Slide 1: Strategic Investment in Key Brisbane Growth Corridor and Capital Management Initiatives
For personal use only Strategic Investment in Key Brisbane Growth Corridor and Capital Management Initiatives June 2011
Slide 2: Important notice
Important notice The following disclaimer applies to this presentation and to any information provided The release, publication or distribution of the Information in jurisdictions outside Australia regarding the information contained in this presentation (Information). You are advised may be restric
Slide 3: Acquisition overview
Acquisition overview » Peet has established a $90 million Flagstone For personal use only partnership with MTAA Super1 through the acquisition of a 50% interest in Flagstone West » MTAA Super to retain a 50% interest » Flagstone West site is a 1,244 hectare land parcel in South East Queensland (SEQ)
Slide 4: Acquisition overview
Acquisition overview » The acquisition leverages Peet’s institutional funds management platform For personal use only » Acquiring a 50% interest from MTAA Super » New Flagstone partnership established » Development management of the entire Flagstone City project on terms similar to Alkimos » Flagsto
Slide 5: Acquisition overview
Acquisition overview For personal use only Illustration 5
Slide 6: Acquisition rationale
Acquisition rationale For personal use only 1. Unique opportunity – large scale off‐market opportunity 2. Acquisition equivalent to $7,000/lot ($70,000/hectare), enhancing future profitability 3. Location – growth corridor targeted to accommodate SEQ’s forecast growth 4. Site de‐risked – largely cle
Slide 7: Impact on Peet
Impact on Peet » Material increase in scale of business For personal use only » Expands funds management platform » Establishes a counter cyclical, large scale presence in SEQ market » Weighted average debt maturity increases to 3.3 years » Diversification of funding sources » Greater medium and lon
Slide 8: Growth in funds management business
Growth in funds management business » Funds management division has consistently demonstrated a strong return profile For personal use only » Target EBIT margin in the range of 65‐75% » Post acquisition, funds management represents: » 68% of total end value versus 60% prior to the acquisition » 69%
Slide 9: Business model drives competitive advantage
Business model drives competitive advantage » Peet is Australia’s largest listed specialist residential developer and fund manager For personal use only » Third largest land bank of ASX listed developers » Unique and specialised business model affords competitive advantage » Greater weighting to fun
Slide 10: Flagstone City
For personal use only Flagstone City
Slide 11: Overview of acquisition
Overview of acquisition » MTAA Super has owned the Flagstone City residential project since 2000 For personal use only » Comprises 2 precincts – East and West » Flagstone East is currently home to approximately 3,500 residents » MTAA Super remains 100% owner of Flagstone East » c.300 lots remain in
Slide 12: Creating a new city
Creating a new city » Flagstone West is the centre of the future city of Flagstone located 38km southwest of For personal use only Brisbane » Located in key growth corridor » Forecast population of 120,000 people and 50,000 dwellings » Flagstone West component will include: » c.10,000 residential lo
Slide 13: Unique opportunity
Unique opportunity » Projects of this scale and quality are very rare and difficult to source For personal use only » One of the largest residential development projects in Australia » Project has the support of the Queensland Government through the Urban Land Development Authority (ULDA) » The ULDA
Slide 14: Value proposition
Value proposition » Acquisition equivalent to $7,000 / lot or $70,000 / hectare For personal use only » Given the scale of the project there are no direct comparables » Compares favourably with other large englobo land sales in SEQ » Cost base enhances profitability over project life » Site benefits
Slide 15: Comparable sales prices & product flexibility
Comparable sales prices & product flexibility » Project feasibility based on sales price range of $123,000 to $180,000 per lot For personal use only » One of the most affordable segments of the market » Highly competitive pricing relative to competing projects » Expected sale price of lots will make
Slide 16: Infrastructure
Infrastructure » Local amenities already available in Flagstone For personal use only East and Jimboomba (schools, shops, etc) » Existing road and public transport network connects Flagstone City to Logan City, Brisbane, Springfield and the Gold Coast » Future potential for passenger rail network in
Slide 17: Fast track planning regime
Fast track planning regime » Greater Flagstone was designated as an Urban Development Area in October 2010 For personal use only » Queensland Government recognition of need to expedite key projects to relieve housing undersupply » Project is governed by the ULDA – removed from council control » Earl
Slide 18: Growth
Growth » Expected to contribute to earnings from FY12 driven by: For personal use only » Development management fees on Flagstone East » Over the medium to long‐term the project is expected to deliver significant earnings » Early release of 500 lots from Flagstone West » $3.5 billion total end value
Slide 19: Counter cyclical investment into SEQ
Counter cyclical investment into SEQ SEQ Logan For personal use only » Market fundamentals point to this being near the bottom of » 6th largest Local Government area in Australia the property cycle » Population >260,000; expected to grow by 67% to » Forecast strong population growth 434,000 in 2031
Slide 20: Funds Management Business
For personal use only Funds Management Business
Slide 21: Continued evolution of business
Continued evolution of business » Over the past three years Peet has established and grown an institutional funds management For personal use only capability, building on its expertise in retail funds management » 2008 ‐ $300 million Alkimos Fund launched with MTAA Super as the cornerstone investor
Slide 22: Leverage of funds management platform
Leverage of funds management platform For personal use only » Flagstone City is an expansion of Peet’s existing relationship with MTAA Super » Peet’s institutional capability demonstrates the considerable operating leverage in the platform Alkimos (WA) Flagstone West (Qld) Total Acquisition cost (10
Slide 23: Alkimos case study
Alkimos case study » Peet’s largest existing managed fund For personal use only » Comprises approximately 2,800 lots » Estimated end value of $1.4 billion over 12 yrs » Peet equity interest of 14% » Institutional partners » Development and pre‐sales commenced in November 2009 » Over 390 gross sales
Slide 24: Market Outlook
For personal use only Market Outlook
Slide 25: Market outlook
Market outlook Medium to long‐term outlook is positive across Peet’s core markets For personal use only Victoria Western Australia » » » Employment and population growth remain positive » Cautious sentiment and continuing soft market » High level of domestic and offshore migration » Signs of stabili
Slide 26: Capital Management
For personal use only Capital Management
Slide 27: Capital management overview
Capital management overview For personal use only » Peet has flexibility in funding the growth of its business » Retail syndication platform » Institutional funds platform » Balance sheet investment » Peet is announcing a number of capital management initiatives » Up to $50 million convertible bonds
Slide 28: Pro forma balance sheet
Pro forma balance sheet $m 31 Dec 10 Adjustments Pro forma For personal use only Assets Cash 28.3 9.7 38.0 Receivables 61.3 61.3 Inventories 422.0 422.0 Investments accounted for using the equity method 32.1 47.9 80.0 Other 13.2 0.7 13.9 Asset1 classified as held for sale 103.6 (41.3) 62.3 Total ass
Slide 29: Capital management
Capital management For personal use only » Moving forward, Peet will report its gearing consistent with its bank covenant measure » For the purpose of the gearing calculation land vendor liabilities will now be included as debt » Peet has significant headroom and tenor under its extended syndicated
Slide 30: Convertible Note details
Convertible Note details For personal use only Key terms Timetable Size Up to $50 million Prospectus despatched 1 June 2011 Underwritten $40 million Bookbuild 2 June 2011 Interest rate 9.5% Broker Firm Offer opens 9 June 2011 Interest payable Semi‐annual Broker Firm Offer closes 15 June 2011 Convers
Slide 31: Share Purchase Plan details
Share Purchase Plan details Key terms Timetable For personal use only Size $20 million Record date for SPP 31 May 2011 Shareholder booklet despatched 2 June 2011 Underwritten $20 million SPP offer period 2 – 16 June 2011 Who may apply All eligible shareholders SPP pricing period 21 – 24 June 2011 Ma
Slide 32: For personal use only
For personal use only