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CAIG

Capital Alliance Investment Group

Bond/Note Structure

Key Terms Comments
Limit AUD50m
Issuer (Borrower) Capital Alliance Au Pty Ltd (FinCo)
Lead Manager IAM Capital Markets Limited and Trustees Australia Limited (together, IAM Capital Markets)
Tenor 4-years
Security General Security Deed (GSD) over the assets and undertakings of the Issuer plus security over the shares in each of the three SPVs (i.e., Capital Alliance Normanby Group Pty Ltd, Capital Alliance Holdings Pty Ltd, and Capital Alliance M Docklands Pty Ltd).

Security Providers are the Issuer (under GSD) and, in respect of the shares in each of the SPVs:

  • Each of DLW Alliance Pty Ltd and DLW Investments Pty Ltd (in respect of shares in Capital Alliance Normanby Group Pty Ltd);
  • Each of Capital Alliance Group Singapore Limited and Mr Li Hai Jun (in respect of shares in Capital Alliance Holdings Pty Ltd); and
  • Ying Long Investments Management Pty Ltd, Mr Wang Zhen Wei, Mr Li Hai Jun, DLW Pty Ltd, and Shen Ru Australia Pty Ltd (in respect of shares in Capital Alliance M Docklands Pty Ltd).
Guarantee Guarantee from Mr Mohan Du, Chief Executive Officer of CAIG.
Structure and Repayment Bullet maturity. An Interest Service Reserve Account (ISRA) capturing six months of cash interest will be included.
Pricing 9-10% p.a.
Events of Default Standard events of default, including non-payment, breach of financial undertakings, breach of other obligations (including by Security Providers), insolvency (applies across CAIG group), cross default (AUD5m and applies across CAIG group), litigation (AUD5m and applies to Issuer and CAIG Covenant Group), cessation of business (CAIG Covenant Group), incorrect representation and warranty (including by Security Providers).
Financial Undertakings
  • CAIG Covenant Group net debt to the aggregate Valuation of the Real Estate Assets held by the CAIG Covenant Group (which, for the avoidance of doubt, excludes the Excluded Real Estate Asset (Docklands Residences)) of no greater than 70%
  • The Asset-Level (Construction) LVR in respect of the relevant Real Estate Asset (Construction) does not exceed 60% as at each Calculation Date (June and December)
  • Minimum total tangible assets (TTA) for the CAIG Covenant Group to remain above AUD200m at book or cost value (reduced in proportion to amount of Notes repaid prior to maturity, if any) at all times on and from the first Calculation Date or the first Test Date (see below) on or after 31 January 2022 (whichever is earlier)
  • Subordination of Shareholder Loans
  • Also: requirement to establish Interest Service Reserve Account to hold 6 months’ interest on each Interest Payment Date, restriction on distributions, capital reductions and payments in respect of Shareholder Loans, restrictions on certain disposals, limits on providing certain financial accommodation
  • Issuer has right to prevent or cure breaches of financial undertakings by making Equity Contributions – see Condition 8.12
Negative Pledge A negative pledge will limit the granting of security by the Issuer, Security Providers, and each member of the CAIG Covenant Group
Change of Control Upon an acquisition of more than 50% of Issuer or member of CAIG Covenant Group (by someone other than Obligor or member of CAIG Covenant Group), the sale of all or substantially all of the assets of the CAIG Covenant Group or a Listing Event (IPO of Issuer or holding company of Issuer on ASX or another tier one exchange), Noteholders will have the option to require the Issuer to redeem the Notes at 101% of the Principal Amount of the Notes plus any accrued interest.
Early Redemption Amount (Issuer early redemption)
  • Year 1: 103%
  • Year 2: 102%
  • Year 3: 101%
Information Undertakings
  • No later than 120 days after the end of the CAIG Covenant Group’s Financial Year, a draft of the unaudited consolidated Financial Statements for the CAIG Covenant Group for that Financial Year;
  • No later than 180 days after the end of the CAIG Covenant Group’s Financial Year, a copy of the:
    • audited Financial Statements for Capital Alliance Holdings Pty Ltd for that Financial Year; and
    • final unaudited consolidated Financial Statements for the CAIG Covenant Group for that Financial Year
  • No later than 90 days after the end of the first half of the CAIG Covenant Group’s Financial Year, a copy of the consolidated unaudited Financial Statements for the CAIG Covenant Group for that half of the Financial Year; and
  • No later than 30 days after each Test Date, the Issuer must provide a compliance certificate which certifies the Issuer has complied with each of the covenants set out in Condition 8 and must set out certain information in relation to the covenants (see Condition 8.11(a)(iv)), as at the Test Date, being each date on which the Issuer or a member of the CAIG Covenant Group:
    • grants a new security interest;
    • incurs secured financial indebtedness;
    • makes a Distribution or Capital Reduction, or repays any Subordinated Shareholder Loan; or
    • upon the testing of the Covenant Gearing Ratio
  • Test Date is also any Real Estate Asset Indebtedness (Construction) Facility Date and the date the first drawing is made under a Real Estate Asset Indebtedness (Construction) Facility.
  • Notice of any other material events (including Events of Default or potential Events of Default) or other matter reasonably requested by the Note Trustee.
Calculation Dates The Financial Covenants will be tested on 30 June and 31 December
Step-up Interest Rate If an Event of Default has occurred and is continuing (a Step-up Event), Interest Rate increases by 2.00% per annum (in aggregate defined as the Step-up Interest Rate)

IAM Capital Markets View

Based in Melbourne, Capital Alliance Investment Group (CAIG) has a revenue mix which comprises hotel income, development profits from residential construction, as well as rental income from commercial assets. Not only did this provide a good buffer throughout COVID-19, but it smoothed out cashflow — which can be lumpy in the development business. CAIG is in a great position being an investor and a developer, providing cashflow stability and cashflow upside.

We take comfort from the strength in asset valuations which have remained solid through COVID-19. At financial close, valuations would need to fall by over 10% (post-completion of Normanby (est. Jan-22)) to breach the CAIG Covenant Group Loan-to-Value (LVR) covenant of 70%. Note: investors are also protected by an asset LVR covenant of 60% for construction facilities (and other residual stock lending) to provide bondholders control over the level of gearing permitted.

The security package will comprise share security over three special purpose vehicles (SPVs), which include three hotels (one under construction, with completion expected in Q4 2021) and two future development sites (one a fully-leased office and the other a vacant site). The property portfolio is conservatively geared at c.49% against an aggregate independent valuation of approximately AUD403m. There remains substantial equity buffer as the proposed AUD50m bond will increase gearing to c.61% (or c.+12%).

In our view, while this is a high-risk bond within the non-investment grade space, there are significant mitigants which make this an attractive investment. At 9-10% fixed coupon, we think relative value compares favourably versus assets in the B and BB rated space and investors should consider this new issue as part of a diversified portfolio.

All CAIG’s hotel assets have HMA/lease agreements (with multi-national hoteliers) which are subject to a minimum gross operating profit (GOP) (those two managed by Marriott) or a minimum base rent (hotel leased to Saville Hotel Group) respectively. These HMA/lease agreements protect hotel cashflow against occupancy falls. For example, the two hotels managed by Marriott operate under a Hotel Management Agreement (HMA) that underwrites a minimum gross operating profit over the next four and three years respectively even if occupancy was to fall to 0%. The hotel leased to Saville has a minimum base rent calculation for the term of the lease. CAIG’s hotel assets were not used for quarantine purposes.

CAIG’s management have successfully delivered over AUD500m of projects within approved budgets and timelines, which gives us confidence they will be able to manage the hefty AUD2bn+ development pipeline.

Furthermore, CAIG’s construction financing agreements with domestic banks (approximately AUD190m currently under construction) generally stipulate a minimum of pre-sales coverage of 100%. Some were up to 120% during COVID-19 to protect against settlement defaults. This has been met on all construction financing agreements, including for the Normanby and Docklands Residences. However, pre-sales coverage is only based on the funding allocated to the residential apartments (i.e., CAIG did not need to generate pre-sales to cover the funding amount allocated to the hotel construction).

Business Overview

CAIG is a diversified mixed-use business with interests in residential real estate, hotels, offices, funds management, as well as catering and hospitality assets across Australia and the US. Established in 2012, the group has successfully delivered over AUD500m of apartments and mixed-use developments, which has earned it a strong reputation as one of the leading premium real estate developers in Melbourne. These developments include landmark hotel complexes, including partnerships with Marriott International and Accor Group.

The group is uniquely positioned as it owns two of the four Marriott hotels in the Asia Pacific that operate under an HMA with support agreements that underwrite a minimum gross operating profit over the next four years. Under an HMA, CAIG benefits from Marriott’s experience as an operator as well as its brand and marketing platform, while retaining ownership of the hotel and the income generated (net of management and incentive fees).

The group is preparing for its next phase of growth, which is underpinned by a pipeline of over AUD2bn of projects — and includes an AUD1.5bn+ project awarded by the Victorian Government to redevelop the Central Dandenong precinct into a retail, commercial, and residential hub. CAIG was selected in December 2020 as the preferred bidder out of six other parties through Development Victoria in partnership with the City of Greater Dandenong, along with other state government agencies, as well as the private sector. In addition, CAIG owns several sites in Australia and North America for future development and actively searches for acquisition opportunities for mixed-use precinct developments in key growth corridors.

CAIG has over 20 staff, which includes dedicated real estate specialists with a wealth of relevant industry experience across the project lifecycle. The group also uses trusted advisors in urban analysis and strategy, architectural design, and delivery for its developments.

Operating Model

CAIG’s vertically integrated operations across development, asset management, and complementary hospitality services allows it to capture revenues at every stage of a project’s lifecycle. CAIG pursues a ‘buy, build, and own’ strategy of high-quality mixed-use real estate assets. The operating model combines capital gains on developments with recurring revenue from ongoing ownership of high-quality/prime assets.

Diversification across property asset classes provides access to multiple revenue streams and reduces income and cash flow volatility. Vertical integration provides organic growth opportunities, e.g., the property management and hospitality businesses continue to expand as CAIG develops further assets.

Chart 1. Operating Model

Source: CAIG Investor Presentation

Chart 2. ‘Buy, Build and Own’ Model

Source: CAIG Investor Presentation

Major Business Activities and Operations

Property Development

CAIG is preparing for its next phase of growth, which is underpinned by a pipeline of over AUD2bn of projects. Projects are landmark mixed-use developments comprising hotel, commercial, retail, or residential elements and combine best in design, urban planning, amenities, and construction.

CAIG’s current focus is on the high growth market of Melbourne, in areas of quality real estate undersupply. Sites are typically acquired within five kilometres of the Melbourne central business district, near transport and entertainment hubs.

CAIG is passionate about developing residences for the benefit of investors and owner-occupiers, and in having a long-term vested interest in the developments through ownership of the commercial elements of the projects. The executive team is actively involved in business operations, ensuring consistency in quality and cost management throughout the lifecycle of each project.

All potential investments are benchmarked against a return on investment of c.20% per annum. Completed projects have achieved an average return of between 17% and 26% per annum.

Property Ownership

CAIG intends to retain ownership of key assets post completion and continue to diversify its business activities and revenue streams over time. The focus includes retaining ownership of high quality, 5-star hotels and commercial properties that are expected to provide attractive and stable returns over the medium to long-term.

CAIG’s current asset portfolio includes two 5-star hotels (Peppers Docklands and Marriott Docklands) and a fully-leased office (King Street). CAIG will retain ownership of several additional assets post completion, including AC Hotels, South West Towers, and the commercial components of the Revitalising Central Dandenong development — which is expected to drive significant portfolio growth over the next five to ten years.

Property Management

CAIG operates a property management business with approximately 200 properties valued at AUD245m under management. A comprehensive range of services are provided, including administrative, operational, and management services.

CAIG charges landlords an average management fee of 5% plus GST on annual gross property rental income. Further to these management fees, re-leasing fees are charged in addition to reimbursements of advertisement costs on an as necessary basis.

Portfolio Overview

Chart 3. Portfolio Summary

Source: CAIG Investor Information Memorandum
GRV = Gross Realisable Value

Security Package

Note: Refer to IM

Asset 1: Marriott Docklands

Completed in early 2021, Marriott Docklands is a mixed-use development that comprises the first purpose-built Marriott hotel in Australia in 25 years, together with residential apartments in the upper levels of the building.

Overview
Description 5-star hotel managed by Marriott Group under an HMA
Background
  • The 19-level, mixed-use precinct includes 189 hotel units, 92 residential apartments, and 88 car parking bays
  • Amenities include a rooftop pool, executive lounge, conference facilities, bar and restaurant, and gymnasium
  • Apartments are being sold with CAIG retaining ownership of the hotel
Site Address 3-43 Waterfront Way, Docklands, VIC
Completed March 2021
Builder Icon Co
Status
  • Pre-sold apartments settled as at Sept 2021 (c.56%)
  • Investment loan with NAB has settled
  • Hotel is expected to begin trading once the current lockdown in Victoria ends
GRV AUD228.1m
Hotel Valuation AUD98.0m (excl. GST)
Valuation Details
  • 10-Feb-21 (CBRE)
  • Reliance: first mortgage security purposes
Debt AUD44.1m (45% LVR)

The hotel is managed by Marriott under a 25-year HMA, which underwrites a minimum GOP in the first four years of operation.

Hotel Management Agreement
Term 25 years with a 10-year option (commencing Oct-21)
Marriott Management Fee
  • Base fee: 1.5% of gross revenue
  • Incentive fee (% of operating profit):
    • Year 1: 5%
    • Year 2: 6%
    • Year 3: 7%
    • Year 4+: 8%
Other fees
  • CAIG to pay an international marketing fee of 1.5% of revenue per annum
  • CAIG to maintain an FF&E reserve of 1% of revenue, stepping up by 1% per annum to 3% from the third year of operation
Other conditions
  • Marriott guarantees a base level of gross profit through a Support Agreement (see below)
  • Marriott paid CAIG USD600k upfront for the key handover
Marriott Support Agreement
  • Marriott underwrites the following minimum GOP for first four years, with the shortfall to be paid in cash.
Year 1 Year 2 Year 3 Year 4
$4,229,000 $4,988,000 $5,883,000 $6,408,000
  • The underwrite is subject to a cap of AUD2.5m per annum over four years and a total cap of AUD7.0m. Example illustration below:
Year GOP Support Actual GOP Difference Support Annual Cap Payment
1 $4,229,000 $500,000 $3,729,000 Yes $2,500,000 $2,500,000
2 $4,988,000 $4,000,000 $988,000 Yes $2,500,000 $988,000
3 $5,883,000 $6,500,000 ($617,000) No $2,500,000
4 $6,408,000 $8,000,000 ($1,592,000) No $2,500,000

Asset 2: Peppers Docklands

Completed in 2016, the Peppers Docklands development comprises residential apartments as well as the first 5-star luxury hotel in the area.

Overview
Description 5-star hotel leased to Saville Hotel Group (subsidiary of AccorHotels)
Background
  • The 18-level, mixed-use development incorporates 185 residential units and 87 hotel rooms
  • Apartments were fully sold with CAIG retaining ownership of the hotel
  • Amenities include a rooftop pool, restaurant and bar, gymnasium, and a 19 space car park
  • The development also includes a retail podium with 11 lots
Site Address 677-679 La Trobe Street, Docklands VIC
Completed 2016
Builder Hamilton Marino
Status Operational
GRV AUD145m
Hotel Valuation AUD36.8m (excl. GST)
Valuation Details
  • 31-Oct-18 (JLL)
  • Reliance: first mortgage security purposes
Debt AUD20.7m (52.8% LVR)

As Peppers Docklands is leased to Saville Hotel Group, CAIG collects a minimum base rent and was therefore not significantly impacted by lower occupancy levels through COVID-19.

Lease Summary
Lease Hotel is leased to Saville Hotel Group, which operate 87 serviced apartments under the Peppers brand
Term 15 years with 3×5 year options (commencing Jan-16)
Termination Date January 2031 (2046 including options)
Base Rent The greater of:

  • AUD2.5m per annum (adjusted to CPI annually); and
  • 35% of hotel revenue
Hotel Room Configuration Room Type Number of Rooms Average Size
King Split 75 32.2m2
Queen 4 25.2m2
Queen Queen 8 40.2m2
Retail Tenants Ezymart, Probuild, Hatch Quarter, and Centree Health

Asset 3: Normanby Melbourne and AC Hotels by Marriott

Located in the heart of Fishermans Bend – Australia’s largest urban renewal project – the Normanby mixed-use development includes premium residential apartments and a 5-star Marriott hotel managed under the AC Hotels brand.

Overview
Description
  • Mixed-use development incorporating a 5-star hotel with residential apartments
  • Hotel to be managed by Marriott Group through AC Hotels, its select lifestyle brand, under an HMA
Background
  • The 40-storey building includes 205 hotel rooms over levels 1 to 19, 101 residential apartments over levels 20 to 39
  • Will be the first AC Hotels by Marriott in Australia
  • Apartments to be sold with CAIG retaining ownership of the hotel
  • Amenities include a swimming pool, gymnasium, restaurant and bar, conference/function rooms, and the AC lounge
Site Address 199-201 Normanby Road, Southbank VIC
Builder Crema Constructions
Status Under Construction
Completion Date December 2021 (expected PC)
GRV AUD189.5m
Hotel Valuation AUD90.4m (excl. GST)
Valuation Details
  • 4 March 2020 (CBRE)
  • Reliance: financial reporting only
Debt
  • Construction: AUD101.0m (54.3% LVR)
  • Investment: AUD45.2m (50% LVR)

Construction is running ahead of schedule and is expected to be completed by December 2021. The initial quantity surveyor (QS) report was completed and approved on 26 August 2020 and the first drawdown request occurred on 1 September 2020. The total development cost (TDC) is AUD157.2m, to which CAIG has contributed AUD55m of equity to date. Cost to complete per QS report is AUD22.3m and will be entirely funded via a construction facility with NAB.

CAIG will retain the hotel as an income generating asset with a committed take-out facility that, combined with development profits from apartment settlements, will refinance construction facilities.

Pre-Sales Summary
No. of sales Sales price %
Foreign 45 $35.4m 35.7%
Local 37 $37.6m 38.0%
Total Pre-Sold 82 $73.0m 73.6%
Remaining
Reserved 2 $1.7m 1.7%
Unsigned 21 $24.5m 24.7%
Total Remaining 23 $26.1m 26.4%
Grand Total 105 $99.1m 100.0%

The hotel will be refinanced through an AUD45.2m, 3-year facility with NAB at a 50% LVR based on the hotel-only valuation of AUD90.4m. The NAB investment facility is fully-committed and documented within one facility agreement, covering both the development facility and hotel investment facility.

Note that NAB syndicated the construction facility with PAG. PAG will be repaid once construction is completed and CAIG transitions into the hotel investment facility. Key commercial conditions precedent (CPs) include Practical Completion, an updated valuation, transfer of title from land owner to hotel borrower, and subsequent mortgage and duly executed and reviewed HMAs.

Funding Summary (In AUDm unless stated otherwise)
Construction Investment
Lender NAB/PAG NAB
Facility Limit ($m) 101.0 (total) 45.2 (hotel only)
Valuation 186.1 90.4
LVR 54.3% 50.0%
LCR 60.5%
Maturity Feb-22 Feb-25 (3 years)
Hotel Management Agreement
Term 25 years
Marriott Management Fee
  • Base fee: 1.5% of gross revenue in Year 1 and 1.5% in Year 2 onwards
  • Incentive fee: 6.5% of operating profit
Other fees
  • CAIG to pay an international marketing fee of 1.5% of revenue per annum
  • CAIG to maintain an FF&E reserve of 1% of revenue, stepping up to 4% per annum in the 11th year of operation
Other conditions
  • Marriott guarantees a base level of gross profit through a Support Agreement (see below)
  • Marriott paid CAIG AUD775k upfront for the key handover
Marriott Support Agreement
  • Marriott underwrites the following GOP for the first three years, with the shortfall to be paid in cash.
Year 1 Year 2 Year 3
$3,566,000 $4,939,000 $5,992,000
  • The underwrite is subject to a cap of AUD1.5m per annum over three years and a total cap of AUD3.5m. Example illustration below:
Year GOP Support Actual GOP Difference Support Annual Cap Payment
1 $3,566,000 $500,000 $3,066,000 Yes $1,500,000 $1,500,000
2 $4,939,000 $4,000,000 $939,000 Yes $1,500,000 $939,000
3 $5,992,000 $6,500,000 ($508,000) No $1,500,000

Asset 4: King Street

CAIG’s King Street mixed-use development will comprise residential and commercial components together with a hotel which benefits from proximity to Melbourne’s commercial offices and sporting grounds.

Overview
Description Future mixed-use development comprising commercial (lower levels), hotel (mid-levels), and residential apartments (higher levels)
Background
  • Site was acquired in March 2015, comprising a three-level office building that was originally constructed in the 1920s and refurbished in 1998 and 2009
  • The building is fully-leased at present to Envato (digital marketplace company) and Cherry Collectables (merchandising)
Site Address 115-129 King Street, Melbourne VIC
Status Future development site to commence construction in CY25
Completion Date CY27 (expected)
GRV c.AUD409m
As is Valuation AUD37.0m (excl. GST)
Valuation Details
  • 13-Apr-21 (CBRE)
  • Reliance: first mortgage security purposes
Debt AUD17.5m (47.2% LVR)

Asset 5: South West Towers

Acquired alongside the Marriott Docklands site, CAIG is developing a two towered mixed-use building that is expected to commence construction in Q3 CY22.

Overview
Description Future mixed-use development comprising residential apartments, commercial offices, a hotel, and convention centre
Background
  • Site is currently a vacant development site
  • Initial DA proposed 408 residential apartments across two buildings comprising 20 and 28 levels and a retail shop
  • CAIG have amended the DA for two taller buildings, one marked for commercial offices and the other for residential apartments and a hotel. The adjoining bridge will serve as a convention centre
Site Address 28-38 Pearl River Road, Docklands VIC
Status Future development site to commence construction in Q3 CY22
Completion Date Q4 CY24 (expected)
GRV c.AUD327m
As is Valuation AUD43.0m (excl. GST)
Valuation Details
  • 12 July 2021
  • Reliance: first mortgage security purposes
Maturity AUD13.5m (31.3% LVR)

Central Dandenong Project

Note: The General Security Deed (GSD) over the undertakings and assets of the Issuer encompasses the use of the bond proceeds within the Dandenong Project. Whilst the Dandenong Project is not part of the CAIG Covenant Group, the bond proceeds represent an asset for the Issuer.
In April 2006, the Victorian Government launched an urban renewal project, Revitalising Central Dandenong (“RCD” or the “Project”), announcing an AUD290m investment to transform the city into a vibrant retail, commercial, and residential hub. RCD is being delivered through Development Victoria in partnership with the City of Greater Dandenong, along with other state government agencies as well as the private sector.

Located 30km south-east of Melbourne’s CBD, Central Dandenong is well connected to the rest of Melbourne by rail and road. The entire precinct spans seven hectares of land, with proximity to Dandenong train station and major arterial roads — including Lonsdale Street, Princes Highway, and Cheltenham Road. RCD has attracted over AUD700m in private investment to date, including developments for the Australian Taxation Office, State Government Services Hub, Quest Apartments, and a new Council Civic Centre.

The Government has compulsorily acquired numerous smaller sites to amalgamate land, creating bigger development-friendly parcels. In 2019, an EOI process was launched to redevelop five sites covering two hectares bound by Halpin Way, Cheltenham Road, and the train station to whoever’s proposal was most aligned to Development Victoria and the council’s vision.

CAIG was selected as the preferred bidder out of six other parties after a lengthy probity period and was awarded exclusive development rights in December 2020.

CAIG will deliver large-scale commercial, residential, and retail assets and add 200,000m2 of gross floor area to the Dandenong precinct. The land will be developed in seven stages — each under its own SPV. The total purchase price is c.AUD33m (including acquisition costs). Note: this value will be apportioned based on the net developable area of each respective stage. Any initial costs funded will lift the valuation of the site as the respective DAs are obtained and preliminary civils, excavation, and remediation works are completed.

CAIG will maintain its marquee ‘buy, build and own’ strategy on the income producing assets. This enables a holistic, end-to-end completion of the vision to develop Dandenong to its full potential. CAIG will invest c.AUD677m to develop over 500 new dwellings, community spaces, commercial offices, a hotel and conference centre, student accommodation, an entertainment district, urban brewery, education and sporting facilities, retail hubs, health, and medical buildings, as well as a cinema and dining precinct.

The Project will complement major investments already made by the Victorian Government, including the newly upgraded Dandenong train station. In addition, Dandenong will be serviced by the AUD15bn upgrade to the Cranbourne/Pakenham railway line once complete, which is expected to cut travel time by up to 50 minutes per day, as well as create a direct link to Melbourne Airport through the Metro Tunnel.

The master-planning process has commenced and working capital requirements will arise with early works commencing in 2021 and construction set to begin in 2023. CAIG estimates the total project will have a value of over AUD1.5bn once complete in 2036. RCD is expected to generate c.AUD614m of development profits over 13 years based on the completion value at each stage.

Corporate Structure

The CAIG Covenant Group which covenants will be tested against comprises the CAIG Asset-Level Subsidiaries and CAIG Intermediate-Level Subsidiaries:

The CAIG Asset-Level Subsidiaries:

  • Capital Alliance Normanby Development Pty Ltd
  • Capital Alliance Normanby Land Pty Ltd
  • Capital Alliance Normanby Hotel Pty Ltd
  • Capital Alliance 5 Pty Ltd
  • Capital Alliance 6 Pty Ltd
  • Capital Alliance 7 Pty Ltd
  • Capital Alliance 8 Pty Ltd
  • Capital Alliance D Hotel Pty Ltd
  • Capital Alliance King Pty Ltd
  • Capital Alliance King Development Pty Ltd
  • Capital Alliance M Docklands Pty Ltd
  • Capital Alliance Docklands Pty Ltd
  • Capital Alliance M Hotel Pty Ltd

The CAIG Intermediate-Level Subsidiaries:

  • Capital Alliance Normanby Group Pty Ltd
  • Capital Alliance Holdings Pty Ltd

For completeness, the CAIG Asset-Level Subsidiary (Docklands Residences) are excluded from the CAIG Covenant Group and include:

  • Capital Alliance 5 Pty Ltd
  • Capital Alliance 7 Pty Ltd

CAIG Broader Group comprises:

  • Capital Alliance Au Pty Ltd (Issuer)
  • The CAIG Asset-Level Subsidiaries and CAIG Intermediate-Level Subsidiaries
  • The CAIG Covenant Group
  • Capital Alliance Dandenong Pty Ltd (Central Dandenong Project)
  • Mr Mo Han Du (Guarantor)

Chart 4. CAIG Corporate Structure

Source: CAIG Investor Information Memorandum

The group is backed by CEO Mohan Du and four other key shareholder families – all of whom have significant property development experience. However, each family’s investment in CAIG is passive and Mohan acts as the principal developer of the Group’s assets. The following two diagrams illustrate the underlying shareholdings of the group.

Chart 5. Capital Alliance Holdings Pty Ltd Shareholdings

Source: CAIG Investor Information Memorandum

Chart 6. Capital Alliance Normanby Pty Ltd and Capital Alliance M Docklands Pty Ltd

Source: CAIG Investor Information Memorandum

Facilities Overview

A balanced approach to funding has been maintained since establishment and the group is well capitalised, with existing shareholders providing most of the capital to date. Traditionally, CAIG has leveraged its domestic bank relationships to provide development financing at c.50% LVR. As projects are completed and settled, capital is recycled and redirected towards other projects.

CAIG maintains a conservative approach to senior debt funding, never exceeding an LVR of 60%. Additional development equity is called over a period of six to eighteen months depending on progress of town planning, sales, and senior debt negotiations. Since establishment, CAIG has successfully completed four projects: Wattlepark (Box Hill), M Docklands, Kings Domain Apartments, and Marriott Docklands.

Security Package

The security package will comprise share security over the Shareholders’ shares in three SPVs, granted by:

  • (in respect of shares in Capital Alliance Normanby Group Pty Ltd) DLW Alliance Pty Ltd and DLW Investments Pty Ltd;
  • (in respect of shares in Capital Alliance Holdings Pty Ltd) each of Capital Alliance Group Singapore Limited and Mr Li Hai Jun; and
  • (in respect of shares in Capital Alliance M Docklands Pty Ltd) Ying Long Investments Management Pty Ltd, Mr Wang Zhen Wei, Mr Li Hai Jun, DLW Pty Ltd, and Shen Ru Australia Pty Ltd.

The issuers of the shares for the security indirectly own (via subsidiaries) three hotels (one under construction, with completion expected in Q4 2021) and two future development sites (one a fully-leased office and the other a vacant site).

The portfolio is conservatively geared at c.49% against an aggregate valuation of approximately c.AUD403m. Thus, there remains substantial equity buffer as the proposed AUD50m bond will increase gearing to c.61% (or c.+12%).

The bond will be structurally subordinated to senior debt providers in the individual assets. However, it is important to note that the lender will have security over the underlying shares in each SPV, in addition to first ranking security over the assets and undertakings of the borrower.

Chart 7. Transaction Structure (Refer to IM)

Source: CAIG Investor Information Memorandum

Developments to date have been funded through individual SPVs to quarantine security with different shareholdings for each individual project. CAIG has strong relationships with the domestic banks, who have historically provided development financing at c.50% LVR for the Group’s projects. The total equity contributed from shareholders across the projects are c.AUD180m (including apartments from Marriott Docklands).

Existing senior facilities are conservative relative to market values based on comparable transactions. For example, the 5-star W Hotel transacted at c. AUD748k per room versus AUD441k and AUD518k for the adopted valuations for AC Hotels and Marriott Docklands respectively — both of which are also 5-stars. In addition, Peppers Docklands was valued at Oct-18, whereas recent market transactions indicate a significant uplift could be achieved.

The current Marriott Docklands valuation of AUD98m (Feb-21) declined from the pre-COVID-19 valuation of AUD106m (May-19), demonstrating resilience despite the pandemic. While recent hotel transaction evidence has been limited, the sale of Rydges on Swanston and Vibe Queen Street during COVID-19 indicates that yields have tightened materially since the end of 2019.

Chart 8. Comparable Transactions

Source: CAIG Investor Information Memorandum

$m Marriott Docklands Peppers Docklands Normanby King Street South West Towers Total
Status Completed (Hotel to begin trading in Oct-21) Operating hotel Current development Fully-leased office (future development) Future development
Project Value (GRV) 228.1 145.0 189.5 409.5 326.9 1,299.0
Valuation 206.4 (total)
98.0 (hotel only)
36.8 (hotel)
2.4 (retail)
186.1 37.0 43.0 403.3
Loan Balance 44.1 (hotel only) 19.4 (hotel)
1.3 (retail)
101.0 (facility limit) 17.5 13.5 196.8
Loan Purpose Investment Investment Construction Investment Land
Lender NAB CBA NAB/PAG* Judo Bank PAG
Maturity June 2024 September 2024 February 2022 May 2024 December 2021
LVR % 45.0% 52.8% 54.3% 47.2% 31.3% 48.8%
Valuation Date February 2021 October 2018 March 2020 April 2021 July 2021

*PAG to be paid out on completion of construction (est. Dec-21). NAB investment facility of AUD45.2m is documented and committed (50% LVR on hotel valuation of AUD90.4m).

Mohan Du Statement of Financial Position

CAIG Covenant Group

The CAIG Covenant Group will be serviced from commercial asset income and development profits via distributions from the underlying subsidiaries. The forecasts in the Financial Model assume 100% of CAIG’s Net Profit after Tax (NPAT) will be distributed to the CAIG Covenant Group, totalling around AUD42m over a five-year period.

Note: Assets are measured at book value in the balance sheet. The current property portfolio is valued at c.AUD403m based on independent valuations.

$m FY19 FY20 FY21
Revenue 8.6 6.6 46.6
EBITDA 0.9 0.0 1.1
EBIT (0.9) (2.4) (0.3)
NPBT (4.8) (4.1) (3.6)
Cash 9.0 7.5 42.3
Borrowings 147.0 261.5 403.7
Assets (excl. cash) 141.2 278.5 367.8
Liabilities (excl. borrowings) 10.5 36.2 21.7

The Issuer may use the proceeds from the issue of the Notes to:

  • Pay for the costs of the issuance of the Notes;
  • Fund the Interest Service Reserve Account;
  • Acquire, develop, construct, and operate new sites for future developments to be undertaken by the CAIG Broader Group;
  • Make strategic investments on behalf of the CAIG Broader Group; and
  • For any other general corporate purposes of the CAIG Broader Group (subject to compliance with the Conditions).

Minimum Total Tangible Assets (TTA)

TTA is a balance sheet metric which includes Real Estate Assets held at book or cost value. CAIG will need to show compliance with the TTA at the earlier of the first Calculation or Test Date after 31 January 2022. TTA is equal to Total Assets less any Related Entity Financial Accommodation and assets resulting from Permitted Payments.

TTA will also exclude:

  • Cash and Cash Equivalent Investments
  • Book or cost value of Docklands Residences
  • Book or cost value of Normanby Residences
  • Trade and other receivables (if included in Total Assets)
  • Intangible Assets

For completeness, depreciation, and amortisation (except Docklands and Normanby Residences) is added back to the TTA calculation. Furthermore, book value means the original cost and carrying costs of the Real Estate Asset less depreciation and impairment costs as recorded in the Financial Statements.

Distribution Policies and Subordinated Shareholder Loans

CAIG is restricted from distributing without the consent of the Noteholders any amounts to Shareholders or Shareholder Lenders in any way whatsoever — including without limitation, by way of dividend, share buy-back, payments in relation to Subordinated Shareholder Loans (as described in the Conditions, and including payments of interest and repayment of principal), reduction of capital, bonus securities issue or otherwise, unless such amount is required to be immediately reinvested as ordinary equity in members of the CAIG Broader Group on the same terms or the amount of the payment is not more than 50% of NPAT and a Step-up Event has not occurred as a result.

The restriction on distributions does not apply to certain payments, including (1) any bonus payment, management, advisory, or other fee payable up to AUD1,000,000 in any financial year and (2) loans to or equity investments in members of the CAIG Broader Group (including equity investments in joint ventures in respect of which a member of the CAIG Broader Group is a joint venturer), provided that such payments are not funded from the proceeds of the Notes, no Event of Default is subsisting or would occur, and the Obligors continue to comply with the Total Tangible Assets covenant in Condition 8.6. Subordinated Shareholder Loans will be subject to subordination provisions set out in the Subordination Deed.

Cashflow Sensitivity

Assuming no measures were taken by CAIG to rectify the issue, then distributions from the underlying subsidiaries would need to at least equal the interest payments to be breakeven. From FY23 onwards, debt payments are AUD4.5m per annum. Distributions are highly sensitive to revenue and EBITDA by CAIG respectively.

However, Noteholders do have the benefit on an interest service reserve account (ISRA), which would cover one semi-annual coupon payment and the owners would likely inject equity to ensure debt is serviced. We have modelled based on a 9% coupon. The debt payments would be AUD5m per annum based on a 10% coupon.

Cashflow (A$000’s)

FY22 FY23 FY24 FY25 FY26 5-year Total
Opening Cash 500 5,084 3,115 3,101
Dividends from Subsidiary Entities 1,857 9,084 2,531 4,486 23,737
Cash from Operations 1,857 9,084 2,531 4,486 23,737 41,695
Loans to Related Parties (RCD) (48,750) (48,750)
Cash from Investing (48,750) (48,750)
Loan Drawdown 48,750 48,750
Interest Payments (2,700) (4,500) (4,500) (4,500) (4,500) (20,700)
Equity Contribution 3,593 3,593
ISRA Withdrawal 625 625 1,250
ISRA Top-up (2,875) (625) (3,500)
Cash from Financing 47,393 (4,500) (4,500) (4,500) (4,500) 29,393
Net Cash Flow 500 4,584 (1969) (14) 19,237 22,338
+ Opening Cash 500 5,084 3,115 3,101
Ending Cash 500 5,084 3,115 3,101 22,338

Doomsday Scenario

Note: based on this analysis, the CAIG Broader Group maintains sufficient cash to service the bond interest throughout the forecast period. It’s important to not just look at the CAIG Covenant Group here. No management fee is applicable in the doomsday scenario given no revenue is being generated.

As of 31 January 2022, three of five assets in the security package will be operational: Marriott Docklands, Peppers Docklands, and Normanby. The assumptions on the doomsday scenario are as follows:

  • CAIG collects the minimum underwrite from the Marriott hotels plus rent from the Peppers Docklands and King Street lease. The other asset is a vacant site and is assumed to be undeveloped.
  • No further apartment sales for the Docklands residences (i.e. caps out at 56%)
  • Normanby settles 60% of pre-sales (i.e. c.14% default from current 74% of existing pre-sales)
  • Dandenong Stage 1 sells 60% of its apartments on completion in Jun-25
  • AUD38m of equity is raised for the Dandenong project:
    • Note that this AUD38m was intended to be raised if CAIG did not raise the AUD50m bond, and the Group has confirmed the full support of its shareholders to do this if the bond raise does not occur
    • In the Financial Model, we have assumed that this AUD38m raise does not occur, and the development is being funded with AUD50m from the proceeds of the bond
(A$000’s) Year 1 Year 2 Year 3 Year 4 Comments
Marriott Docklands 2,500 2,500 2,000 Annual Cap is AUD2.5m pa and a total cap of AUD7m
Peppers Docklands 2,626 2,680 2,736 2,792 Minimum hotel and retail lease rent of AUD2.6m (adjusted to forecast CPI of 2% annually)
AC Hotels 750 1,500 1,250 Annual Cap is AUD1.5m pa and a total cap of AUD3.5m, assuming AC Hotels commences trading mid-year
King Street 1,309 1,346 1,384 1,423 Rent continues to be collected from the fully-leased office
EBITDA 7,185 8,026 7,370 4,215
Senior debt Interest 3,639 4,971 4,947 4,861 Includes senior debt interest on Marriott Docklands, Peppers Docklands, AC Hotels and King Street. Consolidated here, but can provide breakdown if needed.
Earnings available to service bond interest 3,546 3,055 2,423 (646)
Required to Ensure Debt is Serviced 4,500 4,500 4,500 4,500
Shortfall (954) (1,445) (2,077) (5,146)
Cumulative Shortfall (954) (2,399) (4,476) (9,622)
(A$000’s) Jun-22 Jun-23 Jun-24 Jun-25
Cash on balance sheet 87,307 18,465 14,137 22,407 The CAIG Broader Group maintains sufficient cash to service the bond interest throughout the forecast period. It’s important to not just look at the CAIG Covenant Group here.
Sufficient cash to cover shortfall? Yes Yes Yes Yes

Comments on Stress Testing

Note: Income related to hotels are limited by a 100% NPAT distribution stopper, however cash from apartment settlements/residual stock facilities are unrestricted. Therefore, NPAT is not an accurate measure for stress testing – let’s illustrate with an example assuming the following:

  • An AUD200m development;
  • 50% is sold on completion (i.e., AUD100m);
  • COGS for the apartments sold is AUD80m; and
  • Residual stock financing for the remaining AUD100m is obtained at 60% LVR.

On settlement, gross profit is AUD20m, and let’s assume after selling costs/opex/tax that NPAT is AUD5m. Under a 100% NPAT restriction test, you would only be able to distribute AUD5m. However, on a cash flow basis, you would have AUD100m coming in (COGS has already been incurred during the development), plus another AUD60m from the residual stock financing. Once you repay the senior construction facility (let’s assume AUD120m), you have AUD40m of cash flow that is unrestricted and available to service the bond.

Therefore, the worst-case scenario should be assessed based on whether there is sufficient cash in the consolidated CAIG Broader Group balance sheet. The Financial Model has applied a 100% NPAT test to development profits for illustrative purposes only (rather than showing a transfer of AUD40m of residual cash to sit on the balance sheet of the Issuer, which is unrealistic).

Instead, an ‘equity contribution’ toggle has been built into the Financial Model — such that whenever the 100% NPAT dividend from subsidiaries is insufficient, the Issuer will draw cash from the CAIG Broader Group balance sheet.

Capital Alliance Au Pty Ltd (FinCo)

Financials Forecasts

Note: The Financial Model for the FinCo includes the cashflows from the Dandenong project. However, we would highlight to investors that the Dandenong project will not form part of the security pool. See discussion in the paper above. For completeness, Stage 1 of the Dandenong project completes in Jun-25, so it does not have an impact during the term of the bond until the very end.

Available NPAT is assumed to be distributed to the Issuer in the following Financial Year. Total available NPAT is marginally higher than CAIG NPAT as no distributions were assumed for SPVs with negative NPAT (i.e., during the construction period).

Profit & Loss (A$000’s)

FY22 FY23 FY24 FY25
Revenue
Dividends from Subsidiary Entities 1,857 9,084 2,531 4,486
Total Revenue 1,857 9,084 2,5314 4,486
Cost of Sales
Total Cost of Sales
Gross Profit 1,857 9,084 2,531 4,486
Expenses
Total Expenses
EBITDA 1,857 9,084 2,531 4,486
D&A
EBIT 1,857 9,084 2,531 4,486
Interest (3,950) (4,500) (4,500) (4,500)
NPBT (2,093) 4,584 (1,969) (14)
Tax
NPAT (2,093) 4,584 (1,969) (14)

Balance Sheet (A$000’s)

FY22 FY23 FY24 FY25
Assets
Cash and Cash Equivalents 500 5,084 3,115 3,101
Loans to Related Parties (RCD) 48,750 48,750 48,750 48,750
Interest Service Reserve Account 2,250 2,250 2,250 2,250
Total Assets 51,500 56,084 54,115 54,101
Liabilities
Borrowings 50,000 50,000 50,000 50,000
Total Liabilities 50,000 50,000 50,000 50,000
Net Assets 1,500 6,084 4,115 4,101
Equity 1,500 6,084 4,115 4,101

Cashflow (A$000’s)

FY22 FY23 FY24 FY25 FY26 5-year Total
Opening Cash 500 5,084 3,115 3,101
Dividends from Subsidiary Entities 1,857 9,084 2,531 4,486 23,737
Cash from Operations 1,857 9,084 2,531 4,486 23,737 41,695
Loans to Related Parties (RCD) (48,750) (48,750)
Cash from Investing (48,750) (48,750)
Loan Drawdown 48,750 48,750
Interest Payments (2,700) (4,500) (4,500) (4,500) (4,500) (20,700)
Equity Contribution 3,593 3,593
ISRA Withdrawal 625 625 50 1,250
ISRA Top-up (2,875) (625) (3,500)
Cash from Financing 47,393 (4,500) (4,500) (4,500) (4,500) 29,393
Net Cash Flow 500 4,584 (1,969) (14) 19,237 22,338
+ Opening Cash 500 5,084 3,115 3,101
Ending Cash 500 5,084 3,115 3,101 22,338

CAIG Broader Group

Financials Forecasts

CAIG generates significant profits from apartment sales of its mixed-use developments as well as ongoing income from its commercial assets. The financials tallied below are for the CAIG Broader Group only (i.e., not the CAIG Covenant Group). The revenue, profits, and cashflows can be lumpy and tend to correspond to completion of major developments.

FY21 FY22 FY23 FY24 FY25
Financial Year (30-Jun) $000’s $000’s $000’s $000’s $000’s
Revenue
Sales Income 39,739 133,878 24,840 4,506 109,145
Hotel Management Income 16,753 34,683 40,241 49,266
Hotel Lease Income 2,540 2,610 2,662 2,715 2,769
Retail Lease Income 173 178 183 1,285
Office Lease Income 1,490 1,494 1,539 1,585 3,789
Other Income 2,827 367 440 453 2,270
Total Revenue 46,597 155,2753 64,342 49,684 168,524
Cost of Sales
Cost of Units Sold (35,647) (119,442) (23,206) (4,345) (86,195)
Hotel Departmental Expenses (7,389) (14,788) (16,751) (18,076)
Total Cost of Sales (35,647) (126,831) (37,994) (21,097) (104,271)
Gross Profit 10,950 28,444 26,348 28,587 64,253
Expenses
Hotel Management Fee: Base (228) (485) (604) (660)
Hotel Management Fee: Incentive (271) (676) (935) (1,148)
Undistributed Operating Expenses (8,788) (4,498) (8,692) (9,187) (9,606)
Land Holding Costs (1,068) (203) (341) (497) (547)
Other Expenses
Total Expenses (9,855) (5,200) (10,195) (11,223) (11,961)
EBITDA 1,095 23,244 16,153 17,364 52,292
D&A (1,424) (4,959) (6,636) (6,547) (10,577)
EBIT (330) 18,285 9,517 10,817 41,715
Interest (3,290) (5,750) (6,565) (5,739) (7,995)
NPBT (3,620) 12,535 2,953 5,078 33,720
Tax (3,760) (886) (1,523) (10,116)
NPAT (3,620) 8,774 2,067 3,555 23,604
Income Available for Distributions 1,857 9,084 2,531 4,486 23,737
FY21 FY22 FY23 FY24 FY25
Financial Year (30-Jun) $000’s $000’s $000’s $000’s $000’s
Assets
Current Assets
Cash and Cash Equivalents 42,349 94,945 29,999 20,487 60,895
Financial Assets 2,126 2,126 2,126 2,126 2,126
Trade and Other Receivables 18,542 18,542 18,542 18,542 18,542
Inventories 4,080 4,080 4,080 4,080 4,080
Other Current Assets 14,180 14,180 14,180 14,180 14,180
Total Current Assets 81,276 133,873 68,926 59,414 99,822
Non-Current Assets
Investment Properties 179,576 203,209 278,905 421,354 465,371
Plant and Equipment 410 459 831 1,541 2,308
Inventories
The Docklands Residences 58,222 4,749 (0) (0) (0)
South West Towers
RCD 5,519 19,403 67,814 20,594
King Street Tower
Normanby Melbourne 62,223 21,775 4,187 0 0
Loan to Other Entities
Trade and Other Receivables
Right-of-Use Assets 415 415 415 415 415
Other Non-Current Assets 3,369 3,369 3,369 3,369 3,369
Total Non-Current Assets 304,216 239,495 307,111 494,493 492,057
Total Assets 385,492 373,368 376,037 553,908 591,879
Liabilities
Current liabilities
Borrowings
Trade and Other Payables 6,315 6,315 6,315 6,315 6,315
Lease Liabilities 10 10 10 10 10
Employee Benefits 528 528 528 528 528
Other Current Liabilities 10,798 10,798 10,798 10,798 10,798
Total Current Liabilities 17,650 17,650 17,650 17,650 17,650
Non-Current Liabilities
Contract Liabilities 3,594 3,594 3,594 3,594 3,594
Loans from Other Entities 48,750 48,750 48,750 48,750
Shareholder Loans 160,167 161,525 170,336 179,987 194,934
Borrowings 243,579 185,249 179,572 348,723 371,880
Lease Liabilities 396 396 396 396 396
Employee Benefits 37 37 37 37 37
Total Non-Current Liabilities 407,772 399,551 402,684 581,486 619,590
Total Liabilities 425,422 417,201 420,334 599,136 637,240
Net Assets (39,930) (43,833) (44,297) (45,229) (45,362)
Equity
Issued Capital 4,520 4,520 4,520 4,520 4,520
Retained Earnings (Accumulated Losses) (44,450) (48,353) (48,817) (49,749) (49,881)
Total Equity (39,930) (43,833) (44,297) (45,229) (45,362)
FY21 FY22 FY23 FY24 FY25
Financial Year (30-Jun) $000’s $000’s $000’s $000’s $000’s
Opening Cash 42,349 94,945 29,999 20,487
Receipts from Customers 155,275 64,342 49,684 168,524
Payments to Suppliers and Employees (66,234) (118,978) (217,824) (113,840)
Change in Working Capital 353
Income Taxes Paid (3,760) (886) (1,523) (10,116)
Net Cash Inflow/(Outflow)-Operating Activities
Payments for Property, Plant and Equipment (168) (540) (1,027) (1,319)
Proceeds from Sale of Non-Current Assets
Loans from/(to) Related Entities
Net Cash (Outflow)/Inflow-Investing Activities (168) (540) (1,027) (1,319)
Proceeds from Borrowings 216,994 50,876 161,946 420,120
Repayment of Borrowings (231,870) (58,973) (400) (404,188)
Proceeds from Shareholder Loans 1,358 8,811 9,651 14,947
Repayments of Shareholder Loans
Interest Received
Interest and Other Costs of Finance Paid (6,674) (7,069) (5,531) (9,984)
Dividend Received (Paid) (9,084) (2,531) (4,486) (23,737)
Distributions to FinCo (3,593)
Loans from/(to) Shareholders
Net Cash Inflow/(Outflow)-Financing Activities (32,869) (8,885) 161,179 (2,841
Closing Cash 94,945 29,999 20,487 60,895
Cash at the End of the Period 94,945 29,999 20,487 60,895

Valuations and Sensitivity

At Financial Close

$m Normanby &AC Hotels Marriott Docklands Peppers Docklands South West Towers King Street Total
Valuation 186.1 98.0 39.2 43.0 37.0 403.3
Debt 101.0 44.1 20.7 13.5 17.5 196.8
Bond 50.0
Total Debt 246.8
Valuation Group LVR 61.2%

Sensitivity Analysis

Valuation Change Group LVR
59.7%
(1.0%) 60.3%
(2.0%) 60.9%
(3.0%) 61.6%
(4.0%) 62.2%
(5.0%) 62.8%
(6.0%) 63.5%
(7.0%) 64.2%
(8.0%) 64.9%

Post-completion of Normanby (est. Jan-22 onwards)

$m AC Hotels Marriott Docklands Peppers Docklands South West Towers King Street Total
Valuation 90.4 98.0 39.2 43.0 37.0 307.6
Debt 45.2 44.1 20.7 13.5 17.5 141.0
Bond 50.0
Total Debt 191.0
Group LVR 62.1%
Valuation Change Group LVR
62.1%
(1.0%) 62.7%
(2.0%) 63.4%
(3.0%) 64.0%
(4.0%) 64.7%
(5.0%) 65.4%
(6.0%) 66.1%
(7.0%) 66.8%
(8.0%) 67.5%

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