Region Group · ASX:RGN
Region — SCA Property Group — IPO Roadshow (October 2012)
44 slides from Region's IPO roadshow presentation, October 2012
Slide 1: SCA Property Group Investor Presentation
SCA Property Group Investor Presentation October 2012 Merimbula (Tura Beach), NSW
Slide 2: Important Notice
2 Important Notice NOT FOR DISTRIBUTION IN THE UNITED STATES This Investor Presentation has been prepared by Shopping Centres Australasia Property Group RE Limited (ABN 47 158 809 851) (SCPRE) as responsible entity of SCA Property Management Trust (ARSN 160 612 626) and responsible entity of SCA Pro
Slide 3: Summary
3 Summary 11 Transaction Overview 22 Overview of SCA Property Group 33 Investment Highlights 44 Property Portfolio Information 55 Board and Management 66 Financial Summary 77 Investment Summary 88 Overview of the Offer Appendices
Slide 4: Transaction Overview
TRANSACTION SCA O VE R Vi E W Property Group
Slide 5: Management Team
5 Management Team • Over 20 years combined experience with Woolworths property team Anthony Mellowes Kerry Shambly Chief Executive Officer (Interim) Chief Financial Officer • An experienced property executive currently acting • An experienced finance executive who is currently as Head of Asset Manag
Slide 6: Woolworths' Rationale for the Establishment of SCA Property Group
6 Woolworths’ Rationale for the Establishment of SCA Property Group • Consistent with Woolworths’ strategy of focusing on its retailing business • Transaction releases $1.4 billion of property from Woolworths’ balance sheet in one, efficient transaction to create SCA Property Group • Key benefits to
Slide 7: Transaction Overview
7 Transaction Overview A Establishment of SCA Property Group • To implement the Transaction, Woolworths will transfer its interest in the Portfolio to SCA Property Group and then distribute approximately 247 million Stapled Units to Woolworths Shareholders • Subject to approval by Woolworths Shareho
Slide 8: Overview of SCA Property Group
OVERVIEW OF SCA PROPERTY GROUP 2
Slide 9: Summary of SCA Property Group
9 Summary of SCA Property Group Portfolio • 69 shopping centres valued at $1.4 billion (1) – Completed Portfolio: 56 assets valued at $1.1 billion – Development Portfolio: 13 assets valued at $0.3 billion • All assets independently valued • Average property age 2.1 years (2) • WALE 15.8 years (3) •
Slide 10: Convenience Retail Sector
10 Convenience Retail Sector 1 Non-discretionary Bias Australian Non-discretionary Sales Outperformance (1) (2) 112 • Convenience-based assets are weighted to food 108 104 sales through grocery-based anchors 100 96 • Consistent growth in Australian historical food sales 92 Jan-10 May-10 Sep-10 Jan-1
Slide 11: Investment Objectives
11 Investment Objectives “ SCA Property Group will invest in shopping centres predominantly anchored by non-discretionary retailers with long term leases to tenants such as Woolworths Group. • Provide investors with: ” – Secure income stream that supports regular income distributions; – Diversified
Slide 12: Relationship with Woolworths
12 Relationship with Woolworths • Woolworths will have no ownership interest in SCA Property Group following completion of the Distribution and the Offer, but Woolworths and SCA Property Group will maintain an ongoing relationship with regard to: 1 Leases • Major anchor tenant in all properties • Ge
Slide 13: Investment Highlights
13 Investment Highlights 1 A geographically diverse portfolio Bias towards more defensive non-discretionary 2 segment of the retail market 3 Long term leases to quality retail tenants Leura, NSW 4 Modern retail assets 5 An attractive distribution yield Pakenham, VIC
Slide 14: Investment Highlights
INVESTMENT SCA H / GH | GH TS Property Group
Slide 15: A Geographically Diverse Portfolio
15 1 A Geographically Diverse Portfolio • Assets located in all five mainland states of Australia • The largest states by population, New South Wales, Victoria and Queensland, will account for approximately 65% of the Portfolio • Assets located in New Zealand • Diverse weighting among sub-regional a
Slide 16: Bias Towards More Defensive Non-discretionary Retail
16 2 Bias Towards More Defensive Non-discretionary Retail • The Portfolio has a large weighting to non-discretionary retail spending with income from Woolworths Supermarket leases representing 51% of Portfolio Fully Leased Gross Income (1) • A non-discretionary based anchor tenant is likely to attra
Slide 17: Long Term Leases to Quality Retail Tenants
17 3 Long Term Leases to Quality Retail Tenants Earnings underpinned by long term leases backed by the strength of Woolworths Food and Grocery Sales Position Woolworths Group stores as anchor tenant at each property Position Sales Store # • 75% of the Portfolio’s total GLA (1) Australia #1 $38 billi
Slide 18: Modern Retail Assets
18 4 Modern Retail Assets • The Completed Portfolio has an average age of 2.1 years (2) • Relatively recently completed assets are expected to require less near term capital expenditure than older assets – The Portfolio consists of 56 completed and operating properties (the Completed Portfolio) – 13
Slide 19: An Attractive Distribution Yield
19 5 An Attractive Distribution Yield SCA Property Group offers an attractive distribution yield Final Price Sensitivities • Forecast FY14 Distributable Earnings yield of between Final Price ($) 1.26 1.34 1.42 1.50 7.9% and 9.4% (1) Discount to NTA 20% 15% 10% 5% • Forecast FY14 distribution yield o
Slide 20: Property Portfolio Information
PROPERTY PORTFOLIO INFORMATION 4
Slide 21: Portfolio Geography
21 Portfolio Geography Sub-regional Neighbourhood Freestanding Mission Beach Mackay Central Highlands Gladstone (Emerald) Brisbane Woodford Chancellor Park Brookwater Village Carrara Collingwood Park Mullumbimby Cabarita Coorparoo Katoomba Inverell Kerikeri Goonellabah Leura Macksville Lismore Warkw
Slide 22: North Orange, NSW; Pakenham, VIC
22 North Orange, NSW Pakenham, VIC Property Summary Property Summary Type Neighbourhood Woolworths Group % Gross Income 61% Type Sub-regional Woolworths Group % Gross Income 44% Valuation ($m) 24.3 Number of Specialties 13 Valuation ($m) 68.0 Number of Specialties 35 Centre GLA (sqm) 4,974 Capitalis
Slide 23: Berala, NSW; Walkerville, SA
23 Berala, NSW Walkerville, SA Property Summary Property Summary Type Neighbourhood Woolworths Group % Gross Income 75% Type Neighbourhood Fully Leased Gross Income ($m) 2.1 Valuation ($m) 18.7 Number of Specialties 5 Valuation ($m) 19.5 Woolworths Group % Gross Income 65% Centre GLA (sqm) 4,340 Cap
Slide 24: Lease Overviews
24 Lease Overviews Key Initial Lease Terms Lease Expiry Profile (% of Fully Leased Gross Income) (1) • Woolworths maintains a right of refusal across six properties in Australia 74.9% and all properties in New Zealand • Supermarkets (2) – 15 years to 23 years 3 months – 4 x 10 year options (tenant e
Slide 25: Board and Management
BOARD AND SCA MA NA GEMENT Property Group
Slide 26: Board of Directors
26 Board of Directors Philip Clark AM Independent Chairman • Former Managing Partner of law firm Minter Ellison from 1995 to 2005 • Prior to joining Minter Ellison, Mr Clark was a Director and Head of Corporate with ABN Amro Australia, and prior to that he was Managing Partner with law firm Malleson
Slide 27: Management Team
27 Management Team • As part of the Transitional Services Agreement the Chief Executive Officer role will be filled by Woolworths executive, Anthony Mellowes • From the Allotment Date, the Board of SCPRE will undertake an extensive executive search to fill the role of Chief Executive Officer • Antho
Slide 28: Financial Summary
FINANCIAL SUMMARY SGA Property Group
Slide 29: Financial Forecasts
29 Financial Forecasts Forecast Income Statement Pro Forma Statutory 6 months 12 months • Forecast rental income in 2014 of $146 million ($m) 30 Jun 13 30 Jun 14 – Underpinned by Woolworths Group leases Woolworths gross revenue 38.8 86.7 Specialty gross revenue 18.4 45.4 – Rental Guarantee covering
Slide 30: Financial Forecasts
30 Financial Forecasts Forecast Distribution Statement Statutory 12 months • Distributable Earnings represents the Directors’ view of ($m) 30 Jun 14 cash available for distribution in the forecast period Net income after tax 73.3 • Forecast Distributable Earnings in 2014 of $69 million Add: Cash rec
Slide 31: Financial Forecasts (cont.)
31 Financial Forecasts (cont.) Pro Forma Balance Sheet Allotment on fully ($m) At Allotment invested basis • Pro Forma Balance Sheet as at the Allotment Date Assets adjusted for the acquisition of the Development Portfolio Cash 5.0 5.0 – Not a statutory year end balance sheet Investment property - c
Slide 32: Investment Summary
INVESTMENT SUMMARY SGA Property Group
Slide 33: Investment Summary
33 Investment Summary 1 A geographically diverse portfolio Bias towards more defensive non-discretionary 2 segment of the retail market 3 Long term leases to quality retail tenants Leura, NSW 4 Modern retail assets 5 An attractive distribution yield Pakenham, VIC
Slide 34: Overview of the Offer
OVERVIEW OF THE SEA O F F E R Property Group
Slide 35: Overview of the Offer
35 Overview of the Offer • Offer to raise between $425 – 506 million, comprising: Final Price Sensitivities – A Woolworths Retail Shareholder Offer; Final Price ($) 1.26 1.34 1.42 1.50 – A Broker Firm Offer; Discount to NTA 20% 15% 10% 5% – A General Public Offer; and Forecast FY14 – An Institutiona
Slide 36: Timetable
36 Timetable Event Date (1) Record date for the Woolworths Retail Shareholder Offer Wednesday 10 Oct 2012 Woolworths Retail Shareholder Offer, Broker Firm Offer and General Public Monday 15 Oct 2012 Offer open Woolworths Retail Shareholder Offer, Broker Firm Offer and General Public Tuesday 20 Nov 2
Slide 37: Appendices
APPENDICES A. Summary of Financial Assumptions Slide 38 B. Key Hedging Policies and Debt Covenants Slide 40 C. Portfolio List Slide 41 D. Structure of SCA Property Group Slide 44
Slide 38: Summary of Financial Assumptions – Appendix A
38 Summary of Financial Assumptions – Appendix A Forecast assumptions have been done on a property by property basis where appropriate and are consistent with independent valuation reports. Full details of the assumptions are included in PDS section 7.4 Rental income • Based on existing leases and a
Slide 39: Summary of Financial Assumptions (cont.) – Appendix A
39 Summary of Financial Assumptions (cont.) – Appendix A Forecast assumptions have been done on a property by property basis where appropriate and are consistent with independent valuation reports. Full details of the assumptions are included in PDS section 7.4 Minimum Rental Guarantee • The forecas
Slide 40: Key Hedging Policies and Debt Covenants – Appendix B
40 Key Hedging Policies and Debt Covenants – Appendix B Hedging Policies Key Debt Covenants • Interest Rate Exposure: Covenant – Target fixed interest rate exposure of 50 to 100% of drawn borrowings Gearing (1) < 50% – Forecast assumes 90% of initial drawn debt is hedged and 50% of ICR (2) > 2.0x de
Slide 41: Portfolio List – Appendix C
41 Portfolio List – Appendix C Woolworths % of Total Woolworths as Occupancy Forecast Period Number of WALE (years, Capitalisation Independent State Property Type GLA % of Total GLA (% by GLA) Gross Income Specialty Stores by GLA) Rate Valuation (A$m) Completed Portfolio Berala NSW Neighbourhood Cen
Slide 42: Portfolio List (cont.) – Appendix C
42 Portfolio List (cont.) – Appendix C Woolworths % of Total Woolworths as Occupancy Forecast Period Number of WALE (years, Capitalisation Independent State Property Type GLA % of Total GLA (% by GLA) Gross Income Specialty Stores by GLA) Rate Valuation (A$m) Completed Portfolio Takanini NZ Neighbou
Slide 43: Portfolio List (cont.) – Appendix C
43 Portfolio List (cont.) – Appendix C Woolworths % of Total Woolworths as Occupancy Forecast Period Number of WALE (years, Capitalisation Independent State Property Type GLA % of Total GLA (% by GLA) Gross Income Specialty Stores by GLA) Rate Valuation (A$m) Development Portfolio Cabarita NSW Neigh
Slide 44: Structure of SCA Property Group – Appendix D
44 Structure of SCA Property Group – Appendix D SCA Property Group Stapled Units Stapling Deed / Provisions SCA Property SCA Property Management Retail Trust Trust Operating Australian Real Hold Co Co Estate Assets SCA Property NZ Retail Trust SCPRE Key NZ Real Estate Assets = Trust = Company = Asse