Qualitas Real Estate Income Fund Units · ASX:QRI
Qualitas Real Estate Income Fund Units — Corporate Update (April 2020)
28 slides from Qualitas Real Estate Income Fund Units's corporate update, Apr 16, 2020
Slide 1: ASX Announcement – QRI Market Update
ASX Announcement Qualitas Real Estate Income Fund (ASX: QRI) – Market Update For personal use only 16 April 2020: QRI Manager Pty Ltd (“Manager”), the manager of the Qualitas Real Estate Income Fund (“QRI”), has released a market update presented by Group Managing Director of Qualitas, Andrew Schwar
Slide 2: About Qualitas Real Estate Income Fund
About Qualitas Real Estate Income Fund The Qualitas Real Estate Income Fund (“Trust” or “QRI”) seeks to provide monthly income and capital preservation by investing in a portfolio of investments that offers exposure to real estate loans secured by first and second mortgages, predominantly located in
Slide 3: Notices and disclaimers
Notices and disclaimers 1. This communication has been issued by The Trust Company (RE Services) Limited (ACN 003 278 831) (AFSL 235150) as responsible entity of The Qualitas Real Estate Income Fund (ARSN 627 917 971) (Fund) and has been prepared by QRI Manager Pty Ltd (ACN 625 857 070) (AFS Represe
Slide 4: Qualitas Real Estate Income Fund Market update – April 2020
For personal use only Qualitas Real Estate Income Fund (ASX:QRI) ARSN 627 917 971 Market update – April 2020 Andrew Schwartz – Group Managing Director and Co-Founder of the Qualitas Group 1
Slide 5: Agenda
Agenda For personal use only 1 QRI Executive Summary 2 COVID-19 and Impact on QRI 3 QRI Portfolio Composition (as at 31 March 2020) ASX Release | April 2020 2
Slide 6: QRI Executive Summary
For personal use only QRI Executive Summary 3
Slide 7: QRI - Executive Summary
QRI - Executive Summary For personal use only • QRI (established in November 2018) provides exposure to the Australian real estate debt market in a liquid, regular income1 paying form with capital preservation characteristics. Each loan asset in the QRI portfolio is secured via a real property mortg
Slide 8: QRI - Executive Summary
QRI - Executive Summary • QRI is simple to understand For personal use only • Comprises only 30 loan investments1 on a look through basis to investments in underlying funds • Qualitas has direct relationships with each and every borrower and underlying secured property1 • All investments are activel
Slide 9: COVID-19 and Impact on QRI
For personal use only COVID-19 and Impact on QRI 6
Slide 10: Qualitas Manager Update
Qualitas Manager Update For personal use only Staff safety is a priority • On 18 March 2020, Qualitas moved its entire staff to working from home. • Work practices tested and implemented successfully in a virtual environment. • Business as usual in these unusual circumstances. New loans approved but
Slide 11: COVID-19 Implications for QRI
COVID-19 Implications for QRI • The most recent loan review process focused specifically on COVID-19’s impact on the portfolio. For personal use only • Our working assumption is that the current lockdown situation may continue for the next 6 months. • In our view, it is too early to make a definitiv
Slide 12: Loan reviews / Impairment
Loan reviews/ Impairment For personal use only • Qualitas has conducted a detailed assessment of all 30 loan positions specifically having regard to the risks of COVID-19. • AFWT notes, which comprise 7% of the Trust portfolio, has been reviewed as a pool of loans and not on an individual loan basis
Slide 13: Early Pricing Expectations
Early Pricing Expectations For personal use only • Early observations • More favourable pricing compared to 2019; • Increased quality of the security package; • Less competitive pressure. • QRI is fortunate to have cash available to be able to invest in new loan opportunities going forward. • The sh
Slide 14: QRI Portfolio Composition
For personal use only QRI Portfolio Composition 11
Slide 15: QRI Portfolio Composition – Summary
QRI Portfolio Composition – Summary For personal use only • Maintained discipline and did not go up the risk curve to remain competitive. • Focused on being price competitive for the right risk hence the Trust portfolio is predominantly comprised of first mortgage loans (currently c97% of the loan p
Slide 16: Portfolio Composition
Portfolio Composition as at 31 March 2020 For personal use only Loan type Predominantly invested in first mortgages (97% Category $’millions Portfolio of loan portfolio)2 Weighting Underweight to mezzanine loans (3% of loan portfolio) 2 Cash - uncommitted 51.6 14% (Target 20%-35% of Trust capital) F
Slide 17: Trust Balance Sheet
Trust Balance Sheet as at 31 March 2020 For personal use only $ 'millions Net Assets 360.8 Units on issue 225.5 Net Tangible Assets per unit $1.60 • No external debt on balance sheet. • Liabilities mainly comprise of distributions payable to investors. • Based on the latest asset management reviews
Slide 18: Senior Investment Loans
Senior Investment Loans Example loans within the Trust portfolio: For personal use only SENIOR INVESTMENT LOANS DESCRIPTION • Secured against real estate assets that are income generating or have the potential to generate income on an ongoing basis. • Includes residual stock loans which are loans se
Slide 19: Senior Construction Loans
Senior Construction Loans SENIOR CONSTRUCTION LOANS Example loans within the Trust portfolio: For personal use only DESCRIPTION • Provided to fund development and construction costs, and Neutral Bay, NSW secured against land with the potential for development, or real estate assets that are soon-to-
Slide 20: Senior Land Loans
Senior Land Loans SENIOR LAND LOANS For personal use only Example loans within the Trust portfolio: DESCRIPTION • Secured against infill vacant land with the potential for development. This includes undeveloped land that can be subdivided, land approved for development and land yet to be approved fo
Slide 21: Mezzanine Construction Loans
Mezzanine Construction Loans For personal use only MEZZANINE CONSTRUCTION LOANS Example loan within the Trust portfolio: DESCRIPTION • Loans secured with a second ranking mortgage. • These loans are usually associated with construction Fitzroy, VIC projects and will rank behind a senior lender who i
Slide 22: Arch Finance Warehouse Trust Notes
Arch Finance Warehouse Trust Notes DESCRIPTION • The Arch Finance Warehouse Trust (AFWT) is a lender of secured real estate loans which are originated and managed by For personal use only Arch Finance Pty Ltd as trustee for Arch Finance Unit Trust (Arch Finance), both entities being members of the Q
Slide 23: Revenue Composition
Revenue Composition as at 31 March 2020 Significant portion of interest revenue is paid in advance1 For personal use only OTHER KEY PORTFOLIO STATISTICS 98% of the loan 0% of loan portfolio1 with portfolio1 in personal arrears or guarantees impaired Number of loans (look through basis) Direct loans
Slide 24: Capital Management - Trading below NTA
Capital Management - Trading below NTA For personal use only • We maintain our original thesis of providing investors with monthly income and capital preservation (to the maximum extent possible). This has not changed • Per recent ASX announcements, the Manager is considering the buy back of units a
Slide 25: Best Wishes
Best Wishes For personal use only • This is clearly a difficult time in global history with many lives adversely affected. • We will continue to actively keep ahead of issues with a measured and calculated approach and communicate regularly throughout this period. • We wish our investors, borrowers
Slide 26: Stakeholder Engagement and Communication
Stakeholder Engagement and Communication For personal use only Shareholder Engagement Regular unitholder Investor presentations Website Media emails Monthly, semi and Industry Monthly NAV Independent Research annual financial results Conferences ASX Release | March 2020 23
Slide 27: Important Information
Important Information This document has been prepared by QRI Manager Pty Ltd ACN 625 857 070 (Manager), the This document includes “forward looking statements”. Such forward- looking investment manager of the Trust. The Trust Company (RE Services) Limited ABN 45 003 278 statements are not guarantees
Slide 28: Appendix – QRI Structure
Appendix – QRI Structure For personal use only Qualitas Real Estate Income Fund (“QRI” or “Trust”) ASX LISTED 100% Qualitas Wholesale Real Estate Income Fund (“Sub-Trust”) INVESTMENT PORTFOLIO Unitholder Unitholder Lender Lender Unitholder Noteholder Qualitas Qualitas 91 Direct mezz Qualitas Arch Fi
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