CapMan establishes EUR 835 million hotel real estate investment

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 2008
1
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
CapMan Hotels RE
Growth 27 %
CapMan RE II
3,500
CapMan Real Estate I
3,000
Life Science funds
Technology funds
2,500
Mezzanine funds
2,000
Buyout funds
1,500
1,000
500
0
04
05
06
09/07
01/08
CapMan Presentation
18 January 2008
2
Fund structure of CapMan Hotels RE Ky
•
•
•
•
•
Size:
Max. Size:
Focus:
Current investors:
Acquired portfolio:
Realprojekti
Kiinteistökehitys Oy
Advisory
agreement
€835 million, out of which €292 million equity
€1.1 billion, of which €400 million equity
Hotel properties mainly in Finland and Sweden
16 institutional investors + CapMan
39 hotel properties
CapMan Hotels RE Oy
General Partner
Consultant
Institutional investors
Management company
(CapMan Plc 80%, Corintium Oy 20%)
16 Limited Partners
•
•
•
Advisor
11 pension institutions
3 life insurance companies
2 insurance companies
CapMan Hotels RE Ky
39 hotel properties
Investments at cost:
€805 million
Financing
€292 million of equity,
remainder being senior loan
CapMan Presentation
18 January 2008
3
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 2008
4
Profile of buyers in Finnish property market
between 2003–Q3/2007
Distribution of transactions of portfolios and individual buildings
by transaction price
100 %
80 %
60 %
40 %
20 %
0%
2003
2004
Institutional investors
Corporations
Construction companies
Other
2005
2006
Q3/2007
Property companies
International investors
Domestic funds
Source: KTI (Major Transactions)
CapMan Presentation
18 January 2008
5
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
• Clearly focused, unique investment opportunity
• Seed portfolio is the largest and most attractive hotel portfolio in Finland
• Attractive risk return profile
Stable and secure cash
flows
• Long leases with an average maturity exceeding over 14 years
• Leases 100% index adjusted
Development pipeline
• New developments and extensions at attractive yields (good access to
future projects)
• Good existing deal flow of hotels
Rental upside
• 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 2008
6
Investment rationale – Hotel portfolio of 39 assets
2/2
Diversified risk
• 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)
Excellent tenants
• 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
•
Capital leases
• 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 2008
7
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
Michael Ekström
Leasing Manager
Juhani Erke
Project Manager
Mika Heiska
Project Manager
Kalle Myllymäki
Manager, Real
Estate Investments
Tuija Fräntilä
Manager, Real
Estates
Pertti Myllymäki
Senior Consultant
Marjo
Kankaanranta
Shopping Centre
Manager
Kirsi Keskitalo
Shopping Centre
Consultant
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
Liisa Nikkanen
Shopping Centre
Consultant
Jukka Mertanen
Project Manager
Noora Viranko
Project Engineer
Finances
Jukka Iivari
Chairman of the Board
Industrial Advisor
Jorma Kajander
Project Manager
Heidi Lepäntalo
CFO, CapMan Real
Estate
Additional support in e.g. fundraising and fund administration provided by CapMan Group’s Investor Services unit
CapMan Presentation
18 January 2008
8
CapMan’s real estate portfolio and exits
Portfolio
CapMan Real Estate I fund
Kalevankatu 20,
Helsinki
Exits
Lönnrotinkatu 20,
Helsinki
CapMan RE II fund
Malminkaari 9,
Helsinki
Shopping Centre
Entresse, Espoo
Mastola Logistics
Centre, Vantaa
Ludviginkatu 3–5 ,
Helsinki
Elimäenkatu 9A
and 9B, Helsinki
Hankasuontie 3,
Helsinki
Parolantie 104,
Hämeenlinna
Shopping Centre
Skanssi, Turku
Kasarmikatu 4,
Hämeenlinna
Viinikankatu 49,
Tokmanni
Tampere
Logistics
Centrum, Mäntsälä
Ylistönmäentie 33, Kristiinankatu 8,
Turku
Jyväskylä
Yliopistonkatu 22,
Turku
• 22 properties
• Lettable space 154,309 m2
• Vacancy rate 3.2%
• Average length of lease
contracts 4.5 years
• Number of lease contracts 262
(Figures 31.1.2007)
CapMan Presentation
18 January 2008
9
Ilmarinen
Tapiola
Sponda
CapMan
500 – 1,500
> 1,500
Varma
LGPI
Fennia
Citycon
VVO
YHasunnot
Sato
Boultbee
NERP
Wereldhave
W.P.
Carey
Nordisk
Whitehall
Renting
Niam
Aareal
JER
Redevco Teesland
Etera
OP
Group
<500
Market value of properties, M€
Positioning of real estate players in Finland
Aberdeen
Suomi
Life
Technopolis
Nordea
Life
J.Tallberg
Auratum
NV Kiinteistösij.
Sampo
Life
Veritas
Delek
Doughty&
Hanson
Kenmore
JP Morgan
ICE
Capital
Pohjola
Renor
Sampson
Pramerica
Institutional investors
Allianz Rodamco
Curzon
Listed property companies
Domestic non-listed
Property companies/funds
Genesta
Merill
Lynch
Svea
SEB
Keops
Ejendoms
Invest
DEGI
iii Funds
International investors &
property funds
Investor type
CapMan Presentation
18 January 2008
10
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 2008
11
11
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 2008
12
Acquired hotel properties
1 Crowne Plaza
Helsinki
2 Cumulus Airport
Vantaa
9 Cumulus Pinja
Tampere
10 Cumulus
Rauma
17 Holiday Club
Tampere
18 Holiday Club
Åre, Sweden
3 Cumulus
Hämeenlinna
11 Cumulus
Rovaniemi
1/2
4 Cumulus
Jyväskylä
5 Cumulus Kemi
12 Cumulus
Seinäjoki
13 Holiday Club
Katinkulta
14 Holiday Club
Kuusamo
21 Holiday Inn
Tampere
22 Holiday Inn
Turku
19 Holiday Inn
20 Holiday Inn
Garden Court, Vantaa
Oulu
6 Cumulus Koskikatu 7 Cumulus Kuopio
Tampere
15 Holiday Club
Oulu
23 Palace Linna
Helsinki
CapMan Presentation
8 Cumulus Oulu
16 Holiday Club
Saariselkä
24 Radisson SAS
Vaasa
18 January 2008
13
Acquired hotel properties
2/2
25 Ramada Airport 26 Rantasipi Aulanko 27 Rantasipi Eden 28 Rantasipi Joutsen- 29 Rantasipi Laaja-30 Rantasipi Pohjan- 31 Rantasipi Ruka- 32 Rantasipi Sveitsi,
Vantaa
Hämeenlinna
lampi Joutsa
vuori, Jyväskylä
Nokia
hovi, Rovaniemi
hovi, Kuusamo
Hyvinkää
33 Rantasipi Tropic- 34 Scandic Plaza,
landia, Vaasa
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 m2
• Cash flow weighted average maturity
of lease agreements over 14 years
CapMan Presentation
18 January 2008
14
Examples of hotels: Crowne Plaza Helsinki
Property
Crowne Plaza
City
Helsinki
Building type
Hotel
Date of construction
1972/1985
Lettable area
32,600 sqm
Number of rooms
349
Conference facilities
(Nr./Capacity)
-/1,500
Restaurant (Nr./Capacity)
1,500
Number of parking spaces
83
Hotel operator
Hotel brand
CapMan Presentation
18 January 2008
15
Examples of hotels: Cumulus Jyväskylä
Property
Cumulus Jyväskylä
City
Jyväskylä
Building type
Hotel
Date of construction
1983 and 1974/1988
Lettable area
9,540 sqm
Number of rooms
203
Conference facilities
(Nr./Capacity)
-/120
Restaurant (Nr./Capacity)
370
Number of parking spaces
80
Hotel operator
Hotel brand
CapMan Presentation
18 January 2008
16
Examples of hotels: Holiday Club Åre
Property
Holiday Club Åre
Country
Sweden
Building type
Hotel
Date of construction
2004/2005
Lettable area
22,459 sqm
Number of rooms
205
Conference facilities
(Nr./Capacity)
-/-
Restaurant (Nr./Capacity)
-/-
Number of parking spaces
-
Hotel operator and brand
CapMan Presentation
18 January 2008
17
Examples of hotels: Radisson SAS Vaasa
Property
Radisson SAS Vaasa
City
Vaasa
Building type
Hotel
Date of construction
1940/1972
Lettable area
22,349 sqm
Number of rooms
285
Conference facilities
(Nr./Capacity)
16/445
Restaurant (Nr./Capacity)
-/1450
Number of parking spaces
160
Hotel operator
Sokotel Oy
Hotel brand
CapMan Presentation
18 January 2008
18
Examples of hotels: Rantasipi
Property
Rantasipi Aulanko
City
Hämeenlinna
Building type
Hotel
Date of construction
1938/1990
Lettable area
15,584 sqm
Number of rooms
246
Conference facilities
(Nr./Capacity)
-/220
Restaurant (Nr./Capacity)
-/450
Parking spaces
Yes
Hotel operator
Hotel brand
CapMan Presentation
18 January 2008
19
Examples of hotels: Scandic Plaza
Property
Scandic Plaza
City
Turku
Building type
Hotel
Date of construction
1926
Lettable area
5,314 sqm
Number of rooms
117
Conference facilities
(Nr./Capacity)
1/-
Restaurant (Nr./Capacity)
-/160
Number of parking spaces
-
Hotel operator and brand
CapMan Presentation
18 January 2008
20
Examples of hotels: Sokos Hotel Pasila
Property
Sokos Hotel Pasila
City
Helsinki
Building type
Hotel
Date of construction
1984
Lettable area
7,889 sqm
Number of rooms
178
Conference facilities
(Nr./Capacity)
7/314
Restaurant (Nr./Capacity)
2/280
Number of parking spaces
87
Hotel operator
Sokotel Oy
Hotel brand
CapMan Presentation
18 January 2008
21
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 2008
22
Finnish vs. Swedish hotel markets
DEVELOPMENT OF ROOM OCCUPANCY IN FINLAND AND IN SWEDEN
(2000=100)
DEVELOPMENT OF ROOM SUPPLY IN FINLAND AND IN SWEDEN
(2000=100)
115
140
135
110
130
Finland
125
105
Sweden
120
115
110
105
100
100
Helsinki
95
Stockholm
90
85
95
80
2000
2001
2002
2003
2004
2005
2006
1-6 2007
2000
2001
2002
2003
2004
2005
2006
1-6 2007
CHANGES OF SOME HOTEL PARAMETERS IN HELSINKI AND IN
STOCKHOLM IN H1/2007
DEVELOPMENT OF REVPAR IN FINLAND AND IN SWEDEN (2000=100)
140
6.6
Revpar
12.9
130
11.5
Value of sales
15.5
120
ARR
110
6.4
7.8
-1.1
Occupancy
6.1
100
Room supply
90
Room demand
80
2000
2001
2002
2003
2004
2005
2006
1-6 2007
-2.0 %
Stockholm
4.6
2.3
Helsinki
3.4
3.0 %
8.5
8.0 %
13.0 %
Sources: TK, SCB, SBS, MaRa
CapMan Presentation
18 January 2008
23
Hotel market in Finland
•
•
•
•
•
•
Hotel business has developed
positively since year 2000.
The national occupancy rate surpassed
50% in 2006 for the first time since the
1989.
The number of hotel rooms has
increased yearly since 2004.
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 €84.56 (110/2007).
%
56
Occupancy rate (%)
54
52
50
48
46
44
42
2000
2001
2002
2003
2004
2005
2006 2007*
Occupancy rate (%)
Average room price (€)
€
90
85
80
75
70
65
2000
2001
2002
2003
2004
2005
2006
2007*
Average room price (€)
Source: Statistics Finland
CapMan Presentation
18 January 2008
24
Hotel market in Finland
•
•
•
•
•
•
•
The growth in guest-night stays had continued
during the first half of year 2007.
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 2008
25
Hotels in Helsinki
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•
•
•
•
•
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 €107.2. 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.
Hotel information of Helsinki
120.0
100.0
80.0
60.0
40.0
20.0
0.0
2003
2004
2005
Occupancy (%)
2006
1-10/2007
Average room price (€)
Number of rooms (1000)
7,800
7,600
7,400
7,200
7,000
6,800
6,600
6,400
2003
2004
2005
2006
1-10/2007
Number of rooms (1000)
Source: Statistics Finland
CapMan Presentation
18 January 2008
26