ProFile. Responsible Entity: Folkestone Investment Management Limited ABN AFsl Folkestone Education Trust Profile 1

Transcription

1 Folkestone Education Trust ProFile Responsible Entity: Folkestone Investment Management Limited ABN AFsl Folkestone Education Trust Profile 1

2 Contents TRUST AT A GLANCE 3 FET KEY METRICS 4 PORTFOLIO SUMMARY 5 PORTFOLIO PROFILE AUSTRALIA 6 PORTFOLIO PROFILE NEW ZEALAND 7 CAPITAL MANAGEMENT 8 LEASE STRUCTURE & VACANCY PROFILE 8 VALUATION POLICY 9 RESPONSIBLE ENTITY 9 BOARD OF DIRECTORS 10 DIRECTORY 12 Purpose This document has been prepared by Folkestone Investment Management Limited as the Responsible Entity of the Folkestone Education Trust (FET or the Trust). The purpose of this document is to provide a profile of FET s portfolio and financial metrics based on the financial results as at 30 June Disclaimer Folkestone Investment Management Limited ACN ; AFSL ( FIML ) has issued this release in its capacity as the responsible entity of Folkestone Education Trust ARSN This document has been prepared for general information purposes only and is not an offer or invitation for subscription or purchase of, or recommendation of, securities. It does not take into account any potential investors personal objectives, financial situation or needs. All investors are strongly advised to consult professional financial advisors whose role it is to provide professional financial advice, taking into account an individual investor s investment objectives, financial situations and particular needs. The information in this document has been prepared in good faith and may contain information obtained from third party sources believed to be reliable. No representation or warranty expressed or implied is made as to, and no reliance should be placed on, the fairness, reliability, accuracy, completeness or correctness of such third party information. Past performance is not a reliable indicator of future performance. Due care and attention has been exercised in the preparation of forecast information, however, forecasts, by their very nature, are subject to uncertainty and contingencies, many of which are outside the control of FIML. Actual results may vary from any forecasts and any variation may be materially positive or negative. All information contained in this document is current as at 30 June 2016 unless otherwise stated. 2 Folkestone Education Trust Profile

3 7.3% Property YIELD trust AT A GLANCE $753.6m 394 GROSS ASSETS 8.2 properties years WALE 99.5% $2.14 occupancy NTA per unit Armadale, VIC Folkestone Education Trust Profile 3

4 FET KEY METRICS AUSTRALIA s only listed TRUST dedicated to INVESTING in early LEARNING real estate. Springfield Lakes, QLD Financial Profile As at 30 June 2016 Gross Assets ($m) Value of Investment Property 1 ($m) Borrowings 2 ($m) Net Assets ($m) NTA per unit ($) 2.14 Gearing 3 (%) 26.6 Units on Issue (m) Property Performance As at 30 June 2016 Annual Rental Income 4 ($m) 53.8 Property Yield Freehold Properties (%) 7.0 Property Yield Leasehold Properties (%) 13.7 Property Yield Commercial Property (%) 6.3 Total Property Yield (%) 7.3 Occupancy Rate (%) 99.5 Weighted Average Lease Expiry (years) Includes $1.7 million of transaction costs in relation to properties contracted and not settled 2 Borrowings as at 30 June 2016 include loans of $193.0 million and bank overdraft of $7.4 million 3 Gearing calculated by borrowings/gross assets 4 Includes $2.2 million of development site income 4 Folkestone Education Trust Profile

5 PORTFOLIO SUMMARY As at 30 June 2016 No of Properties Carrying Value $m s Current Rent 1 (pa) $m s Rental Income by Tenant Australia New Zealand Development Sites Medical Centre Total Properties Includes head-lease rent on leasehold properties of $1.18 million 2 Based on NZD rent of $4.7 million at an exchange rate of as at 30 June Site rent charged on 6 development sites 233 leases to Goodstart Early Learning Typical tenant bank guarantee 6 months gross rent. Total bank guarantees held of $29.6 million 29 tenants (28 early learning tenants and 1 commercial tenant) WALE of 8.2 years Occupancy of 99.5% Operating properties includes 33 leasehold properties with a value of $27.8 million Goodstart - 63% Goodstart Early Learning 59% Best Start Educare 9% (Previously Kidicorp) G8 Education 8% Only About Children 6% Other 18% Property yield based on existing passing rent and last valuation of 7.3% (excluding head lease rent) 29 TENANTS Cheltenham, VIC Folkestone Education Trust Profile 5

6 PORTFOLIO PROFILE early learning AUSTRALIA A geographically diverse EARLY learning portfolio OF 393 properties, ANChORED by 28 tenants Total number of existing early learning centres in australia 1 6 Location 1 Metropolitan % Outer % Metropolitan Major Regional % Regional % Portfolio Value 1 Carrying Value % of Total Existing Early Learning Properties (by value) Annual Rental Income 2 1 Excludes development sites 2 Excludes development site income $612.2m 90.8% $46.4m TYPICAL CONFIGURATION Internal: Up to five children s activity rooms with direct access to external play areas. Feature entry & foyer, central hallway, toilets for varying ages, shower, preparation areas, nursery, kitchen, ancillary staff area, reception, administration area, storage, and disabled toilet. External: Shade cloths to sandpits and general play areas, awning covered verandas adjoining external play areas, grass and rubber matting to external play areas, child proof fencing throughout, paving, landscaping, lighting and signage. Ancillary: on-site car parking spaces (required by planning regulations) in marked bays (incl. 1 disabled) ~ median 16, maximum 48. Regulatory COMPLIANCE All tenants to meet required legislative requirements regarding building services, Occupational Health & Safety and early learning licensing requirements of each State. LOCATION Typically within established residential and commercial locations featuring medium to high traffic areas, good accessibility and access to public transport. BUILDING SIZE (GROSS BUILDING AREA) ~ 520 square metres - Centre (min 150sqm, max 1623sqm) ~ 250 square metres - Covered Verandas/Porch ~ 1,110 square metres - External Play Area LAND Size ~ 600sqm 9,300sqm, median 2,120sqm LICENCE DETAILS ~ , median 75 early learning places Underlying ZONING Typically Residential Age ~ 41% of portfolio built post 2000 ~ 59% of portfolio built prior 2000 Purpose Built ~ 80% Conversion ~ 20% LEASEHOLD 33 properties, 9% of portfolio (by number) FREEHOLD 301 properties, 78% of portfolio (by number) Folkestone Education Trust Profile

7 PORTFOLIO PROFILE early learning NEW ZEALAND 35 QUALITY real estate that PROVIDES a predictable INCOME stream, with the POTENTIAL for capital GROWTh. 16 Total number of properties TYPICAL CONFIGURATION Internal: Up to five children s activity rooms with direct access to external play areas. Feature entry & foyer, central hallway, toilets for varying ages, shower, preparation areas, nursery, kitchen, ancillary staff area, reception, administration area, storage, and disabled toilet. External: Shade cloths to sandpits and general play areas, awning covered verandas adjoining external play areas, astro-turf and rubber matting to external play areas, child proof fencing throughout, paving, landscaping, lighting and signage. Ancillary: on-site car parking spaces (required by planning regulations) in marked bays (incl. 1 disabled) ~ median 10, maximum 30. Regulatory COMPLIANCE All tenants to meet with required legislative requirements regarding building services, Occupational Health & Safety and Early learning licensing requirements. LOCATION Typically within established residential and commercial locations featuring medium to high traffic areas, good accessibility and access to public transport. BUILDING SIZE (GROSS BUILDING AREA) ~ 312 square metres - Centre (min 100sqm, max 900sqm) ~ 50 square metres - Covered Verandas/Porch ~ 1,000 square metres - External Play Area LAND Size ~ 547sqm - 18,756sqm, median 1,349sqm LICENCE DETAILS ~ , median 49 early learning places Underlying ZONING Typically Residential Age ~ 24% of portfolio built post 2000 ~ 76% of portfolio built prior 2000 Purpose Built ~ 41% Conversion ~ 59% LEASEHOLD Nil FREEHOLD 51 properties, 13% of portfolio (by number) 51 in New zealand Location Metropolitan % Major Regional % Regional % Rural 3 5.9% Portfolio Value Carrying Value % of Total Existing Early Learning Properties (by value) Annual Rental Income 1 $61.8m 9.2% $4.5m 1 Based on NZD rate of as at 30 June 2016 Folkestone Education Trust Profile 7

8 CAPITAL MANAGEMENT 53% Hedged through to june 2021 Hedging Profile: Based on debt of $193.0 million as at 30 June 2016 FY21 FY20 FY19 FY18 FY17 Summary As at 30 June 2016 Financiers Debt Facilities Limit ($m) Debt Drawn Amount ($m) Overdraft Facilities ($m) 10.0 HSBC & ANZ Facility Maturity Tranche A - June 2019 Tranche B - June 2021 Interest Cover Ratio (x) 5.1 Cost of Debt (% p.a.) 4.5 All-in Cost of Debt 1 (% p.a.) 4.8 Average Interest Rate Hedged (% p.a.) 53 Average Hedged Rate (% p.a.) 3.27 Average Hedging Maturity (years) Includes amortisation of deferred borrowing costs Hedged Unhedged LEASE STRUCTURE & VACANCY PROFILE Lease Expiry (by Annual Rent) 25% 20% 15% 10% 5% 0% LEASE STRUCTURE Triple net leases all costs including outgoings, except Qld land tax, payable by the tenant; Rent, structural repairs, general repairs and maintenance, rates, taxes and other assessments, insurance premiums and charges and property management expenses are met by the tenant; and Tenant required to redecorate/ refurbish the centre once every 5 years as directed by FET (acting reasonably). Typical lease term from commencement; 15 years plus two 5 year options Rental growth indexed annually to CPI with a market review at year 11 Most leases have a 5 year notice period regarding option take-up by tenants TYPICAL ASSET PROFILE Average passing rental $1,767 (Australia) per long day care licensed placed per annum OCCUPANCY PROFILE Occupancy of 99.5% as at June 2016 No significant number of vacancies until 2021 Weighted Average Lease Expiry of 8.2 years 8 Folkestone Education Trust Profile

9 Valuation POLICY VALUATION POLICY Investment properties are measured at fair value and revalued on a regular basis to ensure the carrying amount of each property does not differ materially from its fair value at the balance date. A full independent valuation of each property is carried out at least once every three years. The fair value of investment property is updated to reflect market conditions at the end of a reporting period, twice annually. This represents best estimates as at the balance sheet date, and if investment property is sold in the future, the price achieved may be higher or lower than the most recent valuation. The average carrying value per freehold early learning property is approximately $1.8 million (Australia and New Zealand Freehold) and FET operates within a market place that remains relatively liquid with continued purchase activity. CAPITAL & RENTAL VALUES Each valuation assesses both capital and rental value on a mark to market basis. Rental and purchase markets exist for early learning centres on an existing use basis together with alternate uses from a capital value perspective. Management has a conservative valuation approach with a preference for assets that are leased at market levels rather than being reliant upon any measure of over renting to maintain distribution levels to investors. This guards against any shortfall in long term cashflow and underpins the capital values in the event that a centre falls vacant. Relative to other asset classes, research and past performance indicates that movements in value for early learning assets is more restricted than for the more traditional commercial/industrial sector, indicating a lower level of volatility for early learning asset values. RESPONSIBLE ENTITY FIML Board of Directors Fund Manager Corporate Finance Asset Management Banking & Finance Legal Investor Relations Corporate Governance / Compliance Capital Raisings, Balance Sheet Structuring Property Management, Valuation, Building, Environmental Treasury, Banks, Audit & Tax Corporate, Property Specialist Legal Services Investors, Analysts, Research, Media ASIC, ASX Audit & Compliance Committee Folkestone Investment Management Limited (FIML) is the Responsible Entity (RE) for the Folkestone Education Trust. FIML holds an Australian Financial Services Licence (AFSL No ) which allows the RE to administer funds at a retail and wholesale level, produce PDS s and raise funds for property investment purposes. FIML s model is based on independent decision making to ensure a high level of expertise across each investment discipline. Management delivers economies of scale and consistent systems that are aligned with Unitholder performance expectations. Like other organisations whose core business involves the provision of professional services, FIML s key asset is its people. This means quality and well-trained personnel with proven expertise within the Australian Real Estate Funds Management sector. The key aspects of our business partnerships are transparency and accountability. We focus on trusted relationships with our partners based on defined deliverables and a long term commitment. Folkestone Education Trust Profile 9

10 BOARD OF DIRECTORS A BOARD of DIRECTORS with YEARS of proven expertise IN real estate, banking AND finance, financial PLANNING and investment MANAGEMENT. A broad AND multi-dimensional APPROACh, together with SIGNIFICANT investment experience, particularly in the banking and finance ARENA, ensures the BOARD has the necessary skills IN mitigating risk and PROTECTING capital. GRANT Hodgetts Chairman & Non-Executive Director Grant was appointed Chairman on 1 September 2015 and Non-Executive Director on 24 October He is the Non-Executive Chairman of Folkestone Funds Management Limited, Non Executive Director of Knight Capital Group Limited, Director of Bethley Group Pty Ltd and Principal of Hodgetts and Partners. Between early 2006 and 2010 he held various positions within the Investment and Funds Management Division of Mirvac Limited including that of CEO Australia for Mirvac Investment Management. Prior to joining Mirvac, he was Head of Property in the Specialised Capital Group of Westpac Institutional Bank; a Division Director of Property Investment Banking at Macquarie Bank; a Director of Richard Ellis (Vic) Pty Ltd; and an executive of the AMP Society s Property Division. He is an Associate of the Australian Property Institute, a licensed real estate agent in Victoria and a member of the Australian Institute of Company Directors. He was a founding Director of the Property Industry Foundation in Victoria. NICK ANAGNOSTOU Executive Director & Chief Executive Officer Nick joined Folkestone in September 2012 following Folkestone s acquisition of Austock s property business (Nick joined Austock in 2006). Nick is CEO of Folkestone s Social Infrastructure Funds business across two funds comprising approximately $840 million of assets. Nick has 25 years of experience in the Australian commercial property and Funds Management industries. Nick holds a Bachelor of Business in Property and is an Associate of the Australian Property Institute and Affiliate of FINSIA. He is a Certified Funds Manager, qualified property valuer and a Licensed Estate Agent and was previously a Director of an international real estate agency where he focussed on Premium and A-grade office markets. 10 Folkestone Education Trust Profile

11 MIChAEL Johnstone Non-Executive Director VIC COTTREN Non-Executive Director Michael was appointed on 22 December Michael has almost 40 years of global business experience in Chief Executive and General Management roles and more recently in non executive Directorships. He has lived and worked in overseas locations including the USA, has been involved in a range of industries and has specialized in corporate and property finance and investment, property development and funds management. His career has included lengthy periods in corporate roles including 10 years as one of the Global General Managers of the National Australia Bank Group. Michael is currently a Non Executive Director of a number of companies in both listed and private environments, including board appointments in the not for profit sector. Vic was appointed on 22 December Vic has over 50 years industry experience, with an extensive background in share broking, financial planning, life insurance, superannuation and investment management gained with AMP, Australian Eagle Insurance Company, Norwich Union, The Investors Life Group and National Australia Bank. He held various senior posts including Chief Executive and Director within these companies and their subsidiaries. Since 1995, Vic has worked as a consultant to financial service companies in relation to investment, superannuation and financial planning. Vic was also appointed as a Professorial Fellow at RMIT University in 1993 with responsibility for researching and establishing Australia s first undergraduate degree in financial planning. Folkestone Education Trust Profile 11

12 directory RESPONSIBLE ENTITY and PRINCIPAL place of business of THE TRUST Folkestone Investment Management Limited Level Collins Street Melbourne VIC 3000 DIRECTORS of the RESPONSIBLE ENTITY Grant Bartley Hodgetts (Chairman) Michael Francis Johnstone Nicholas James Anagnostou Victor David Cottren LAWYERS Clayton Utz Level 15 1 Bligh Street Sydney NSW 2000 UNIT Registry Boardroom Pty Limited Level Kent Street Sydney NSW 2000 Ph: AUDITORS/TAXATION ADVISORS PricewaterhouseCoopers Freshwater Place 2 Southbank Boulevard Southbank VIC 3006 Bank The Hongkong and Shanghai Banking Corporation Limited 580 George Street Sydney NSW 2000 Australia & New Zealand Banking Group Limited Level Queen Street Melbourne VIC 3000 CUSTODIAN The Trust Company Limited Level Bond Street Sydney NSW 2000 COMPANY SECRETARY Scott Martin Level Collins Street Melbourne VIC 3000 INVESTOR RELATIONS Lula Liossi Level Collins Street Melbourne VIC 3000 Tel: Folkestone Education Trust Profile