The Developer - Benchmark

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: