Nordics' most connected data center | ~9.5% annual dividend 23-year remaining lease agreement with a market leading data center service provider Project Finance 23-year Blue chip Zero Property value remaining international economical SEK 480m lease period tenant vacancy Unique data ~9.5% annual Residual risk Rent per sqm of infrastructure dividend protection SEK 1,013 location Investor Presentation 01.03.2017
Agenda 1. Executive summary 2. Data center introduction 3. Tenant and lease agreement 4. About the property 5. Residual value 6. Equity returns and financials 7. Additional information 2
Information Carnegie AS, organization number 936 310 974 (Carnegie) with business address Fjordalléen 16, Aker Brygge, 0250 Oslo, is acting as the sole arranger for the investment in the property and as a business manager and administrator for the investment company. Carnegie will collaborate with Carnegie Investment Bank AB, organization number 516406-0138, in the distribution of equity in the project. This presentation (the “Presentation”) has been prepared by Carnegie in connection with the investment / subscription of shar es in Data Center Invest 1 AB (the Company). The subscription is carried out with the aim to capitalize the company to be able to acquire all shares in Niam V Sic AB, org.no. 556660-5597 (the Property company). The Property company owns the Property Vandenbergh 9, with the address Mariehällsvägen 40-44, Bromma. The purpose of the Presentation is to provide a description of how investors can invest in the property by subscribing for shares in the company at issue. The Presentation does not constitute an offer for subscription of shares in the Company. Terms and conditions for investment / subscription of shares in the company is stated in a separate offer to subscribe for shares (subscription form) prepared by Carnegie, arranger of the issue (hereinafter also referred to as Manager). In the following, the term "property" is used on both the Company and the property unless stated otherwise. At the date of this Presentation a binding agreement to purchase the property is not yet signed. The acquisition of the property will take place after the Company has obtained sufficient binding interests from investors and after satisfactory legal, financial and (depending on conditions) technical due diligence of the property, and received and achieved a satisfactory debt financing and purchase agreement for the acquisition of the property. Carnegie reserves the right without any liability and at its sole discretion to modify, terminate or suspend the buying process, structure or terms of the transaction, at any time and without notice and grounds, until a binding contract and any other agreements are signed. 3
Agenda 1. Hovedpunkter 2. Eiendommen 3. Leietaker og leietakerforhold 1. Executive summary 4. Finansiering og avkastning 5. Struktur og roller 4 Equinix generic data center
Market leading data center located in one of Stockholm’s fastest growing areas The 23-year lease agreement provide investors with a predictable and stable long-term cash flow • The Property is the most connected data center in the Nordic region. • The tenant, the US based Equinix, operates 150 data centers across 41 major metropolitan areas in 15 countries on five continents. Global tenant, in an industry • Equinix had an annual turnover in 2016 of USD 3.4bn and a corresponding with increasing EBITDA of USD 1.7bn. The ultimate parent company is listed on NASDAQ Estimated annual Nordics' most Property value demand (Ticker: EQIX) and has a credit rating of BB+ (Standard & Poor). dividend ~9.5% connected data center SEK 480m • Since 2000, it has been an exponential growth in demand for data storage services, and consequently demand for data centers. • Estimated annual dividend capacity of ~9.5% over the lease period. • Accumulated dividends are estimated to ~218% of the equity, assuming an Attractive and ~23 year Gross area exit in year 2040. Equinix has predictable remaining lease ~23,500 sqm BB+ S&P rating period • If the Property is sold to yield 4.8% (initial purchase yield) in 2025 with dividend 15 years remaining lease period, the IRR is estimated to 11.1% capacity • 10-year senior secured bond with no amortization, gives the project an attractive yield-spread and boosts the project IRR. • Rental income of SEK ~23.8m (2017e), which corresponds to a rent of SEK 1,013 per sqm, provides a solid long-term cash flow. • The lease agreement cannot be terminated and expire on 31.12.2039. The The lease is CPI-adjusted 100%, on an annually basis. investment • The location is optimal for data center operations due to dark fiber crossing case secure point, connection to multiple power grids and a central location in reduced Stockholm. residual risk • Market rent for storage/warehouses in the area is estimated to SEK 1,300/sqm. This is SEK ~300/sqm higher than the current rent level for the property and hence reduce residual risk. Note that the figures in the presentation are based on all available information, and believed to be correct at the date of mailing of the presentation. Carnegie cannot guarantee the accuracy of the calculations or the 5 quality of the figures that the calculations are based upon. Carnegie reserves that forecasts cannot be used as a reliable indicator of future returns and that the expected return is not a guarantee of actual return.
Rent per sqm of SEK 1,013, is significantly below the current estimated market rent The estimated capital structure comprise SEK ~312m of long tenor bond financing and equity of SEK ~172m Key financial figures The Property is located just outside Stockholm city center Financing SEK (000) Per sqm Net yield Gross property value 480,000 20,426 4.8 % Estimated deduction for latent tax gains -16,000 Tax losses carried forward 0 +/- gain and loss account 0 Estimated purchase price 464,000 19,745 5.0 % Arrangement fees 9,600 Estimated DD, start up and debt arrangement fees 5,400 Estimated transaction costs 15,000 Estimated working capital 5,000 Estimated total project price 484,000 4.8 % 20,596 % of ~8 km – 10 min. Sources and uses total capital SEK (000) Per sqm 13,277 Bond financing 312,000 64.5 % Equity 172,000 35.5 % 7,319 Total capital 484,000 100.0 % 20,596 % of Key figures (2017E) SEK (000) Per sqm total capital Gross rent 23,800 1,013 100.0 % Maintenance and insurance fees 700 30 2.9 % Property tax 0 0 0.0 % Net operating income 23,100 983 97.1 % The Property Adm, audit, accounting and Nordic Trustee fees 700 30 2.9 % EBITDA 22,400 9,532 94.1 % Note that the figures in the presentation are based on all available information, and believed to be correct at the date of mailing of the presentation. Carnegie cannot guarantee the accuracy of the calculations or the 6 quality of the figures that the calculations are based upon. Carnegie reserves that forecasts cannot be used as a reliable indicator of future returns and that the expected return is not a guarantee of actual return.
Estimated annual dividend capacity of ~9.5% during the lease period Accumulated dividends are estimated to ~218% of initial equity, if the Property is sold in year 2040. Cash-flow in % of equity* Sensitivity analysis Cash flow in % of equity Time of exit 13% 250% 1.1.2025 1.1.2030 1.1.2040 4.30 % 13.6 % 12.1 % 10.9 % 12% 4.55 % 12.3 % 11.5 % 10.7 % Average yield for sale 4.80 % 11.1 % 10.9 % 10.5 % 11% of the property 5.05 % 9.8 % 10.3 % 10.3 % 200% 5.30 % 8.6 % 9.7 % 10.1 % 10% Gross rent per sqm Net exit yield 9% PV 2017 2040 5.0 % 5.5 % 6.0 % 813 1,297 9.3 % 8.9 % 8.6 % 8% 150% 913 1,456 9.8 % 9.4 % 9.1 % Rent per sqm in 2017 1,013 1,616 10.2 % 9.9 % 9.5 % 7% value 1,113 1,775 10.6 % 10.2 % 9.9 % 1,213 1,935 11.0 % 10.6 % 10.3 % 6% 100% 5% • The annual dividend capacity is estimated to ~9.5% over the lease period. The target dividend policy is quarterly distributions, with the first estimated 4% distribution in Q4'17 / Q1'18 (not illustrated in cash flow as this is on a full- 3% year basis). 50% • Accumulated dividends amounts to ~218% assuming an exit in year 2040 2% and refinancing at the same terms after 10 years. 1% • If the Property is sold at yield 4.8% (initial purchase yield) in 2025 with 15 years remaining lease period the IRR is estimated to 11.1%. 0% 0% 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 • Note that the dividend capacity for the project may be affected by the covenant structure in the initial bond financing offer (LTV<70%), and Dividend Accumulated dividend financing terms when the debt is to be refinanced. *Based on annual CPI-adjustments (October index) of 1.8% in 2017, 2.5% in 2018, 2,9% in 2019 and 2% after this Source: http://www.riksbank.se/Documents/Rapporter/PPR/2017/170215/dat_ppr_170215_H09e88lkj_sv.xlsx Note that the figures in the presentation are based on all available information, and believed to be correct at the date of mailing of the presentation. Carnegie cannot guarantee the accuracy of the calculations or the 7 quality of the figures that the calculations are based upon. Carnegie reserves that forecasts cannot be used as a reliable indicator of future returns and that the expected return is not a guarantee of actual return.
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