Accordia Golf Trust SAC-SGX Small/Mid Cap Corporate Access Seminar - March 2019
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Accordia Golf Trust
SAC-SGX Small/Mid Cap Corporate Access Seminar
March 2019
SGX ticker: ADQU
Bloomberg: AGT SP
Important Notice
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.
2
Contents
01 Golf Industry in Japan
02 About Accordia Golf Trust
03 Q3 FY18/19 Financial Highlights
04 Portfolio Updates
05 Outlook
3
01
Golf Industry in Japan
Central New Golf Club, Tokyo Region (Ibaraki)
Huis Ten Bosh GC Nagasaki (Other Region)
4
Daiatsugi Country Club Hon Course, Tokyo Region
Overview
• Japan was ranked third in the golf market worldwide
• Highest number of active golf players per golf course compared with other countries
Number of active golf players per golf course
Country No. of golf courses Number
4,000
USA 15,047
Canada 2,295 3,500
Japan 2,290 3,000
England 1,991
2,500
Australia 1,591
Germany 747 2,000
France 637 1,500
Scotland 540
1,000
Sweden 485
South Africa 484 500
Other countries 2,838 0
Japan Canada USA Australia England
Total 28,945
Source: R&A – Golf Around the World 2017 Source: Various company reports
5
Steady demand from senior players
• The number of plays per senior player has increased, thanks to Japan’s increasing
healthy life expectancy
Number (million)
100.0
80.0
60.0 86.5 87.7 86.7 86.6
91.6 86.7 86.7
90.7 88.1 84.3
40.0
20.0
12.8 13.9 14.8 15.6 15.7 16.8
9.0 10.0 10.5 11.3
0.0
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
No. of plays (age >70) No. of plays
Source: Nihon Golf-jo Keieisha Kyokai (Japan)
6
Urbanisation development
• Population shift from rural to urban prefecture
Percent
5.0
4.0
3.0
2.0
1.0
0.0
-1.0
-2.0
-3.0
-4.0
-5.0
-6.0
Tokyo
Kanagawa
Iwate
Hiroshima
Gifu
Fukui
Oita
Tottori
Nara
Yamaguchi
Yamanashi
Kagoshima
Aomori
Niigata
Okinawa
Ehime
Aichi
Fukuoka
Chiba
Osaka
Miyagi
Shiga
Hyogo
Ishikawa
Mie
Nagano
Kumamoto
Shizuoka
Gumma
Hokkaido
Miyazaki
Nagasaki
Kochi
Akita
Kyoto
Okayama
Kagawa
Toyama
Saitama
Tochigi
Saga
Tokushima
Yamagata
Fukushima
Ibaraki
Shimane
Wakayama
2005-2010 2010-2015
Source: Statistics Bureau (Japan)
Note: Population Census (2015) is the latest publication by Statistics Bureau (Japan) and the country’s total population was 127.1 million. According to the bureau,
Japan had a total population of 126.5 million as at the end of April 2018. 7
02
About Accordia Golf Trust
8
Northern Country Club Nishikigahara, Tokyo Region
Trust structure
• Singapore’s first listed Business Trust with golf course assets
• Listed on Singapore Exchange on 1 August 2014
Unitholders
(Institutional and Public)
Provides Trust
management services
Trustee-Manager
Accordia Golf Trust
Management Pte. Ltd.
TK Investment1
Provides asset
management services
Golf Course Holding Company2 Asset Manager
51%
Accordia Golf Asset Godo Kaisha
Trustee-Manager Partner
89 Golf Courses
Daiwa Real Estate Asset
Management Co. Ltd.
Provides golf course
management services
Golf Course Manager
28.85% 49%
Sponsor
Accordia Golf Co., Ltd
1 The relationship between the golf course holding company (“Golf Course Holding Company or SPC”) and AGT is governed by a Tokumei Kumiai (”TK”) agreement, being a silent partnership agreement. TK is a contractual
relationship between an investor and a business operator, whereby the investor makes certain business contributions to the business operator (whether in the form of cash, shares or other things of value) in return for the right to
receive distributions of profits generated from the business managed by the operator. The assets contributed by the investor to the business operator shall be legally owned by the business operator (“TK Investment”). For further
information on TK structure, please see the prospectus of AGT dated 21 July 2014.
9
2 AGT invests in the Initial Portfolio via the Golf Course Holding Company established to hold the Initial Portfolio under a TK investment structure
Unique portfolio of assets: 89 golf courses in Japan
• Approximately 70% are located in 3 key metropolitan areas
• Total appraisal value of JPY149.2 billion
Greater Tokyo region
No. of golf courses 35
Appraisal value (JPY bil) 72.7
Greater Osaka region
No. of golf courses 15
Appraisal value (JPY bil) 37.4
Greater Nagoya region
No. of golf courses 12
Appraisal value (JPY bil) 17.8
Other regions
No. of golf courses 27
Appraisal value (JPY bil) 21.3
10
Information as at 31 December 2017Ownership of land
• 76% of the golf courses (by area) are owned by AGT
• Typical lease term is between 10 and 20 years
• Nishikigahara GC is the only golf course that operates with a lease permit from the government
Ownership of land Number of land owners
4
24% 10
22
Golf courses
Freehold vs
owned by
leased land by
13 multiple land
area
owners
10
76%
16
Freehold Leased 0-5 6-10 11-20 21-50 51-100 over 100
11Top golf operator in Japan
No. Company Name No. of Golf Courses Market Share1 (%)
1 PGM Group 137 6.12
2 Accordia Group2 134 5.99
3
3 ORIX Golf Management Corporation 39 1.74
4 Seibu Group 29 1.30
5 Ichikawa Golf Kogyo Group 28 1.25
6 Tokyu Group 26 1.16
7 Cherry Golf Group 20 0.89
8 Unimat Group 18 0.80
9 Taiheiyo Club 17 0.76
10 Chateraise 16 0.71
11 GCE Group 14 0.63
12 RESOL Group 13 0.58
13 Resort Trust 13 0.58
14 Tokyo Tatemono (J Golf) 12 0.54
15 JGM Group 11 0.49
527 23.5
Source: Golf Management July 2018 / Golf Market Activity Committee
1 According to Golf Market Activity Committee, there were 2,238 golf courses in Japan as at the end of March 2018.
2 Accordia Golf and AGT combined.
3 MBK, the owner of Accordia Group, has acquired the golf business of ORIX Group in March 2019. 12Strong "Accordia" brand
Mid-range golf courses with high number of visitors
1 High ability in golf course management
Play fee
Luxury exclusive golf courses
2 Possess well located golf courses
Mid-range golf courses
3 Reasonable play fee
4 Large player base (loyalty card holder)
Affordable / public golf courses
Number of visitors
13High market penetration
Loyalty card holders of Accordia Golf
4.48
4.14 0.16
3.78 0.17 0.31
0.18 0.32 3.35^
3.32 0.31
0.18 0.15
2.84 0.33
0.34
2.36 0.19 • 3.35 million loyalty card holders as at 31 March 2018.
0.32
0.20 • Accounts for approximately 60% of the total number of
0.24 4.00
3.65 2.87 golf players in Japan.
3.29
2.80
2.33
1.92
Diamond Black
>24 timesNumber of players higher than national average
• High number of players is expected to generate stable operating cash flows
Number of players per golf course per year
Number (‘000)
60.0
53.70 54.84 54.32 54.24
53.01 52.20
51.28 51.44
50.0
AGT’s Average Approximately 43% higher
than national average
40.0
37.03 37.87 37.62 37.89
36.21 34.95 36.07 36.36
30.0
National average
20.0
10.0
0.0
FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18
Source: Nihon Golf-jo Keieisha Kyokai
Note: Average number of players is calculated by dividing total number of players by 18 holes converted number of golf courses.
15Historical performance
• Despite unfavourable weather conditions, EBITDA# stays healthy and the number
of players in Japan remains stable
JPY billion Number (million)
5.69 5.81 5.75 5.69
16 5.61 5.53 6
5.42 5.45
14
5
12
4
10
8 3
12.58 12.70 12.93 12.76
6 11.78 12.03 11.91 11.35 2
4
Earthquake Heavy Warm Typhoons
1
2 in March snowfall weather and winter
0 0
FY10/11 FY11/12 FY12/13 FY13/14 FY14/15 FY15/16 FY16/17 FY17/18
EBITDA Number of players
# EBITDA is calculated based on J-GAAP revenue and for illustration purpose only. The figures are unaudited.
16Yield comparison
• Policy: At least 90% of AGT’s distributable income
• Distribution: SGD on a semi-annual basis+
• Hedging: Short-term to minimise foreign exchange risk
AGT DPU yield for FY17/18
(based on closing unit price of SGD0.645 as at the end of March 2018)
Yield (%)
8.0
7.0
6.0
5.0
4.0
3.0 6.0 6.2
6.5
2.0 4.2
1.0
0.0
AGT BT S-REITs J-REITs
Source: OCBC Investment Research Weekly S-REITS Tracker / The Association for Real Estate Securitization
+ For the six-month period ending as at 31 March and 30 September of each year.
17Earnings and costs structure
Membership SG&A and
revenue3 others
Operating Lease
8% 13%
Expenses
5%
Restaurant Utility Expenses Labour &
revenue2 5% Outsourcing
25% Expenses
Operating income Depreciation & Operating expenses 40%
(FY17/18) Amortisation (FY17/18)
8%
Golf
course
revenue1 Golf Course Maintenance &
67% Repair Cost Merchandise
6% & Material
Golf Course Expenses
Management Fee 9%
14%
1 Golf course revenue: play fees, caddie fees, accommodation fees, driving range fees, etc.
2 Restaurant revenue: sales at golf course restaurant and golf course shops, hotel sales of food and drinks, etc.
3 Membership revenue: annual membership fee, new membership fee, name transfer fee, etc.
18Acquisition opportunities: Pipeline from the Sponsor
Right of first refusal
“Accordia” brand golf courses
AGT has a right of first refusal for all golf courses related
assets owned by the Sponsor
14 golf courses Call option granted to AGT
(Call option) AGT can initiate asset purchase negotiations with the
Sponsor any time over the relevant assets subject to the
call option
15 golf courses Golf courses
Accordia brand
Non-Accordia brand
“Non-Accordia” brand
15 golf courses
25 driving ranges
Information as at 1 March 2019 1903
Q3 FY18/19 Financial Highlights
Central New Golf Club, Tokyo Region (Ibaraki)
Huis Ten Bosh GC Nagasaki (Other Region)
20
Otsu Country Club, Osaka RegionFinancial highlights
• Operating income has picked up in 3Q thanks to more favourable weather.
• The number of players has increased by 5.6% (+80,240) YoY, and utilisation rate
at the golf courses held steady at around 80% during the 3-month period.
JPY million
3Q 3Q YoY chge 9 months 9 months YoY chge
FY18/19 FY17/18 (%) FY18/19 FY17/18 (%)
Operating income 14,626 13,942 +4.9 41,077 41,895 (2.0)
Operating profit 3,547 3,345 +6.0 7,834 8,999 (12.9)
Profit (after tax) 3,233 2,594 +24.6 5,987 7,022 (14.7)
Total distributable income*
1,720 1,576 +9.1 3,194 3,048 +4.8
(100% basis)
* Distributions to unitholders will be made on a semi-annual basis for the period ending 31 March and 30 September of each year.
21Balance sheet summary
As at As at
31 Dec 2018 31 Mar 2018
Cash (JPY million) 7,086 8,145
Total assets (JPY million) 174,440 175,952
Total liabilities (JPY million) 91,717 95,797
Total borrowings (JPY million) 42,974 43,455
NAV per unit (SGD) 0.93 0.90
22Debt profile
Loan amount Interest rate Maturity period Lender
T+1.95%
Aozora Bank +
Tranche A JPY43.425 bil (T: 6-month Yen TIBOR) 5-year (mature in Aug 2023)
ORIX Co.Ltd
3-to 5-year committed loan
Tranche B1 JPY1.5 bil T+1.50% facility for capex (expire in Aozora Bank
Aug 2023)
Subordinated Accordia Golf
JPY0.5 bil 3.0% Not applicable
Loan2 Co.,Ltd
Total loan facility: JPY45.425 bil
Loan-to-value ratio: 29.4%3
1 Loan facility yet to be drawn.
2 A subordinated loan has been extended from the Sponsor to the SPC and opened solely to deposit and manage the SPC’s own funds in connection with the
TK business.
3 Based on the latest appraisal value as at 31 December 2017, and calculation = Actual loan (JPY43.925 billion) / Total appraisal value (JPY149.24 billion)
2304
Portfolio Update
Central New Golf Club, Tokyo Region (Ibaraki)
Huis Ten Bosh GC Nagasaki (Other Region)
24
Daiatsugi Country Club Sakura Course, Tokyo RegionRevenue per player trending up
• Revenue per player has registered modest sequential increase since 3Q FY17/18.
Revenue^ per player
(J-GAAP basis)
3Q FY17/18
3Q FY18/19
(cumulative)
JPY (cumulative) JPY
12,000 11,003 12,000 10,805
381 369
10,000 10,000
2,440 8,507 2,371 8,442
67 368 358
8,000 8,000 80
6,921 6,941
2,297 351 2,246
360
6,000 6,000 67
56 2,166
2,207
48 59
4,000 8,115 4,000 7,986
5,785 5,771
2,000 4,305 2,000 4,364
0 0
Weekday Weekend All day Weekday Weekend All day
Play fee Caddy fee F&B Others Play fee Caddy fee F&B Others
Note: Play fee includes green fee and cart fee
25
^ Revenue excludes membership fees and pro-shop business.Revenue per player – Monthly trend
• Encouraging improvement since late FY17/18.
Revenue^ per player
JPY (J-GAAP basis)
10,000
8,000
6,000
4,000
2,000
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY16/17 FY17/18 FY18/19
Figures in JPY
Year Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY16/17 8,633 8,797 8,338 8,058 7,540 8,191 8,955 9,267 8,745 7,605 7,133 8,066
FY17/18 8,460 8,590 8,210 8,029 7,476 8,127 8,862 9,390 8,928 7,936 7,371 8,347
FY18/19 8,494 8,730 8,448 7,956 7,484 8,264 8,791 9,287 9,006
^ Revenue excludes membership fees and pro-shop business.
26Stable demand for golf
• Despite lacklustre reservation in October and November FY18/19, the number
of players was approximately 2% (+18,000) higher against FY14/15.
Number of players under reservation
Percent
15 14.0
12.0 12.8
11.7
11.0
10 8.6
7.4 5.5 7.3
6.8 6.4
5.7 4.8 6.1
5.5
4.8 4.1
5 6.9 4.0 4.1 3.4
3.4 2.4 2.4
1.8
1.0 4.2 0.2 0.0
-0.4
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
-0.7
-5 -4.1
-5.3
-10
FY16/17 FY17/18 FY18/19
Note: Figures are based on real-time reservation on the first day of every month for the 89 golf courses and compared against FY14/15.
27Number of players – Monthly trend
• The number of players has increased 5.6% YoY in 3Q amid better-than-expected
weather conditions.
Number of players
Number (’000)
587
600 572 514
556 540 512 512
517 541 508 541 534
524 458
512 446
491 492 495 497 498
500 484 477 465 462 473 465
464 466
371
400
332 307
334
300
200
100
0
Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar
FY16/17 FY17/18 FY18/19
28Ongoing marketing efforts
• Promote golf as an enjoyable and healthy sports for ladies and juniors
• Adopt automation to boost productivity
The annual Pink Ribbon Ladies’ Golf The biannual kids party held at the golf Installation of eMenu system to
event had attracted approximately club to spark their interest in golf game. enhance dining experience and
140 female golfers. improve productivity.
29Refreshed interior
• The newly refurbished clubhouse at Kanetsu Highland Golf Club (Tokyo region)
offers contemporary and cosy space for golfers.
Reception area
Before After
Cafeteria
Before After
3005
Outlook
Central New Golf Club, Tokyo Region (Ibaraki)
Huis Ten Bosh GC Nagasaki (Other Region)
31
Izumisano Country Club, Osaka RegionJapanese economy
Change in
Gross domestic
immigration policy Geopolitical
product forecast
to welcome uncertainties
to grow 1.1%
foreign workers
• International • Current • US trade
Monetary Fund unemployment protectionism
expects economic rate stood at 2.4% could potentially
growth to remain slowdown Japan’s
healthy in the • Approximately export
fiscal year 2018 345,000 foreign
blue-collar
workers are
expected to join
the workforce in
the next 5 years
32Japanese golf industry
Supply and Tight labour Geopolitical
Challenges
demand market uncertainties
• Consolidation of • Automation to • Aging population –
golf courses is combat the a global issue
likely to continue impending labour
amid market shortage • Engaging the
saturation pivotal group –
• Tapping the new ladies and juniors
• Demand for golf is immigration policy,
well-supported by companies could • Rising labour
senior players potentially gain costs – a pressure
access to a pool of on profit margin
prospective skilled
talents
33Thank You Investor Contact: Ling Bee Lin +65 6592 1059 info@agtrust.com.sg For more information, please visit www.agtrust.com.sg
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