africa reit
DESCRIPTION
Africa REIT "info memorandum"TRANSCRIPT
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REAL ESTATE INVESTMENT TRUST REAL ESTATE INVESTMENT TRUST
(REIT)(REIT)
A REIT is set up as a company that owns,
manages and develops real properties with
which it and its management have
developed successful experience
REITS invest in different kinds of real estate
or real estate related assets, including
shopping centers, office buildings, hotels,
and mortgages secured by real estate
22
TypesTypes……..Equity REITSEquity REITS
�� invest in or own real estate and make money for invest in or own real estate and make money for
investors from the rents they collectinvestors from the rents they collect
Mortgage REITS Mortgage REITS
�� which which lend money to owners and developers or invest in lend money to owners and developers or invest in
financial instruments secured by mortgages on real financial instruments secured by mortgages on real
estate; and estate; and
Hybrid REITS Hybrid REITS
�� which are a combination of equity and mortgage REITSwhich are a combination of equity and mortgage REITS
Africa REIT LimitedAfrica REIT Limited
OBLIGATIONS OF REITSOBLIGATIONS OF REITSAs stated by the Capital Markets Act,As stated by the Capital Markets Act,
�� A real estate management company is A real estate management company is
responsible for managing the funds or properties responsible for managing the funds or properties
of the scheme on behalf of the unit holdersof the scheme on behalf of the unit holders
�� To comply with such guidelines, directives, To comply with such guidelines, directives,
circulars and instructions as may be issued by circulars and instructions as may be issued by
the Authority on the subject of real estate the Authority on the subject of real estate
investment schemesinvestment schemes
Africa REIT LimitedAfrica REIT Limited
INVESTMENT LIMITATIONINVESTMENT LIMITATION
�� The scheme shall only invest in real estateThe scheme shall only invest in real estate
�� The real estate shall generally be income The real estate shall generally be income
generatinggenerating
Africa REIT LimitedAfrica REIT Limited
CMA DIVIDEND POLICYCMA DIVIDEND POLICY
The scheme shall distribute to unit The scheme shall distribute to unit
holders as dividends each year holders as dividends each year
an amount not less than 90% of an amount not less than 90% of
its annual net income after taxits annual net income after tax
Africa REIT LimitedAfrica REIT Limited
WHY WHY INVESTINVEST IN PROPERTY IN KENYA?IN PROPERTY IN KENYA?Kenya is an attractive destination for real estate Kenya is an attractive destination for real estate
developments because of the positive economic growthdevelopments because of the positive economic growth
Serious scarcity of accommodation particularly in the Serious scarcity of accommodation particularly in the
lowlow--cost housing segmentcost housing segment
RealReal--estate provides attractive returns in this region as estate provides attractive returns in this region as
compared with almost all other investment opportunitiescompared with almost all other investment opportunities
Africa REIT LimitedAfrica REIT Limited
RISK FACTORS:RISK FACTORS:--The Business RisksThe Business Risks
�� Property PricesProperty Prices
�� Borrowing risksBorrowing risks
�� Rental defaultsRental defaults
Country RisksCountry Risks
�� Political stability Political stability
Offer RisksOffer Risks
�� Lock in period of approximately 24 months within Lock in period of approximately 24 months within
which the shares of the company will not be which the shares of the company will not be
transferable transferable –– Africa Africa ReitReit LtdLtdAfrica REIT LimitedAfrica REIT Limited
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BUSINESS OVERVIEWBUSINESS OVERVIEW
Africa REIT Ltd is a private real estate investment company thaAfrica REIT Ltd is a private real estate investment company that t provides equity funding for commercial and residential property provides equity funding for commercial and residential property in in AfricaAfrica
Africa REIT Limited was formed to:Africa REIT Limited was formed to:
�� Provide investors with a portfolio of real estate investments inProvide investors with a portfolio of real estate investments inselected properties in Kenya and the Eastselected properties in Kenya and the East--African region at largeAfrican region at large
�� Provide equity funding for commercial and residential property iProvide equity funding for commercial and residential property in n Africa Africa
•• Develop property, acquire, own and manage commercial and Develop property, acquire, own and manage commercial and residential sectorsresidential sectors
Africa REIT is associated with Africa REIT is associated with Hardy Projects LtdHardy Projects Ltd
Africa REIT LimitedAfrica REIT Limited
ABOUT US : ABOUT US : ––•• Our VisionOur Vision
To be an engine of economic growth in theTo be an engine of economic growth in the
African continent through realAfrican continent through real--estateestate
developmentdevelopment
•• Our MissionOur Mission
Consistently provide quality commercial andConsistently provide quality commercial and
residential property to our customers, delivered byresidential property to our customers, delivered by
a team of professionals, while creating investmenta team of professionals, while creating investment
value to our shareholdersvalue to our shareholders
Africa REIT LimitedAfrica REIT Limited
REASONS FOR THE OFFERREASONS FOR THE OFFER
1. Great potential in Real Estate Sector in 1. Great potential in Real Estate Sector in
KenyaKenya
2.2. Opportunity for the prospective investors Opportunity for the prospective investors
to diversify their investment portfolioto diversify their investment portfolio
3. Expand the Company3. Expand the Company’’s shareholders shareholder’’s s
basebase
Africa REIT LimitedAfrica REIT Limited
INVESTMENT STRATEGYINVESTMENT STRATEGY
The company has identified for investment:The company has identified for investment:
a)a) Properties with a high potential for attractive Properties with a high potential for attractive
capital gainscapital gains
b)b) Properties with a high potential for attractive Properties with a high potential for attractive
rental incomesrental incomes
c)c) Shares in companies that have invested in Shares in companies that have invested in
properties with features described in (a) and (b) properties with features described in (a) and (b)
above and a strong balance sheetabove and a strong balance sheet
Africa REIT LimitedAfrica REIT Limited
OUR PORTFOLIOOUR PORTFOLIOCOMMERCIAL PROPERTYCOMMERCIAL PROPERTY
1.1. Project Hardy House Project Hardy House -- Commercial Office Commercial Office DevelopmentDevelopment :: –––– Location: Upper hill, Nairobi Location: Upper hill, Nairobi
–– Develop Develop -- To Let To Let
–– Size: 64,560 Ft2 building Size: 64,560 Ft2 building
–– Features: Commercial building, 11 floors including 3 Features: Commercial building, 11 floors including 3 levels parking & banking hall levels parking & banking hall
–– Vicinity of the World Bank, Coca Cola, Embassies Vicinity of the World Bank, Coca Cola, Embassies etc etc
–– Building commencement date Building commencement date –– Feb 2009 Feb 2009
–– Targeted completion date Targeted completion date –– Q2 2010 Q2 2010
Africa REIT LimitedAfrica REIT Limited
HARDY HOUSE HARDY HOUSE –– ELGON ROADELGON ROAD
UPPER HILLUPPER HILL
Africa REIT LimitedAfrica REIT Limited
2. 2. Project Hardy EPZ Project Hardy EPZ -- Technology Technology
Park DevelopmentPark Development ::––�� Location: Athi River, Kenya Location: Athi River, Kenya
�� Develop Develop -- To Let To Let
�� Features: 300,000 Ft2 technology fitted Features: 300,000 Ft2 technology fitted
offices, 10 block development each covering offices, 10 block development each covering
an estimated 30,000 Ft2 including conference an estimated 30,000 Ft2 including conference
facilities and a multifacilities and a multi--facility sports centre, on facility sports centre, on
25 acres (Phase I) 25 acres (Phase I)
�� 10 year Tax holiday 10 year Tax holiday
�� Building commencement date Building commencement date –– Q3 2009 Q3 2009
�� Targeted completion date Targeted completion date –– Q1 2011 Q1 2011
Africa REIT LimitedAfrica REIT Limited
Project Hardy EPZ Project Hardy EPZ -- Athi River:Athi River:--
Africa REIT LimitedAfrica REIT Limited
3. 3. Hardy WestHardy West--End CBD End CBD -- Commercial Commercial
Development ProjectDevelopment Project :: ––
�� Location: Nairobi CBD Location: Nairobi CBD
�� Renovate to Let Renovate to Let
�� Vision: Renovate a specific area within the CBD Vision: Renovate a specific area within the CBD
into upinto up--market commercial & entertainment market commercial & entertainment
centre centre
�� Location: CBD, neighboring 5Location: CBD, neighboring 5--star hotels, several star hotels, several
theatres and restaurants theatres and restaurants
�� Status: In negotiation to purchase first old Status: In negotiation to purchase first old
building building
�� Expected renovation commencement: 2011 Expected renovation commencement: 2011
Africa REIT LimitedAfrica REIT Limited
Hardy West End Hardy West End –– Nairobi CBD Nairobi CBD
1919
Residential PropertyResidential Property�� 1. Wood Avenue Apartments 1. Wood Avenue Apartments :: ––
�� Location: Kilimani, Nairobi Location: Kilimani, Nairobi
�� Develop Develop -- For Sale For Sale
�� Size: 46,400 Ft2 Size: 46,400 Ft2
�� Features: 24 apartments; 2 & 3 bedrooms Features: 24 apartments; 2 & 3 bedrooms --
For sale For sale
�� Located close to large shopping mall Located close to large shopping mall -- Yaya Yaya
Centre Centre
�� Building commencement date Building commencement date –– April 2009 April 2009
�� Targeted completion date Targeted completion date –– Q1 2010 Q1 2010 Africa REIT LimitedAfrica REIT Limited
1. Wood Avenue Apartments 1. Wood Avenue Apartments ––
KilimaniKilimani, Nairobi, Nairobi
2121
2. 2. Dennis Pritt ApartmentsDennis Pritt Apartments ––
Kilimani, NairobiKilimani, Nairobi�� Location: Kilimani, Nairobi Location: Kilimani, Nairobi
�� Develop Develop -- For Sale For Sale
�� Size: 25,000 Ft2 Size: 25,000 Ft2
�� Features: 20 apartments; 2 bedrooms Features: 20 apartments; 2 bedrooms -- For For
sale sale
�� Located close to State House, Kilimani Police Located close to State House, Kilimani Police
station and several Embassies station and several Embassies
�� Building commencement date Building commencement date –– Q2 2009 Q2 2009
�� Targeted completion date Targeted completion date –– Q1 2010 Q1 2010
Africa REIT LimitedAfrica REIT Limited
Dennis Dennis PrittPritt –– KilimaniKilimani, Nairobi, Nairobi
2323
3. Athi River Housing Development :3. Athi River Housing Development : ––
�� Location: Athi River, Kenya Location: Athi River, Kenya
�� Develop Develop -- For Sale For Sale
�� Features: 400 Housing units and commercial Features: 400 Housing units and commercial
centre on 50 acres centre on 50 acres
�� Located close to Athi River Export Processing Located close to Athi River Export Processing
Zone (EPZ) and Daystar University Zone (EPZ) and Daystar University
�� Status: Land acquisition negotiation Status: Land acquisition negotiation
�� Expected commencement: Jan 2010 Expected commencement: Jan 2010
Africa REIT LimitedAfrica REIT Limited
Athi River Housing ProjectAthi River Housing Project
2525
PROJECT VALUATION SUMMARYPROJECT VALUATION SUMMARY
PROJECT TOTAL PROJECT COST (KSHS)
EQUITY REQUIRED (40% OF COST)
ESTIMATED COMPLETED VALUE ( KSHS)
Wood Avenue Apartments
198,544,000 - 269,500,000
Dennis Pritt Apartments
113,520,000 - 184,000,000
Hardy House Ltd 369,606,320 147,842,528 1,000,000,000
Hardy EPZ Ltd 1,155,000,000 462,000,000 2,000,000,000
Athi River Housing 870,000,000 348,000,000 1,600,000,000
Hardy West End 641,310,000 256,524,000 1,500,000,000
TOTAL(kshs) 3,035,916,320 1,214,366,528 6,553,500,000
USD Equiv $ 37,500,000 $ 15,000,000 $82,000,000
Africa REIT LimitedAfrica REIT Limited
PRICE PER SHAREPRICE PER SHARECOMPANY AFRICA REIT LIMITED
TOTAL EQUITY REQUIRED* 1,200,000,000/=
TOTAL NUMBER OF SHARES 100,000
EQUITY AVAILABLE FOR SALE 40%
NUMBER OF SHARES FOR SALE 40,000
PRICE PER SHARE TO NEW SHAREHOLDERS
30,000/=
* TOTAL EQUITY ROUNDED OFF
2727
FOR MORE DETAILS PLEASE CONTACT:FOR MORE DETAILS PLEASE CONTACT:
AFRICA REIT LIMITED,AFRICA REIT LIMITED,
Upper hill, Elgon road,Upper hill, Elgon road,
P.O. Box 15397 P.O. Box 15397 –– 00509 ,Nairobi, Kenya00509 ,Nairobi, Kenya
T: +254T: +254--(20)(20)--2710320 / 2724350 / 07702710320 / 2724350 / 0770--166566 166566
F: +254F: +254––2020--27247882724788
E: E: [email protected]@africareit.co.ke
W: www.africareit.co.keW: www.africareit.co.ke
Africa REIT LimitedAfrica REIT Limited