AVIVA INVESTORS REAL ESTATE FINANCE

Transcription

1 AVIVA INVESTORS REAL ESTATE FINANCE Introduction H This document is for Professional Clients, institutional/qualified investors and Advisers only. It is not to be viewed by or used with retail clients

2 The Aviva Context Working together as one global team Life Insurance General Insurance Health Insurance Asset Management Aviva Investors Executive Committee Liquid Markets Multi-asset and macros, Credit and Equities Solutions Global Client Solutions (including Marketing, Distribution and Client Relations) Real Assets Alternative Income and Global Real Estate Global Responsible Investment, Risk, Human Resources, Operations (incl. Legal, Compliance, Audit and Information Technology) Managing clients assets across the globe through functionally integrated investment capabilities Source: Aviva Investors as at 1 July 2018 Aviva Investors: Public 2

3 Aviva Investors Who we are About Aviva plc c.32m customers 475bn in assets Top 10% for our sector in the Dow Jones Sustainability Index 4 main pillars in the group life insurance, general insurance, investment and health insurance Operates in 16 markets Our clients benefit from the diversity of our capabilities, with investment professionals in various locations sharing knowledge and ideas About Aviva Investors Owned by Aviva plc Over 344bn in AUM Global Asset Manager operating in 17 locations across 13 countries worldwide Over 1,400 employees and 400 investment professionals Our strategy is to deliver the specific and meaningful outcomes that matter most to today s investor Investment arm of Aviva plc a large global insurance investor Source 1 : Aviva plc. Interim report and accounts 2017 Source 2: Aviva Investors, as at 31 March Aviva Investors is the name under which a number of globally integrated asset management businesses operate. Aviva Investors Global Services Limited is our main investment arm ultimately 100% owned by Aviva plc (a multinational financial services company) Aviva Investors: Public 3

4 Aviva Investors - expertise to build effective solutions Delivering focused outcomes Aviva Investors: owned by Aviva plc who have; Aviva Investors asset breakdown as at 31 March m customers worldwide 1 475bn in assets 1 m % Fixed Income 212, Equities 61, Real Estate 35, Listed on the London and New York stock exchanges Other 35, TOTAL 344, Rated A+ by Fitch, A2 by Moody s and A- by S&P and A.M. Best2 Insurance heritage giving strong insight into risk management Employees 13 Locations 344bn Assets Giving our clients the confidence to invest Source 1 : Aviva plc. Interim report and accounts 2017 Source 2 :Aviva publically published by the relevant ratings agencies as 20 October 2017 Source 3 : Aviva Investors: 31 March 2018 Aviva Investors: Public 4

5 Aviva Investors Real Estate Finance Overview We have been providing real estate finance for over 30 years and are the leading institutional lender in the UK with a commercial loan book of c 8bn We offer a wide range of senior real estate financing solutions in the UK and Europe We are able to deploy multiple mandates on a single transaction with both fixed and floating rate capabilities We are growing our business with capital from Aviva as well as third party investors with real estate financing origination targets of over 1bn per annum Criteria GBP EUR Format Fixed and floating Fixed and floating Tenor 5-25 years or longer for fixed rate 3-7 years for floating 3 10 years Transaction size From 5m to 200m m Asset type & quality Most asset classes with preference for prime / good secondary Most asset classes with preference for prime / good secondary Asset location UK only Western Europe (limited appetite for peripheral countries, must be Euro denominated) Prepayment Modified SPENS / Market standard Market standard Source: Aviva Investors as at 31 December 2017 Aviva Investors: Public 5

6 Aviva Investors Real Estate Finance An efficient and effective investment process Initial discussion and indicative terms Investment analysis Investment approval and offer Due diligence and completion Ongoing monitoring and reporting Dedicated loan originator will discuss your investment proposition and requirements with you. Based on this, we issue indicative terms which are subject to further due diligence and approvals. Your originator will maintain close contact with you throughout the process to answer any questions you might have. Once the loan profile is agreed, your originator will work with you to conduct a thorough analysis of the transaction. At the end of this stage, we will create a detailed finance proposal recommending the transaction to our Investment Committee, We conduct financial modelling at this stage. This will include research into both the borrower and the asset including its tenants. This requires us to coordinate input from a range of external sources. As soon as the investment analysis is completed, our Investment Committee will consider the finance proposal and discuss it with your originator. Once approved, we issue a full terms sheet (offer) which is typically valid for two months. Once an offer has been accepted and any fees due have been paid, the full due diligence process commences. Legal due diligence is taken care of by our legal counsel with documentation based on the Loan Markets Association REF standard. We will agree a valuer with you from our independent panel. Once our team has completed any remaining due diligence and a completion date has been agreed, drawdown from the loan can occur. Our client relationship team is there to support our borrowers throughout the life of their loans. This means they can help adapt the loan to any changes that might arise in their clients portfolios. Your dedicated relationship manager will be your personal contact throughout the life of your loan providing you with access to our expert teams. They will also agree a programme of periodic reviews with you. Aviva Investors: Public 6

7 Aviva Investors Real Estate Finance Real Estate Finance - key transactions Urbanest Size 175m (of 350m total facility) Term 10+ years Security 2,500+ bed PBSA Mandate Internal Custodian REIT Size 50m Term 15 years Security Multi-sector portfolio Mandate Internal Primary Healthcare Properties Size 75m Term c11 years Security Medical Centre portfolio Mandate Internal Lazari Investments Limited Size 55m Term 12 years Security Central London Office Mandate Internal Ediston Property Investment Company Size 111.1m Term 10 years Security Two Retail Warehouse portfolios Mandate Internal Bruntwood Size Type Term Security Mandate 115.5m Fixed 15 years 12 UK Regional Offices Internal Aviva Investors: Public 7

8 Aviva Investors Real Estate Finance Real Estate Finance - key transactions Aquila Size 144m Term 7 years Security Multi-sector portfolio Mandate Internal + 3rd party Mezzanine FIREM Size 72.7m Term 5 years Security 26 industrial assets Mandate External + 3rd party Mezzanine Regional REIT Size 75m (of 165m total facility) Term 10 years Security Multi-sector portfolio Mandate Internal & External Omni Size 38m Type Floating Term 5 years Security Prime Leisure Scheme Mandate External Helical Plc Size 124m & Floating Term 7 years Security Office portfolio Mandate Internal and two external Private Property Company Size Type Term Security Mandate 44.8m Floating 5 years Industrial portfolio External Aviva Investors: Public 8

9 Case study: Bruntwood Bruntwood (Direct) Size 115.5m LTV 55% Term 15 years Rate 3.46% p.a (fixed) Day 1 DSCR >2.5 UK Security Portfolio of 12 UK regional offices Tenants Various (250+ of Bruntwood s customers ) In December 2016, just five weeks after being mandated by Bruntwood, Aviva Investors Real Estate Finance completed a 115.5m 15 year bilateral loan to refinance a portfolio of 12 regional offices, nine of which were located in Manchester City Centre or Greater Manchester. The properties are let to numerous occupational customers on tailored lease terms and it was important for the company to manage the portfolio dynamically. Chris Oglesby, Chief Executive of Bruntwood comments This new facility affords a level of flexibility that will allow us to remain nimble in the way in which we accommodate our customer s requirements. Kevin Crotty, Chief Financial Officer of Bruntwood adds Aviva Investors has taken the time to understand our business and customer proposition and provide a finance package around our requirements. Bruntwood is all about long term relationships and we are delighted to have them on board. Aviva Investors has for a number of years been in dialogue with Bruntwood. As Gregor Bamert, Head of Real Estate Finance explains We have for some time aspired to build a relationship with this outstanding sponsor who shares our long-term, customer-focused ethos. Bruntwood is a family-owned and run Property Investment, Development and Management company that specialises in creating spaces for business. Over its 40-year history, the company has developed a proven business model based on an innovative approach to property development combined with a single minded focus on the needs of its customers. Source: Aviva Investors as at January 2017 Aviva Investors: Public 9

10 Case study: Urbanest Urbanest (Direct) Size 175m (Aviva Investors 50% share) LTV 55% Term 11.5 years Rate c.2.55% p.a (fixed) ICR > 4.0x (on 50% of gross revenue) Security Portfolio of five prime PBSA Tenants Majority nom. agreements with universities, part direct-let to students Urbanest is a specialist developer and operator of Central London Purpose Built Student Accommodation (PBSA), backed by institutional private equity. In July 2016 Aviva Investors Real Estate Finance, alongside M&G Investments, provided a 350 million 11.5 year loan to refinance Urbanest s five-asset 2,520-bed PBSA portfolio within zone 1 locations including Hoxton, King s Cross, Tower Bridge and St Pancras, anchored by their award-winning 1,140-bed Westminster Bridge scheme, pictured. The transaction is underpinned by long term arrangements with top-tier universities including London School of Economics, Kings College London and University of Westminster. Vicky Skinner, Chief Financial Officer, Urbanest said: This transaction consolidates the existing lending positions of the business, securing longdated, fixed rate finance at an attractive point in the market cycle. The team at Aviva Investors Real Estate have taken time to understand our properties and our business and delivered a joint funding solution in a condensed timeframe which matches Urbanest s requirements as the business continues to invest in the existing portfolio and explore opportunities for expansion. Source: Aviva Investors as at July 2016 Aviva Investors: Public 10

11 Case study: Aquila Aquila (Direct) Size 144m LTV 61% Term 7 years Rate Fixed at c.2.75% p.a. ICR > 4.0x (on 50% of gross revenue) Security Portfolio of 12 assets, weighted to Chelmsford and anchored by the Bond St. retail/leisure scheme Tenants Various (Bond St. scheme anchored by John Lewis) Source: Aviva Investors as at Nov 2017 Aquila is a privately owned property development and investment business based in Chelmsford and operating throughout London and the South East. In October 2017, Aviva Investors Real Estate Finance completed a 144m 7 year bilateral loan to refinance the majority of Aquila s assets. The facility is secured against a multi-sector portfolio of 12 assets located in Chelmsford and Maldon, principally being the Bond Street Shopping Centre which Aquila have developed over a number of years and opened in September The scheme comprises a prime retail and leisure scheme of 300,000 sq ft located in the heart of the City and anchored by a 120,000 sq ft John Lewis store. The loan, in conjunction with mezzanine debt of 16m from PGIM Real Estate, provides Aquila with a stable debt facility as they implement further value-add initiatives across the portfolio. Tony Chambers, Founder and Chairman, Aquila said We are delighted to have consolidated our long-term debt with Aviva Investors. We very much look forward to working with Aviva Investors as we focus on improving the value of our portfolio and delivering further successful developments in the region. Gregor Bamert, Head of Real Estate Finance, Aviva Investors, added Aquila has a deep understanding of the Chelmsford market and has delivered a fantastic ground-up development which enhances the City s retail offer. We are delighted to commence the relationship with a company that has created value throughout the development and benefitting from holding the investment over the long term. Aviva Investors: Public 11

12 Case study: Regional REIT Regional REIT Size 165m ( 75m hold for Aviva Investors) LTV 50% Term 10 years Rate Fixed ICR > 3x Security Portfolio of 70+ regional office and industrial assets Tenants Various 600+ Source: Aviva Investors as at January 2018 In December 2017, Aviva Investors provided 75m of a 165m 10-year debt facility to Regional REIT, the UK regional office and industrial focused REIT that listed on the LSE in November The REIT s total portfolio is now in excess of 650m. The new facility replaces five existing debt facilities and reduces the number of Regional REIT s debt facilities from nine to five and increases the company s average debt maturity from 2.5 years to 6.2 years. The loan is secured against a granular portfolio of over 70 office and industrial properties, consistent with the REIT s strategy of investing in a diversified portfolio of actively managed regional UK assets. Stephen Inglis, Chief Executive Officer of London & Scottish Investments, Asset Manager of Regional REIT, said: "This refinancing simplifies our balance sheet, lengthens the average maturity of our debt, and better aligns our financing arrangements to our real estate strategy. The two financings announced in the last two weeks and the proposed transaction announced on 4 December demonstrate the momentum building at Regional REIT as we enter the next stage of growth. Gregor Bamert, Head of Real Estate Finance, Aviva Investors, said: We are delighted to support Regional REIT with its new financing facility. The management team at Regional REIT is very experienced with a demonstrated ability to successfully manage assets through the property cycle. With a strong focus on regional assets, the REIT s strategy is an ideal fit with our appetite to provide financing for all property sectors across the UK. Aviva Investors: Public 12

13 Case study: Helical Plc Helical Plc Size 124m LTV 50% Term 7 years Rate Fixed & Floating ICR > 3x Security Portfolio of two London and one Manchester offices Tenants Various 100+ Source: Aviva Investors as at January 2018 In January 2018, Aviva Investors provided an additional c 45m to an existing 79m debt facility expiring in December 2024 to Helical Plc, the UK office focused LSE listed investor and developer, with a portfolio in excess of 1bn. The extended facility refinances three assets, The Shepherds Building in London, which was already held as security, together with The Loom in London and Churchgate and Lee House in Manchester. The secured portfolio now covers more than 500,000 square feet with more than 100 tenants generating rents of circa 13 million per annum. The new facility is split between fixed and a 31m floating rate tranche which provides flexibility on repayment. These funds were provided by two external mandates managed by Aviva Investors with the transaction representing the first time three different mandates have been used to co-fund a single facility. Tim Murphy, Finance Director at Helical Plc said: Aviva Investors have been a core provider of long term debt to Helical since 2014 and I am delighted that we have increased the existing facility to 124m. This increased facility provides the long term commitment and flexibility that we are looking for in our debt providers and its timing enables us to lock into current low finance rates Gregor Bamert, Head of Real Estate Finance, Aviva Investors, said: We are delighted to continue to support Helical s debt requirements as part of its ongoing strategy. These are good quality assets which have been identified as key to Helical s portfolio, and have benefitted from an effective hands-on management approach, with recent investment in all three assets. This facility also demonstrates our ability to deliver sponsors with a mix of both traditional fixed rate and new floating rate funds using multiple mandates, providing both certainty and flexibility in a single facility. Aviva Investors: Public 13

14 Contact information Origination Gregor Bamert Head of Real Estate Finance Adrian Poole Director, Origination Nick Solomon Director, Origination Simeon Cobb Associate Director, Origination Neil Dobson Associate Director, Origination Joseph Barrett Analyst, Origination Anthony Turner Analyst, Origination Karolina Pavlovic Analyst, Origination Aviva Investors: Public 14

15 Aviva Investors Real Estate Finance IMPORTANT INFORMATION: Except where stated as otherwise, the source of all information is Aviva Investors Global Services Limited ( Aviva Investors ) as at 1 July Unless stated otherwise any views, opinions expressed are those of Aviva Investors. They should not be viewed as indicating any guarantee of return from an investment managed by Aviva Investors nor as advice of any nature. The value of an investment and any income from it may go down as well as up and the investor may not get back the original amount invested. Issued By Aviva Investors Global Services Limited, registered in England No Registered Office: St. Helen s, 1 Undershaft, London, EC3P 3DQ. Authorised and regulated by the Financial Conduct Authority. RA18/0756/ Aviva Investors: Public 15