360 Capital Reit · ASX:TOT
360 Capital Reit — Trafalgar Corporate Group — Merger or Acquisition (August 2013)
51 slides from 360 Capital Reit's merger presentation, August 2013
Slide 1: $70.8m Institutional Placement and Acquisition of 360 Capital Property Group
• $70.8m Institutional Placement • Acquisition of 360 Capital Property Group Investor Presentation | August 2013 Lead Manager and Underwriter 1
Slide 2: Disclaimer
Disclaimer This investor presentation (Presentation) has been prepared by Trafalgar Corporate Group Limited ACN 113 569 136 and Trafalgar Managed Investments Limited ACN 090 664 396 as responsible entity of Trafalgar Platinum Fund No. 12 (TGP). To the maximum extent permitted by law, TGP, the Moelis
Slide 3: Executive Summary
Executive Summary • Acquisition: on 20 August 2013, Trafalgar Corporate Group (“TGP”) entered into a Security Sale Agreement to acquire 100% of 360 Capital Property Group (“360 Capital”) — Scrip for scrip offer to 360 Capital securityholders (with a cash election) — Acquisition is subject to (among
Slide 4: Investment Highlights
Investment Highlights • Funds management platform provides the potential for New 360 to enhance return on equity and earnings Growth-oriented and growth through growing existing funds and establishment of new funds market-aligned real estate and funds management • Co-investments provide alignment of
Slide 5: Key Capital Raising Metrics
Key Capital Raising Metrics Issue Price $0.59 Amount to be raised $70.8m FY14 operating EPS and EPS yield 5.9 cents 10.0x PER1 / 10.0% FY14 DPS and DPS yield 5.0 cents 8.5% New 360 Securities to be issued under Capital Capital Raising 120.0m Raising2 Pro forma NTA per New 360 security $0.59 Pro form
Slide 6: Section 1: New 360 Overview
Section 1: New 360 Overview 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 6
Slide 7: Simple and Effective Business Model
Simple and Effective Business Model Fund and Asset Management Co-investments in Managed Funds Direct Real Estate Investments • Provides New 360 with enhanced return • Provides stability of income to New 360 • Provides stable rental cash flow to New on its co-invested equity through through distribut
Slide 8: Significant New 360 Platform Depth
Significant New 360 Platform Depth New 360 Direct Real Estate Co-Investments and Funds Managements Investments Listed and Potential Listed Direct Co-investments Other Unlisted Funds Funds Retail Fund Industrial Fund 111 St George’s Terrace ATO Building 441 Murray Street Havelock House Office Fund Su
Slide 9: Strong Management Proposition
Strong Management Proposition New 360 will be led by the 360 Capital management team with an average of 16 years of experience across the Australian real estate and funds management sectors • Since acquiring the management platform in 2010 from Becton Property Group, the 360 Capital management team
Slide 10: Diversified Assets and Income Stream
Diversified Assets and Income Stream • New 360’s business model will generates revenue in three (3) FY14 total revenue of $19.0m3 categories: Funds management, — Funds management fees of $4.7m in FY14 25% Direct real — Co-investment income1 of $7.4m in FY14 estate, 36% — Net rental income of $6.8m i
Slide 11: Investment Structure
Investment Structure New 3601 58.9% Diversified Fund 40.2% 100.0% 21.7%2 to 43.8% 14.8% 1.1% Direct Assets Industrial Fund Other Funds 111 St George’s Terrace • ATO Building (ASX listed: TIX) • Goulburn Asset Funds Management Notes: 1. New 360 also holds a 9.6% direct interest in the Developments In
Slide 12: Investments and Managed Funds
Investments and Managed Funds FY14 Funds FY14 Look Through Combined Look Through % of Total Fund Total Assets Managemen Investment Revenue3 Ownership Fund Expiry Revenue LVR ($m) t Fees1($m) Income2 ($m) ($m) interest4 Direct Investments ATO Building - 6.85 6.8 36.0% 100.0% N/A N/A 44.0 Strategic Lo
Slide 13: Well diversified $764m Real Estate Portfolio
Well diversified $764m Real Estate Portfolio Queensland (14% by income1) TIX: 1 Ashburn Road, Bundamba (Australian Pharmaceutical Industries) TIX: 22 Hawkins Crescent, Bundamba (The Reject Shop) Retail: Inala Plaza Shopping Centre, Inala, Qld (Woolworths) New South Wales (26% by income1) TIX: 60 Mar
Slide 14: Experienced New 360 Board and Management
Experienced New 360 Board and Management • Existing 360 Capital management team to be transitioned into New 360 immediately with all 17 staff to be located in Sydney • Experienced Board with 23 years average experience and a management team with an average 16 years experience • Employee Security Pla
Slide 15: Section 2: Key Investments & Strategies
Section 2: Key Investments & Strategies 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 15
Slide 16: 111 St George's Terrace – Stable Income & Growth
111 St George’s Terrace – Stable Income & Growth • Unlisted, single asset trust owning an office building at 111 St George’s Terrace, Perth, WA • Trust is significant to New 360 with FY14 income of $3.2m comprising co-investment distributions of $2.3m and management fees of $0.9m • Strong performing
Slide 17: Industrial Fund – Positioned for Growth
Industrial Fund – Positioned for Growth • Industrial Fund (ASX code: TIX) is an A-REIT which will be managed by New Key Metrics 360 and is key to its earnings Share Price2 $2.07 — FY14 forecast revenue of $3.3m with management fees of $2.2m and co- Market capitalisation2 $193.9m investment income of
Slide 18: ATO Building – Asset Management
ATO Building – Asset Management • ATO Building is an office property located in Hurstville, NSW — 100% leased to the Australian Tax Office since 2005 — FY14 forecast of $6.8m of net rental income — Independently valued at $44.0m (30 June 2013) • New 360’s focus will be to renew and extend the lease
Slide 19: Office Fund – Value Add Restructuring
Office Fund – Value Add Restructuring Current Structure • Office Fund to be managed by New 360 with two (2) office assets valued at $94.8m in Burwood, NSW and Allara, ACT New 360 — The fund currently has negative book equity of -$35.2m — NAB senior loan $45.7m (LVR of 48.3%), and mezzanine loan 9.6%
Slide 20: Unlisted Funds – Distribution Base For Growth
Unlisted Funds – Distribution Base For Growth Unlisted Funds - Fund Manager Ranking 2013 • New 360 will have almost 6,000 investors across 9 unlisted funds and trusts, of which five are single asset trusts which have performed well under 360 Capital management Total % Total Fund Manager Assets Indus
Slide 21: Section 3: Capital Raising & Acquisition
Section 3: Capital Raising & Acquisition 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 21
Slide 22: Capital Raising Overview
Capital Raising Overview Conditional • Issue of 120.0m New 360 Securities to institutional investors to raise $70.8m Institutional • Subject to conditions precedent including securityholder approval of the Transaction and institutional placement Placement • Capital Raising is fully underwritten by M
Slide 23: Acquisition Overview
Acquisition Overview • TGP has agreed to acquire 100% of 360 Capital via a scrip for scrip offer to 360 Capital securityholders: — 2.5 New 360 Securities for each 360 Capital security they own, or Acquisition — An option to elect to receive $1.40 of cash in lieu of the Scrip Offer for each 360 Capit
Slide 24: Sources and Uses of Funding
Sources and Uses of Funding Capital Raising proceeds, new drawn debt from refinancing the ATO Building and existing cash will be used to fund: • Cash payment to AMB (Cash Election) of $44.9m as part of the acquisition of 360 Capital by TGP; • Repayment of TGP’s $5.4m Westpac loan facility; • Repayme
Slide 25: Indicative Timetable
Indicative Timetable Announcement of Capital Raising and Transaction Wednesday, 21 August 2013 Notice of Meeting and PDS and Prospectus dispatched Monday, 26 August 2013 General meeting of TGP securityholders Tuesday, 24 September 2013 Settlement of Capital Raising Tuesday, 1 October 2013 Allotment
Slide 26: Section 4: Financials
Section 4: Financials 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 26
Slide 27: Forecast Pro Forma Profit and Loss
Forecast Pro Forma Profit and Loss Adjusted1 • Forecast adjusted revenue in FY14 of $20.4m comprising; FY14 ($m) ─ Co-investment income from interests in New 360 managed funds and interest income generated from the strategic loan Co-investment income2 7.4 investments Funds management revenue 4.7 ─ F
Slide 28: Pro Forma Balance Sheet
Pro Forma Balance Sheet Adjusted1 • Direct investments (28% of total assets) include: As at 31 May 2013 ($m) ─ ATO Hurstville Building valued at $44.0m (25% of total assets) ─ The Goulburn Asset (held for sale) at valued at $4.8m (3% of Cash 14.0 total assets) Co-investments² 90.9 • Co-investments (
Slide 29: Section 5: Key Risks
Section 5: Key Risks 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 29
Slide 30: Key Risks
Key Risks Please refer to the “Key Investment Risks” section and Section 6 “Risk Factors” in the Prospectus and PDS for further details Removal of New • As a funds management business, there is a risk that New 360 is removed as the responsible entity/funds manager of the funds 360 as RE through a vo
Slide 31: Section 6: Glossary
Section 6: Glossary 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 31
Slide 32: Glossary
Glossary Term Definition 111 St George’s Terrace 360 Capital 111 St George’s Terrace Property Trust (ARSN 098 126 660) The stapled entities of the 360 Capital Property Group, comprising of 360 Capital Investment Trust (ARSN 141 872 360 Capital 844) and 360 Capital Property Limited (ACN 146 484 433)
Slide 33: Glossary (Con't)
Glossary (Con’t) Term Definition FY13 Financial year ending 30 June 2013 FY14 Financial year ending 30 June 2014 Goulburn Asset Distribution Centre at 158 Hume Street, Goulburn NSW Havelock House 360 Capital Havelock House Property Trust (ARSN 100 593 548) Industrial Fund 360 Capital Industrial Fund
Slide 34: Appendices
Appendices Appendix A Board of Directors & Key Management B Case Studies C Office Fund Assets D Investments and Funds Descriptions E Reconciliation of Financial Statements 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 34
Slide 35: Appendix A: Board of Directors & Key Management
Appendix A: Board of Directors & Key Management 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 35
Slide 36: Board of Directors
Board of Directors David van • David has over 20 years of experience in the Property Funds Management industry Aanholt • David’s previous roles have included Chief Executive Officer (Asia Pacific) of the Goodman Group (previously known as Independent Non Macquarie Goodman) overseeing the group’s ope
Slide 37: Key Management
Key Management Ben James • Ben is responsible for all property investment activities within 360 Capital • Ben has over 17 years experience in real estate funds management Chief • Prior to joining 360 Capital, Ben was the Trust Manager of Mirvac Property Trust, the investment vehicle of Mirvac Group
Slide 38: Key Management (Con't)
Key Management (Con’t) • Ben is responsible for the 360 Capital Industrial Fund and has over 14 years experience in the property industry, most recently as Ben Butler Senior Portfolio Manager at Centuria Property Funds Limited • Prior to that, Ben spent seven years at ING Real Estate in the roles of
Slide 39: Employee Share Plan (ESP)
Employee Share Plan (ESP) Please refer to the Section 11.3 “Employee Security Plan” in the Prospectus and PDS for further details Tony Pitt Ben James Non-Exec Directors Other Staff Participants 1 1 4 15 Salary package/ $600,000 $400,000 $400,000 $2,600,000 Directors Fees ESP equity issued 6,000,000
Slide 40: Appendix B: Case Studies
Appendix B: Case Studies 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 40
Slide 41: Case Study – Unlisted Funds
Case Study 1 – Unlisted Funds 111 St George’s Terrace Property Trust Recognising and executing the opportunity • 360 Capital identified 111 St George’s Terrace as a co-investment opportunity prior to the Becton acquisition in 2010, which provided 360 Capital with the RE rights over the 111 St George
Slide 42: Case Study – Listed Funds
Case Study 2 – Listed Funds Industrial Fund (ASX code: TIX) Recognising and executing the opportunity • 360 Capital identified the Industrial Fund as an ASX listing opportunity at time of Becton acquisition • Since acquiring the management rights over the Fund in 2010, 360 Capital has successfully r
Slide 43: Appendix C: Office Fund Assets
Appendix C: Office Fund Assets 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 43
Slide 44: 52-56 Railway Parade, Burwood – Seed Asset
52-56 Railway Parade, Burwood – “Seed Asset” Office Fund • Railway Parade, Burwood is an office property located in Burwood, NSW — Forecast FY14 net rental income of $5.9m — Last independent valuation Dec-12 at $60.0m • Proactive asset management — 360’s active asset management strategy has resulted
Slide 45: 33 Allara Street, Canberra – Seed Asset
33 Allara Street, Canberra – “Seed Asset” Office Fund • Allara St, Canberra is an office property located in Civic, ACT — Located adjacent to the Canberra Casino — Forecast FY14 net rental income of $4.2m — Last independent valuation Dec-12 at $34.5m • Proactive asset management — 92.0% (by income)
Slide 46: Appendix D: Investments and Funds Descriptions
Appendix D: Investments and Funds Descriptions 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 46
Slide 47: Direct Investments
Direct Investments The property is located at 12-22 Woniora Road Hurstville NSW and represents an A-grade commercial office building approximately 50 metres from the railway station. Hurstville is a regional metropolitan centre in the middle of Sydney’s South Western suburbs ATO Building approximate
Slide 48: Managed Funds
Managed Funds The Industrial Fund was established in August 2002 to acquire and hold a portfolio of industrial properties. Members voted in favour of listing the fund in November 2012 and the fund subsequently began trading on the ASX in December 2012. The term of the fund is Industrial Fund for 80
Slide 49: Appendix E: Reconciliation of Financial Statements
Appendix E: Reconciliation of Financial Statements 1 Ashburn Road, Bundamba, Queensland (The Reject Shop) 49
Slide 50: Forecast Pro Forma Profit & Loss Reconciliation
Forecast Pro Forma Profit & Loss Reconciliation Adjustment: Adjustment: Adjustment: Consolidated Adjusted FY14 Diversified Fund AIFRS treatment Non-recurring ($m) ($m) Consolidation of ATO Rent1 revenue Co-investment income 9.4 (1.9) - - 7.4 Funds management revenue 4.6 0.1 - - 4.7 Rental income 8.1
Slide 51: Pro Forma Balance Sheet Reconciliation
Pro Forma Balance Sheet Reconciliation Adjustment: Consolidated Adjusted As at 31 May 2013 Diversified Fund ($m) ($m) Consolidation Cash 15.1 (1.1) 14.0 Co-investments 114.9 (24.0) 90.9 Direct investments 48.8 - 48.8 Other 25.5 (4.5) 21.0 Total Assets 204.3 (29.6) 174.7 Interest bearing liabilities
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