Patron Capital Overview
•
Established European property investor over 20 years
➢
Operations across Europe with advisory offices in the UK and Luxembourg and offices in Germany, Spain and
Italy
➢
Experienced 75-person team including 31 investment professionals, supported by 11 senior advisers, with regional
and product focused expertise
o
Average of 20 years experience across the investment team
➢
Hybrid owner operator model supporting local partners across Europe
$109,700,000
PATRONCAPITALL.P., I
Pan-European value oriented property and asset based corporate investments
October 2002
€303,000,000
PATRONCAPITALL.P., II
October 2004
Pan-European value-oriented property and asset-based
corporate investments
€895,000,000
PATRONCAPITALL.P., III
March 2007
Pan-European value-oriented property and asset-based
corporate investments (with GP commitment of up to €45,000,000) €1,100,000,000 PATRONCAPITALL.P., IV July 2012 Pan-European opportunistic distressed property and asset based corporate investments (including €100,000,000 dedicated discretionary co-investment pool and
apx. €220,000,000 of co-investment capital within investments) C. £62,000,000
(C. €96,000,000) PATRONCAPITAL
CAPTIVEFUND
DEDICATED FUND RAISE
FOR THE ACQUISITION OF OCWENUK (RENAMED
IGROUP) A LEADING PLAYER IN THE SUB-PRIME
MORTGAGE MARKET October 1999 €948,632,391 PATRONCAPITAL, V L.P. July 2016 TARGETING OPPORTUNISTIC DISTRESSED AND UNDERVALUED
PROPERTY AND PROPERTY RELATED INVESTMENTS ACROSS
EUROPE
Deep Value Investment Strategy
3 •
Identify
granular
and/or
complex
opportunities
and
properties
within
corporates
•
Value-add
through
asset
management,
improved strategy and introduction of clear
focus, sell into domestic market once asset
stabilised
•
Drive net equity multiple of 1.6x+ over 3-5
years
➢
Target unlevered p.a. return of
11%-13%; approximate net profits of
35%-45% on total cost
➢
Use leverage 50%-65% LTC debt to
move levered returns to 16%+ and
1.6x+ equity multiple
•
Ensure
fund/capital
pools
properly
diversified; limited development risk
•
Limit leverage as tail risk protection
6m 1y 2y 3y 4y 5y
Classic Investment Path
Target %
Companies with strong cash flow and value supported by underlying real estate assets, properties that have operational-tied variable cash flow
Property assets below intrinsic value deemed non-core
by parent/owner 20-30%
Challenged situations solved by repositioning assets or platforms for broader market appeal
Financial securities (e.g., loans, equity release) backed by real estate
Corporate Acquisitions and Operational Real Estate
Institutional Non-Core and Distressed Property
Complex Positions
Real Estate Credit
Focus on Investments below Intrinsic Value
CALA Banner
30-40%
20-30%
10-30%
10-20%
5
Origination - Geographic Focus
•
Western Europe remains the prime focus with increasingly more granular smaller opportunities dominating our activities
Note: The % in the above charts represent proportion by capital Western Europe includes France, Spain and Italy
Other 1% SwitzerlandGermany / 15% Western Europe 36% UK / Ireland 44% Central Europe 3% Eastern Europe 1%
Total Evaluated Opportunities: 1999-2019 2,997 Opportunities - $121.9bn Other 0% Germany / Switzerland 28% Western Europe 30% UK / Ireland 42%
Patron Platform – Integrated and Interactive (42)
• Dedicated 75-person team including 42 investment professionals averaging 20 years of experience and Senior Team averaging 24 years
of experience Christoph Ignaczak Pedro Barcelo Arnau Osorio Vicente Conesa * Mark Collins Daniel Weisz Jason Meads * Robert Booth * Rafael Fitoussi Bertrand Schwab * Guillaume Lefort * Keith M. Breslauer Shane Law Matteo Busa Luigi Capuano * Camil Yazbeck Ashish Kashyap Nate Kornfeld *
Stephen Green Irina Stamate Rocha Fei Xie Tim Street * Danny Kay * Product Focus Specialists Kevin Cooke Richard Sykes Thijs Van Dorssen
Vanessa Sloan
Corporate Home Building Residential & Consumer Development
Distressed Education
Senior Team Member
Key:
Country Focus Specialists
Jonatas Szkurnik Wiktor Lesinski Julian Rosenberg
Yolanda Leal
Juan Du Nicolo Benzi Roy Binkowicz Alejandro Pasquin Clothilde Guittard Tim Swift Julius Kühn Country and Product Generalists Product Focus Specialists Property Development & Project Management Strategy & Business
Development Sir David Capewell *
Laurens Feleus *
Michael Capaccio
Patron Support Team, Risk and Compliance (33)
7 Investment Team Keith M. Breslauer Managing Director Shane LawChief Operating Officer
Senior Team
Jackie Burn *
Human Resource
Kendall Langford
General Counsel/Compliance Finance DirectorMark Parnell Geraldine Schmit Managing Director
Daniel Cohn
Senior Legal Counsel Senior Legal CounselFarhod Moghadam Caroline McGrath Investment & Closing
Denise Goodwin Investment & Tax
Mark Harris Group Financial Accountant
Seemone Cheung Financial Accountant Andreas Blum Senior Accountant Administration Charlene Carr Legal PA Lisa Dave
Senior Team PA Victoria CollinsFinance PA Meritxell GonfausAdmin, Spain Stephanie BohlerAdmin, Lux
Legal Finance & Tax Luxembourg
Stuart Ansher
Financial Accountant Suchilla DillonAccountant
Steve Van Den Broek COO
Halim Mekbel Accountant Richard Carter
Assistant Fund Accountant Moses Kim
Transaction Assistant
Isabel Furtado Senior Accountant
Senior Advisers Jonathan Paganelli
Senior Corporate Officer Samir Boukra Senior Corporate Officer Amelia Carter
PA to Keith M. Breslauer Hayley St AngeTeam PA
Andrew Haig Financial Accountant/
Fund Modeller
Nicola Gambin
Investment Performance – Overall
•
Since 1999, Patron has invested in 79 investments totalling €2.7 billion of equity and over €12 billion of
gross asset value predominantly across Western Europe
➢
The primary strategy, comprising 87% of invested equity, is towards opportunities in Western
Europe. Notwithstanding the effect of the GFC, these investments have seen very positive returns
➢Patron’s overall performance since the GFC has been significantly higher
Past Eighteen Years
Number of Investments Invested & Identified Equity Realised Proceeds Unrealised Proceeds Total Realised & Unrealised
Proceeds Gross IRR
WORKING HARD TO HELP CHANGE THE WORLD
Recent Awards - Selection
Property Fund Manager of the Year Best Places to Work
in Property
Responsible Investor of the Year 2016
Healthcare
Investor & Developer of the Year Private Equity
Investor of the Year Financial Services
Deal of the Year
Property Fund of the Year
Corporate Social Responsibility Award
11
Specific Investment Review
Selected Opportunities
Opportunity
• Grainger, a listed residential property company, changed its focus to developing PRS
units and decided to sell its non-core Retirement Solutions (RS) business. The business comprises a portfolio of over 3,800 ‘Home Reversion’ equity release assets.
• On 31st December 2015, Patron exchanged contracts with Grainger to acquire the RS
Business.
• Completion took place in May 2016 post regulatory approval – renamed Retirement
Bridge Group.
• June 2017 – acquired Sovereign Reversions (c. 700 assets)
Home Reversion
• Home reversion is an equity release product where the homeowner sells part or all of the
equity in his home in exchange for a discounted appraisal value of the equity and a right to live in the property until it is vacated upon the occupant’s death or move into long term care.
• The industry underwent a significant improvement in market perception after home
reversions were regulated by the FCA since 2007.
Portfolio (as at May 2015 cut-off date)
• 3,839 properties located across the whole of the UK, with concentration in the south of
England.
• Very seasoned portfolio (over 10 years on average) with average age of tenant of 82 years.
Business Plan
• As part of the acquisition, Patron acquired the platform, including staff, systems,
regulatory licences, brand and any other intellectual property.
• Strategy assumes no new origination or acquisition and sale of the business in 4 years.
13
UK Consumer Leisure Program (Fund V)
•
The acquisition of Punch Taverns Plc in August 2017, following
Competition and Mergers Authority approval. The acquisition
was funded in part by the simultaneous back to back sale of a
substantial portfolio of Punch’s assets to Heineken.
•
A total of 3,254 pubs were acquired, of which 1,879 were sold to
Heineken. Patron retained ownership of 1,375 pubs and the head
office operations, of which 1,323 are held in a securitisation
structure and 52 pubs and the head office operations held at
TopCo.
•
Add-on acquisition of Laine in 2018 with 55 pubs
•The business plan is predicated on
➢
strategic capex across the core estate to improve the
underlying quality of the portfolio
➢
continued roll-out of a hybrid tenanted / managed operating
model
EastPoint, Ireland – sold (Fund V)
• Acquisition of 4 multi-let office buildings with gross internal area of c.153,000 sq. ft. on EastPoint Business Park in Dublin, Ireland.
• EastPoint is c.40 acres in size, with approx. 1.5 million square feet of primarily office space (grade B) across 35 buildings. EastPoint has been developed in phases since the site was originally acquired and developed by Earlsfort Developments in the 1990s. The park is located adjacent to Dublin Docklands (where a lot of central Dublin office development is taking place, including the new Central Bank HQ), and in close proximity to the traditional core CBD area. The park has attracted a concentration of TMT tenants.
• The assets were acquired in joint-venture with O’Callaghan Properties (“OCP”) and Earlsfort Developments (“Earlsfort”). OCP are Fund IV’s existing JV partner on Project Drive, including acting as asset manager on Northside Shopping Centre, where there is a strong working relationship. Earlsfort originally developed EastPoint and are the existing part-owner and asset manager for several units on the Park, demonstrating their good knowledge of the Assets / local market. Both OCP and Earlsfort are investing alongside Patron.
• Strategy is to lease up vacant space and regear/release existing let space, where appropriate.
•
Acquisition of 43 retail units (32 supermarkets, 5 Cash&Carry
and 6 high street units) across Spain, comprising 41,567sqm of
GLA. Main tenant is El Árbol/DIA (#2 chain in Spain), with
31 leases, and other individual tenants (including ING, Sanitas,
Cortefiel).
•
Purchased from Blackstone who acquired the portfolio within
a larger €23bn transaction from GE in 2015.
•
Strategy comprises lease up of vacant space and sale over a 3-4
year investment period, with some capex across portfolio as
appropriate.
•
Business plan undertaken by Patron team working with key
local brokers with extensive experience in each region, as well
as Aguirre Newman, CBRE and Vicente Conesa (Patron’s long
term advisor and local partner in the Fund III Poblenou
investment).
15
GSPP – Cologne, Germany – sold (Fund V)
•
Acquisition of a 14,372 sqm office building on the
border of Cologne’s city centre, with significant and
unique redevelopment potential in an economically
strong and affluent city with a good micro location
and excellent connections to public transport.
•
Seller was Patrizia who shifted strategy from a direct
investor to primarily a Spezialfonds manager. As a
result the asset became non-core for them.
•
JV partner is Development Partner AG, an
experienced office and retail developer and investor
with a strong track record.
•
Strategy to reposition the asset as a good building and
a cheaper alternative within the premium segment
which is undersupplied in the local market, supported
by an extensive capex program and lease up of the
asset.
CALA Homes - sold (Fund IV)
• Acquisition in March 2013 of CALA Homes, a leading UK premium volume house builder from Lloyds Banking Group (“LBG”) as part of bank’s non-core asset disposal strategy and subsequent add-on acquisition in March 2014 of Banner Homes
• CALA is a national house builder with a 15,846 plot land bank equivalent to c.6.8 years of production. CALA achieves the highest average selling price (“ASP”) among the UK volume house builders, £509k vs. average of £233k
• CALA focuses on 3+ bedroom, single family homes in affluent districts of the UK, with customers who are generally equity rich, with average LTVs of 65%
• For strategic as well as capital diversification reasons, Patron brought Legal & General (“L&G”) and Electra Partners into the investment with Patron at 37%, L&G holding 47.5%, Electra 10.5%, management 5% - from a governance perspective Patron retains operational control, with both Patron and L&G having board seats and Electra having a passive role subject to material matters above a 10% of EV threshold
• Management team includes 21 professionals led by Alan Brown, CEO and Graham Reid, CFO, who successfully turned around the CALA after the downturn and the LBG debt for equity swap
• Business plan is predicated on the build out of the land bank acquired during the downturn at attractive terms and the build out of “legacy” sites acquired pre-recession improving gross margin from 16% at the time of acquisition to 21%. Profits generated from developments are sufficient to replenish the land bank and position the business for exit
• In March 2014 CALA acquired Banner Homes, a leading premium house builder operating in the South East and Midlands with a land bank of 2,360 plots and turnover of c.£140 million
➢ Banner greatly increased CALA’s exposure to more affluent areas in the South East of England and the increased scale will improve the combined business margins through operational leverage
• March 2018 – sale of Patron interest to Legal & General
Banner CALA
• 89% equity share in the property assets and business of Motor Fuel Group (“MFG”), the 2nd largest
independent owner & operator of convenience retail / petrol filling stations (“Forecourts”) in the UK
➢ Total of 373 operational Forecourt assets – pro forma 333 (89%) freeholds and 40 (11%) leaseholds,
with unexpired lease terms typically in excess of 25 years
• Joint venture with Alasdair Locke, high-net-worth veteran of the oil, property and insurance industries, and
new management team
➢ Highly specialist and experienced partner with over 450 previous successful forecourt acquisitions,
turnarounds and asset managements to their credit
➢ Management team includes several experienced executives ex Murco UK (the UK subsidiary of Murphy Oil)
• Initial MFG Platform investment completed Dec 2011 – corporate acquisition of the business and portfolio
of 47 Forecourts, MFG then being the 5th largest independent forecourt owner /operator in the UK.
➢ Intrinsically high quality assets, significantly underperforming against industry average and historic performance
➢ Business plan focussed on enhancing operations and profitability of retail assets via conversion to
efficient ‘Commission Operator’ management structure, systemic shop rebranding, dedicated capex programme and improved supply agreements
• Enhanced returns from bolt-on acquisitions of additional PFS assets/portfolios - key ones include:
➢ “Scorpion Portfolio” acquisition, July 2013 - freeholds of 53 sites, let on long leases to Murco
Petroleum Limited (“Murco”)
➢ Murco Business acquisition, Sept 2014 - entire UK retail business of Murco, primarily consisting
of a portfolio of 223 high-quality Forecourt assets (including the Scorpion leaseholds), acquired by MFG effectively off-market
➢ “Project Strawberry” - contracts exchanged 10th April 2015 for the acquisition of a portfolio of
90 Forecourts from Shell. Final completion October 2015, funded by senior debt refinance plus
cash on MFG’s balance sheet - no new equity required
• July 2015 – sale of platform to Clayton, Dubilier & Rice
Asset Location Map – MFG & Target Portfolio
MFG (288) Shell (90) MFG (288) Shell (90)
Business Plan
• Target product segment - Prime credit with 65-70% average LTV
• Mid 2017 - launched near prime product up to 75% LTV • Funding through senior debt from banks at significant
advance rate and through capital markets and sales • Securitisation of loan book completed July 2017
• Explore optionality in the platform - (a) additional secured loan products and (b) secondary loan portfolio acquisitions – acquired and further being explored
Opportunity
• Deleveraging by UK high street banks has resulted in a significant undersupply of secured credit, creating an opportunity to create a high yield secured lending platform, focusing on products like second charge (2nd mortgage) loans, short-term (bridge) loans and shared equity mortgages and achieve 8%+ unlevered yield
• In July 2013, Patron backed the senior management team of Nemo Principal Finance, the only mainstream UK second charge mortgage lender to survive the credit crisis, to setup a new platform and originate second charge loans, leveraging their significant credit experience and deep broker relationships
Second Charge Mortgage Product
• Loan to homeowner secured through a second charge on the property, typically for debt consolidation and home improvement; consolidation results in lower monthly outgoings
Shared Equity Product
• Shared equity mortgages are loans from housebuilders to new home buyers which are secured through a second charge and have an equity share in the underlying property
• Acquisition of loan portfolios, using established Optimum platform for asset management
• December 2018 – sale of platform to Pepper Group
19
• Investment program targeting acquisition of undervalued commercial properties in strong regional commercial centres in the United Kingdom
• Program is primarily carried out in JV with Alliance Property Asset Management Limited - a UK asset manager with significant experience in UK commercial markets and extensive existing asset management/asset work relationships with UK banks and institutions
• Program Strategy:
➢ Targeting commercial or mixed use assets sub £20m lot size with value-add potential or undervalued opportunities;
➢ UK focus, with particular emphasis on 2nd and 3rd tier centres still to be impacted by positive inflows from institutional market
• First Investment - April 2014 - Thorpe Park, Leeds; (3% of program) - SOLD
➢ 21,000 sqft fully let office building located on out of town Leeds business park. Single tenanted office space with ground floor retail element
• Second Acquisition - December 2014 - Crossways, Dartford; (9% of program) - SOLD
➢ 42,600 sq ft office in two Grade A detached office buildings located on Crossways Business Park in Dartford, South East of London, with 25,500 sqft /60% vacancy in one building
• Third Acquisition - March 2015 - Arlington Business Park, Reading; (54% of program) ➢ 330,000 sqft in ten office buildings (with industrial asset sub-sold in April 2015) located on
Arlington Business Park in the Thames Valley / out of town Reading market - a key established office market (West of London), with c. 105,000 sqft vacancy / 30% of space – subsequent 29,500 sqft 100% leased add-on asset in November 2015
• Fourth Acquisition - April 2015 - The Mint, Leeds; (27% of program) - SOLD
➢ 118,000 sqft modern office building located in Central Leeds, 94% let on acquisition to two tenants, Asda and Dart PLC
• Fifth Acquisition - Sep 2015 – Quattro (Basingstoke, Cardiff, Luton); (7% of program) - SOLD ➢ 68,000 sqft in three office buildings with 35% vacant space across to assets
Merin – sold (Fund IV)
• Effectively a portfolio of 202 office and industrial buildings totaling 1.1 million
sqm across The Netherlands, along with its management business
• The acquisition was facilitated through the default of the CMBS vehicle
(Opera-Finance) in February 2012 which in turn led to the acquisition of the Class A bonds (€360m), the subsequent enforcement of the senior loan and ownership of the underlying assets, with the equity shares of the company Uni-Invest to follow
• Acquired in a joint-venture with TPG Capital, and financed by 60% vendor loan
from the existing Class A noteholders
• The 202 assets comprise of:
➢ ca 590,000 sqm of B-Class office space, with ca 47% vacancy
➢ ca 500,000 sqm of industrial and logistics space, with ca 20% vacancy • Strategy includes:
➢ Disposal of well-let element of portfolio (14% by sqm) in the medium term ➢ Disposal of approximately (20% by sqm) of assets for land value less
demolition costs
➢ Increasing occupancy across 64% of the assets through selected
refurbishment of between €100€300 psqm and lease up at rents of of €85 -€100 psqm p.a. for offices and c. €40 psqm p.a. for industrial space, which represents ca 15 - 20% discount to comparable assets
• First add-on acquisitions closed in December 2013 (MSREF - 3 properties, 43,000
sqm) and December 2014 (Trois - 3 properties, 18,000 sqm); other value enhancing opportunities involving other large Dutch office operators are being explored
• July 2017 – sale of platform to Dream Global REIT
• Similar to prior funds’ programs, the focus is on building a balanced portfolio of smaller buildings and sub-portfolios of smaller assets that are typically a mixture of partially vacant, vacant or fully let, but requiring active asset management, including refurbishment and redevelopment, re-letting of vacancy and exiting
• First Investment: Mollstrasse; 23% of program SOLD
➢ Acquired in September 2011, a 15,900 sqm primarily vacant office and retail building in the attractive central “Mitte” district of Berlin from a distressed developer
• Second Investment: Ridlerstrasse; 17% of program SOLD
➢ Acquired in April 2014, a 11,200 sqm office building in Munich's West End district with 40% vacancy and capex requirements
• Third Investment: Campus West; 30% of program SOLD
➢ Acquired in October 2014, a 36,700 sqm office complex also in Munich but further west in an established B-office hub, with a diversified tenant base and 20% vacancy
• Fourth Investment: Franklinstrasse; 30% of program SOLD
➢ Acquired in May 2015, a 51,000 sqm office complex in Berlin Charlottenburg adjoining Ernst-Reuter-Platz with the Technical University of Berlin in close proximity. Business plan envisages redevelopment and lease up of 37,000 sqm of office space (95% of total lettable space)
Freehold Leasehold
• Acquisition of 24 office, industrial and retail properties for a total
consideration of £184m located principally in London and South East England.
• Assets acquired from a distressed CMBS vehicle which reached maturity
in October 2012 and was in LTV breach since 2007, owned by Henderson Casper LP, a fund managed by Henderson Global Investors.
• Acquired in a 50:50 Joint Venture with Mountgrange Real Estate
Opportunity Fund with new senior debt financing from Santander.
• Simultaneously completed 9 asset sub-sales of assets to institutional
investors.
• Total 15 assets post sub sales at acquisition
➢ Offices (60%), Retail Warehousing (8%), Distribution Warehouse
(25%), High Street Retail (2%), Multi-let Industrial Property (5%).
• Transaction Strategy:
➢ Maintain and improve strong cash flow yields and lease up of the
lettable vacant space amounting to c.a. 100,000 sq. ft. of total area, including select capex investments, to drive gross income yield improvement – in progress and significantly completed
➢ Disposal program for stable and stabilized assets over a 4 year
period
• All assets now sold
23
• Acquisition of the Clarion Hotel in Dublin, Ireland. The Hotel had been in
administration for nearly 3 years and was underinvested with a poorly motivated management team and a poorly performing brand. The Hotel was financed by a loan owned by the National Asset Management Agency (“NAMA”), the Irish-state-owned ‘bad bank’, who was the ultimate seller.
• Hotel is a modern (opened in 2001) purpose-built 165-room (consisting of 15 suites /
family rooms and 150 standard rooms) 4-star hotel fronting the River Liffey in the International Financial Services Centre (“IFSC”) in Dublin. The Hotel benefits from 10 conference rooms (catering for between 10 and 150 delegates), a leisure club (including an 18m heated swimming pool; the leisure club has c.1000 members), two dining options and a bar.
• The Hotel is held on a long lease (184 years remaining) from the Dublin Docks
Authority. The Hotel was previously managed by Choice Hotels Ireland and traded under the Clarion brand. The Hotel benefits from a strong location in the IFSC (a successful financial services hub).
• The operating partner in the transaction is Fitzpatrick Lifestyle Hotels (“Fitzpatrick”), an
experienced local owner and manager of mid-market hotels. Hotel is being run on an independent basis, managed by Fitzpatrick, and rebranded as part of the Fitzpatrick collection as The Spencer (as announced and launched in March 2014).
• A key part of the business plan was the investment within the first six months of
ownership to refresh the guest rooms, update the health club and the public areas, including full relaunch of the food & beverage outlets – completed and full launch took place in July 2014
• Sold November 2016
• In late 2009 strategy initiated to take advantage of:
➢ imbalance between demand for high quality accommodation, care and
services and current old/poor supply
➢ impact of an ageing population
➢ current market conditions – led to overleveraged larger players or smaller
poorly capitalised operators unable to take advantage of new
• Strategy to build platform of at least 15-20 care homes within approximately 4
regional clusters in the UK
• Achieved through acquisition of land and subsequent development and
acquisition of existing operational premium care homes
• Management team established at Opco level to manage homes and program • As of August 2014 - across both funds
➢ 10 sites operating and 1 under development – “core”
➢ 10 sites acquired or exchanged subject to planning for construction over
the next 18 months – “pipeline”
• In August 2014 sold the core portfolio and the operations to Health Care REIT
(HCN) and Sunrise Senior living
• Partnership with HCN agreed to develop out current 10 site pipeline plus
additional opportunities
• Current portfolio of 33 sites
➢ 10 acquired, and sold as part of original HCN partnership - now ended ➢ 23 outside of agreement acquired / exchanged subject to planning / site
sales, of which 6 sold
25
Badby Park – sold (Fund IV)
• In 2012 Patron acquired the Badby Park Care Facility which is set within a 57-acre estate located in Daventry (Midlands, UK). Badby Park comprises a 68 bed facility dedicated to acquired brain injury, complex care and neurological disorders providing specialist nursing and rehabilitation services.
• A further development in Stoke-on-Trent was acquired (75 bed specialist facility, 24 apartments and 60 bed care home) in March 2015. The 75 bed specialist unit opened in October 2015 and is currently in “fill” mode
• Worcester (Worcestershire) exchanged in April 2016 subject to planning • Middlesbrough (40 beds) and Darlington (54 beds) acquired Q4 2016 • 2 further sites, Southampton and Basingstoke, exchanged in November
2016 subject to planning
Strategy Includes:
• Increasing revenue and managing staff agency costs at Badby Park at mature occupancy
• Exploring the development potential from the excess land on the site and bolt-on acquisitions - planning consent for 17 bed extension was granted in 2015
• Fill Stoke, Middlesbrough and Darlington facilities and achieve planning on exchanged sites
•
Acquisition of budget youth hostel accommodation portfolio and
the management operations from family owned business based in
London, with properties in London and Berlin:
➢
The Generator Hostels Ltd: operating company and all
intellectual property including brand name “Generator
Hostels”
➢
London Freehold: 872 Beds (60,000 ft²), which has now
completed a full refurbishment to bring rooms and public
areas in-line with newer properties.
➢
Berlin Leasehold: 892 Beds (80,000 ft²)
•
Further hostels acquired since initial acquisition and now operating:
Copenhagen, Dublin, Hamburg, Barcelona, Berlin Mitte, Venice and
Paris
•
Newest assets Amsterdam and Stockholm opened in H1 2016
➢Rome in Q3 2016
•
Sites recently acquired: Madrid and Miami – both under
development to open in 2017
•
Active pipeline of hostels within Europe and North America –
includes freehold, leasehold and management contracts
•
Sale exchanged March 2017, completed May 2017
27
Powerleague (Fund III)
Pitches Clubhouse
Parking • Takeover of Powerleague Group plc, the leading five-a-side football
operator in the UK, delisted from the AIM exchange, the LSE market for growth companies in November 2009
➢ Initial 29% acquired in the public entity in March 2008
➢ Over 50 indoor and outdoor sites with over 750 floodlit pitches (including acquired league operators business, additional 350 pitches across >150 sites)
➢ Highly cash generative business, with recurrent revenue streams
➢ Fragmented market with few large players and strong growth potential
➢ Strong and enhanced management team • Strategy includes:
➢ Backing the management team in the expansion program both in the UK and Internationally – organically and acquisition
➢ Improving customer focus, through highly trained /
passionate teams at the branch level
➢ Transforming “facilities” into “destinations” through new “club brand concept” and re-invested centres
29 • Capital Park platform was acquired in 2005 with the acquisition of
Neptune portfolio (42 assets including redevelopment of selected assets as retail / residential)
• Portfolio expanded to encompass 100 assets with a variety of strategies including
➢ Retail – program to acquire small assets on high streets in Polish cites to refurbish, relet and exit
➢ Opportunistic – property assets, including land, for
refurbishment and development for residential and office use (including Wilanow – 37,000 sqm)
➢ Eurocentrum (69,000 sqm)
➢ Norblin (centre Warsaw, > 64,000 sqm)
• After disposals, Portfolio now comprises over 62 assets, representing 249,000 sqm (inc. development potential)
• Platform restructured in 2011 to create independent Polish corporate entity, called Capital Park SA
• Company comprises over 60 staff, encompassing all aspects of investment management, and property development including origination, financing, project management, and tenanting.
• IPO on Warsaw Stock Exchange in December 2013 raising over €30 million in primary capital for growth and business plan execution • Focus on improving share prices through business plan execution • In May 2019, sold 90% of position to Madison International Realty;
residual portion held with a deferred put option
• Acquisition of portfolio of mid market regional UK hotels (2,861 rooms) from the
administrators to Jarvis Hotels Limited by a newly established entity, Jupiter Hotels Limited
• Acquired:
➢ 21 properties on a freehold basis and 5 leaseholds and the operating company ➢ Post re-structuring; now branded Mercure (Accor franchised hotels)
• Acquired in joint venture (50:50) with West Register, Royal Bank of Scotland’s vehicle
for acquiring real estate assets from defaulted RBS loans.
➢ First joint venture deal undertaken by West Register
• Jarvis had been in financial distress for 3 years. The acquisition of the business via a
pre-packaged administration sale addressed a number of these issues immediately, i.e.:
➢ Over leveraged balance sheet: debt reduced by half (via write-off and cash
equity) and provided on attractive terms - post re-structuring LTC: 64%
➢ Loss-making leasehold properties: 15 leases not transferred to Jupiter (handed
back to landlords) and 3 transferred with lower rents
➢ Poorly performing brand (Ramada): new franchise agreed by Jupiter with Accor,
under the Mercure brand
• Strategy includes:
➢ Using the Mercure brand to produce an uplift in hotel performance
➢ Significant head office cost savings achievable in the short term by restructuring
the head office given reduced size of portfolio under management and a much smaller sales and marketing function due to far higher sales support from Accor
➢ Capex program of £9m over next 2 years to address property related issues in
addition to ongoing FF&E expenditure to support performance growth
• Sold October 2015
Jupiter Hotels - sold (Fund III)
Leasehold Asset*
• Acquisition of a complex of 5 connected commercial real estate
assets in central Manchester, UK, held on a long leasehold basis
• Complex includes:
➢ The world renowned 21,000 person capacity MEN
entertainment arena, the second largest indoor arena in the world based on 2009 ticket sales
➢ 149,000 ft2 of office area in two buildings ➢ Retail elements
➢ c.a. 1,250 space car park structure
• Very strong local partner Development Securities PLC (publically
listed property company) with considerable experience and first rate reputation
• Strategy Includes:
➢ Renegotiation of the main Arena lease with the current
tenant creating a more stable and safe income stream – completed
➢ Agreement of a new Naming Rights deal to replace the
current deal at a higher level – completed
• Sold in October 2013 to UK property fund
Car Park
Martin House (Office) City Square (Retail) MEN Arena
Arena Point (Office)
31
Poblenou - sold (Fund III)
•
Acquisition of 3 residential blocks of apartments in
Barcelona from local developer Habitat (recently
emerged out of insolvency proceedings), comprising:
➢
208 flats of 1, 2 and 3 bedrooms (14,700 sqm)
➢6 retail units (600 sqm)
➢
230 parking spaces and 14 storage rooms
•
Strategy is to sell individual units to tenants, new
occupiers and investors at a significant discount to
market prices (20%-35%%)
•
Asset liquidity provided by (i) very good product
quality; (ii) strong location within Barcelona; (iii)
micro market with favourable supply/demand
dynamics; and (iv) attractive sale prices
•
Asset management team has proven track record
33 •
Acquisition in mid 2005 of a portfolio of eight buildings /
assets in France
•
Office portfolio – three in and around Paris, one in Lille
•
Leisure portfolio – two large Center Parcs, and two smaller
hotels in Courchevel
•
Taken public as Vectrane, a French SIIC
•Investment activity included:
•
Acquisition of additional office building in Lille and leisure
complex on the Alps
•
2 smaller assets (French Alp Hotels) sold to tenant (Pierre &
Vacances)
•
Commencement of major renovation of Tour Anjou
•Sold entire shareholding (78%) to Eurosic in March 2007
•
UK’s leading independent bulk liquids and gas terminal operator
and manager – warehousing
•
Operated out of 7 sites with 500 bulk liquid and gas tanks and 1
million m
3capacity, handling in excess of 4 million tonnes per
annum
•
Customers primarily blue chip international oil & petrochemical
companies
➢
Majority of income (approximately 70%) operating under
long-term agreements (up to 10 years), or stable
relationships (many over 20 years)
•
Traditional US risks either non-existent (non-practical) in UK or
covered by insurance
•
Approximately 400 employees
•
Transformed largely dormant chemical business to become the
leading provider of storage and infrastructure in the UK for
biofuels
•
Exited the business late 2005 to Inter Pipeline Fund
Simon Storage - sold (Fund I)
Tyne Cumbria Shannon Seal Sands Riverside Immingham Antwerp Rotterdam Legend Refinery
Simon Storage Facility
Tyne Cumbria Shannon Seal Sands Riverside Immingham Antwerp Rotterdam Legend Refinery
Simon Storage Facility Legend
Refinery
Simon Storage Facility
Immingham Terminal
35 Hotel Arts Hotel Arts Office Building Office Building Land Plot Land Plot
Retail & casino area
Retail & casino area Apartments Apartments Hotel Arts Hotel Arts Office Building Office Building Land Plot Land Plot
Retail & casino area
Retail & casino area
Apartments
Apartments
•
Parent company (Sogo) went bankrupt forcing liquidation
•
Assets trapped in complex corporate structure with management
contract on hotel
•
Considered to be one of the best Ritz Carlton’s in the world
•
Via corporate investment, acquisition of mixed use portfolio of
approx. 1.2 million square feet) consisting of:
➢
44-story, 482-room, 5-Star Hotel Arts
➢12,375 sq.m Office Building
➢
13,084 sq.m Retail Building
➢3,611 sq.m Land Parcel
•
Deal won “International Hotel Deal of the Year” in 2001
•
Harvard Business School case study notes its success despite
adversity
•
Over 400 employees
•
Majority sold in 2004, while retaining minority stake
•
Final Exit in August 2006 to a Host Hotels & Resorts led investor
consortium
igroup – sold (Fund I)
•
One of the leading players in the subprime UK
mortgage market
•
One of the largest MBOs in the UK for 1999
•
Growth from £450m to £1.6 billion in assets; growth
from £30m to £105m+ a month in originations at sale
•
Company grew from 300+ to 800+ employees
•
Equity partners include Royal Bank of Scotland (£76m)
and management
•
Sold to GE Capital in 2001 and continues to be leading
performer
•
Exit won “British Venture Capital Association Deal of
37
