ASPEN GROUP — AGM Information 2023

Nov 21, 2023

Aspen Group Annual General Meeting

22 November 2023

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Coorong Quays and Alexandrina Cove Lifestyle Village
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Aspen’s Business Model and Platform

Portfolio Optimisation

Disciplined acquisitions highly suited to our core customer base Repositioning out of properties with higher rent / price points Measured balance of rent (80%) and development profit (20%)

Mission

Operations

Boosting profitability by offering a variety of lease types and services, and through disciplined cost management

Provide Quality Accommodation on Competitive Terms

Core Customer Base

Four million Australian households with annual income <$90k

Development

Brownfield redevelopment / refurbishment and New Greenfield development

Severe Housing Shortages <$400pw rent and <$400k price

TAM[1] > $1 trillion

Capital Management

Flexible financial structures for customers (eg. dwelling rentals v. land lease v. sale) Optimising ROIC for shareholders

1. TAM – Total Addressable Market estimate based on total value of housing worth <$400k

2

Residential Markets to Remain Undersupplied over the Medium Term

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Severe (and worsening) Housing Shortages for
National Vacancy Rate [3]
Aspen’s Core Customer Base
q Population growth currently >2% pa [1] 3.5%
Proportion of Rentals Offered at <$400pw [4]
q New dwelling approvals down 14% past 3.0%
60%
year [2]
2020
2.5% 50%
q Land located where people want to live
close to jobs, facilities, and recreation is
increasingly scarce 40%
2.0%
2022
q Building costs likely to remain elevated –
30%
shortages of skilled labour 1.5%
2023
20%
q Building regulations and approvals more 1.0%
onerous and costly over time
10%
0.5%
q Higher interest rates increase development
cost, and the rent landlords require to 0%
provide their capital and effort Regions
0.0%
Capitals
2005 2008 2011 2014 2017 2020 2023
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Sources: 1. ABS. 2. ABS. 3. SQM Research. 4. PropTrack - % of all dwellings (houses and units) offered for rent in Australia at <$400pw on Realestate.com.au in the months ending March 2020, April 2022 and April 2023.

3

Aspen’s Performance

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Earnings and Distributions per Security (cents) Net Asset Value per Security
12.50 $2.10
$1.90
10.50
21% per annum
$1.70
8.50 20% per annum
$1.50
6.50
$1.30
4.50 $1.10
$0.90
2.50
$0.70
0.50
FY20 FY21 FY22 FY23
$0.50
Underlying Operating Earnings Distributions FY20 FY21 FY22 FY23
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4

CoVE Cooks Hill, Newcastle NSW

All 50 apartments leased within 12 weeks...

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5

CoVE Maylands, Perth WA

Strong leasing enquiry prior to completion...

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Rendered furniture
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6

Operations

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Residential [1] Lifestyle Parks
Diverse mix of “permanent”
Current Commonwealth Rent tenants through to shorter stay
tourists and workers
Est. Average Market Rent [2] Assistance Cap [3]
$380pw $232pw Dynamic Yield Management
(rate v. lease term v. occupancy)
+10%
Current
25%
Average In-place Rent Dwelling & facility upgrades
$344pw gap and cost saving initiatives
+17%
FY23 FY23 FY23
Average Revenue per Dwelling Average Revenue per Site Average Revenue per Dwelling/Site
$295pw $186pw $291pw
1. Operational dwellings only – excludes dwellings under refurbishment 2. Based on rents currently being achieved on new leases and renewals 3. Commonwealth Rent Assistance (CRA) cap for a couple household
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7

Development

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Development Sales [1] - # Development Sales [1] and Pipeline - #
100 1,400
90 Pipeline >10x Current Sales Rate
FY24 YTD - 1,200 c.30% profit margin
80 already achieved c.20% ROIC
73% of FY23
1,000
70
Result
Plenty of runway for profitable
60 growth...
800
50
600
40
30
400
20
200
10
0 0
FY19 FY20 FY21 FY22 FY23 FY24 YTD FY19 FY20 FY21 FY22 FY23 FY24 YTD
Residential Land Land Lease Houses Sales Opening Pipeline
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1. FY24 YTD sales includes settlements, contracts, deposits and EOIs

8

Income and Value Creation - Residential Build to Rent Projects

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Strata titling
$900,000 underway – capital 15%
recycling candidate
Total Valuation Uplift
$800,000
$59m or 54% of cost 13%
$700,000
11%
$600,000
9%
$500,000
7%
$400,000
5%
$300,000
3%
$200,000
1%
$100,000
$0 -2%
Burleigh Heads Cooks Hill The Ranges (Sierra)1 PAP ex-CoVE CoVE Maylands2 All BTR Projects
Completed Value per Dwelling Total Cost per Dwelling ROIC (rhs) Valuation Yield (rhs)
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1. The Ranges refurbishment was recently completed - completion value is an estimate based on contracted rent and cap rate assumed in the external valuation of Sierra Lifestyle Village (30 June 2023 book value was $0.5m). 2. CoVE Maylands based on management’s current estimates (30 June 2023 book value was $15.4m). Build to Rent includes Refurbishing existing buildings for rental purposes

9

Recycling Capital to Optimise Portfolio and Returns

Sold 36 Houses Past Two Years 2.

Sales Price $18m ($500k / dwelling) Average Rent ~$480pw / Yield on Sales Price ~3.0%

1. Initial Perth House Portfolio – 84 Houses

Acquired November 2019 Purchase Price $20m ($238k / dwelling) Average Rent $351pw / NOI $0.7m / ROIC ~3.3%

Capital Redeployed - Example 3.

Residential Build-to-Rent Total Cost $110m ($182k / dwelling) Average Rent c.$375pw / NOI $7.5m / ROIC ~6.9% Completed Value $169m / Valuation Yield ~4.5% Value-add ~$59m

Current Perth House Portfolio – 48 Houses

Average Rent ~$440pw / NOI $0.7m / ROIC ~5.5% Book Value $17m / Valuation Yield ~3.5%

10

Outlook

• q Aspen is well positioned for continued growth in earnings, distributions and NAV

• q Residential markets likely to remain undersupplied, particularly at lower rent and price points

• q Aspen’s high quality management team and platform adds significant value – not a passive rent collector:

FY24 Guidance

EPS 12.50-13.00 cents DPS at least 8.50 cents

APZ Stock Metrics @ $1.70 Price : NAV 0.85x Earnings yield 7.4 - 7.7% Distribution yield 5.0%

• § Operating platform intensively managing properties:

  • ⁃ Providing highly competitive and affordable rents to customers on various lease terms

  • ⁃ Generating over 6% net income yield from portfolio - at least twice the rate available from passive rent collection across Australia’s residential markets

• § Development platform creating new income streams and NAV:

  • ⁃ Developing and selling new land lease community houses and residential land

  • ⁃ Residential BTR projects at relatively low cost / high ROIC

• q APZ stock currently trading at 15% discount to NAV - nothing for the valueadding platform

• q 1QFY24 earnings above budget and previous corresponding period

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11

Disclaimer

This presentation has been prepared by Aspen Group Limited on behalf of Aspen Group Limited and Aspen Property Trust (“Aspen”) and should not be considered in any way to be an offer, invitation, solicitation or recommendation with respect to the subscription for, purchase or sale of any security, and neither this document nor anything in it shall form the basis of any contract or commitment. Prospective investors should make their own independent evaluation of an investment in Aspen. Nothing in this presentation constitutes investment, legal, tax or other advice. The information in this presentation does not take into account your investment objectives, financial situation or particular needs. The information does not purport to constitute all of the information that a potential investor may require in making an investment decision.

Aspen has prepared this presentation based on information available to it. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness or correctness of the information, opinions and conclusions contained in this presentation. To the maximum extent permitted by law, none of Aspen, its directors, employees or agents, nor any other person accepts any liability, including, without limitation, any liability arising from fault or negligence on the part of any of them or any other person, for any loss arising from the use of this presentation or its contents or otherwise arising in connection with it. This presentation contains forward looking information. Indications of, and guidance on, future earnings, distributions and financial position and performance are forward looking statements. Forward looking statements are based on Aspen’s current intentions, plans, expectations, assumptions, and beliefs about future events and are subject to risks, uncertainties and other factors which could cause actual results to differ materially. Aspen and its related bodies corporate and their respective directors, officers, employees, agents, and advisers do not give any assurance or guarantee that the occurrence of any forwardlooking information, view or intention referred to in this presentation will actually occur as contemplated. All references to dollar amounts are in Australian currency.

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