11.16-17.2015, PRESENTATION, Distressed opportunities-banking and real estate, Oliver Thirlwall

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  • A R E C A R E C A R E C

    0

    Distressed Opportunities - Banking and Real Estate November 2015 For further information on Asian Real Estate Capital please contact Oliver Thirlwall at oliver.thirlwall@arec.co

    ASIAN REAL ESTATE CAPITAL

  • www.arec.co oliver.thirlwall@arec.co

    A R E C Opportunities Provide Distressed Level Returns

    Real Estate: Opportunities are not in completed distressed assets

    Inefficiencies and lack of liquidity leads to small investment sizes / big returns RE developers in China in the early days. Leverage of land ownership.

    NPL investors in 2002 03

    Banking:

    Traditional lending, focused strategies

  • www.arec.co oliver.thirlwall@arec.co

    A R E C

    2

    Residential Development

    1) Grand Med

    Hospital

    2) Zaisan Luxury

    Apartments

    3) Royal Crown

    Apartments

    Luxury (large) villa project under construction

  • www.arec.co oliver.thirlwall@arec.co

    A R E C

    3

    Surrounding Apartment Buildings

    Royal Crown Apartments Grand Med Hospital

  • www.arec.co oliver.thirlwall@arec.co

    A R E C Development Assumptions

  • www.arec.co oliver.thirlwall@arec.co

    A R E C Development Project Comparison Mongolia / China

  • www.arec.co oliver.thirlwall@arec.co

    A R E C Development Project Comparison Mongolia / China

  • www.arec.co oliver.thirlwall@arec.co

    A R E C New Fast Food Chains

  • www.arec.co oliver.thirlwall@arec.co

    A R E C New Fast Food Chains

    Caffe Bene already has several outlets and is agressively opening more YUM plans to open 15 restaurants in Mongolia by 2018

    Burger King to open 10 restaurants by end 2016 More want to set up in Mongolia, if not for the weak economy, would already be there

    Current yields on retail property

  • www.arec.co oliver.thirlwall@arec.co

    A R E C Banking

    AREC Mortgage Corp experience: 18 months

    1.5 mn loans issued Average interest rate 36%, 12 months, 85% secured by mortgage

    26% PAR, 9.1% provisions. Provisions rising.

    Good lending market for small / medium size lenders

    Bank interest rates on USD loans of 14 20%. Small and medium size loans collateralised with property, larger loans secured by a mix of collateral

    Scope to grow loan portfolio. Focus by sector.

    Many areas ripe for consolidation. 423 NBFIs. 14 banks, of which several have paid in capital of less than $10 mn. Mongol Bank requirements to raise capital.

    Traditional opportunities. No need to be too creative (in developed markets need to invest in fintech / more competitive)

    Limitations: Credit assessment capability