CapMan establishes EUR 835 million hotel real estate investment fund and buys 39-hotel portfolio

Transcription

1 CapMan establishes EUR 835 million hotel real estate investment fund and buys 39-hotel portfolio Press conference 18 January 2008 Present: Heikki Westerlund, CEO, CapMan Plc Jukka Iivari, Chairman of the Board, CapMan Real Estate Oy Markku Hietala, Head of CapMan Real Estate Jorma Lehtonen, Fund Director, CapMan Real Estate Tomi Bergman, Director of Hotel Investments, CapMan Real Estate Vesa Tengman, L&R Nordic Properties AB CapMan Presentation 18 January

2 CapMan Hotels RE raises capital under management to 3.8 billion, of which 1.9 billion now in real estate funds The establishment of the new fund is estimated to have a slightly positive impact on CapMan Plc s result for 2008 Management fees are based on portfolio at acquisition cost Hurdle rates and cash flow distribution: Hurdle rate 1: 8% IRR p.a. to investors, 80% of cash flows to investors, 20% to management company Hurdle rate 2: 10% IRR p.a. to investors, 70% of cash flows to investors, 30% to management company CapMan Plc s share of the possible carried interest income is 60%, real estate team s and Corintium Oy s combined share is 40% Capital under mgmt, M 4,000 3,500 3,000 2,500 2,000 1,500 1, Growth 27 % /07 01/08 CapMan Hotels RE CapMan RE II CapMan Real Estate I Life Science funds Technology funds Mezzanine funds Buyout funds CapMan Presentation 18 January

3 Fund structure of CapMan Hotels RE Ky Size: 835 million, out of which 292 million equity Max. Size: 1.1 billion, of which 400 million equity Focus: Hotel properties mainly in Finland and Sweden Current investors: 16 institutional investors + CapMan Acquired portfolio: 39 hotel properties Realprojekti Kiinteistökehitys Oy Advisory agreement CapMan Hotels RE Oy Management company (CapMan Plc 80%, Corintium Oy 20%) Institutional investors Consultant Advisor General Partner 16 Limited Partners 11 pension institutions 3 life insurance companies 2 insurance companies CapMan Hotels RE Ky 39 hotel properties Financing Investments at cost: 805 million 292 million of equity, remainder being senior loan CapMan Presentation 18 January

4 Increasing interest towards non-listed real estate funds 10.2bn raised in 2006 into 63 European non-listed real estate funds European private equity real estate funds raised 13.8bn in 2007 A total of 126 private equity real estate funds worldwide have raised 49.2bn in 2007 Pension funds were the largest investor group contributing some 40% of the capital raised in 2006 Growth explained by e.g. strong returns, new investors entering the asset class, access to professional management and international diversification Source: INREV, Property EU CapMan Presentation 18 January

5 Profile of buyers in Finnish property market between 2003 Q3/ % Distribution of transactions of portfolios and individual buildings by transaction price 80 % 60 % 40 % 20 % 0 % Q3/2007 Institutional investors Property companies Corporations International investors Construction companies Domestic funds Other Source: KTI (Major Transactions) CapMan Presentation 18 January

6 Investment rationale Hotel portfolio of 39 assets 1/2 Strong economy and hotel market Finland has one of the best performing economies in the Euro-zone Hotel market has performed extremely well during the past few years and is expected to continue so Rare investment opportunity Stable and secure cash flows Development pipeline Rental upside Clearly focused, unique investment opportunity Seed portfolio is the largest and most attractive hotel portfolio in Finland Attractive risk return profile Long leases with an average maturity exceeding over 14 years Leases 100% index adjusted New developments and extensions at attractive yields (good access to future projects) Good existing deal flow of hotels Considerable upside potential from turnover based rents Revenues linked to strong operator performance Good quality properties Current portfolio hotels have been maintained in very good condition CapMan Presentation 18 January

7 Investment rationale Hotel portfolio of 39 assets 2/2 Diversified risk Excellent tenants Capital leases Risk allocated between various leading hotel operators and brands (both domestic and foreign), as well as locations and types of hotels (resort hotels, spa hotels, city hotels, airport hotels) Well known and credit worthy (A-class) operators such as Restel Oy, Sokotel Oy, Scandic Hotels Oy, Holiday Club Sweden Ab, Palace Oy and Osuuskauppa Ympyrä Tenants carry in most cases the cost responsibility under the existing lease agreements Excellent locations Popular holiday resorts and city centers Specialist organisation Specialist organisation included as a part of the transaction Organisation has a long experience in hotel property investments in Finland and abroad and know the current portfolio well Excellent platform for add-on investments and developments supported by CapMan s real estate professionals CapMan Presentation 18 January

8 Dedicated team with complementary backgrounds Deal flow team Asset management team Development & services team Commercial team Project management team Jorma Lehtonen Fund Director Deputy Managing Director Lea Jokinen Director, Real Estates Markku Hietala Head of CapMan Real Estate Managing Director Matti Karlsson Shopping Centre Director Jorma Konsti Director, Construction contracting Mika Matikainen Manager, Real Estate Investments Kalle Myllymäki Manager, Real Estate Investments Michael Ekström Leasing Manager Tuija Fräntilä Manager, Real Estates Juhani Erke Project Manager Pertti Myllymäki Senior Consultant Marjo Kankaanranta Shopping Centre Manager Kirsi Keskitalo Shopping Centre Consultant Mika Heiska Project Manager Jorma Kajander Project Manager Mervi Roiha-Muilu Analyst Norma Holmberg Marketing Manager Petri Rignell Advisor Sanna Kinnunen Marketing Manager Noora Kuvaja Project Engineer Henrik Winberg Commercial Director Hanna-Mari Raitanen Marketing Assistant Tommi Seppänen Consultant Atte Köykkä Shopping Centre Manager Heikki Liukkonen Project Manager Jukka Iivari Chairman of the Board Industrial Advisor Finances Heidi Lepäntalo CFO, CapMan Real Estate Liisa Nikkanen Shopping Centre Consultant Additional support in e.g. fundraising and fund administration provided by CapMan Group s Investor Services unit Jukka Mertanen Project Manager Noora Viranko Project Engineer CapMan Presentation 18 January

9 CapMan s real estate portfolio and exits CapMan Real Estate I fund CapMan RE II fund Portfolio Kalevankatu 20, Helsinki Malminkaari 9, Helsinki Shopping Centre Entresse, Espoo Mastola Logistics Centre, Vantaa Parolantie 104, Hämeenlinna Kasarmikatu 4, Hämeenlinna Tokmanni Logistics Centrum, Mäntsälä Viinikankatu 49, Tampere Lönnrotinkatu 20, Helsinki Ludviginkatu 3 5, Helsinki Elimäenkatu 9A and 9B, Helsinki Hankasuontie 3, Helsinki Shopping Centre Skanssi, Turku Ylistönmäentie 33, Jyväskylä Kristiinankatu 8, Turku Yliopistonkatu 22, Turku Exits 22 properties Lettable space 154,309 m 2 Vacancy rate 3.2% Average length of lease contracts 4.5 years Number of lease contracts 262 (Figures ) CapMan Presentation 18 January

10 Positioning of real estate players in Finland Market value of properties, M < ,500 > 1,500 Varma Ilmarinen Tapiola OP Group Veritas LGPI Etera Nordea Life Pohjola Fennia Suomi Life Sampo Life Sponda Citycon J.Tallberg VVO Auratum ICE Capital CapMan Sato Aberdeen Renor Technopolis YHasunnot Niam Aareal JER Redevco Teesland Sampson NERP Nordisk Renting NV Kiinteistösij. Boultbee Wereldhave Curzon Allianz Rodamco Delek Doughty& Genesta Hanson Kenmore SEB JP Morgan Keops Ejendoms Merill Invest Lynch W.P. Carey Whitehall Pramerica Svea DEGI iii Funds Institutional investors Listed property companies Domestic non-listed Property companies/funds International investors & property funds Investor type CapMan Presentation 18 January

11 Acquired Finnish hotels on a map Inari Holiday Club Saariselkä (139) Rovaniemi Cumulus Rovaniemi (64) Rantasipi Pohjanhovi (215) Scandic Rovaniemi (167) Kuusamo Rantasipi Rukahovi (180) Holiday Club Kuusamon Tropiikki (125) Kemi Cumulus Kemi (184) Oulu Holiday Inn Oulu (154) Cumulus Oulu (207) Holiday Club Oulun Eden (169) 38 hotels in Finland and 1 in Sweden 6,477 hotel rooms in 2007 Well-known hotel chains ¾ Crowne Plaza ¾ Cumulus ¾ Holiday Club Finland Sotkamo Holiday Club Katinkulta (116) Vaasa Radisson SAS Vaasa (285) Rantasipi Tropiclandia (184) Kuopio Cumulus Kuopio (141) Jyväskylä Rantasipi Laajavuori (175) Cumulus Jyväskylä (203) Seinäjoki Cumulus Seinäjoki (71) Tampere Cumulus Koskikatu (230) Holiday Inn Tampere (135) Holiday Club Tampere (92) Cumulus Pinja (60) Nokia Rantasipi Eden (204) Hämeenlinna Rantasipi Aulanko (246) Cumulus Hämeenlinna (100) Sokos Hotel Vaakuna (123) Rauma Cumulus Rauma (103) Hyvinkää Rantasipi Sveitsi (194) Joutsa Rantasipi Joutsenlampi (42) ¾ Holiday Inn ¾ Palace Hotels ¾ Radisson SAS ¾ Ramada ¾ Rantasipi ¾ Scandic ¾ Sokos Hotels Kotka Sokos Hotel Seurahuone (128) Turku Holiday Inn Turku (199) Scandic Turku Plaza (117) 02/10/2007 Helsinki Crowne Plaza Helsinki (349) Sokos Hotel Pasila (178) Palace Linna (48) Sokos Hotel Albert (95) Vantaa Cumulus Airport (278) Ramada Airport (292) Holiday Inn Garden Court (284) CapMan Presentation 18 January

12 Largest tenants (hotel operators) and hotel brands Restel Group Restel Ltd is Finland s largest hotel and restaurant company with a turnover of 280 million in 2006 and approximately 4,700 employees in over 320 establishments Restel is the largest tenant in the portfolio, leasing 25 hotels with around 4,500 hotel rooms in Finland Sokotel Sokotel Oy (part of the S Group) operates a hotel and restaurant business comprising of a comprehensive network of 49 hotels and more than 550 restaurants in Finland Sokotel is the second largest tenant of the portfolio leasing 9 hotels with 1,322 hotel rooms in Finland Skandic Skandic is the largest hotel chain in the Nordic region with 132 hotels and more than 23,000 rooms in 9 countries in Northern Europe Scandic is the the third largest tenant of the portfolio leasing 3 hotels with 344 hotel rooms in Finland CapMan Presentation 18 January

13 Acquired hotel properties 1/2 1 Crowne Plaza Helsinki 2 Cumulus Airport Vantaa 3 Cumulus Hämeenlinna 4 Cumulus Jyväskylä 5 Cumulus Kemi 6 Cumulus Koskikatu 7 Cumulus Kuopio 8 Cumulus Oulu Tampere 9 Cumulus Pinja Tampere 10 Cumulus Rauma 11 Cumulus Rovaniemi 12 Cumulus Seinäjoki 13 Holiday Club Katinkulta 14 Holiday Club Kuusamo 15 Holiday Club Oulu 16 Holiday Club Saariselkä 17 Holiday Club Tampere 18 Holiday Club Åre, Sweden 19 Holiday Inn 20 Holiday Inn Garden Court, Vantaa Oulu 21 Holiday Inn Tampere 22 Holiday Inn Turku 23 Palace Linna Helsinki 24 Radisson SAS Vaasa CapMan Presentation 18 January

14 Acquired hotel properties 2/2 25 Ramada Airport Vantaa 26 Rantasipi Aulanko Hämeenlinna 27 Rantasipi Eden Nokia 28 Rantasipi Joutsenlampi Joutsa 29 Rantasipi Laaja-3vuori, Jyväskylä hovi, Rantasipi Pohjan- Rovaniemi 31 Rantasipi Rukahovi, Kuusamo 32 Rantasipi Sveitsi, Hyvinkää 33 Rantasipi Tropiclandia, Vaasa 34 Scandic Plaza, Turku 35 Scandic Rovaniemi 36 Sokos Hotel Albert, Helsinki 37 Sokos Hotel Pasila, Helsinki 38 Sokos Hotel Seurahuone, Kotka 39 Sokos Hotel Vaakuna, Hämeenlinna 39 hotel properties Lettable space 408,994 m 2 Cash flow weighted average maturity of lease agreements over 14 years CapMan Presentation 18 January

15 Examples of hotels: Crowne Plaza Helsinki Property City Building type Crowne Plaza Helsinki Hotel Date of construction 1972/1985 Lettable area Number of rooms ,600 sqm Conference facilities (Nr./Capacity) -/1,500 Restaurant (Nr./Capacity) 1,500 Number of parking spaces 83 Hotel operator Hotel brand CapMan Presentation 18 January

16 Examples of hotels: Cumulus Jyväskylä Property City Building type Cumulus Jyväskylä Jyväskylä Hotel Date of construction 1983 and 1974/1988 Lettable area Number of rooms 203 9,540 sqm Conference facilities (Nr./Capacity) -/120 Restaurant (Nr./Capacity) 370 Number of parking spaces 80 Hotel operator Hotel brand CapMan Presentation 18 January

17 Examples of hotels: Holiday Club Åre Property Country Building type Holiday Club Åre Sweden Hotel Date of construction 2004/2005 Lettable area Number of rooms 205 Conference facilities (Nr./Capacity) -/- Restaurant (Nr./Capacity) -/- Number of parking spaces - Hotel operator and brand 22,459 sqm CapMan Presentation 18 January

18 Examples of hotels: Radisson SAS Vaasa Property City Building type Radisson SAS Vaasa Vaasa Hotel Date of construction 1940/1972 Lettable area Number of rooms ,349 sqm Conference facilities (Nr./Capacity) 16/445 Restaurant (Nr./Capacity) -/1450 Number of parking spaces 160 Hotel operator Hotel brand Sokotel Oy CapMan Presentation 18 January

19 Examples of hotels: Rantasipi Property City Building type Rantasipi Aulanko Hämeenlinna Hotel Date of construction 1938/1990 Lettable area Number of rooms 246 Conference facilities (Nr./Capacity) -/220 Restaurant (Nr./Capacity) -/450 Parking spaces Hotel operator Hotel brand 15,584 sqm Yes CapMan Presentation 18 January

20 Examples of hotels: Scandic Plaza Property City Building type Scandic Plaza Turku Hotel Date of construction 1926 Lettable area Number of rooms 117 Conference facilities (Nr./Capacity) 1/- Restaurant (Nr./Capacity) -/160 Number of parking spaces - Hotel operator and brand 5,314 sqm CapMan Presentation 18 January

21 Examples of hotels: Sokos Hotel Pasila Property City Building type Sokos Hotel Pasila Helsinki Hotel Date of construction 1984 Lettable area Number of rooms 178 7,889 sqm Conference facilities (Nr./Capacity) 7/314 Restaurant (Nr./Capacity) 2/280 Number of parking spaces 87 Hotel operator Hotel brand Sokotel Oy CapMan Presentation 18 January

22 Concrete plans to further develop the portfolio Ambition to complement the acquired portfolio with new assets A team of 10 people responsible for management and development of the hotel portfolio will transfer to work for CapMan with the transaction CapMan Real Estate has signed a letter of intent with Holiday Club Resorts Oy for the development of four spa hotel projects under consideration in the Nordic countries in the coming years the planned resorts are located at Himos and Saimaa in Finland and Västervik and Öresund in Sweden CapMan Real Estate team is the leading team within real estate investment and development of different commercial, logistics and hotel properties in Finland Active ownership, first class real estate development work and customer service are the key value creation drivers in real estate investments CapMan Presentation 18 January

23 Finnish vs. Swedish hotel markets 140 DEVELOPMENT OF ROOM SUPPLY IN FINLAND AND IN SWEDEN (2000=100) 115 DEVELOPMENT OF ROOM OCCUPANCY IN FINLAND AND IN SWEDEN (2000=100) Finland Sweden Helsinki Stockholm DEVELOPMENT OF REVPAR IN FINLAND AND IN SWEDEN (2000=100) Revpar Value of sales ARR Occupancy Room supply Room demand CHANGES OF SOME HOTEL PARAMETERS IN HELSINKI AND IN STOCKHOLM IN H1/ Stockholm Helsinki -2.0 % 3.0 % 8.0 % 13.0 % Sources: TK, SCB, SBS, MaRa CapMan Presentation 18 January

24 Hotel market in Finland Hotel business has developed positively since year The national occupancy rate surpassed 50% in 2006 for the first time since the The number of hotel rooms has increased yearly since Since year 2000 the average occupancy rate has increased by 19.5% being 54% according to the latest statistics (1-10/2007). At the same time the room capacity has increased by 8%. The average room price has grown by 17.4%. According to the latest statistics the average room price is (1-10/2007). % Occupancy rate (%) * Occupancy rate (%) Average room price ( ) * Average room price ( ) Source: Statistics Finland CapMan Presentation 18 January

25 Hotel market in Finland The growth in guest-night stays had continued during the first half of year The main driver of the growth was the continued high interest of foreign visitors in Finland, as witnessed from a 13.5% increase in foreign guest-night stays. Still the majority of overnight stays was done by Finnish residents, 71% while foreign visitors stood for the 29 % of the overnight stays. The amount of domestic guest-night stays did also increase and was 4.9% higher than for the same period the year before. The demand for hotel rooms was fuelled particularly by foreign business and conference travel. The Finnish hotel market is dominated by three large hotel operators, who together stand for over half of the Finnish hotel capacity. Approximately 80% of Finnish hotels operates in rented premises. Hotel visitors in Finland (2006) Domestic visitors Foreign visitors Source: DTZ: The Nordic Hotel Market CapMan Presentation 18 January

26 Hotels in Helsinki Hotel room capacity in Helsinki is 7,700. The capacity has been increasing with 3.8% since 2006 and with 8.0% within past five years. The average room price is There has been an increase of 2.7% during past year and of 6.7% within past five years. The average occupancy rate is 71.5%, which is 7.6% more than a year ago and 21.3% more than five years ago. Acquired portfolio forms 9% of hotel room capacity in Helsinki. High occupancy rate attracts hotel operators and investors to invest in hotel market. Although the amount of new hotel rooms coming to the market is high, there has been a demand for the new capacity ,800 7,600 7,400 7,200 7,000 6,800 6,600 6,400 Hotel information of Helsinki /2007 Occupancy (%) Average room price ( ) Number of rooms (1000) /2007 Number of rooms (1000) Source: Statistics Finland CapMan Presentation 18 January