Us Masters Residential Property Fund · ASX:URF
Us Masters Residential Property Fund — Investor Presentation (February 2017)
70 slides from Us Masters Residential Property Fund's investor presentation, Feb 20, 2017
Slide 1: 2017 URF update
For personal use only 2017 URF update Alan Dixon – CEO David Orr – COO Alex MacLachlan – Strategy Laura Mooney – Director, Leasing
Slide 2: Disclaimer
Disclaimer For personal use only This presentation has been prepared by URF Investment Management Pty Limited (ACN 21 600 188 805), a corporate authorised representative (CAR No: 1009350) of Walsh & Company Asset Management Pty Limited (ACN 159 902 708, AFSL 450 257) (Investment Manager) as Investme
Slide 3: Agenda
Agenda For personal use only 1 The big picture 2 Portfolio review 3 Leasing overview 4 Questions 3
Slide 4: The big picture
For personal use only The big picture 4
Slide 5: URF five years ago
URF five years ago For personal use only First ASX listed property trust focused on NYC properties AUD$70 million fund Cash & few properties 100% Hudson County 5
Slide 6: URF today
URF today For personal use only Largest owner of townhouses in NYC metro > AUD$1 billion in assets Over 1,500 housing units Diversified portfolio 6
Slide 7: Positioned for continued growth
Positioned for continued growth For personal use only Multiple levers to create value URF total cumulative return for unitholders 200 Cumulative return since inception: 67% Capital appreciation Annualised return since inception: 12% Total Cumulative Unitholder 180 % 160 Return Index 140 Growing rent
Slide 8: The world has changed
The world has changed For personal use only 120 - 46% - 34% - 68% - 53% 100 80 INDEX 60 40 20 0 Commodity Prices Exchange Rate Interest Rates Wage Growth 2011 2016 Source: Bloomberg, Reserve Bank of Australia, Australian Bureau of Statistics 8
Slide 9: The world has changed
The world has changed For personal use only Created a new listed asset class for Australian investors What hasn’t changed - Australian dollar adjustment not complete - US economy strongest of developed countries - New York housing represents quality store of long term value What has changed - Eurozo
Slide 10: The world has really changed
The world has really changed For personal use only 10
Slide 11: The Trump Bump
The Trump Bump US Election: 8 November 2016 For personal use only 30 Year Fixed Rate Mortgage Avg. S&P 500 4.3 400 387.00 4.1 4.04% 380 Avg. Int. Rate% 3.9 360 3.7 3.34% 340 331.75 3.5 320 3.3 300 30/09/2016 31/10/2016 30/11/2016 31/12/2016 31/01/2017 30/09/2016 31/10/2016 30/11/2016 31/12/2016 31/0
Slide 12: The impact of rising rates
The impact of rising rates For personal use only Weak relationship between housing prices and rates 30 Year Fixed Rate Mortgage Avg. 4.3 - Higher rates coincide 4.04% with higher growth 4.1 and jobs Avg. Int. Rate 3.9 - House prices rose 25 3.7 of last 26 times 3.34% interest rates went up 3.5 3.3 3
Slide 13: Portfolio review
For personal use only Portfolio review 13
Slide 14: Investment focus
Investment focus For personal use only Fund has targeted four distinct investment markets Hudson County Workforce Multi-family New Jersey premium New York premium 14
Slide 15: Hudson County workforce
Hudson County workforce For personal use only Greenville | Bayonne | West Bergen | The Heights | Journal Square Low acquisition costs Rent quickly Yield well 15
Slide 16: Hudson County workforce: acquisition profile
Hudson County workforce For personal use only High-yield properties in gentrifying areas Acquisition profile 2219 Evaluated 1161 Bid 52% 354 Acquired 16% 31 Sold 323 Portfolio 15% 0 500 1000 1500 2000 2500 Properties 16
Slide 17: Hudson County workforce: scale with low acquisition costs
Hudson County workforce For personal use only Significant scale built with low acquisition costs Neighbourhood Average cost and value per property (USD) $500,000 39 $450,000 73 $400,000 34 $350,000 $300,000 $250,000 64 56 $200,000 $150,000 57 $100,000 $50,000 Greenville Bayonne $- West Bergen The He
Slide 18: Hudson County workforce: who are our tenants?
Hudson County workforce For personal use only Who are our tenants? Roommates 18% Families 37% 18% 16% 14% 12% Singles 10% 20% 8% Couples 6% 25% 4% 2% Median household 0% income USD$79,200 Average rent Occupation USD$1,832 per month 18
Slide 19: Update: Ogden Avenue
Update: 354 Ogden Avenue For personal use only Prime example of New Jersey auction process Acquisition process - 2005: Bought by 3rd party for $635,000 - 2009: Financial distress - 2012: Placed on potential foreclosure list - 2013: Fund visits for first time - 2016: Fund purchases for $470,000 Analy
Slide 20: Multi family joint ventures
Multi family joint ventures For personal use only Strategy complements single family portfolio Attractive financing Expedited use of capital Immediately cash flowing 20
Slide 21: Update: West St
th Update: 515 West 168 St For personal use only Extended partnership with Urban American 84 unit building USD$18.2 million asset USD$216,667 per unit 21
Slide 22: Multi family joint ventures: Urban American as a partner
Multi family joint ventures For personal use only Urban American as a Partner - 19 years of experience - c8,000 units owned - Very strong track record - JV with Brookfield (who run USD$72 billion portfolio) - Manage largest multifamily complex in North America Source: Crains New York Business, 31 De
Slide 23: Joint Venture investments with Urban American
Multi family joint ventures For personal use only Joint Venture investments with Urban American Fund Purchase Valuation Location Buildings Units Share (US$m) (US$m) West New York 7 250 67.5% $23.5 $35.2 Union City 5 119 67.5% $11.2 $12.2 North Bergen 1 31 67.5% $2.9 $2.3 Washington Heights 1 84 63.7
Slide 24: Premium New Jersey
Premium New Jersey For personal use only Downtown Jersey City | Hoboken | Weehawken Classic architecture Exceptional location Excellent neighbourhoods The Fund’s purchasing in Downtown, JC has coincided with the development boom in the area 24
Slide 25: Premium New Jersey: selective approach
Premium New Jersey For personal use only Lower volume of actively marketed properties; Fund maintains selective approach 787 Evaluated 397 Bid 50% 149 Acquired 19% 14 Sold 135 Portfolio 17% 0 200 400 600 800 1000 Properties 25
Slide 26: Premium portfolio at attractive valuations
Premium New Jersey For personal use only Premium portfolio at attractive valuations Neighbourhood Average cost and value per property (USD) $2,000,000 $1,800,000 16 $1,600,000 $1,400,000 16 $1,200,000 $1,000,000 $800,000 103 $600,000 $400,000 $200,000 $- Acquisition Renovation All in Cost Uplift Cur
Slide 27: Premium New Jersey: who are our tenants?
Premium New Jersey For personal use only Who are our tenants? Roommates 7% Singles 40% 11% 35% - Pharma Couples 30% 53% - Sports 25% Families - Media 29% 20% - Medical 15% - Tech 10% 5% - HR Median household 0% income USD$300,000 Average rent Occupation USD$5,577 per month 27
Slide 28: Update: Jersey City Awarded
Update: Jersey City Awarded For personal use only Jersey City is #1 “Jersey City ranks as the most livable city in the U.S…” – CNBC Money 28
Slide 29: Premium New York
Premium New York For personal use only Brownstone Brooklyn | Harlem | Queens | Lower Manhattan Irreplaceable assets Highly sought after locations Opportunistic acquisitions “…‘New Brooklyn’ has become a global brand.” New York Times 29
Slide 30: Premium New York: undervalued assets
Premium New York For personal use only Undervalued assets in gentrifying neighbourhoods Wide array of properties evaluated across the three boroughs; lowest purchasing rate 2094 Evaluated 759 Bid 36% 151 Acquired 7% 8 Sold 143 Portfolio 6% 0 500 1000 1500 2000 2500 Properties 30
Slide 31: Premium New York: core holdings
Premium New York For personal use only Core holdings of hard-to-find, prime New York properties Neighbourhood Average cost and value per property (USD) $3,000,000 8 $2,500,000 25 $2,000,000 $1,500,000 $1,000,000 110 $500,000 $- Acquisition Renovation All in Cost Uplift Current Brooklyn Manhattan Que
Slide 32: Premium New York: who are our tenants?
Premium New York For personal use only Singles 11% Who are our tenants? Families 20% 38% Couples 18% 17% 16% 14% 12% 10% - Fashion 8% Roommates 6% - Law 34% 4% - Foreign Aid 2% Median household - Events 0% income USD$433,068 Average rent Occupation USD$9,030 per month 32
Slide 33: Update: Powers Project
Update: 211 Powers Project For personal use only Acquisition Construction Lease Capital appreciation - Strategic neighbourhood selection - Best deals in neighbourhood - Smart construction investment $1.85m $420k $134k Cost Reno Uplift Focus on rental income - Leased before construction completio
Slide 34: Current portfolio
Current portfolio For personal use only High-quality, unique, and diversified portfolio of New York metropolitan area residential housing Property distribution Properties Units Value Weighting by value 6% Premium New York 143 197 $383.7 47% 17% Premium New Jersey 135 235 $244.0 30% 47% Workforce 323
Slide 35: Rental income growth
Rental income growth For personal use only $25.0 $22.3 $20.0 $16.3 $15.0 US$M $12.3 $9.7 $10.0 $5.0 $4.3 $- 2012 2013 2014 2015 2016 - 2016 gross revenue of US$22.3m represents a 37% increase over 2015 and an 80% increase over 2014 35
Slide 36: Leasing overview
For personal use only Leasing overview 36
Slide 37: Team objectives
Team objectives For personal use only Premium Minimum service vacancy Leasing Success Great Maximum tenants prices 37
Slide 38: Operations
For personal use only Operations 38
Slide 39: Operations: marketing innovations
Operations For personal use only Marketing innovations Lease application Lease signing Online bookings 39
Slide 40: Operations: Marketing innovations
Operations For personal use only Marketing innovations 40
Slide 41: For personal use only
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Slide 42: For personal use only
For personal use only 42
Slide 43: For personal use only
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Slide 44: For personal use only
For personal use only 44
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Slide 47: Operations: Lease application
Operations For personal use only Lease application 47
Slide 48: Application
For personal use only Application 48
Slide 49: Operations: Lease signing
Operations For personal use only Lease signing 49
Slide 50: Lease signing
For personal use only Lease signing 50
Slide 51: Operations: Online bookings
Operations For personal use only Online bookings 51
Slide 52: Self booking
For personal use only Self booking 52
Slide 53: 2016 highlights
For personal use only 2016 highlights 53
Slide 54: New Leases
New Leases For personal use only Lease type Total annual Increased Percentage Total count annual (USD) Revenue (USD) increase New lease 38 $3.75M $3.75M - New New lease 199 $6.68M $0.58M 10% - Existing 54
Slide 55: For personal use only
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Slide 56: New Leases
New Leases For personal use only Lease type Total annual Increased Percentage Total count annual (USD) Revenue (USD) increase New lease 38 $3.75M $3.75M - New New lease 199 $6.68M $0.58M 10% - Existing Renewals 592 $14M $0.43M 3% 56
Slide 57: Renewal rate: detailed application process
Renewal rate For personal use only Why? New York 1. Detailed application process 57
Slide 58: Renewal rate: premium VIP service
Renewal rate For personal use only Why? New York 2. Premium VIP service 58
Slide 59: Renewal rate: thorough renewals process
Renewal rate For personal use only Why? New York 3. Thorough renewals process 59
Slide 60: What they do
What they do For personal use only Shanniel M. Newark, NJ 60
Slide 61: For personal use only
RA 2 dixonieasing em or personal use only Residential Property Fund
Slide 62: New Leases
New Leases For personal use only Lease type Total annual Increased Percentage Total count annual (USD) Revenue (USD) increase New lease 38 $3.75M $3.75M - New New lease 199 $6.68M $0.58M 10% - Existing Renewals 592 $14M $0.43M 3% Grand total 829 $24.4M $4.8M 62
Slide 63: 2016 Success Story
2016 Success Story For personal use only Member 3 $18,995/Month Member 2 $19,695/Month Member 1 $19,000/Month Broker referral Client Referral 63
Slide 64: Dean Street, Brooklyn
Dean Street, Brooklyn For personal use only Original • $14,500 lease • $18,995 New lease • 31% Increase 64
Slide 65: Market comparison
For personal use only Market comparison 65
Slide 66: The Heights, Jersey City
The Heights, Jersey City For personal use only MANHATTAN 66
Slide 67: Purchase comparison - QLD
Purchase comparison - QLD For personal use only The Heights, Jersey City Morningside, Brisbane Price: $710,000 Price: $705,000 Style: 2 family home Style: Single family home 7 bed / 3 bath / 2 car 3 bed / 2 bath / 2 car Rent: $900 per week Rent: $500 per week Gross yield: 6.6% Gross yield: 3.7% 67
Slide 68: Lending comparison - QLD
Lending comparison - QLD For personal use only New York QLD Purchase price $700,000 $700,000 Loan to Value 75% 90% + Lenders Mortgage Ratio (LVR) Insurance (LMI) Total upfront costs $199,000 $98,525 and deposit Difference $100,475 68
Slide 69: Team objectives
Team objectives For personal use only Premium Minimum service vacancy Leasing Success Great Maximum tenants prices 69
Slide 70: Questions
For personal use only Questions 70
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