US Masters Residential Property Fund · ASX:URF
US Masters Residential Property Fund — Investor Presentation (May 2012)
40 slides from US Masters Residential Property Fund's investor presentation, May 2012
Slide 1: Capital Raising and Portfolio Update
Capital Raising and Portfolio Update May 2012
Slide 2: Disclaimer
Disclaimer This presentation is not financial product advice and is intended to provide information only. It does not take into account your individual objectives, financial situation or needs. The information is taken from sources which are believed to be accurate, but Dixon Advisory & Superannuati
Slide 3: Agenda
Agenda 1. Introduction 2. Target market and portfolio overview 3. Free standing properties 4. Urban American & multi-dwelling properties 5. Details of the offer 6. Questions 3
Slide 4: Introduction
Introduction 4
Slide 5: Overview of URF
Overview of URF • First ever Australian listed property trust focused on US residential property market • c.$100 million raised since IPO in June 2011 • Initially targeting New York metropolitan region • Successfully secured US$76.1 million of residential properties in Hudson County, New Jersey • Lo
Slide 6: Responsible Entity
Responsible Entity DARYL DIXON MAXIMILIAN WALSH EXECUTIVE CHAIRMAN DEPUTY CHAIRMAN MA (Hons) (Cambridge), BEC (Syd Uni) BA (Hons) (UQ) ALEX MACLACHLAN ALAN DIXON MANAGING DIRECTOR, CEO GROUP MANAGING FUNDS MANAGEMENT DIRCTOR BA (Cornell), MBA (Wharton) BCom (ANU), CA CHRIS BROWN TRISTAN O’CONNELL MA
Slide 7: Advisory Board
Advisory Board NIRAV DESAI STUART NISBETT Managing Director, Managing Director, Sparta Group LLC Archerfield Capital BA (University of BCom (UNSW) Michigan) MCom (UNSW), CA MBA (Wharton) DEAN MILLER DAVID WHELAN Managing Director, Managing Director, Novitas Capital Cloverleaf Group BA (Franklin and
Slide 8: US property team
US property team Locally based team of 28 experienced property professionals Property Property Property sourcing & execution & management & Leasing evaluation legal construction (7) (3) (6) (4) Finance and administration (8) Note: numbers in brackets represent team size 8
Slide 9: Target market and portfolio overview
Target market and portfolio overview 9
Slide 10: US residential remains attractive
US residential remains attractive • Valuations are very depressed but improving – Mortgage market on both sides still broken (but healing slowly) • Robust rental demand – Growing rents, low vacancy, quality applicants • Housing affordability at record highs (but they can’t get mortgages) • Favorable
Slide 11: New York metropolitan area
New York metropolitan area Initial focus on residential properties in Hudson County • Solid economic base • Deep and well established housing stock, limited development sites • Positive demographics TARGET Manhattan • Favourable tenancy laws AREA Island • Excellent access to mass transit Hudson (NYC
Slide 12: Investment strategy
Investment strategy • Target properties with attractive rental income and/or potential for long-term capital growth • Mix of free standing properties (1 - 4 dwellings) and multi-dwelling properties (>4 units) • Geographically focused within Hudson County – Easy access to Manhattan, close proximity t
Slide 13: Why multi-dwelling?
Why multi-dwelling? • Attractive in-place rental income and potential for long- term capital growth • Further diversify structurally and geographically (within Hudson County) • Economies of scale in property management and leasing • While subject to increased regulation vs. free standing houses, nat
Slide 14: Investment update
Investment update US$76.1 million of properties secured NUMBER TOTAL ACQUISITION AVERAGE COST COST (US$m) PER UNIT (US$) Properties Units FREE STANDING Properties purchased 132 299 27.5 91,941 Conditional acceptances 99 233 23.0 98,854 Total Free standing 231 532 50.5 94,968 MULTI-DWELLING 13 398 37
Slide 15: Free standing properties
Free standing properties ry Residential [ 7a Property Fund
Slide 16: Free standing property strategy
Free standing property strategy Strategy Comments Focus on 1-to-4 family houses in select Ample supply of housing stock in 1 target market neighbourhoods in Hudson County Acquire at attractive valuations and restore Many properties acquired at or below 2 replacement cost properties, where required 3
Slide 17: Free standing portfolio overview
Free standing portfolio overview 231 free standing properties secured for US$50.5 million 17
Slide 18: Debt financing
Debt financing • Agreed terms with Investors Bank on US$3 million limited recourse loan after a successful competitive process, with strong underbidders • 10 year term-loan facility • Interest cost of 3.99% p.a., fixed for first 5 years • Secured against 32 properties – gearing ratio of 50% • Strate
Slide 19: Key investment locations
Key investment locations Investments largely focused in Jersey City Key statistics Population (2010) 247,597 Population density 16,736 / square mile Housing units (2010) 108,720 Source: US Census Bureau Jersey City neighbourhoods: Downtown Jersey City The Heights Bergen Lafayette West Bergen Journal
Slide 20: Key locations — Greenville
Key locations — Greenville • Highest yields – 10%+ in almost all cases • Good public transport • High Walk Scores • Predominantly African American • Most affected by housing crisis – May be slower to recover 20
Slide 21: Key locations — West Bergen
Key locations — West Bergen • Yields typically 8 – 10% • Quieter area • Lower Walk Scores • Very multicultural • Solid family neighbourhood 21
Slide 22: Key locations — Journal Square
Key locations — Journal Square • Yields typically 8 – 10% • Bustling busy area • Excellent public transport • Highest Walk Scores • Very multicultural 22
Slide 23: Key locations — The Heights
Key locations — The Heights • Yields typically 6 - 8% • Directly west of Hoboken • Ok public transport • Lower Walk Scores • Beautiful neighbourhoods • Gentrification starting • Multicultural • Capital growth imminent 23
Slide 24: Key locations — Downtown Jersey City
Key locations — Downtown Jersey City • Yields typically 5 – 7% • Great public transport • Beautiful area – parks, schools • Strong rental growth • Gentrification and price increase commenced • Wealthier residents 24
Slide 25: Key locations — Bayonne
Key locations — Bayonne Key statistics (2010) Population 63,024 Population 10,859 / density square mile Housing units 27,799 • Yields typically 6 – 8% • Quiet township with very strong community feeling • Good schools; ok public transport • Capital growth imminently • Mainly white & Hispanic 25
Slide 26: New target areas
New target areas • Will be intensely targeting Union City North Bergen • Selectively targeting – West New York West New York – North Bergen Weehawken – Weehawken Union City – Hoboken Hoboken 26
Slide 27: Multi-dwelling properties
Multi-dwelling properties 27
Slide 28: Urban American executives
Urban American executives Philip Eisenberg Joshua Eisenberg Founder and CEO Exec. Vice President & General Counsel BA (New York University) BSc (Cornell) Juris Doctorate (Cornell) Juris Doctorate (Cornell) James Eisenberg Sanjay Chauhan Exec. Vice President & Exec. Vice President & Head of Construct
Slide 29: Overview of Urban American
Overview of Urban American • Founded in 1997 by Philip Eisenberg • Owner / manager of 12,000 apartments in over 150 buildings • Extensive experience acquiring, improving and operating multi-dwelling apartment complexes in the New York metropolitan area • Strong track record of successfully operating
Slide 30: Urban American investment strategy
Urban American investment strategy 1 Focus on small and medium sized multi-dwelling properties – Attractive niche market – Below size threshold of larger institutions – Beyond financial scope of individual investors or local groups – Require specialized skills in management and construction 2 Apartm
Slide 31: JV portfolio overview
JV portfolio overview 13 multi-dwelling apartment complexes acquired for US$38 million 31
Slide 32: Perspectives on the JV portfolio
Perspectives on the JV portfolio • The 13 best properties selected from the larger JPM /UA sale portfolio • Properties with greatest value and strongest capital growth potential • Strongest expected rental demand in West New York and Union City • Excellent knowledge and extensive experience with the
Slide 33: Key locations – West New York
Key locations – West New York • Great public transport • High Walk Scores • Several new property developments underway • Very high percentage of renters (c. 80%) • Steady rental growth; lower vacancy rates • Mainly Hispanic & white • Hosting 2013 Formula 1 Grand Prix of America 33
Slide 34: Key locations – Union City
Key locations – Union City • Great public transport; high Walk Scores • 3km from Lincoln Tunnel - key road access to NYC • Benefited from significant investment to improve public amenities • Very high percentage of renters (c. 80%) • Steady rental growth; lower vacancy rates • Mainly Hispanic & whit
Slide 35: Close to the heart of Manhattan
Close to the heart of Manhattan 35
Slide 36: Urban American's approach to management
Urban American’s approach to management • Hands-on management – “no job is too small” • Institutional approach to property and construction management • Leverage economies of scale and purchasing power to reduce operating expenses • Focus on income generation and return on cost • Strong working rela
Slide 37: JV with Urban American
JV with Urban American 67.5% 32.5% Joint Venture US$38m • US$38 million total acquisition cost • 13 multi-dwelling apartment complexes in Hudson County with 398 residential units • Debt funding of up to 60% of purchase value 37
Slide 38: Details of the Offer
Details of the Offer ry o os c © 2 n ® ox Uv c 3 a o a ° = a Lees |
Slide 39: Offer details and key dates
Offer details and key dates Opening Date 15 May 2012 Offer Closing Date 12 June 2012 Final calculation of Offer Price 25 June 2012 Offer Allotment Date 26 June 2012 Trading of Units to commence 20 July 2012 Note: Dates are indicative only Maximum value of Units available under the $50,000,000 Offer
Slide 40: Questions?
Questions? ry Residential [ 7a Property Fund
US Masters Residential Property Fund — Investor Presentation (May 2012) on 6ix