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Accordia Golf TrustRHB Securities Corporate Day: Top 25 Jewels
April 2017 Stock code: ADQU
This presentation is intended solely for your information only and does not constitute an invitation or offer to acquire, purchase or subscribe for units (“Units”) in Accordia
Golf Trust (“AGT” or the “Trust”). The information and opinions in this presentation are subject to change without notice, its accuracy is not guaranteed, and it may not
contain all material information concerning AGT.
No representation or warranty, expressed or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of, the
information or opinions contained herein. None of the Trust, Accordia Golf Trust Management Pte. Ltd. (the “Trustee-Manager”), Accordia Golf Co., Ltd. (the “Sponsor”),
and Daiwa Real Estate Asset Management Co. Ltd., or any of their respective affiliates, directors, officers, employees, agents, advisers or representatives shall have
assume any responsibility or any liability whatsoever (in negligence or otherwise) for any loss howsoever arising, whether directly or indirectly, from any use, reliance or
distribution of this presentation or its contents or otherwise arising in connection with this presentation. Nothing contained herein is, or shall be relied upon as, a promise or
representation, whether as to the past or the future and no reliance, in whole or in part, should be placed on the fairness, accuracy, completeness or correctness of the
information contained herein. Further, nothing in this document should be construed as constituting legal, business, tax or financial advice.
The information in this presentation may not be forwarded or distributed to any other person and may not be reproduced in any manner whatsoever. Any forwarding,
distribution or reproduction of this information in whole or in part is unauthorised. Failure to comply with this directive may result in a violation of the United States
Securities Act of 1933, as amended or the applicable laws of other jurisdictions.
This presentation contains forward-looking statements that may be identified by their use of words like “plans,” “expects,” “will,” “anticipates,” “believes,” “intends,”
“depends,” “projects,” “estimates” or other words of similar meaning and that involve assumptions, risks and uncertainties. All statements that address expectations or
projections about the future and all statements other than statements of historical facts included in this presentation, including, but not limited to, statements about the
strategy for growth, product development, market position, expenditures, and financial results, are forward-looking statements. Such forward-looking statements are based
on certain assumptions and expectations of future events regarding the Trust's present and future business strategies and the environment in which the Trust and the
Trustee-Manager will operate, and must be read together with those assumptions. The Trustee-Manager does not guarantee that these assumptions and expectations are
accurate or will be realised. Actual future performance, outcomes and results may differ materially from those expressed in forward-looking statements as a result of a
number of risks, uncertainties and assumptions. There can be no assurance that such expectations will be met. Representative examples of these risks, uncertainties and
assumptions include (without limitation) general global, regional and local economic conditions, regulatory developments and changes in the golf course industry,
implementation of new changes in government regulations, man-made or natural disasters that affect the business or assets of AGT, and general global, regional and local
political and social conditions and the implementation of or changes to existing government policies in the jurisdictions where AGT operates. Predictions, projections or
forecasts of the economy or economic trends of the markets are not necessarily indicative of the future or likely performance of the Trust. Past performance is not
necessarily indicative of future performance. The forecast financial performance of the Trust is not guaranteed. You are cautioned not to place undue reliance on these
forward-looking statements, which are based on the Trustee-Manager's current view of future events. The Trustee-Manager does not assume any responsibility to amend,
modify, revise or update any forward-looking statements, on the basis of any subsequent developments, information or events, or otherwise. While the Trustee-Manager
has taken care to ensure that information is extracted accurately and in its proper context, the Trustee-Manager has not independently verified any of the data from third
party sources.
The value of the Units and the income derived from them may fall or rise. The Units are not obligations, or deposits in, or guaranteed by the Trustee-Manager. An
investment in the Units is subject to investment risks, including the possible loss of the principal amount invested. The holders of the Units (the “Unitholders”) have no right
to request that the Trustee-Manager redeem or purchase their Units while the Units are listed. It is intended that Unitholders may only deal in their Units through trading on
Singapore Exchange Securities Trading Limited (the “SGX-ST”). Listing of the Units on the SGX-ST does not guarantee a liquid market for the Units.
Important Notice
2
Golf Industry
3
Central Golf Course, Tokyo Region
Golf Industry Overview
4
• Japan is the second largest golf market globally
• Highest number of golf players per golf course as compared to other mature countries
Country 2014: No. of Golf Courses(1)
USA 15,372
Japan 2,383
Canada 2,363
UK 2,084
Australia 1,628
China 473
France 648
Korea 447
Sweden 491
Total 25,8890
500
1,000
1,500
2,000
2,500
3,000
3,500
Japan USA UK Canada Australia
Golf Player Per Golf Course in Mature Countries(2)
Source:
(1) Golf Around the World 2015 by R&A and Nihhon Golf-jo Keieisha Kyodai
(2) National Golf Foundation (in US), British Golf Industry Association, Leisure White Paper 2013 by Japan Productivity Council, Forward Management Group (in
China), Korea Leisure Industry Institute, UK Sports Marketing Surveys 2011, Australia Golf Industry Economic Report 2010, Economic Impact of Golf for Canada
2009 by National Allied Golf Associations, Measuring the Lifecycle Carbon Footprint of a Golf Course and Greening the Golf Industry in Japan by Saito, Dr.,
Osamu, 2011, International Monetary Fund & CBRE
Limited Supply of Golf Courses in Japan
5
Significant Barriers to Establishing New Golf Courses
High land cost
Relatively high construction cost of at least US$50.0
million to US$60.0 million (5 billion to 6 billion yen)
No new development of golf course in the past few
years.
Source: Nihon Golf Jo Jigyo Kyokai (NGK)(1)
Declining Number of Golf Courses
Market in Consolidation
(1) NGK has not provided its consent to the inclusion of the information extracted from the relevant report published by it and therefore is not liable for such information. While the
Trustee-Manager has taken reasonable actions to ensure that the information from the respective reports published by NGK is reproduced in its proper form and context, and
that the information is extracted accurately and fairly from such report, neither the Trustee-Manager nor any other party has conducted an independent review of the information
contained in such report nor verified the accuracy of the contents of the relevant information.
• High Barriers of Entry to the Japanese Golf Course Market
2,000
2,100
2,200
2,300
2,400
2,500
2,600
2,700
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
No. of Golf Courses
6
Top 20 Golf Operators/Owners in Japan
(1) Source: Golf-jo Kigyo Group & Keiretsu
(2) Based on the total number of golf courses in Japan (2,317) from Nihhon Golf-jo Keieisha Kyokai
(3) Combined AGT and Accordia Golf
No. Company NameNo. of Golf Courses(1)
as at 1 April 2016
Market Share(2) as at
1 April 2016
1 Accordia Golf(3) 132 5.69%
2 PGM Group 130 5.39%
3 Orix Group 40 1.71%
4 Seibu Group 31 1.20%
5 Tokyu Group 27 1.20%
6 Ichikawa Golf Kogyo Group 24 1.11%
7 Cherry Golf Group 22 0.98%
8 OGI Group 22 0.98%
9 Unimat Group 18 0.81%
10 Taiheyo Club 17 0.73%
11 Chateraise 16 0.68%
12 GCE Group 16 0.68%
13 RESOL Group 15 0.64%
14 Resort Trust 13 0.56%
15 Tokyo Tatemono (J Golf) 12 0.51%
16 JGM Golf Group 12 0.51%
17 Kamori Kanko 11 0.47%
18 Akechi Club & Boso Country Club Group 10 0.43%
19 Daiwa House 10 0.43%
20 Hotel Monterey 10 0.43%
• Japanese golf course market remains fragmented with the top 10 players holding
approximately 20% of the total market share
7
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2005-2010(%)
2010-2015(%)
Source:
National Institute of Population and Social Security Research, Japan (www.ipss.go.jp)
Region classification is based on AGT’s area classification
Population Shift to Urban Prefecture from in Rural Prefecture since 2005 to 2015
Urbanization in Japan
About Accordia Golf
Trust
8
Midono Country Club, Tokyo Region
ACCORIA GOLF TRUST
1. Unique Asset
2. Attractive Yield with
Relatively Steady Cash Flow
3. Acquisition Opportunities
9
Unique Asset: Golf Courses (89 courses in Japan)
70% are located in the 3 Key Metropolitan AreasTotal Appraisal Value: JPY 150.89 billion(1)
Greater Tokyo Region
No of Golf Courses 35
Appraisal Value (JPY bil) 73.984
Greater Nagoya Region
No of Golf Courses 12
Appraisal Value (JPY bil) 17.884
Greater Osaka Region
No of Golf Courses 15
Appraisal Value (JPY bil) 37.860
Other Regions
No of Golf Courses 27
Appraisal Value (JPY bil) 21.166
(1) Appraisal Value is as at 31 December 2016. 10
1
Unique Asset : Trust Structure
• Singapore’s first listed Business Trust with golf course assets
• Listed on Singapore Exchange (SGX-ST) on 1 August 2014
11
1
Unique Asset: Income and Expense Structure
Golf CourseRevenue
67%
RestaurantRevenue
24%
MembershipRevenue
8%
Other,1%
Operating Income (9M YTD FY16/17)
Labour & Outsourcing Expenses
38.0%
Merchandise & Material Expenses ,9.0%
Golf Course Management Fee14.0%
Golf Course Maintenance & Repair Cost, 6.6%
Depreciation & Amortisation, 7.3%
Utility Expenses4.8%
Operating Lease Expenses,4.6%
SG&A and others15.7%
Operating Expenses (9M YTD FY 16/17)
Golf course revenue: play fees, caddie fees, accommodation
fees, driving range fees, etc.
Restaurant revenue: sales at golf course restaurant and golf
course shops, hotel sales of food and drinks, etc.
Membership revenue: annual membership fee, new
membership fees, name transfer fee, etc. 12
1
12.58 12.70 12.9311.78 12.03
12.76
5.42 5.455.61
5.53 5.695.81
0
1
2
3
4
5
6
7
0
2
4
6
8
10
12
14
16
FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16
EBITDA Number of players(JPY billion) million
Earthquake
in March
Economy
stagnant
Heavy
snowfall
Warmer
winter
(1) Earnings before Interest, Taxes, Depreciation and Amortization (“EBITDA”): These figures are on J-GAAP basis and for illustration purposes and have not
been audited or verified by third parties. 13
• Actual Number of players for AGT’s golf courses remains stable over the years.
• EBITDA(1) (based on J-GAAP) reflects the stability of players regardless of unfavourable
events.
(1)
Relatively Steady EBITDA Regardless of Unfavourable Events2
3.6%
5.7%
3.4%
0.6% 0.4%
4.1%
0.5%
-0.4%
2.7%
10.6%
7.0%
3.2%
6.8%
4.8%
2.4%
8.6%
1.8%
4.0%
2.4%
-0.4%
4.1%
-5%
0%
5%
10%
15%
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY15/16: Change in Reservations FY16/17: Change in Reservations
Year-on-Year changes of number of visitors under reservation as at beginning of month
14
The calculation on change in reservation is based on actual reservation vs the same month of the previous year for 89 golf courses and does not reflect any cancellation
due to weather conditions
Sound demand for golf brought fairly positive reservation rate each month.
Sound Demand with Stable Number of Visitors under Reservation 2
Number of Plays in Japan Remains Stable
15
• Number of plays in Japan remains stable as the number of plays per player has been
increasing.
• Proportion of senior plays has been increasing.
Source: Japan Productivity Centre
Nihon Golf-jo Keieisha Kyokai, Japan
90.7 91.6 88.1
84.3 86.7 86.7 86.5 87.7
9.0 10.0 10.5 11.3 12.8 13.9 14.8 15.5
9.5 9.510.9
10.511.0
10.1
12.011.5
0
2
4
6
8
10
12
14
-
20
40
60
80
100
120
140
2008 2009 2010 2011 2012 2013 2014 2015
Number of Play and Number of Plays Per PlayerNo of Plays
(millions)
No. of Play
per PlayerOver 70sNo of plays (mil) No of Play per Player
2
Seasonality in Operation, Accounting Profit and Cash Flows
1QSpring
2QSummer
3QAutumn
4QWinter
Operating Revenue Operating Profit
1st Half
Golf Seasonality (Image)
1st Half
2nd Half
Operating Profit
1st Half
2nd Half
Distribution
Golf course business naturally has seasonality
Demand fluctuates according not only to Japanese
seasons but also weather conditions,
e.g.
• Rainy season (June to July) : low demand & high
cancellation.
• Typhoon (September to October) : high cancellation.
• Snow fall (January to March) : low demand.
➢ Cash available for distribution could differ from
operating profit as the distributable amount is calculated
based not only on the operating profit but also actual
“cash flow”.
➢ The major cause for such deviation is the membership
fees that are recognized monthly but actually received
and become distributable mostly in the fourth quarter.
Distribution
Calculated based on
cash flow
Calculated based on
accounting profit
16
2nd Half
High Season
Middle Season
High Season
Low Season
3.8
6.9
10.7
9.0
0.0 2.0 4.0 6.0 8.0 10.0 12.0
JREITs
SREITS
BTrusts
AGT
Source:
AGT: Calculation is based on actual announced/payout in 2HFY15/16 DPU and 1H FY16/17 DPU / AGT’s closing price as at 7 April 2017 of SGD0.725 cents
NOTE: AGT’s financial year is March and AGT’s distribution is payable on a semi-annually basis (March and September)
BTrusts: Data consists of 9 business trust, including AGT. OCBC SREITs Tracker as at 3 April 2017
SREITs: Data consists of 9 business trust, including AGT. OCBC SREITs Tracker as at 3 April 2017
JREITs: J-REIT Report from The Association for Real Estate Securitization. Data is as at 7 April 2017 and includes 56 REITs.
17
Attractive Yield2
Acquisition Opportunities: Pipeline from Sponsor
Right of First Refusal (“ROFR”)
AGT has a right of first refusal for ALL golf course
related assets owned by the Sponsor
Call Option granted to AGT
AGT can initiate asset purchase negotiations with
the Sponsor any time over the relevant assets
subject to the call option
18 Golf Courses
(Call Option)
“Non-Accordia” Brand
19 Golf Courses
26 Driving Ranges
7 Golf Courses
“Accordia” Brand
Data as at 31 December 2015
Golf courses held by Sponsor
Accordia brand
Non-Accordia brand
Assets under Sponsor
18
3
Strength of "Accordia" Brand Golf Course
Accordia Brand Golf Courses
• Main Target: Middle Class
• Provide Casual atmosphere with Reasonable Play
Fees
• Higher number of Visitors (utilisation)
19
Middle class golf courses with
higher number of visitors
Strength of Accordia Brand Golf Courses
1. Well located golf courses
2. Sponsored by the Largest Golf Operators in Japan(*)
with Economies of Scale, Efficient Golf Course
Operation, and Effective Brand Management
(* by market share)
Strength of "Accordia" Brand Golf Course
20
Loyalty Card Holders of Accordia Golf
(million)
1.922.33
2.803.29
3.650.24
0.32
0.34
0.31
0.32
0.20
0.19
0.18
0.18
0.17
Mar 2012 Mar 2013 Mar 2014 Mar 2015 Mar 2016
Visitor Silver Member
Source: Sponsor/Golf Course Manager
2.36
2.84
3.32
3.784.14
Strength of Accordia Brand Golf Courses
3. Expertise in Expanding Tee Time Slots
4. Ability to Attract and Retain Customers with
Competitive Play Fee, and Direct/Indirect Marketing
5. Large and Loyal Customer Base
“Silver” : non-member “Gold” and Silver” status loyalty card holders
(frequent player).
“Member” : member loyalty card holders. (member of each golf course)
“Visitor” : non-member “White” status loyalty card holders.
High Market Penetration Rate
4.14 million loyalty card holders (as at 31 March
2016).
approx. 57.5% of total number of golf players in
Japan (7.2 million(1)).
51.28 51.44
53.01 52.20 53.70
36.21 34.95 36.07 36.36 37.03
-
10
20
30
40
50
60
FY09/10 FY10/11 FY11/12 FY12/13 FY13/14
Thousands
• Higher numbers of players would drive stable operating cash flows.
(1) Average number of players is calculated by dividing total number of players by 18 holes converted number of golf courses.
Source: Nihon Golf-jo Keieisha Kyokai
Strength of "Accordia" Brand Golf Course
Higher Number of Visitors
Approx. 45% higher
than national average
21
AGT’s Average
Japan national
average
Number of Players per Golf Course per year
Outlook
22
Hanao Country Club, Tokyo Region (Chiba)
Outlook
Japan Economy
• Expected to recover gradually with underlying support from domestic factors such as:
growth of real wages and Implementation of economic stimulus package
• Downside risk factors includes: yen appreciation and World economic slowdown
• GDP forecast revised upwards(1):
• Fiscal Year 2017 at 1.5% (from 1.3%); and
• Fiscal Year 2018 at 1.1% (from 0.9%)
Steady Number of Golf Plays in Japan Expected to Continue
• Affordable play cost leads to steady number of plays in the mid-to-long run.
Golf Remains as a Popular Leisure and Sports
• Golf continues to be a healthy leisure activity for seniors.
• Japanese baby boomers who have money and more time for golf.
• Higher healthy life expectancy of seniors led to increasing demand as players can
play at a higher age.
23
Source: Golf News Net dated 18 Oct 2016(1) Source: CNN News dated 1 February 2017
Appendix
Lake Forest Resort, Osaka Region
24
Revenue per Player (3Q FY16/17 vs 3Q FY15/16)
Note: Revenue per player based on IFRS were lower than J-GAAP base especially for weekday because of “free play” coupon of the rewards programme.
Play fee includes Green fee and cart fee
(1) Revenue does not include revenue from memberships fees and Pro-shop business.
Revenue(1) per Player (J-GAAP-based Revenue)
25
4,712
8,554
6,165
81
109
92 2,264
2,577
2,382 365
403
379
¥-
¥2,000
¥4,000
¥6,000
¥8,000
¥10,000
¥12,000
Weekday Weekend All day
3Q FY15/16
Play fee Caddy fee F & B Others
4,621
8,559
6,164
68
94
78 2,245
2,577
2,375 361
394
374
¥-
¥2,000
¥4,000
¥6,000
¥8,000
¥10,000
¥12,000
Weekday Weekend All day
3Q FY16/17
Play fee Caddy fee F & B Others
7,296
11,625
8,992
11,644
7,422
9,018
26
Monthly Number of Players and Utilization Rate
FY16/17 Number of Players (thousands) Utilization Rate(1)
Actual YoY Change(2) 3 Year Average
Change(3) Actual
YoY Change
Percentage Point
(ppt)(4)
3 Year Average
Percentage Point
(ppt) Change(5)
Apr 491 +0.1% +0.2% 77.9% -0.3 ppt -0.2 ppt
May 572 -4.0% -1.0% 87.2% -3.6 ppt -0.8 ppt
Jun 492 -5.4% -3.0% 77.8% -4.2 ppt -2.1 ppt
Jul 541 +11.9% +8.6% 82.5% +8.3 ppt +6.3 ppt
Aug 497 -1.8% -0.2% 76.4% -1.2 ppt +0.1 ppt
Sep 477 -4.6% -6.3% 75.3% -4.6 ppt -5.6 ppt
Oct 541 -2.3% 4.4% 82.4% -2.0 ppt +2.7 ppt
Nov 498 -0.9% -2.7% 80.9% +0.9 ppt -0.3 ppt
Dec 473 -1.8% +3.7% 75.9% -0.4 ppt +1.3 ppt
Jan 371 +6.8% +5.0% 67.9% +1.9 ppt +3.9 ppt
Feb 334 -6.9% +10.1% 66.3% +0.2 ppt +2.1 ppt
Mar 466 -0.2% +3.2% 76.4% +0.9 ppt +2.2 ppt
TOTAL 5,753 -0.9% +1.4% 77.2% -0.3 ppt +0.8 ppt
1Q 1,555 -3.2% -1.3% 81.0% -2.7 ppt -1.0 ppt
2Q 1,515 +1.7% +0.7% 78.1% +0.9 ppt +0.3 ppt
3Q 1,512 -1.7% +1.7% 79.7% -0.5 ppt +1.2 ppt
4Q 1,171 -0.2% +5.7% 70.2% +1.0 ppt +2.7 ppt
(1) Utilization Rate = Total number of players per 18 holes / (Total operating days x 50 (flights) x 4 (persons)). Total operating days exclude closed days under specific
circumstances such as typhoon and snow, among other factors.
(2) Year-on-Year (YoY) Change = (Current month data - corresponding month of the previous year) / corresponding month of the previous year.
(3) 3 Year Average Change = (Current month data – previous 3 Year Average) / previous 3 Year Average.
(4) Year-on-Year (YoY) Change Percentage Point (ppt) = Current month data - corresponding month of the previous year.
(5) 3 Year Average Percentage Point Change = Current month data – previous 3 Year Average.
Leased Land in the Golf Courses
27
• Percentage of leased land
Freehold, 76%
Leased, 24%
0% 20% 40% 60% 80% 100%
• Overall 76% of the land are owned by AGT group.
14
22
10
16
13
10
4
0 5 10 15 20 25
0
0 - 5
6 - 10
11 - 20
21- 50
51 - 100
over 100
Number of golf courses in AGT
14
12
13
14
16
6
5
9
0 5 10 15 20
0.00
0 - 5 %
5 - 10%
10 - 20%
20 - 40%
40 - 60%
60 - 80%
80 - 100%
Number of golf courses in AGT
• Number of leased land owners
- Most of the land owners are individuals or corporate
- Only one course has land leased from the
government
- Standard lease term is 10- 20 years
Management FeesFund Fee Formula(1)
Trustee-Manager Fees • Base fee: 0.11% per annum of the value of the total assets
• Performance fee: 0.25% per annum of Adjusted NOI(2)
• Acquisition fee: 0.6% of appraisal value
• Divestment fee: 0.15% of divestment value
• Initial set-up fees: JPY400 million or 0.232% of Trust Property as at 31 December 2013
Asset Management
Fees
• Base fee: 0.066% per annum of the appraisal value of New SPC’s golf courses(3)
• Acquisition fee: 0.75% of appraisal value
• Disposal fee: 0.15% of divestment value
• Initial set-up fees: JPY400 million or 0.265% of total appraisal value of the Initial
Portfolio as at 30 September 2013
Golf Course
Management Fee
• Fixed fee: JPY2.75 million per 18 holes per month and JPY1 million per driving range
• Variable fee: 3.0% of the net sales and 5.0% of incremental operating profits per month
• Integral Purchase System Usage fee: JPY15,000 per course per month
• New Membership fee: 60% of admission fee
(1) Please refer to the Prospectus for further details
(2) Net Operating Income (“NOI”) = Gross revenue less merchandise and material expenses, labour costs and other operating expenses in respect of such golf courses,
driving ranges, golf course related assets and driving range related assets but before deduction of fees payable under the golf course management agreement
(3) Appraised value of the total assets of New SPC based on the last available appraised value obtained by New SPC
28
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