Brookfield Asset Management Inc. BROOKFIELD PROPERTY PARTNERS SEPTEMBER 2012

Transcription

1 Brookfield Asset Management Inc. A GLOBAL ASSET MANAGEMENT COMPANY Focused on Property, Renewable Power and Infrastructure Assets BROOKFIELD PROPERTY PARTNERS SEPTEMBER 2012

2 Summary Brookfield Asset Management ( Brookfield ) intends to distribute to holders of our common shares an interest in our commercial and other income producing property operations, through a special dividend of units of Brookfield Property Partners ( BPY ) Following the spin off, our common shareholders are expected to hold approximately a 10% interest in the underlying BPY business and Brookfield will hold approximately a 90% interest BPY will be one of the largest, publicly traded commercialpropertycompanieswithapremierportfolioof highh quality office, retail, til multi family il and industrial i assets around the world. With assets under management of ±$72 billion and a significant market capitalization, BPY is positioned to be a premier entity for investors seeking diversified global exposure to commercial property assets The distribution policy for BPY is intended to deliver quarterly cash distributions with an initial yield of approximately 4% per annum of initial IFRS value; an initial payout targeted at approximately 80% of FFO; and a targeted distribution growth of 3% 5% per year BPY s structure is similar to two successful income oriented entities previously introduced by Brookfield Brookfield Infrastructure Partners ( BIP ) and Brookfield Renewable Energy Partners ( BREP ) BPY will be managed by Brookfield under the terms of a long term management contract BPY will be applying to list its shares on the NYSE and TSX, subject to BPY meeting the listing requirements Subject to regulatory approval and other factors, the distribution is expected to be completed in the second half of

3 BPY Scope BPY will be our flagship public commercial property company and the primary entity through which Brookfield will own and operate our commercial property business BPY will be one of the few property organizations with a global business and a strategy to allocate capital to the most attractive commercial property opportunities around the world BPY s primary investment mandate is to: Invest in commercial property assets including: office, retail, multi family and industrial Invest in development properties which h can be converted to commercial properties Invest in opportunistic assets directly and through private funds BPY will primarily target: Countries in which we have existing operating platforms including: U.S., Canada, Europe, Australia and Brazil Other countries if opportunities to expand our operating platforms or acquire assets at attractive values exist BPY will typically not invest in: Single family residential properties Real estate service businesses Construction services 2

4 BPY Strategy To acquire assets on an opportunistic basis either directly, through private Brookfield sponsored funds or public affiliates This varied form of ownership is a strategy designed to provide us with maximum flexibility to pursue investments which others may not be able to participate in, and therefore gives us a competitive advantage We are not passive portfolio investors, but look to have control or significant influence over our investments. Therefore, should BPY wish to monetize an investment, change a dividend policy or alter its strategic direction, we should generally be able to do so Through h BPY s investments in private funds, shareholders h will be able to participate i in transactions typically only available to large institutional investors 3

5 BPY Property Platforms BPY currently has interests in over 250 million sq. ft. of commercial space in key growth markets in North America, Europe, Australia and Brazil BPY will comprise substantially all of Brookfield s commercial property operations, including, among other things, its directly held commercial properties and Brookfield s significant stakes in Brookfield Office Properties, General Growth Properties and Canary Wharf Group BROOKFIELD PROPERTY PARTNERS $72 Billion AUM OFFICE $35 Billion AUM 126 Properties 82 million sq. ft. 18 million sq. ft. development pipeline RETAIL $33 Billion AUM 184 Properties 163 million sq. ft. $350 million redevelopment pipeline MULTIFAMILY & INDUSTRIAL $1 Billion AUM 11,900 multi family units 2 million sq. ft. industrial space OPPORTUNITY $3 Billion AUM 12 million sq. ft. office and other assets 4

6 BPY Key Investment Highlights BPY will be one of the largest publicly traded commercial property companies, and will be positioned to become the premier entity for investors seeking global exposure to the commercial property sector with: Strong track record 1 Since 1989, Brookfield has invested approximately $17.3 billion of equity in commercial property, generating an estimated compound annual return of 15.4% through December 31, 2011 on all opportunistic and core investments that will be acquired by BPY from Brookfield Strong returns Sustainable and growing cash flows underpinned by a high quality asset base, quality tenant base and long term lease expiry profile This, combined with our opportunistic investingactivities andthe portfolio s developmentpotential, potential, should make BPY attractive to both income and growth oriented investors Anticipated dividend yield of approximately 4% per annum of initial IFRS value with an initial payout of approximately 80% of FFO; targeted to grow 3% to 5% annually Global scale Provides diversification ifi i of risk ikand access to opportunities ii Enables allocation of capital to markets/sectors where opportunities are best Sector diversification Interests in office, retail, multifamily and industrial properties and other income producing real property expected to cause revenue streams to be more stable Strong acquisition currency Through a significant equity market capitalization, together with planned exchange listings, BPY will have access to a wide range of capital sources and a greater ability to complete significant mergers and acquisitions Established operating capabilities Brookfield s long established operating experience and expertise should provide a strong pipeline of deal flow, market specific underwriting expertise and ability to add value at the property and operations level 1 The historical performance of Brookfield should not be taken as an indication of performance by our company or Brookfield in the future. 5

7 Key Investment Highlights to Brookfield Provides strong access to capital Brookfield retains significant upside in the business Ongoing and growing management fees (similar to BIP/BREP) Listed entity enhances liquidity to fund growth Well capitalized and conservatively structured balance sheet Access to a wide range of capital sources including an expected diversification of investor base over time Following the spin off, Brookfield shareholders are currently expected to hold approximately a 10% interest in the underlying BPY business and Brookfield is currently expected to hold approximately a 90% interest Brookfield expects to reduce ownership over time Management contract provides ongoing asset management fees and incentive distributions which align Brookfield s interests with BPY s long term success Base fee of $50 million plus 1.25% of increases in total capitalization Brookfield entitlement to an incentive based distribution linked to growth in distributions to limited partners Enhanced profile as asset manager Greater transparency of Brookfield as a global alternative asset manager Value recognition Showcase the value of our commercial property assets Proven governance structure (i.e. BIP and BREP) Proven oe structure u Brookfield will retain full control through the GP ownership Majority of Board of the General Partner will be independent directors 6

8 Multi Year Strategy The formation ofbpy represents the continuation ofa strategy to maximize our business flexibility through the launch of publicly traded flagship companies supported by flagship private funds The launch of our infrastructure company (BIP, 2008) and renewable power company (BREP, 2011) have been well received by the market Oncethe full re alignment is completed, with our flagship private funds working in conjunction with these sector specific listed entities, we believe that we will have created a global alternative asset manager with access to capital that few will rival BROOKFIELD ASSET MANAGEMENT 28% 68% 90% 100% BROOKFIELD INFRASTRUCTURE PARTNERS (BIP) BROOKFIELD RENEWABLE ENERGY PARTNERS (BREP) BROOKFIELD PROPERTY PARTNERS (BPY) BROOKFIELD PRIVATE EQUITY PARTNERS BROOKFIELD AMERICAS BROOKFIELD BROOKFIELD INFRASTRUCTURE FUND REAL ESTATE FUNDS SPECIAL SITUATIONS FUNDS 7

9 Significant Shareholder Alignment Brookfield Asset Management has an equity investment in BPY of approximately $11 million, in addition to acting as manager Accordingly, the largest component of return to the Brookfield remains the equity returns on invested capital in BPY In addition, Brookfield earns management fee and incentive fees as BPY s capitalization increases Brookfield s significant capital investment alongside investors, fully aligns interests, risks and rewards with BPY shareholders with a focus on profitable growth Capital Investment Total Return Expectations Expected Annual Returns On Capital to BAM $11.0 B 12% 15% $1.32B $1.65B Fee Returns Initial Annual Management Fee $50M Potential Annual Management Fees if Market Value & Distributions increase by 25% $99M 8

10 Conclusion One of Largest Public Real Estate Platforms $72 billion of real estate assets globally 82 million square feet of office / 163 million square feet of retail Attractive Distribution Profile Anticipated initial yield of approximately 4% per annum of initial IFRS value Targeted distribution growth of 3% to 5% per year Initial payout ratio targeted at approximately 80% of FFO Well Positioned for Global Growth Brookfield s primary entity for commercial property investing globally Strong capitalization and highly competitive position Positioned in attractive and growing markets Liquidity and Access to Capital Enhanced scale and capitalization Dual listing on TSX and NYSE will be sought Expected diversification of investor base over time Brookfield Management and Sponsorship Significant incentive to grow business and increase distributions Strong track record of originating transactions aligned with growth strategy Experienced senior management team and sponsor 9

11 Contacts Contact Title Address Phone Number Ric Clark Chief Executive Officer kfi ld (212) Steve Douglas Chief Financial Officer (416) Melissa Coley VP, Investor Relations (212)

12 Cautionary Notes A registration statement containing important information relating to the securities described in this presentation has been filed with the United States Securities and Exchange Commission. The registration statement is subject to completion. This presentation does not provide full disclosure of all material facts relating to the securities. Investors should read the final registration statement for disclosure of those facts, especially risk factors relating to the units of Brookfield Property Partners L.P. ( BPY ). This presentation does not constitute an offer to sell or the solicitation of an offer to buy any securities. BPY units are expected to be distributed as aspecial dividend and no securities are being sold and no proceeds will be raised. There is no assurance that a special dividend of BPY units will be declared by Brookfield Asset Management Inc. ( Brookfield ) or, if declared, as to the amount of the dividend. All operating and other statistical information is presented as if BPY will own 100% of each property in its portfolio, regardless of whether it will own allof the interests in each property. All amounts are in U.S. dollars unless otherwise specified. Cautionary Note Concerning Forward Looking Statements This presentation contains certain forward looking statements. Forward looking statements relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions concerning matters that are not historical facts. Forward looking statements in this presentation include statements regarding the anticipated benefits of the spin off of BPY, the quality of BPY s assets, BPY s anticipated financial performance, BPY s future growth prospects, BPY s ability to make distributions and the amount of such distributions, the listing and liquidity of BPY s units and BPY s access to capital. In some cases, forward looking statements can be identified by terms such as anticipate, believe, could, estimate, expect, intend, may, plan, potential, should, will and would or the negative of those terms or other comparable terminology. 11

13 Cautionary Notes cont d The forward looking statements are based on Brookfield s beliefs, assumptions and expectations of BPY s future performance, taking into account all information currently available to it. These beliefs, assumptions and expectations can change as a result of many possible events or factors, not all of which are known to Brookfield or within its control. If a change occurs, BPY s business, financial condition, liquidity and results of operations may vary materially fromthoseexpressedintheforward looking statements. The following factors, among others, could cause actual results to vary from the forward looking statements: changes in the general economy; the cyclical nature of the real estate industry; actions of competitors; failure to attract new tenants and enter into renewal or new leases with tenants on favourable terms; BPY s ability to derive fully anticipated benefits from future or existing acquisitions, joint ventures, investments or dispositions; actions or potential actions that could be taken by BPY s co venturers, partners, fund investors or co tenants; the bankruptcy, insolvency, credit deterioration or other default of BPY s tenants; actions or potential actions that could be taken by Brookfield; the departure of some or all of Brookfield s key professionals; the threat of litigation; changes to legislation and regulations; possible environmental liabilities and other possible liabilities; BPY s ability to obtain adequate insurance at commercially reasonable rates; BPY s financial condition and liquidity; downgrading of credit ratings and adverse conditions in the credit markets; changes in financial markets, foreign currency exchange, interest rates or political conditions; the general volatility of the capital markets and the market price of BPY s units; and other factors described in the registration statement, including those set forth under Item 3.D. Key Information Risk Factors, Item 5. Operating and Financial Review and Prospects anditem4.b. InformationontheCompany Business Overview. Except as required by applicable law, Brookfield undertakes no obligation to update or revise publicly any forward looking statements, whether as a result of new information, future events or otherwise. Non IFRS Measures This presentation contains references to funds from operations ( FFO ), which does not have a standard meaning prescribed by International Financial Reporting Standards as issued by the International Accounting Standards Board ( IFRS ) and therefore may not be comparable to similar measures presented by other companies. Brookfield defines FFO as income, including equity accounted income, before realized gains and losses from fair value gains (losses) (including equity accounted fair value gains (losses)), income tax expense (benefit), and less non controlling interests. FFO is an important measure of operating performance. FFO is a widely recognized measure that is frequently used by securities analysts, investors and other interested parties in the evaluation of real estate entities, particularly those that own and operate commercial properties. 12