key Personnel Ryan Banting, Executive General Manager Social Infrastructure Ryan joined Australian Unity in 2011. As the Head of Social Infrastructure, Ryan is responsible for the growth of Australian Unity’s investment activities across assets including disability accommodation, student accommodati
Slide 39: Key Personnel
Key Personnel Esther-Kerr Smith, Chief Executive Officer – Wealth & Capital Markets Esther joined Australian Unity in September 2017. Esther is Chief Executive Officer for Wealth & Capital Markets for the Australian Unity Group. Esther is responsible for all of Australian Unity’s financial services
Slide 40: Important Information
Important Information 156 Aberdeen Street, Northbridge, Perth WA 40
Slide 41: Forecast Financials Assumptions
Forecast Financials Category Assumption Assumptions Portfolio • Property valuations assume moderate yield compression in comparison to market indicators The distribution return assets forecasts are made on the Pipeline • Consists of 17 childcare centres with over 1,582 licensed • Fund-through arrang
Slide 42: Summary of Fees and Costs
Summary of Fees and Costs Fees and costs of managing your investment Fee Fee (%) Note Base management fee 0.75% p.a. of the Funds month end GAV The base management fee is generally calculated at the end of each month, based on the month end GAV for that month, and paid monthly in arrears from the as
Slide 43: Important Information
Important Information Units in the Fund are issued by Australian Unity Funds Management Limited ABN 60 071 497 115, AFSL 234454 (AUFM) General Advice Forward-looking statements No Reliance Illustrative information only Trademarks The information in this presentation is of Certain statements in this
Slide 44: Austiglin >]
Austiglin >] Real Wellbeing
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