our values OVERVIEW APOLLO INVESTMENTS Sources and packages commercial real estate investment opportunities across Portugal on behalf of international investors with appetite for 7% blended Euro based yield. Deal sourcing is based on the ability to identify and provide a viable exit to private Real Estate developers with assets meeting the desired yield, under rental or lease agreements with a minimum 10-year tenure.
STEP I
STEP IV
Deal Sourcing
Earnings Distribution
Appointment of Brokerage firm and approval of Brokerage Fees Deal evaluation and negotiation based on 7% blended annual yield Conducting due diligence on the asset and the seller’s mandate
Quarterly distribution of 90% of net profits Net profits derived after all expenses and bank repayments 10% of net earnings to be allocated to a reserve fund
STEP II
STEP V
Investment Structure
Exit
Securing Equity Investment commitment - 60% of the purchase price Secure debt financing commitment 40% of the purchase price Setting up SPV for ownership of the asset based in Portugal Approval of Management fee structure by SPV from the outset
Option I - Roll the asset into a future REIT to be established Option II – Sale of the asset to established Property Funds
STEP III Management Structure Management agreement between SPV and Management Co. Management Co. will be JV between Apollo and reputable partner Management Fee based on a % of the value of the asset, paid yearly Management Co. to submit annual budget for approval by SPV Budget to include Management fees, Insurance, Taxes, Maintenance
dealflow August 2019
01.LisbonOffice Dealflow August 2019 Type: Office building Location: Lisbon, Business District Anchor Tenant: Multinational company with strong presence in Portugal Total Office Area: 8,365 sqm Total Parking Area: 5,703 sqm (187 parking spaces) Asking Price: 33,000,000€ (Pre-Negotiation) Target Price: 30.000.000€ Gross Annual Income: 1,609,202.18€ Annual Expenses: 39,015€ (IMI Taxes) + 71,672€ (Maintenance Expenses) = Total Net Annual Income: 1.498.515€ Current Annual Yield: 4.54% (based on Asking price) Target Annual Yield: 5% Minimum (Based on Target Price) Capital Growth: 2% Minimum (Market growth currently exceeding 5% since 2017) Total Blended yield: 7% Minimum (5 + 2) Key Market Features: Portuguese property market has been growing at abnormally high rates The projected 2% capital appreciation is ultra conservative, could reach 4% No competition from Traditional funds seeking much higher deal size Key Asset Features: Located in one the Main Business areas of Lisbon ONE ANCHOR TENANT UNDER LONG TERM COMMITMENT PRIVATE SELLER, PROPERTY NOT LISTED
01.LisbonOffice Dealflow August 2019 Type: Office building Location: Lisbon, Business District Anchor Tenant: Insurance Company, subsidiary of a Recognized Portuguese Bank Total Office Area: Total Parking Area: Asking Price: 27.777.260€(Pre-Negotiation) Target Price: 25.500.000€ Gross Annual Income: 1,609,202.18€ Annual Expenses: 33€/sqm Condominium Fee Charged to tenants, covers all expenses Net Annual Income: 4.54% (based on Asking price) Current Annual Yield: 4.54% (based on Asking price) Target Annual Yield: 5.2% Minimum (based on Target Price) Capital Growth: 2% Minimum Total Blended yield: 7.2% Minimum (5.2 + 2) Key Market Features: Portuguese property market has been growing at abnormally high rates The projected 2% capital appreciation is ultra conservative, could reach 4% No competition from Traditional funds seeking much higher deal size Key Asset Features: Located in one the Main Business areas of Lisbon ONE ANCHOR TENANT UNDER LONG TERM COMMITMENT OVER 1MILLION € IN IMPROVEMENTS BY ANCHOR TENANT PRIVATE SELLER, PROPERTY NOT LISTED
01.CoimbraOffice Dealflow August 2019 Type: Office building Location: Coimbra (Commercial Zone) Anchor Tenant: 1350 sqm of the building rented to the Portuguese Government (Court) Total Office Area: 5.048 sqm Total Parking Area: Asking Price: 13.400.000€ (Pre-Negotiation) Target Price: 12.500.000€ Gross Annual Income: 893.306,00€ (250.740,00€ from the State Tenant) Annual Expenses: 22.325€ (IMI Taxes) + 235.241€ (Maintenance Expenses) = Total 257.566€es Net Annual Income: 635.740€ Current Annual Yield: 5% Minimum (based on Target Price) Target Annual Yield: 5.2% Minimum (based on Target Price) Capital Growth: 2% Minimum (Market growth currently exceeding 5% since 2017) Total Blended yield: 7% Minimum (5 +2) Key Market Features: Portuguese property market has been growing at abnormally high rates The projected 2% capital appreciation is ultra conservative, could reach 4% No competition from Traditional funds seeking much higher deal size Key Asset Features: Located in Coimbra’s main commercial zone CURRENT YIELD ACHIEVED WITH 20% OF THE BUILDING STILL VACANT PRIVATE SELLER, PROPERTY NOT LISTED FOR SALE
dealflow SUMMARY Total Deal Pipeline: 68.000.000€ Gross Annual Income: 3.473.118€ Gross Income over 10 years: 34.731.180€ (5% Yield Average) Capital Growth over 10 years: 82.891.620€ (2% Yield per year)
indicative termsheet Date: August 2019 Scope: Establishment of an SPV for ownership of commercial property Domiciliation: Lisbon, Portugal Shareholding: Apollo Investments 40% 60% (Prospective Investors)
Currency:
â‚Ź (Euro)
Pledge deadline:
October 30th, 2019
Disbursement date:
December 1st, 2019
Financial Reporting:
Quarterly Reports and Annual Audited Financial Statements
Earnings Distribution: Distribution of 90% of net earnings quarterly Exit Strategy:
Merge multiple assets into a REIT to list or Sale of Assets to a Property Fund
Conditions of Closing: Subject to standard and customary conditions, satisfactory to the Investors Legal Counsel:
To be appointed to the satisfaction of the investor’s investment committee
APOLLO INVESTMENTS