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Gateway Lifestyle Group Gateway Lifestyle Group

Morgans Investor Conference

Gateway Lifestyle Group 2 2

• Founded in December 2009 by Trent Ottawa.

• Listed on ASX in June 2015, with 36 MHE communities across NSW, QLD and VIC. Over 6,500 residents with a development pipeline of over 2,000 sites

• 4 new MHEs acquired since listing (860 new sites)

• Attractive financial metrics: – Stable income stream from long term site rental – Growth income from the development of new

manufactured homes – Cottage industry provide acquisition growth potential

• Demand driven by an ageing population seeking choice

Overview of Gateway Lifestyle

Providing affordable living solutions to residents through building communities in Manufactured Homed Estates (MHEs)

Gateway Lifestyle Group 3

Gateway Lifestyle Communities

Community Number % Total No. Sites Occupied by

MHE

Available for MHE

Development

As at 30 June 2015

MHE 13 36% 2,264 2,264 0

MHE Conversion 16 44% 2,492 885 1,477

MHE Expansion 7 19% 1,105 897 338

TOTAL 36 100% 5,861 4,046 1,815

Acquired Post 30 June 2015

MHE 1 25% 95 95 0

MHE Conversion 2 50% 571 80 290

MHE Expansion 1 25% 198 198 40

TOTAL 4 100% 864 373 330

COMBINED TOTAL 40 6,725 4,419 2,145


• MHE’s are and always have been a land lease model

• Residents own their homes and rent the land from Gateway Lifestyle

• Industry remains cottage for now!

• Ageing population is driving demand

• Not just a low income resident model

Evolution of the MHE Industry

MHE

Lifestyle Resorts

Lifestyle Villages

Caravan Parks

Mobile home Villages

Residential Parks

Communities


• MHEs evolved from Caravan Parks, originally established in the 1930’s to:

– Provide low cost housing options post the Great Depression

– Assisted the Government in reducing the burden on social housing – still relevant today

• MHE’s today still maintain the same principles of the original Caravan Park by providing alternative affordable living options for retirees or low income earners with the following exceptions:

– Quality of dwellings is now comparable to typical residential dwellings with high quality finishes

– Facilities have improved to include bowling greens, tennis courts, community rooms

– Increasing demand for MHEs in the over 55 retiree category – not just low income earners

– Slowly gaining recognition as a genuine alternative to traditional retirement living options

Evolution of the MHE Industry


Demand Drivers – “The Grey Tsunami”

We know the population is ageing, but what does that really mean? Balancing the social and financial responsibility is the key.

What Gateway Lifestyle residents know about the Grey Tsunami

• Greater awareness of the cost of living increases and impact on them – 77% of Australians aged over 65 receive some form of Government income support (70% receive the Age Pension)

– Retirees expect their retirement savings to run out in around 10 years leaving a ‘funding gap’

• Greater appreciation by retirees of actual life expectancy and the costs associated with that

– 4.8 million Australians aged between 55 – 75. Projected to be 8.8 million by 2055

– 46% of retirees are not confident in their ability to maintain a comfortable living standard

• The need to free up equity from family homes to live comfortably in retirement

– Mean household wealth of a lone person aged > 65 is circa $620,000

– Median superannuation balance for person aged > 60 not yet retired is $95,000

• Being part of a community is a key driver of demand – People are getting older and are alone

– Traditional retirement or Government housing models alone are not enough to meet the demand

Source: All statistics from ABS and Intergenerational Report 2015


Gateway Lifestyle Business Model

Acquire existing income streams – Improve the quality and sustainability of the income stream – Grow the income stream – Provide benefits to Residents and Investors

Gateway Lifestyle’s business model is fully internalized, capital efficient, sustainable and well positioned to access future growth

• Success comes from enhancing the revenue streams to provide long term organic growth

– Pure MHE income streams will have a higher value than mixed income streams

– MHE income streams are grown by selling new homes or acquiring new assets

• A unique combination of sustainable income with organic growth and capital efficient development income

Acquisition Conversion or Expansion Sales and marketing Ongoing management

• Acquire existing mixed use MHE’s, MHE’s with expansion potential or completed MHE’s

• Development MHEs

• Focus on managing and minimising development risk

• Rebranding of the MHEs, sale of the manufactured homes

• Maximise rental income streams

• Integration of existing and new MHE residents

• Pursuit of additional revenue opportunities within MHEs


Gateway Lifestyle’s business model provides access to long term annuity style income streams which have consistently grown since inception

• MHE rental growth increased from $5M to $36M (FY16 Forecast) in 6 years. • Average site rents increased by an average of 5.5% p.a • Cottage industry provides for consolidation opportunities – 40 MHE’s acquired in 6 years • Pipeline of circa 2,000 future development sites allows for incremental MHE income growth

• Most importantly - The business model is attractive to Residents because it is simple and transparent:

– No entry or exit fees – No deferred management fees – No complicated contracts

Gateway Lifestyle Business Model

$5 million 5 MHEs

$8 million 9 MHEs

$14 million 24 MHEs

$28 million 36 MHEs

$36 million 36 MHEs

$0m

$10m

$20m

$30m

$40m

FY12A FY13A FY14A FY15F FY16F

Long Term Rental Income Growth


Conversion Program 1 – Stanhope Gardens, Sydney NSW

Acquired in 2012:

• Purchase price $23.7m • EBITDA $2.3m • Mixed income - 60%

permanent MHE; 40% Short Term (refer to coloured component)

Today (June 2015):

• Valuation $27m • EBITDA $2.2m • 100% permanent MHE

income • Development profits of

approx $10m


Conversion Program 2 – Bayside, Brisbane QLD

Acquired in 2009: • Purchase price - $9.25m • 203 sites of MHE, rental

cabins and camp sites • 40 year old caravan park with

minimal upgrades

Today (June 2015): • Valuation – $11.7m • 167 MHE sites providing

stable income • 78 new home sales • Facilities and

infrastructure upgraded


Transforming the old MHE’s


To new MHE’s


Facilities are improved…

Bayside 2009…

Bayside 2015…


The Outcome is sustainable communities


Is the MHE Sector now an ‘INVESTABLE’?

A property sector with a long history of individual investment, demonstrated ability to remain stable during downturns, strong macro demand drivers.

How long will it remain a cottage industry?

The MHE sector has historically and still is today an attractive investment for individuals: • High cash generating • Development opportunities with good margins • Consistent annual returns • Capital efficient • Property-backed investment profile

Increasing institutional investment demand:

• Scale and size with more listed entities create more focus • Better understanding of the income streams derived from MHE’s • Attraction to organic growth, development upside and acquisition opportunities • Increasing appreciation that MHE’s offer a genuine alternative to traditional retirement

living offerings


Why Gateway is well positioned to take advantage

1. First mover advantage ensures systems and processes are in place 2. Established management platform 3. Critical mass of 40 communities with over 6,500 residents 4. Pipeline of development sites and new acquisitions 5. Strong financial position following the IPO

Experienced management team, executable business plan, resident focused and commitment


Disclaimer

Summary Information

The material in this presentation has been prepared by Gateway Lifestyle and contains summary information about GTY's activities current as at 31 August 2015. The information in this presentation is of a general background nature and does not purport to be complete. It should be read in conjunction with GTY's other periodic and continuous disclosure announcements which are available at www.gatewaylifestyle.com.au

Past performance

Past performance information given in this presentation is given for illustrative purposes only and should not be relied upon as (and is not) an indication of future performance.

Future performance

This presentation contains certain “forward–looking statements”. Forward-looking statements, opinions and estimates provided in this presentation are based on assumptions and estimates which are subject to change without notice, as are statements about market and industry trends, which are based on interpretation of market conditions. Although due care has been used in the preparation of forward-looking statements, actual results and performance may vary materially because events and actual circumstances frequently do not occur as forecast. Investors should form their own views as to these matters and any assumptions on which any of the forward-looking statements are based.

Not financial product advice

Information in this presentation, including forecast financial information, should not be considered as advice or a recommendation to investors or potential investors in relation to holding, purchasing or selling securities. Before acting on any information, you should consider the appropriateness of the information having regard to these matters, any relevant offer document and in particular, you should seek independent financial advice.

http://www.gatewaylifestyle.com.au/

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