LANDHOLM REIT plc - Landholm Asset Management
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Objective: To purchase and manage residential investment properties in Ireland
leading to the formation of:
LANDHOLM REIT plc
a Real Estate Investment Trust to be quoted on the Irish Stock Exchange, specialising in
Residential Investment Property in Ireland.
Initial Offer Period: 1 March to 31 July 2017
Target Size: €30,000,000 by 31 July 2017
Size by end 2017: €100,000,000
Investment Term: 18 months to 30 Nov 2018
Responding to the Irish Government’s Housing Plan 2016
Exit Mechanism: Irish Stock Exchange REIT Listing
Gearing: Max 35% Loan to Value
Minimum Investment: €100,000
1
LANDHOLM RESIDENTIAL LTD
This Presentation should be read in conjunction with the Information Memorandum, which is an invitation to investors
to subscribe for Shares in Landholm Residential Ltd (the “Company”) at the prevailing subscription price during the
applicable Initial Offer Period.
A decision to invest in the Company should take into account your own financial circumstances and the suitability of
the investment as a part of your portfolio. If you are in any doubt about the action you should take, please consult
your professional adviser.
Shares are offered solely on the basis of the information and representations contained in the Information
Memorandum and not this Presentation. No person is authorised to give any information or make any representation
other than those contained in the Information Memorandum. Statements made in the Information Memorandum are
based on the law and practice currently in force in Ireland.
The Directors of the Company accept responsibility for the information contained in this presentation and have taken
all reasonable care to ensure that the facts stated herein are true and accurate in all material respects and that there
are no other material facts the omission of which would make misleading any statement herein, whether of fact or of
opinion.
Risks
Investors should note that the price of Shares may go down as well as up to reflect changes in the Net Asset Value of the
Company. Investment in the Company carries risks and is suitable only for investors who are in a position to take such
risk. The investment risks include the possible loss of all or part of the entire amount invested.
This Company has set limits and other restrictions on the investment objectives, the investment policies and the degree
of leverage which may be employed by the Company and the Company complies with these requirements and with the
aim of spreading investment risk.
Income generated by the Company may fluctuate and no representation or warranty is made as to the level of returns
experienced by investors in the Company.
Further information on risks in available in the Information Memorandum.
2INVESTMENT STRUCTURE
AIFM Property Adviser
Depositary Services Lettings Management
Property 1 Property 2 Property 3
3LIST OF PARTIES & ADDRESSES
Legal Form: Landholm Residential Ltd
Limited liability company with variable capital, incorporated under
Irish Companies Act 2014.
Registered AIF Landholm Asset Management Ltd
Manager: 25 Lr Leeson Street, Dublin 2
Property Advisers: Cushman & Wakefield/ Hooke & MacDonald/ Ian McCarthy SCSI
Property Letting Sherry FitzGerald Lettings Hooke & MacDonald Property
Manager: Shelbourne Road, 118 Lr Baggot Street
Dublin 4 Dublin 2
Depositary Caceis Investor Services Ltd
1 Custom House Plaza, IFSC, Dublin 1
Auditors Grant Thornton
24/26 City Quay, Dublin 2
Legal Advisers A&L Goodbody Solicitors
2 Grand Canal Square, Dublin 2
4INVESTMENT STRATEGY
Objectives To assemble and manage portfolio of residential investment properties in
Ireland, let to tenants on variable term leases;
To provide investors with professionally managed means of investing in
income-generating assets with dividend and capital growth potential.
To target 40% Dublin, 20% Cork, 20% Limerick, 20% Galway
Cluster investment policy
Target Yield Purchase Yield including acquisition costs = 6.5%
Yield reduction for management/ maintenance/ marketing costs = 1.3%
Net target yield to Investors = 5.2% pa, with further capital growth potential
Align with Corporate objectives match Government and social priorities
Government & Requirement of 30,000 dwellings pa for next 7/10 years.
Social objectives
Target Investment €30m to be raised by end July 2017, €100m+ by end Q4 2017.
Size Cornerstone Investors followed by Institutional support here and overseas.
Exit Strategy Listing as LANDHOLM REIT plc on Irish Stock Exchange by Nov 2018
Investor Dividend
A stable cash flow and consistent dividend stream to investors,
LANDHOLM will distribute 85% pa of its distributable reserves.
5ADVANTAGES OF PROPOSED STRUCTURE
Simple Structure Landholm Residential Ltd owns the properties
Separate to the Registered AIFM Landholm Asset Management Ltd
Can be simply converted to REIT status
Recognition/ REIT structure is favoured property ownership structure
Marketing QIAIFS and IRES REIT plc comprise only 6% of total Irish res market
Strong case for a second Residential REIT in Ireland. 43 REITS in UK.
Liquidity Provided by ISE listing within 18 months
Pending that, on a matched basis
Governance Robust & transparent Irish/ EU Law requirements
Credibility & track record of Directors
Company Taxation No Income Tax, Corporation Tax or Capital Gains Tax in the Company
Shareholder 20% Dividend Withholding Tax (DWT)
Taxation Credit given for the DWT deducted
Dividends tax free to Pension Funds & Approved Retirement Funds
33% Capital Gains Tax (CGT) on REIT share sale profits
6LANDHOLM ‘Living for You’
Branding Recognised & respected rental property owner & manager.
LANDHOLM name is descriptive of the Company’s intended activities.
Logo ’Living for You’ reflective of Landholm’s objectives.
Conversion to REIT is the globally understood & favoured property ownership structure.
REIT Sept ‘18 ‘Shares for €1’, ensuring ease of access & liquidity for early investors.
Diversification/ Aim is to provide wide geographical footprint and varied housing mix.
Consolidation Part of the consolidation trend of the currently fragmented rental market.
Clear Strategy Irish owned and operated, long term view with max 35% gearing.
Existing foreign QIAIFs have shorter investment time horizon and now a less
favourable tax environment.
Government LANDHOLM objectives align with Government and social policy to increase
Policy amount & quality of long term residential rental accommodation.
30,000 units required pa for next 7/10 years.
To encourage institutional property ownership.
Cost Structure Cost structure simple, reasonable and transparent.
7SOURCE OF PROPERTIES TO PURCHASE
Property Sales Agents Open market purchases; Private off-market opportunities;
Direct from Developers/ bulk purchase
Off-market transactions Apartment blocks, new build to rent, student accommodation,
housing estates or part thereof
Irish banking institutions Property and construction loan books of c. €14 billion
Private equity investors Private equity investors are beginning to recycle.
Foreign owned QIAIFs Change in tax law in late 2016 - foreign owners/ QIAIFs have 20%
Withholding Tax deducted, formerly €Nil, may prompt sales.
Long term Strategy Linkages with developers with pipelines of property assets
8SAMPLE PROJECTS – Castleforbes Square, North Dock, Dublin 1 (for illustration only)
Guide €7,500,000
28 apartments for sale
Current rental income of €437,100 per annum = 5.8% Gross Yield
Estimated market rental value of €592,200 per annum = 7.9% Gross Yield
Recent rents achieved in the vicinity average €1,350 for one-bedroom, €1,800 for two-
bedroom & €2,100 for three-bedroom.
Tenants not affected
9SAMPLE PROJECTS – Smithfield Lofts, North King St, Dublin 7 (for illustration only) Guide Price: €9,500,000 Modern development of 63 apartments and townhouses. 50 residential units for sale: 16 one-bedroom, 28 two-bedroom & 6 two-bedroom townhouses; 33 car parking spaces . Passing rent of €637,740 pa, Gross Yield 6.7% Estimated market rent of €885,600 per annum, Gross Yield 9.3% 10
EXAMPLE OF INVESTMENTS (for illustration only)
LANDHOLM Residential
Multi-Family Investments for Public Sale
March 2017
Total
Ave Current Total ERV
Income Income Income Current ERV
Name Address Description Price per Apt pa pa pa Yield Yield Agents
€ € € € % %
Shelbourne Plaza Ringsend D 4 53 Apts 20 mill 23,818 1,262,400 1,262,400 6.3% 6.31% Savills
Hooke &
Castleforbes Square Docklands, D 1 28 Apts 7,5 mill 15,611 437,100 592,200 5.8% 7.9% MacDonald
Bachelors Quay, CBRE/ Cushman
Leeside Apartments Cork 78 Apts 10 mill 10,404 811,500 970,000 8.1% 9.7% & Wakefield
Hooke &
St Edmund's MacDonald/
Apartments Liffey Valley, D 20 160 Apts 32.5 mill 15,221 2,435,400 2,791,800 7.5% 8.6% Lisney
Henry Street, Cushman &
The Carlton Limerick 67 Apts 9,5 mill 8,758 586,800 - 6.2% - Wakefield
Hooke &
Neptune Block Dun Laoghaire 197 Apts 72.5 mill 22,335 - 4,400,000 - 6.1% MacDonald
11LANDHOLM Residential Ltd pro forma Profit/ Loss A/c GAV €25,000,000 35% Debt
% of LANDHOLM LANDHOLM
Gross % of Residential Ltd Residential Ltd
Rent GAV € €
Property Purchase Price 25,000,000 75,000,000
Gross Yield excl purchase costs 6.50% 6.50%
Stamp Duty 490,000 1,090,000
Transaction Costs 684,370 2,053,110
Property Cost incl purchase costs = GAV 26,174,370 78,143,110
Gross Yield incl purchase costs 6.2% 6.2%
Funded by Equity 65% 17,013,341 50,793,022
Funded by Bank Loan 35% 9,161,030 27,350,089
Rental Income 1,625,000 4,875,000
Less Costs:
Loan Interest 3.19% (289,008) (867,024)
Maintenance Costs 7.5% 0.47% (121,875) (365,625)
Depositary Fee 3.3% 0.20% (52,813) (158,438)
Property Letting 5.0% 0.31% (81,250) (243,750)
Repairs 1.9% 0.12% (30,875) (92,625)
AIFM Management Fee 5.2% 0.32% (84,500) (253,500)
22.9% 1.4% (660,320) (1,980,961)
Profit/ Surplus 964,680 2,894,039
Distribution 85% 819,978 2,459,933
Net Income Yield to Investors 5.7% 5.7%
12YIELD CALCULATIONS per Property – 100% Equity
Property 1 Property 2 Property 3 Property 4 Property 5 Total
€ € € € € €
Purchase Price/ Value 230,000 270,000 310,000 350,000 390,000
Stamp Duty 1% 2,300 2,700 3,100 3,500 3,900
Legal Fees etc 0.5% 1,150 1,350 1,550 1,750 1,950
Agent's Fees 1% 2,300 2,700 3,100 3,500 3,900
Purchase Price incl costs 235,750 276,750 317,750 358,750 399,750 1,588,750
Gross monthly Rent 1,275 1,500 1,720 1,940 2,175
Gross annual Rent 15,300 18,000 20,640 23,280 26,100
Gross Yield 6.5% 6.5% 6.5% 6.5% 6.5%
AIFM Management .32% of GAV (1,265) (1,530) (1,754) (1,979) (2,219) (8,782)
Property Letting 5% of Rent (805) (990) (1,135) (1,280) (1,436) (5,683)
Maintenance etc .79% of GAV (1,150) (1,440) (1,651) (1,862) (2,088) (8,266)
Net Annual Rent 12,080 14,040 16,099 18,158 20,358 1.4%
Net Yield 5.2% 5.2% 5.2% 5.2% 5.2%
13INVESTMENT DETAILS
Subscriptions
Ordinary Shares offered to investors at an initial offer price per Share of €1.00.
Subscription Price may include a Subscription Fee, not exceeding 2%.
Fee may be amortised over such period as the Directors (& Auditors) may determine.
Only one class of Ordinary Share. No Preference Shares.
Minimum size of €5,000,000 to be achieved during the initial offer period. If the minimum size is
not achieved in the initial offer period, all funds shall be returned to investors.
Shares Sales
On the flotation of LANDHOLM REIT, investors can sell their Shares on the Stock Exchange.
Redemption prior to that will be on a matched basis.
Dividend/ Distribution Policy
The Company intends to float by Sept 2018 and will not make a distribution before that.
Gross Asset Value/ Net Asset Value
Will be calculated in Euro by the AIFM.
Any expense or liability of the Company may be amortised over such period as the Directors
(with the approval of the Auditors) may determine.
14FEES AND CHARGES AIFM Fee 0.32% of Gross Asset Value, may not be increased without Shareholder approval. Includes Depositary Fee of maximum of 0.02% per annum of the Gross Asset Value of the Company (plus VAT, if any) subject to a minimum annual fee of €15,000 for the Company; may be waived for an agreed period of time. Includes Directors’ Remuneration, for the first 12 months shall not exceed €50,000 in total. Performance Fee 20% of the excess of Shareholder Return over a 7% annual return hurdle, only payable where the Investor has earned an 7%+ return, payable annually based on the Company’s GAV plus Dividend at each year end. Property Letting Manager Property Letting Management fee under the Property Letting Management Agreement of up to 5% of gross rent collected. Maintenance and Services .79% of Gross Asset Value, including landlord service charges and repairs. 15
PROPERTY ADVISERS Cushman & Wakefield Ireland, commercial property partner of Sherry FitzGerald, is the exclusive Irish affiliate of the leading global real estate services firm. Lisney is a full service property advisory company providing residential property services. Established over 80 Years ago, serving the island of Ireland. Ian McCarthy SCSI Ian has many years’ residential property experience, previously Board Member and shareholder of Sherry FitzGerald, working on all aspects of the Irish residential property market, including valuation, project appraisal, acquisition, letting and management. PROPERTY LETTING MANAGEMENT Sherry FitzGerald Lettings & Hooke & MacDonald Property Management will provide tenant and lease management, rent collection, service charges, utilities, insurances, local authority charges and repairs. 16
ALTERNATIVE INVESTMENT FUND MANAGER (AIFM)
Registered as an Alternative Investment Fund Manager by the Central Bank of Ireland.
Provides management services to LANDHOLM Residential:
Investment advice and acquisition services in conjunction with Property Advisers
Asset management services with Hooke & MacDonald Letting & Property Management
Risk and liquidity management
Corporate governance and compliance
Structuring, marketing and financing
Overseeing functions of the Depositary.
Provides Administrator services – AML/ KYC
Banking Services
Production of Gross Asset Value/ Net Asset Value calculations
Financial Statements – Annual, Semi Annual, Common Reporting Standards.
Annex 4 Reporting - Central Bank
FATCA Compliance/ Automatic Exchange of Information.
17STRONG 2016 IRISH GNP GROWTH & FORECAST FOR 2017
6.9%
5.7%
4.6%
3.3% 3.3%
2012 2013 2014 2015 2016
IRELAND POPULATION GROWTH (%)
Source: Central Statistics Office, Bank of Ireland
3.50%
3.00%
Population growth is supported by the highest birth rate in Europe.
2.50%
Immigrants and growing young population natural renters
2.00%
1.50%
1.00%
0.50%
0.00%
18
2011 2012 2013 2014 2015 2016FEATURES OF IRISH RESIDENTIAL RENTAL SECTOR (NESC Report 2015)
Rental Housing 1.6m homes nationally, 305,000 (20%) rental - 58% Irish Renter
- 42% Foreign Renter
% Renters in Cities 34% in Dublin; 29% in Cork; 40% in Galway
Secure Occupancy Rent Regulation/ Indefinite Leases/ Tenure
Sale of Property no longer valid reason for vacant possession
Improved Dispute resolution procedures
Increase Supply Government policy is to encourage institutional property ownership.
Development of REIT legislation in Ireland over the past 3 years
More favourable tax treatment for REITs than for private (80% Rule)
Incentives to Landlords for tenants in receipt of Rent Supplement.
New Build to Rent Increasing Life Renters including families. Home ownership down to 70%
in 2015. Falling household sizes, average 2.7 in 2015.
‘Limited supply & high cost of rental housing is now a threat to Ireland’s competitiveness & job creation’
NESC Report 2015.
‘Strong rental sector needed to support a mobile labour market.’ Government Housing Plan 2016
19GOVERNMENT HOUSING STRATEGY SUMMARY – 2016
Cabinet Committee on Housing chaired by An Taoiseach ‘Accelerating delivery of housing for the private, social and
rented sectors is a key priority.’
‘REITs and other institutional investors which have been successful at raising development finance have the
potential to begin significant investment in build to rent projects.’
Pillar 1: Doubling of housing construction output to 25,000 units pa Dublin
by 2020
Housing
Pillar 2: Social Housing €5bn investment plan, 47,000 units to 2021 = private sector
Completions 2015
fund to provide additional social housing
2,891
Pillar 3: Build More Planning permission for 27,000 new homes in Dublin
Homes NTMA large scale infrastructure development finance
€200mill Infrastructure Fund announced
Land supply management/ Planning reforms
Housing
Pillar 4: Improve Rental Security of tenancies – cap rental growth required pa
Sector Supply - provision of mixed tenure development 2014 – 2018
Standards of building 35,433
Services – reform of Residential Tenancies Board
Regulatory: Residential Tenancies Acts 2004 - 2015
Pillar 5: Utilise existing 200,000 homes vacant 2016 Census
Housing
20LANDHOLM Asset Management – Directors & Advisers
Johnny Fortune BComm MBS MSc (Econ) - Chairman
Director and co-founder of Pegasus Capital and former Managing Partner of Pilot View Capital, a specialist Central Bank
regulated investment firm. Formerly Director of IBI Corporate Finance and a non - executive Director of Esat Digifone plc.
Former CFO of Skillsoft plc and central to their IPO, the first Irish company to float on NASDAQ.
John Gilsenan BComm FCCA CTA LCOI QFA
Head of Financial Services & Corporate Bond operations for large multinational in Dublin, growing it into one of the top 60
financial institutions in Ireland and central to structured bond fund raising issues of €3.8 bn from 2007-2011. Former Director
of international property fund specialising in syndicated commercial investments.
Paul McGowan BComm FCA, Registered Stockbroker
Managing Director of Ocean Capital, owner and manager of extensive commercial real estate portfolio. Founding Managing
Director of Dolmen Stockbrokers (now Cantor Fitzgerald Ireland).
Non-Executive Director: Barry Smyth FRICS FSCSI MCIArb dVW Smyth Surveyors & Valuers
Property Acquisitions Adviser: Ian McCarthy SCSI
Johnny Fortune John Gilsenan Paul McGowan
Director Director Director
jfortune@landholm.ie jgilsenan@landholm.ie pmcgowan@landholm.ie
21SUMMARY
Simple Structure
Experienced Directors and management & advisers
Rigorous property acquisitions appraisal
Long term attainable Goals and Objectives
Single and newly-defined Asset Class
Steady and diverse Income Stream
Excellent Liquidity; ease of entry and exit
Rigorous Cost Control
Very substantial market opportunity
Favourable tax environment
Robust compliance and regulation
Independent Depositary
Aligned with national interest
LANDHOLM : ‘Living for You’
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