CO-DEVELOPER PRESENTATION
Medical : 2015 Day Hospital Developments October 2014
Who we are
Small/medium-sized specialist medical facilities developer with a 20 year track record
• Established in 2012, Benchmark Group has developed several medical and commercial properties to the value of R200 million
• Directors have been actively involved in all aspects of property development since 1993 • Developments in both developed (Australia) and developing (South Africa) markets • Differentiated itself as a niche specialist medical facilities developer with blue-chip clients, including JSE-
listed Advanced Health, Medi Africa and top medical practitioners • Vertically integrated provider managing the development, property and assets in its portfolio • Core assets:
o Lifestyle Medical Park and the Centurion Eye Hospital, next to Unitas Hospital in Pretoria, South Africa
o Bloemfontein Medical Centre in Bloemfontein, South Africa
DIRECTORS
Ivan Makkink Hennie Bezuidenhoudt (CEO)
Pieter Knoesen
Picture of Ivan Picture of Pieter
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Core Medical Developments
Lifestyle Medical Park Bloemfontein Medical Centre
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Current Developments
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§ Our relationship with various clients is of such a nature that we are now being approached as a preferred developer for their specific needs on a national basis.
§ Structural shifts in the acute healthcare providers businesses through regulatory pressures due to the NHI (National Health Insurance) implementation and a squeeze in medical aid payments who too are now looking to save on costs, have lent credence to the creation of alternatives
§ A decentralised, more cost-effective, niche approach to healthcare through a national footprint of high-quality, technologically advanced day hospitals and sub-acute facilities has become vital
§ Benchmark Group’s strategy is to leverage its strong name, medical track record, capital and experience in medical developments, to cherry pick the most attractive developments in the segment.
§ Our system of analysis has ear-marked the following opportunities for current development, which wholistically offer the best risk and return characteristics:
The size and scope of the developments have given rise to co-developer opportunities
Knysna
Worcester
Somerset-West (Vergelegen)
Worcester Day Hospital
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DEAL OVERVIEW: • Land secured • Licensing and zoning in place • Bankable feasibility complete • 10 year Development Bond with FNB/Nedbank approved
(50% LTV – only BG posts surety) • Benchmark Group undertakes full development management,
architectural services in-house • Benchmark group manages facility post-completion for a 5.5%
fee of net rental income
Vergelegen Day Hospital
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DEAL OVERVIEW: • Land secured • Licensing and zoning in place • Bankable feasibility complete • 10 year Development Bond with FNB/ Nedbank approved
(50% LTV – only BG posts surety) • Benchmark Group undertakes full development management,
architectural services in-house • Benchmark group manages facility post-completion for a 5.5%
fee of net rental income
Knysna Day Hospital
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DEAL OVERVIEW: • Land secured • Licensing and zoning in place • Bankable feasibility complete • 10 year Development Bond with FNB/ Nedbank approved
(50% LTV – only BG posts surety) • Benchmark Group undertakes full development management,
architectural services in-house • Benchmark group manages facility post-completion for a 5.5%
fee of net rental income
Offer (1/2)
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¨ Benchmark Group is undertaking a private placement exercise for prospective co-developers on the 3 aforementioned projects for 2015, with considerable scope for additional developments as long-term development partners
¨ The co-developer will finance, jointly with BG:
¤ 3 x projects with combined GLA of approximately 4,327 m² (already > 85% pre let)
¤ Total development cost of approximately R 72,756,000
¤ Market price post-delivery of approximately R90 mil; R 17 mil development profit (conservative 9% net yield, may possibly be 8.25%)
¤ Term loan of approximately R37 mill (10 year) in place; LTV (Loan-to-Value of 50%)
¤ BG asks a development management fee of 6% of total development cost that covers all aspects of development management and in-house architectural services, and manages the facilities for a 5.5% fee of net rental income. Both these costs have been considered in calculation of net yield as well as total development cost
50% LTV (no co-surety; BG posts surety)
Sale assumption after 5 years; can be held long-term
Offer (2/2)
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T0 T1 T2 T3 T4 T5 T10
Development Company Shareholding
(BG) 50% : 50% (Co-developers)
(R 72, 756, 000) Capital Cost
Development Profit earned post –
delivery R 17, 000, 000
Sale assumption (5 years) ---
Total = R 109, 540, 042 BG = R 24, 920, 769
Co-developer(s) [net of investment repaid] =
R 40, 266, 788
Hold assumption ---
Yr1 NOI = R 1, 382, 364 Escalation Rate = 8%
Bank – Debt (R 36, 378, 000)
BG – Equity (R 7, 251, 072)
Co-developer(s) – Equity
(R 30, 000, 000)
Proposed Structure
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Asset Level SPV 1
Asset Level SPV 2
Asset Level SPV 3
Asset 1 Asset 2 Asset 3
Development Company 50% - Co-Developer(s)
50% - Benchmark Group
A 50/50 split in equity holding is proposed, along with the below company structure
Contact Us
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Please contact: