360 Capital Reit · ASX:TOT
360 Capital Reit — 360 Capital Total Return Fund — FY2018 Earnings Presentation
27 slides from 360 Capital Reit's earnings presentation, Aug 22, 2018
Slide 1: FY18 Results Presentation
For personal use only 360 CAPITAL TOTAL RETURN FUND (ASX: TOT) FY18 Results Presentation 22 August 2018 The stapled fund comprising 360 Capital Total Return Passive Fund (ARSN 602 304 432) and 360 Capital Total Return Active Fund (ARSN 602 303 613) | FY18 Annual Results August 2018 360 Capital Total
Slide 2: Table of Contents
Table of Contents Section For personal use only 1 FY18 Results and Investment Strategy 3 2 Distribution History and Trading Performance 6 3 Real Estate Credit and AMF Finance 8 4 Loan Portfolio 14 5 Financial Results 20 6 Capital Management 23 7 Outlook and Guidance 26 2 | FY18 Annual Results August
Slide 3: FY18 Results and Investment Strategy
For personal use only 1. FY18 Results and Investment Strategy 3 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 4: FY18 Results
FY18 Results For personal use only $5.9m 9.0 cpu 9.0 cpu Operating Profit FY18 Operating EPU FY18 DPU 22.2% $1.19 $111.0m FY18 Net Tangible Assets Loan Book2,3 Total Unitholder Return1 per Unit 1. Total Unitholder Return is the movement in unit price and distributions (assumed to be reinvested) over
Slide 5: TOT's Investment Strategy
TOT’s Investment Strategy Why Real Estate Debt? Current Focus Real Estate Debt For personal use only • Late stages of real estate cycle • Focus on capital preservation, step-out of first loss position • Changes in prudential regulation have further created non-bank lending opportunities • Secured lo
Slide 6: Distribution History and Trading Performance
For personal use only 2. Distribution History and Trading Performance 6 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 7: Distribution History and Trading Performance
Distribution History and Trading Performance For personal use only Distributions enhanced by distributable gains Index outperformance TOT FY18 Total Unitholder Return1 – 12mths: 22.2% vs. ASX 300 A-REIT Index – 12mths: 14.5% 12.0cpu 2.4cpu 9.0cpu 1.2cpu 8.1cpu 7.3cpu Aug-2017 Oct-2017 Nov-2017 Mar-2
Slide 8: Real Estate Credit and AMF Finance
For personal use only 3. Real Estate Credit and AMF Finance 8 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 9: Why Real Estate Credit - the Capital Stack
Why Real Estate Credit - the Capital Stack AMF Finance takes senior and mezzanine positions secured by registered For personal use only mortgages against the underlying assets Typical A-REIT Investment Equity First loss position, late cycle potential for capital loss Preferred Equity Priority Ahead
Slide 10: Why Real Estate Credit - An Example, Melbourne Hotel
Why Real Estate Credit - An Example, Melbourne Hotel Market Correction For personal use only -31.6% decline in commercial Current Market Valuation real estate values $53.0m@6.5% Cap Rate Equity Market Correction Equity $16.7m $36.3m@9.4% Initial Yield $0.0m Capital buffer if market conditions change
Slide 11: Australia's Evolving Real Estate Credit Market
Australia’s Evolving Real Estate Credit Market Foreign Banks Increasing Exposures, a sign of increased regulatory pressures on local major banks For personal use only $bn Traditional banks are unable to service the demand for real estate 50 lending, creating a funding gap for non-bank lenders1 45 40
Slide 12: AMF Finance – Origination is Key to Quality Transactions
AMF Finance – Origination is Key to Quality Transactions • Over 7,500 finance brokers get regular updates For personal use only • Broker accreditation and login • Tracks every DA submitted in Australia updated up to four times per day • Introducer incentivisation program • On-line applications acros
Slide 13: AMF Finance – Months of Operation
AMF Finance – 8 Months of Operation Snapshot after 8 Months AMF Finance Deal Flow For personal use only $1,800m $69m Completed Deals1 $1,600m $1,400m Total Deal Pipeline $111.0m $2.1m $1,200m $1,579m $1,000m Loan Closed1 Gross Revenue1 $800m $600m $400m $32m $10m 71 588 $200m $347m $244m $- FY 18 Ju
Slide 14: Loan Portfolio
For personal use only 4. Loan Portfolio 14 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 15: Loan Portfolio
Loan Portfolio For personal use only 7 $111.0m $234.9m Loan Investments1 Loan Book1,2 Projected End Value1,2,3 $77.7m 66.1% 11.6% First loss buffer1,3,4 Loan to Value Ratio1,2,3 Average Interest Rate1,5 1. Inclusive of Port Coogee facility (terms agreed) 2. Facility amount including capitalised inte
Slide 16: Loan Portfolio
Loan Portfolio For personal use only Investment Type1,2 Geography1,2 Asset Type1,2 Mezzanine WA Accommodation 7.0% 16.0% 7.2% NSW Residential 43.0% 44.9% Hotel 39.5% Senior VIC Medical Centre 93.0% 41.0% 8.3% 1. Based on facility amount including capitalised interest and fees 2. Inclusive of Port Co
Slide 17: Loan Portfolio
Loan Portfolio For personal use only Hotel Melbourne Medical Centre Accommodation Loan Type Mezzanine loan Progressively drawn senior loan Progressively drawn senior loan Development of 2,396 sqm (GLA) medical centre in Sunbury, Development of 28 room residential accommodation facility Project Descr
Slide 18: Loan Portfolio
Loan Portfolio For personal use only Hotel Residential Residential Loan Type Progressively drawn senior loan Cash advance senior loan Progressively drawn senior loan Construction of 30 residential apartments in Western Project Description Development of 162 room 4-star hotel in Melbourne CBD Develop
Slide 19: New Investment – Perth Residual Stock (terms agreed)
New Investment – Perth Residual Stock (terms agreed) For personal use only Property Type Medium Density Residential Development Loan Type Senior “In-one line” Valuation: $18.0m (excl. GST) Size1 Facility Amount: $9.9m (55% “In-one line”) Interest Rate 10.0% p.a. capitalising monthly Term 18 mont
Slide 20: Financial Results
For personal use only 5. Financial Results 20 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 21: Earnings and Distributions
Earnings and Distributions FY18 FY17 CHANGE For personal use only Statutory net profit Statutory net profit attributable to ($’000) ($’000) attributable to securityholders securityholders lower than prior year Distribution income 5 3,636 primarily reflecting unrealised gains on $2.4m listed investme
Slide 22: Assets and Liabilities
Assets and Liabilities FY18 FY17 For personal use only CHANGE Committed The appointment of 360 Capital’s dedicated ($’000) ($’000 $73.2m debt team has led to a significant increase in deal flow with the Fund committing to deploy Cash 40,089 19,858 To non-bank lending $73.2m across five separate loan
Slide 23: Capital Management
For personal use only 6. Capital Management 23 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 24: Activation of Capital's Private Capital Network
Activation of 360 Capital’s Private Capital Network Focus to make AMF a major Real Estate Credit Provider For personal use only Build Sell Manage Initial $100m loan book Balance Sheet Capital 10% - 15% IRR Initial Investment Capital - $80m Continue to build Sell loan portfolio and Securitisation and
Slide 25: Distribution Reinvestment Plan
Distribution Reinvestment Plan For personal use only • The Fund will introduce a Distribution Reinvestment Plan (DRP) for the Fund for the quarter ending 30 September 2018. • The DRP allows securityholders to choose between continuing to receive distributions in the form of cash paid into their bank
Slide 26: Outlook and Guidance
For personal use only 7. Outlook and Guidance 26 | FY18 Annual Results August 2018 360 Capital Total Return Fund
Slide 27: Outlook and Guidance
Outlook and Guidance Market Outlook For personal use only • Non-bank lending in real estate expected to continue to increase: - APRA has imposed more banking regulations on Australian Banks - Banking Royal Commission may further restrict bank lending • Capital, robust processes and efficient executi
360 Capital Total Return Fund — FY2018 Earnings Presentation on 6ix