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
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Distressed Opportunities - Banking and Real Estate November 2015 For further information on Asian Real Estate Capital please contact Oliver Thirlwall at [email protected]
ASIAN REAL ESTATE CAPITAL
www.arec.co [email protected]
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 [email protected]
A R E C
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Residential Development
1) Grand Med
Hospital
2) Zaisan Luxury
Apartments
3) Royal Crown
Apartments
Luxury (large) villa project under construction
www.arec.co [email protected]
A R E C
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Surrounding Apartment Buildings
Royal Crown Apartments Grand Med Hospital
www.arec.co [email protected]
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 [email protected]
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