Aspen Group - February 2021 Newcastle, NSW
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Aspen Group
February 2021
Newcastle, NSW
Darwin Freespirits Resort, NSW
Four Lanterns
Aspen
Barlings Beach Estate,
Karratha Leppington
Village,
Holiday WA NSWNSW
Park,
1
Aspen Group
Overview
16 Treatts
Barlings
Perth, Rd, Lindfield
WABeach HolidayApartments,
Park, NSW NSW Seabreeze Villa cabins – Barlings Beach, NSW
2
Aspen Group Overview 1.1
▪ Aspen is a leading provider of quality accommodation on Current Lease Offering
competitive terms in the residential, retirement and short stay (by number of dwellings and land sites)
sectors
▪ Our customers range from single to large family households of
all ages. Our addressable market is worth over $1 trillion - about
6.5 million households (70% of total) are either renting or Short Stay
servicing a mortgage of which 1.5 million are considered c. 40%
“stressed”, paying more than 30% of income on housing costs
▪ Aspen’s fully integrated platform encompassing operations,
asset management, development and capital management Long Lease
enables us to provide a broad spectrum of products and c. 60%
services to our customers under different regulatory regimes
and ownership schemes - examples:
o Rentals of dwellings
Operating Revenue Sources (FY20)
o Shared Equity where Aspen and the customer own
different components of the property - eg. Aspen leases
land sites to customers who own their dwellings in land
lease communities and mixed-use parks Other
8%
o Sales of dwellings and land Leasing Land
28%
▪ We provide one, some or the entire range of our
accommodation products and services at each of our properties.
Our offering is flexible and can be pivoted between products.
This enables Aspen to maximise the profitability and value of Leasing
properties and reduce risk by optimising the customer mix Dwellings
based on demand, length of stay, service offering, relative 64%
pricing and expenses, regulation, capital costs and other factors
3
Aspen’s Competitive Prices and Rents 1.2
As at 31 December 2020
Portfolio Value $186m
Number of Dwellings/Sites 2,361
Average Value per Dwelling/Site $79k
WACR 8.3%
Land Lease
Houses Apartments Mixed Use Parks Co-Living
Communities
Average Book Value per
Dwelling/Site
$254k $284k $68k $78k $69k
Average Weekly Rent
(Medium/Long Term)
$346 $2291 $2682 $172 $158
1. Includes residents under Retirement Village leases at below-market rent
2. Based on short stay cabin conversions into medium-long term rentals across Mixed Use / Tourist Parks 4
Treatts Rd – Lindfield Apartments
Sweetwater Grove Estate, Tomago, NSW
2
Portfolio
5
Portfolio Summary 2.1
Portfolio Aggregates1 ▪ Aspen currently has 16 properties valued at approximately $186m:
o Average value of approximately $79k per approved dwelling/site
Properties* 16
o Only $2.5m per hectare / $250 per sqm of land
Land Area 74 hectares
o WACR of 8.3%
Approved Sites 2,361
Dwellings Owned by Aspen 859 ▪ Aspen also manages two major residential and retirement projects and earns project
management fees for this service
Density: ▪ General traits that Aspen seeks in properties it acquires:
- sites per hectare 32 o Desirable locations – particularly metropolitan
- dwelling / sites ratio 36% o Large land parcels that are under-utilised
o Existing dwellings priced at well below replacement cost that have alternative uses and can
Portfolio Value: $186m be refurbished / repurposed
- per hectare $2.5m o Land and development cost at the low end of (or below) local competition
- per approved dwelling/site $79k
o Competitive operating costs (e.g. tax incentives / subsidies)
o Flexibility / optionality
Valuation WACR 8.3% o Strong potential for higher value use over time
* Perth Residential Portfolio of 84 dwellings is counted as 1
Increasing Property Value – providing our customers attractive lifestyles at competitive prices and rents
Camping / Sites Cabins Manufactured Homes Residential Homes Apartments / Co-Living
6
Aspen’s portfolio is geographically diversified… 2.2
Land Area Dwellings/ Land Area Dwellings/
WA NT (Hectares) Sites Property Type by Location
(Hectares) Sites
12 Mandurah 6.8 158 15 Darwin FreeSpirit 10.8 461 (value weighted)
13 AKV 2.9 180
Total
14 Perth Residential 3.4 84 15
Dwellings/
Sites
2,361 Regional
(40%)
$17m (9%) Metropolitan
13
(60%)
$51m (28%) Portfolio Value: ~$186m
$3m (2%)
16
Land Area Dwellings/
Queensland (Hectares) Sites
$41m (22%)
16 Burleigh Heads 0.94 18
14
12 $73m (39%) 5 2 NSW
Land Area
(Hectares)
Dwellings/
Sites
10 i 8
1 3/4
9 11 1 Four Lanterns 3.9 131
ii 2 Sweetwater Grove 6.0 214
6
Land Area Dwellings/ 7
SA (Hectares) Sites
3 Lindfield Kiah 0.19 20
9 Adelaide CP 1.5 97 4 Lindfield Kalinda 0.16 22
10 Highway One 9.9 322 5 Koala Shores 5.1 144
11 Mount Barker 11.53 97 6 Barlings Beach 8.8 260
1
i CREST 22 106 7 Tween Waters 1.9 98
1
ii Coorong Quays 225 483+
8 Cooks Hill 0.19 55
1. CREST and Coorong Quays are owned by Funds managed by Aspen Group
7
Aspen’s Portfolio Composition & Growth 2.3
▪ Aspen’s portfolio composition and income streams have Property Type2 Property Type2
improved materially over the past few years. (value weighted) (NOI weighted)
o Increased weighting to:
- Metropolitan locations
- More stable, less seasonal rental income
- Capital growth v. income profile
- More liquid properties - individual houses and
apartment buildings in metropolitan locations are
easier and quicker to rent and sell
o Continued pivoting between short stay and long stay
offer when conditions change to maximise profits
Short Stay Mixed-Use Residential Short Stay Mixed-Use Residential
o AKV weighting has reduced – Aspen is in a stronger
Land Lease AKV Land Lease AKV
position to be able to optimise risks/rewards
Portfolio Composition1,2 and Acquisition History + Mount Barker
+ Lindfield Apartments + Burleigh Heads
$m + Perth Residential Portfolio + Cooks Hill
200 AKV + Highway 1 $186m
+ Koala Shores $174m
180 Four Lanterns + Tween Waters 9%
160
+ Darwin FSR 9%
Mandurah + Barlings Beach $141m 21%
140 Tomago 23%
$116m 11%
120 ACP
$90m 14% 28% 19% 24%
100 total value of
80 $67m properties 18% 34%
60 24% 28% 23% 21%
44% 13%
40
58% 16%
20 40% 33% 26% 25%
18% 22%
0
FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 1H FY21
Short Stay Mixed-Use Residential Land Lease AKV
1: Value weighted based on property values
2. Excludes value of CREST and Coorong Quays which are managed by Aspen Group and owned by Funds 8
Aspen Group: Portfolio Summary 2.4
New South Wales Queensland
Cooks Hill
Four Lindfield Sweetwater Koala Barlings Tween NSW Burleigh
Lindfield Kiah Co-Living
Lanterns Kalinda Grove Shores Beach Waters TOTAL Heads
Community
Sydney Sydney Sydney Greater Greater Greater South South
Region Metro Metro Metro Newcastle Newcastle Newcastle Coast Coast
Gold Coast
Land Ownership Freehold Freehold Freehold Freehold Free/Leasehold Freehold Freehold Freehold Freehold
Land Lease / Land Lease /
Customer Tenure Land Lease Rental Rental
Rental
Short Stay Rental
Short Stay
Short Stay Rental
Total Land Area (HA) 1 3.9 0.19 0.16 6.0 5.1 0.19 8.8 1.9 26.3 0.94
Approved Sites 2 131 20 22 214 144 55 260 98 944 18
- per Ha 33 104 140 36 28 289 30 50 36 19
Owned Dwelling Inventory 3 8 20 22 53 40 55 33 33 264 18
- per Approved Site 6% 100% 100% 25% 28% 100% 13% 34% 28% 100%
Property Value 4 ($m) 12.4 6.9 5.0 13.1 8.7 3.8 14.8 8.2 72.9 3.2
Valuation Cap Rate 5 6.50% 3.74% 3.97% 8.50% 8.85% 4.50%6 8.75% 9.00% 7.34% N/A
Value Per HA ($m) 3.2 35.8 31.9 2.2 1.7 20.1 1.7 4.2 2.8 3.4
Value Per Approved Site ($k) 95 345 228 61 60 69 57 84 77 175
1. Sweetwater Grove land area excludes "Environmental Conservation" land that is not currently approved for development
2. Approved Sites is the total number of underlying units or land sites currently permitted on the property under title, licence or other conditions
3. Owned Dwelling Inventory are houses, apartments, cabins, vans, commercial/retail space etc. that Aspen owns that can be sold or leased on short to long term basis to customers
4. Property values are a mixture of Directors’ and external valuations
5. Valuation cap rate that has been applied by external valuers in the most recent external valuations
6. The valuation utilised a capitalisation rate range of 7 – 7.5% based on their adopted gross annual rent. We have adjusted this a net rate assuming 60% margin
9
Aspen Group: Portfolio Summary 2.5
WA South Australia NT GROUP
Mandurah Perth Adelaide Highway Darwin
AKV WA TOTAL Mount Barker SA TOTAL TOTAL
Gardens Residential CP One FSR
South
Region Coast
Pilbara Perth Metro Adelaide Metro Adelaide Metro Adelaide Metro Darwin Metro
Land Ownership Freehold Freehold Freehold Freehold Freehold Freehold Freehold
Short Stay /
Short Stay /
Customer Tenure Land Lease Short Stay Rental Short Stay Rental / Land Under Review
Rental
Lease
Total Land Area (HA) 1 6.8 2.9 3.4 13.1 1.5 9.9 11.5 22.9 10.8 74.0
Approved Sites 2 158 180 84 422 97 322 97 516 461 2,361
- per Ha 23 62 24 32 65 33 8 23 43 32
Owned Dwelling Inventory 3 1 180 84 265 47 115 N/A 162 150 859
- per Approved Site 1% 100% 100% 63% 48% 36% N/A 31% 33% 36%
Property Value 4 ($m) 13.7 16.0 21.3 51.1 11.9 24.9 4.5 41.4 17.1 185.7
Valuation Cap Rate 5 7.50% 17.00% 4.25% 9.12% 8.25% 9.25% N/A 7.95% 9.00% 8.34%
Value Per HA ($m) 2.0 5.5 6.2 3.9 7.9 2.5 0.4 1.8 1.6 2.51
Value Per Approved Site ($k) 87 89 254 121 123 77 46 80 37 79
1. Sweetwater Grove land area excludes "Environmental Conservation" land that is not currently approved for development
2. Approved Sites is the total number of underlying units or land sites currently permitted on the property under title, licence or other conditions
3. Owned Dwelling Inventory are houses, apartments, cabins, vans, commercial/retail space etc. that Aspen owns that can be sold or leased on short to long term basis to customers
4. Book values are a mixture of Directors’ and external valuations
5. Valuation cap rate that has been applied by external valuers in the most recent external valuations
10Burleigh Heads, QLD
3
Ethical, Social,
and Corporate
Governance
11Environmental, Social and Corporate Governance Program 3.1
Social
• Aspen improves society and reduces inequality by providing quality accommodation on affordable terms to a wide variety of Australian households in
the residential, retirement and short stay sectors. Many of our customers are disadvantaged with below-average wealth and income, and therefore find
it difficult to secure suitable accommodation
• Our properties are located in past and present Indigenous communities and we actively seek to help these communities and conserve heritage items.
For instance, to help protect the Barlings Beach Aboriginal Place, we recently completed an archaeological dig within our Barlings Beach park with the
assistance of the Mogo Local Aboriginal Land Council. Another example is the protection and proposed public display of an Aboriginal Scar Tree within
our Mount Barker property
Environmental
• Looking after the environment today and for future generations is essential. We recognise the need to continually reduce environmental impacts, work
towards sustainable resource use and ensure emissions are at or below levels that can be reabsorbed without harm
• We continually embrace new technologies to deliver innovative products and services to our customers whilst minimising costs and our ecological
footprint. For instance, where feasible, our communities include:
- New homes and community facilities with improved building techniques, designs and materials that must meet current regulated building codes that
are usually equivalent to the top 6 Star NABERS rating (eg. replacing obsolete caravans with highly insulated Xodboxes that require significantly
less energy for heating and cooling)
- Energy and water monitoring systems that enable us and our customers to better regulate and reduce energy and water use
- Solar installations (eg. rooftop solar panels, solar-boosted hot water heaters, solar lights for pathways and gardens)
- Appliances and devices that consume less energy and water (eg. LED lighting, low-flow shower heads, automated shut down of air conditioners)
- Recycled water systems (eg. recycling wastewater for grounds watering)
- Recycled waste collection facilities
- Shared community facilities including pools, gym facilities, tennis courts and garden/vegetable/fruit pods
- Shared vehicles for group transport (eg. community bus) and bike storage areas
12Environmental, Social and Corporate Governance Program 3.2
Governance
• Aspen Group comprises the stapled head entities Aspen Group Limited and Aspen Property Trust. Aspen Group Limited is a company with a Board of
Directors and Aspen Property Trust is a trust governed by a Responsible Entity, Evolution Trustees Limited which is independent from Aspen Group
Limited and has its own Board. Between the two entities’ Boards, there are currently 6 members of which 5 are considered independent. The only
member who is considered non-independent is the Joint Chief Executive Officer by virtue of his executive role and substantial shareholding in Aspen
Group
• The Boards have ultimate responsibility for ensuring that Aspen’s sustainability strategies are robust and that systems are in place for managing
Aspen's key areas of sustainability risk and opportunity
• Our senior executives ensure that the organisation continues to perform in a way that demonstrates integrity on our environmental position, our
commitment to the communities in which we operate and the opportunities we provide for our people and business partners to contribute to current and
future generations
• Our current key management personnel are the Joint Chief Executive Officers. They are aligned to the long-term performance of Aspen Group through
their substantial personal shareholdings and the structure of their remuneration packages where 50% of total remuneration is deferred for up to 3
years, subject to vesting conditions including qualitative and quantitative performance measures
13Disclaimer This presentation has been prepared by Aspen Group Limited on behalf of Aspen Group Limited and Aspen Property Trust (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anything in it shall form the basis of any contract or commitment. Prospective investors should make their own independent evaluation of an investment in Aspen. Nothing in this presentation constitutes investment, legal, tax or other advice. The information in this presentation does not take into account your investment objectives, financial situation or particular needs. The information does not purport to constitute all of the information that a potential investor may require in making an investment decision. Aspen has prepared this presentation based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Aspen, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation contains forward looking information. Indications of, and guidance on, future earnings, distributions and financial position and performance are forward looking statements. Forward looking statements are based on Aspen’s current intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties and other factors which could cause actual results to differ materially. Aspen and its related bodies corporate and their respective directors, officers, employees, agents, and advisers do not give any assurance or guarantee that the occurrence of any forward-looking information, view or intention referred to in this presentation will actually occur as contemplated. All references to dollar amounts are in Australian currency.
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