Ingenia Communities : 2016 AGM - CEO Update

 ASX / MEDIA RELEASE 15 November 2016

Ingenia Communities 2016 Annual General Meeting

CEO Update

Good afternoon everyone. It's great to be here. Today I'm pleased to say that the results we recently reported for the year to 30 June 2016 validate our strategy of building a market- leading position in the lifestyle communities sector, a space we only entered three years ago. Even more exciting is that with the portfolio of communities we have assembled in key metro and coastal markets, combined with the pipeline of over 2,280 development sites secured, Ingenia's outlook is very positive.

This afternoon I will present you with a brief overview of the Group's operational performance over the last 12 months, update you on the markets within which we operate and outline the Group's outlook for the next 12 months and our future business strategy to create superior and sustainable securityholder value. I am also pleased to announce several new acquisitions as well as an upgrade to our new home settlements target for the current year.

I would now like to review a number of highlights that have happened in the past 12 months.

Several years ago Ingenia announced its intention to focus on the cash yielding affordable segment of the Australian seniors living market and that our traditional DMF village model was no longer core. After a long process it was pleasing to announce in September that the Group had divested a 90% interest in five of its eight DMF communities to Forum Partners which released $41 million for reinvestment in our rapidly growing lifestyle communities business.

From a standing start in 2013 the Group now has 13 communities in expansion and development mode and in 2016 we settled 107 new manufactured homes, up over 100% on the 52 new homes settled in the prior year.

Level 9, 115 Pitt Street, Sydney

NSW 2000, Australia

T 1300 132 946

E [e-mail]

www.ingeniacommunities.com.au

The Group's balance sheet remains in a very strong and stable position and in June we raised a further $68 million in new equity via a placement and Security Purchase Plan, both of which received strong investor support.

Notwithstanding all of the green ticks and positive news there remain some areas of the business where further improvement is required. The return on equity of the Group is yet to achieve threshold requirements - reflecting vacant land and the repositioning of key assets. The Group's security price has again largely tracked sideways over the last 12 months which is particularly frustrating as I do think the business has ticked a lot of boxes over the past 12 months. We have demonstrated our ability to develop and sell homes in volume and at attractive margins, divested a majority interest in our non-core DMF business, improved the operational performance of our key businesses and been able to originate, acquire and integrate high quality lifestyle communities and development sites.

As you can appreciate it is not possible to control the security price but if we can execute well on our longer term strategy then I am sure the market will appropriately value the Group's business.

Today Ingenia provides a quality and affordable home to 4,000 Australian seniors. In our growing holiday and short-term accommodation business we own 1,800 cabins and sites representing over 655,000 room nights per annum.

Each week we collect $1 million in rent, much of it underpinned by Government pension and rent assistance payments and in the 2016 financial year, for the first time, Group revenues exceeded $100 million.

Ingenia exhibited continuing strong financial growth during the 2016 financial year with Revenue up 41% to $107 million and Underlying Profit from continuing operations up 20% to

$20 million. Operating cashflow was up 133% to $21 million.

The Group's capital position is very robust with our Loan to Valuation Ratio closing out the year at 25%, pending the settlement of several contracted acquisitions.

A key focus internally over the past year has been defining our purpose, vision and values not only for our own team but for a growing resident and guest base. We now have a very clear vision 'to create Australia's best lifestyle communities'. This vision will be delivered by four clear values:

1. Integrity

2. Community

3. Respect

4. Improvement.

These guide the way our team interacts with each other and our residents and guests every day.

This is the lovely outlook from our Chain Valley Bay community on the shores of Lake Macquarie on the NSW Central Coast where we recently added a new Club House. In the current financial year we remain on track to sell 16 new homes in this boutique waterfront lifestyle community.

In October 2016 the Group divested a 90% interest in five of our eight DMF communities to Forum Partners for a net $41 million.

While it has been important strategically to divest non-core assets, I think it is important to call out that there will be a short term dilutive impact from the sale of the DMF business, pending reinvestment in new projects. Whilst $25 million has been pencilled in for the acquisition of an existing lifestyle community in Brisbane, the balance of the capital is being invested into our new Latitude One development site and accelerating other development projects which will not contribute to current year earnings.

We believe that investing in our development pipeline will provide the best medium term returns for securityholders.

Ingenia Garden Villages is our seniors' rental business comprising 31 communities located across Australia and is very much a core component of the Group's operations.

Over the past year we have been able to continue to improve financial performance - off a smaller asset base - through growing occupancy, increasing rents and expanding margins.

The continuing growth in our Ingenia Care, ageing in place strategy, has also been a key driver in occupancy and earnings growth. For our existing residents and their families the clear value proposition is the ease of arranging government funded care into their home enabling them to live more independently for longer, delaying the need to consider residential care. Ingenia does not charge its residents for this service - it is part of an improved value proposition.

Ingenia Lifestyle and Holidays is our rapidly growing portfolio of communities on the East Coast of Australia. Today the Group owns 29 communities, has an additional six under contract or option and another 20 under active assessment.

Lifestyle communities are an attractive asset class as they have multiple opportunities to create value for securityholders as well as providing quality and vibrant communities for our residents and guests.

Over the course of the 2016 financial the Group was again able to grow site rentals to an average weekly rent of $149.

During this period the Group has made considerable changes to the geographical weighing of our lifestyle portfolio which now has an 89% weighting to key metro and coastal markets.

As a complementary market opportunity to our rent based senior living businesses, Ingenia is now one of the largest owners of tourism parks across Sydney and coastal NSW with a rapidly growing portfolio in coastal Queensland.