Ingenia Communities Group · ASX:INA
Ingenia Communities — ING Real Estate Community Living Group — FY2011 Earnings Presentation
47 slides from Ingenia Communities's earnings presentation, Aug 26, 2011
Slide 1: 2011 Annual Results Presentation
ING Real Estate AUSTRALIA Community Living Group 2011 Annual Results Presentation Simon Owen Chief Executive Officer 26 August 2011
Slide 2: Agenda
Agenda Highlights Key financials Capital management Review of operations Strategy and outlook Appendices 2
Slide 3: Highlights
Highlights Progress against 2010/11 strategic initiatives • Successful conversion of three QLD villages in October 2010 with 18 sales achieved 9 Execution of DMF Conversion and 22 contracted and reserved as at 30 June 2011 Project • Planning underway for additional village conversion • Five non-core
Slide 4: Key financials
Key financials Residents at Settlers Lakeside, WA 4
Slide 5: Key financials
Key financials Asset sales impacted earnings while strengthening balance sheet metrics Key financial metrics FY2011 FY2010 Statutory profit/(loss) $m 13.1 (67.7) Operating income $m 6.9 18.3 Operating income per unit cents 1.6 4.1 Look through Gearing % 69% 73% Assets under management1 $m 644.0 772.
Slide 6: NAV firming slightly despite appreciation of AUD
Key financials NAV firming slightly despite appreciation of AUD 29 25.9 27 1.6 (0.1) (2.0) 1.5 25.9 24.9 25 A$ cent per unit 23 21 1.0 NZ and US Students (4%) 19 2.4 AU Conversion (9%) 2.8 AU Settlers (11%) 9.9 AU Garden Villages (38%) 17 7.7 Non-New York (30%) 2.1 New York (8%) 15 1 /06 /2 01 1 30-
Slide 7: Earnings reconciliation – FY11
Key financials Earnings reconciliation – FY11 Operating income 25 > Garden Villages portfolio is the key and growing 20 2.5 (3.1) contributor to earnings 1.2 (0.4) 2.8 (8.9) > DMF Conversion income impacted by expensing of 15 6.5 0.5 one-off launch and set-up costs. Significantly A$m higher contribu
Slide 8: Cashflow reconciliation – FY11
Key financials Cashflow reconciliation – FY11 Cashflow 80 5.3 0.7 (0.6) (6.9) 70 10.2 (7.7) > One-off capital hedges termination costs were paid 60 12.7 (16.0) in November 2010 50 19.9 > Investment property sale proceeds from the A$m 40 (22.8) divestment of five non-core Garden Villages were 30 util
Slide 9: Capital management
Capital management Settlers Gladstone Gardens (DMF Conversion), QLD 9
Slide 10: Look through debt maturity profile
Capital management Fund’s look through debt maturity profile to significantly improve with partial US sale > Partial sale of US profile Debt maturity portfolio as will at create a significant 30 June 2011 reduction in look through debt with the remaining US assets having a long dated maturity profil
Slide 11: Australian gearing continues to improve
Capital management Australian gearing continues to improve > Application of US sale proceeds to repay Australian debt will considerably reduce gearing > Proforma gearing position will provide capital to fund internal growth initiatives > Remaining US Seniors debt long dated, non recourse and covenan
Slide 12: Review of operations
Review of operations Settlers Ridgewood Rise, WA 12
Slide 13: Increased focus towards Australia
Review of operations Increased focus towards Australia Australian Australian Australian US Rental NZ Portfolio 30 June 2011 Rental DMF DMF (New York) Students FY 20111 Conversion (Proforma) Properties 26 4 3 6 3 42 Units 1,371 677 216 914 359 3,537 Book Value A$89.7m A$56.5m A$26.4m US$132.2m NZ$22.
Slide 14: Our Australian focus
Review of operations Our Australian focus TWO PRIMARY BRANDS Rental DMF Conversion DMF Villages > 26 Rental Villages across Australia > 3 rental villages converted to > 4 DMF Villages (3 in WA / 1 QLD) DMF model in Oct 2010 > Core market is pension supported seniors > Target self funded retirees wit
Slide 15: Snapshot of Australian Seniors portfolio
Review of operations – Australian Seniors Snapshot of Australian Seniors portfolio ILF owns and operates a large and diverse portfolio of Seniors communities QUEENSLAND Settler Lifestyle DMF Conversion Garden Villages No of properties: 1 3 2 Total value: A$6.4m A$26.4m A$11.4 m Total units: 149 216
Slide 16: Garden Villages (Rental)
Review of operations – Garden Villages (Rental) KEY DATA KEY ACTIVITY OVER 12 MONTHS FY 2011 FY 2010 > Occupancy trending towards long term target of 89%, Occupancy: 81% 73% with 81% achieved at 30 June 2011 Net property income: $6.5m $5.2m > Consolidation of business operations well advanced - Tota
Slide 17: DMF Conversion
Review of operations – DMF Conversion KEY DATA KEY ACTIVITY OVER 12 MONTHS KEY DATA as at 30 Jun 2010 FY 20111 > Stage 1 conversion village works completed in October 2010, with first settlement in March 2011 Occupancy: 50% Net property income: $0.5m > Sell down of existing 216 units will release ca
Slide 18: Settlers Lifestyle (DMF)
Review of operations – Settlers Lifestyle (DMF) KEY DATA KEY ACTIVITY OVER 12 MONTHS KEY DATA as at 30 Jun 2010 FY 2011 FY 2010 > Improved sales and marketing to drive awareness and market penetration for Settlers Lifestyle brand Occupancy: 95% 97% DMF income: $1.4m $1.6m > Softening of residential
Slide 19: US Seniors
Review of operations – US Seniors Refining a geographically diverse US portfolio to one premium market NEW YORK (Long Island) No of states: 1 No of properties: 6 Total value: US$241.8m Total units: 914 NON-NEW YORK ASSETS No of states: 9 No of properties: 15 Total value: US$343.0m Total units: 2,951
Slide 20: Partial Sale of US Seniors Portfolio
Review of operations – US Seniors Partial Sale of US Seniors Portfolio was announced in July 2011 > Divested 50% interest in 15 of the 21 US Seniors communities (non-New York assets) to existing joint venture partner, Chartwell Seniors Housing REIT The > Sale price of US$171.5m is in line with Decem
Slide 21: US Seniors – Bristal portfolio
Review of operations – US Seniors KEY DATA1 KEY CHARACTERITICS OF BRISTAL PORTFOLIO FY 2011 FY2010 > Six A-grade communities located in high median income neighbourhoods close to New York city New York assets (Bristal) > Consistent performing assets with NOI margin of ~40% Occupancy: 91.9% 90.2% > H
Slide 22: NZ Students
Review of operations – NZ Students KEY DATA KEY ACTIVITY OVER 12 MONTHS FY 2011 FY 2010 > Negotiations underway with Victoria University of Occupancy: 90%1 98% Wellington (VUW) for a new long-term contract Net property income: NZ$2.6m NZ$2.4m > Six month extension to February 2012 granted for the To
Slide 23: Strategy and outlook
Strategy and outlook Settlers Gladstone, QLD 23
Slide 24: Build a leading Australian Seniors business
Strategy Our strategic direction: to build a leading Australian Seniors business > Recent announced sale of non-New York seniors communities will Monetise offshore monetise > 6¢ per unit equity which will deleverage Australian balance 1. sheet and fund growth capital equity > Patient and disciplined
Slide 25: Considerable value building in development pipeline
Strategy Considerable value building in development pipeline Development forecast within existing portfolios Completion # of FY12 FY13 FY14 FY15 FY16+ Value ($m) Units1 Active Development Settlers DMF Ridgewood, WA $4.9 11 Gladstone, QLD $13.2 64 Stage 1 Stage 2 DMF Rockhampton, QLD $17.2 90 Stage 1
Slide 26: Assessing opportunities to drive unitholder value
Strategy Management assessing a range of opportunities to drive unitholder value in Australia Explore new market niches Develop, acquire and seed Seed new business models eg, hybrid, care High Acquire Greenfields village in new market Acquire partially built village in new market Extend and Convert
Slide 27: Outlook
Outlook Plans to convert an additional village to DMF and divest three rental villages; commence Stage 2 development at Gladstone Conversion village Forecast improving operating cashflows Investigate monetising equity in remaining overseas investments – US Seniors and NZ Students Assess future Distr
Slide 28: Update on ING's position
Update on ING’s position ING to undertake a phased withdrawal from the REIMA business Operationally, Management is confident that ILF now has a stable platform with capital flexibility to consider various go-forward strategies for the business ING REIMA Management and the IML Board aligned with unit
Slide 29: Appendices
Appendices Bristal North Woodmere, Long Island, New York 29
Slide 30: Operating income
Appendix 1 Operating income1 FY11 FY10 (A$m) (A$m) Continuing Operations US Seniors 5.8 6.1 Australian Seniors - Garden Villages 6.5 5.2 - Conversion Properties 0.5 - - Settlers Lifestyle 2.8 5.0 NZ Students 1.2 0.9 Finance Costs (8.9) (8.3) Management Fee (1.8) (3.3) Fund Administration (1.3) (2.5)
Slide 31: Operating result versus statutory result
Appendix 2 Operating result versus statutory result 25 12.2 (2.7) 20 (2.2) (2.1) A$m 15 13.1 10 0.8 6.9 0.2 5 0 Operating Residents' Other Property Loss on Discontinued Mark-to-market Statutory profit income loans revaluations revaluation of operations 1 derivatives new construction 1. Discontinued
Slide 32: Sell down of overseas portfolios reduced earnings base
Appendix 3 Sell down of overseas portfolios has significantly reduced earnings base 1.4 50 45 Assets Under Management (A$b) 1.2 Assets under Management (A$b) Net NetOperating 40 Operating Income 1.0 35 30 0.8 Income (A$m) 25 0.6 20 (A$m) 0.4 15 10 0.2 5 0.0 0 FY 08 FY 09 FY 10 FY 11 Assets Under Man
Slide 33: Look through balance sheet
Appendix 4 Look through balance sheet As at 30 June 2011 (A$m) US Australian NZ US1 Total Seniors Seniors Students Students Cash 2.8 14.7 2.4 19.9 Investment property and property under development 283.2 323.4 17.4 624.0 Derivatives - - - - Other assets 11.0 2.9 0.8 14.7 Total assets 658.6 297.0 341
Slide 34: Cashflow in detail
Appendix 5 Cashflow in detail Amount A$m Opening cash at 1 July 2010 20.2 Cashflow generated from operations: Australian Seniors 10.2 US Seniors 5.3 US Students - NZ Students - Borrowing costs paid (10.6) Interest rate swaps 3.7 Net Cashflows from Operations 8.6 Proceeds from sale of investment prop
Slide 35: Valuations
Appendix 6 Strong increase in valuations of DMF Conversion assets offset by declines in Settlers and NZ Students asset values 30 Jun 31 Dec Movement Movement 30 Jun 2011 31 Dec 2010 Valuations 2011 2010 Cap rate 1 Cap rate1 Key drivers of valuation movement Valuation Valuation ($m) (%) (%) (%) Austr
Slide 36: Debt Facilities
Appendix 7 Debt Facilities Australian US Seniors US Seniors NZ Students Seniors (New York) (Non-New York) Core debt A$89.7m Limit ($m) Revolver A$15.0m US$128.2m1 US$135.8m1 NZ$18.7m1 Total A$104.7m Amount drawn ($m) A$96.2m US$128.2m1 US$135.8m1 NZ$18.7m1 Loan to value ratio (LVR) actual 55.7% N/A
Slide 37: Productivity Commission implications
Appendix 8 – Productivity Commission implications Affordable housing required to keep pace with low household growth 700 Affordable housing required to keep pace with medium household growth “Australia has a shortage of Affordable Housing Dwellings (‘000) Actual/projected affordable housing dwelling
Slide 38: US Students
Appendix 9 – US Students Progress > In November 2009, announced withdraw from US Students portfolio of 17 properties > Only one property remaining > We are currently engaged with lenders for the remaining property Summary Total Properties (Nov 2009) 17 Sold 3 Handed back to debt holders 13 Remaining
Slide 39: Portfolio Statistics: Garden Villages (Rental)
Appendix 10 – Portfolio Statistics: Garden Villages (Rental) Book Value Property Name Location 30 June 2011 (A$m) Cap Rate Total Units Occupancy Western Australia Swan View Gardens Swan Valley, WA 6.2 10.00% 72 86% Yakamia Gardens Yakamia, WA 3.9 10.00% 56 77% Sea Scape Gardens Erskine, WA 4.1 10.00
Slide 40: Portfolio Statistics: Garden Villages (Rental)
Appendix 11 – Portfolio Statistics: Garden Villages (Rental) Book Value Property Name Location 30 June 2011 (A$m) Cap Rate Total Units Occupancy Victoria Lovely Banks Gardens Corio, VIC 3.0 10.00% 65 55% Grovedale Gardens Grovedale, VIC 3.2 10.25% 50 73% St Albans Park Gardens St Albans Park, VIC 2.
Slide 41: Portfolio Statistics: Settlers (DMF)
Appendix 12 – Portfolio Statistics: Settlers (DMF) Property Name Location Book Value Discount Rate Total Units Occupancy 30 June 2011 (A$m) DMF Villages Lakeside Ravenswood, WA 24.5 13.5% 231 94% Ridgewood Rise Ridgewood, WA 20.8 13.3% 241 93% Meadow Springs Mandurah, WA 4.8 14.0% 56 90% Noyea Park
Slide 42: Portfolio Statistics: US Seniors
Appendix 13 – Portfolio Statistics: US Seniors 30 June 2011 ILF Interest Property Name Location (US$m) (A$m)1 Cap Rate Total Units Occupancy NEW YORK ASSETS (BRISTAL) East Meadow East Meadow, NY 39.1 18.2 7.25% 133 98% Lynbrook Lynbook, NY 22.7 21.1 7.25% 149 91% Massapequa Massapequa, NY 40.9 19.1
Slide 43: Portfolio Statistics: NZ Students
Appendix 14 – Portfolio Statistics: NZ Students Book Value Book Value 30 June 2011 30 June 2011 Property Name Location ILF Interest ILF Interest Cap Rate Total Units Occupancy2 (NZ$m) (A$m)1 Cumberland House Wellington, NZ 14.4 11.1 9.50% 187 90% Education House Wellington, NZ 3.6 2.8 9.50% 108 90%
Slide 44: Typical Garden Villages (Rental)
Appendix 15 – Typical Garden Villages (Rental) Site plan for Marsden Village, QLD Village Features > Rental accommodation for over 55s > Independent living options available in a gated community, coupled with services and activities > Community center with modest facilities such as reception and off
Slide 45: Typical DMF Conversion village
Appendix 16 – Typical DMF Conversion village Site plan for Settlers Gladstone Village, QLD Village Features > Independent living retirement village for over 55s in a gated community, coupled with communal services and facilities > Community center with recently upgraded facilities > Typically also i
Slide 46: Typical DMF village
Appendix 17 – Typical DMF village Aerial view of Settlers Noyea, QLD Village Features > Independent living retirement village for over 55s in a gated community, with resort style facilities > Community center includes residents lounge with bar and modern kitchen, games room, hairdressing salon, libr
Slide 47: Disclaimer
Disclaimer A copy of this presentation will be made available on www.ingrealestate.com.au This presentation was prepared by ING Management Limited (ABN The forward looking statements included in this presentation involve 15 006 065 032) (the "Responsible Entity") in respect of ING Real subjective ju
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