Initial Public Offer
Babcock & Brown Communities Group
Babcock & Brown Communities Group
CommSec is pleased to inform you of the opportunity to invest in Babcock & Brown Communities Group (BBCG).
BBCG represents the consolidation of three significant Senior Living businesses, Primelife, the PrimeLiving Trust and the Fini Portfolio, into Australia’s largest listed “pure play” Senior Living business and provides an exciting opportunity for investors to be part of an industry leading investment platform.
BBCG offers an opportunity to invest in an integrated Senior Living business which it expects to deliver a combination of an attractive income yield with strong growth potential from its portfolio of 61 established and 18 developing Senior Living communities across Australia and New Zealand.
BBCG expects to benefit from the increasing demand for Senior Living products and services in Australia and New Zealand driven by an ageing population and a growing acceptance of Senior Living communities as these markets mature. BBCG believes it will be well positioned for growth, both organically, through its fully owned development pipeline of 2,110 Retirement Village units and 171 Aged Care beds, and through targeted accretive acquisitions.
BBCG expects to pay an annualised distribution yield of 8%1. These distributions are expected to be fully tax deferred.
Potential Investment Highlights Australia’s largest “pure play”
Senior Living business
> Substantial portfolio of 61 Senior Living communities with 18 under development > Diversified across all Australian mainland states and into New Zealand Strong growth prospects
> Organic growth through owned development pipeline of 2,110 Retirement Village units > Acquisition opportunities as the consolidating vehicle of a highly fragmented market Attractive forecast yield
> Annualised distribution yield of 8.0% in FY081 > Expected to be 100% tax deferred for at least the next 3 years Stable and diversified income
streams from integrated
> Integrated business across each stage of the Senior Living continuum > Annuity-style Deferred Management Fee (DMF) > Development profit from first time sales of Retirement Village units > Stable and largely government funded Aged Care revenue Unique exposure to retirement
> Favourable industry dynamics for Senior Living due to ageing population > Significant development of additional facilities required to meet growing demand Management expertise
> Combination of Babcock & Brown’s experience as a Senior Living adviser and investment manager and Primelife’s experience as an operational manager
There are general risks associated with investing in BBCG, as well as specific risks associated with BBCG and its assets. Details of risks are set out in Section 8 of the prospectus and product disclosure statement dated 15 June 2007 (together referred to as the Offer Document). Before applying for Stapled Securities, prospective investors should consider whether an investment in BBCG is a suitable investment for them. Prospective investors should be aware that there are risks associated with an investment in BBCG, many of which are outside the control of BBCG.
Potential investors must read the Offer Document and understand the terms and the risks associated with an investment in BBCG.
1 Annualised yield based on Main Offer Price and on period from Allotment Date (expected to be 3 August 2007) to 30 June 2008.
Capitalised terms in this document have equal meaning to the capitalised terms in the Offer Document.
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