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Africa REIT "info memorandum"

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Page 1: Africa REIT

11

Page 2: Africa REIT

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

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Page 3: Africa REIT

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

Page 4: Africa REIT

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

Page 5: Africa REIT

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

Page 6: Africa REIT

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

Page 7: Africa REIT

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

Page 8: Africa REIT

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

Page 9: Africa REIT

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Page 10: Africa REIT

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

Page 11: Africa REIT

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

Page 12: Africa REIT

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

Page 13: Africa REIT

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

Page 14: Africa REIT

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

Page 15: Africa REIT

HARDY HOUSE HARDY HOUSE –– ELGON ROADELGON ROAD

UPPER HILLUPPER HILL

Africa REIT LimitedAfrica REIT Limited

Page 16: Africa REIT

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

Page 17: Africa REIT

Project Hardy EPZ Project Hardy EPZ -- Athi River:Athi River:--

Africa REIT LimitedAfrica REIT Limited

Page 18: Africa REIT

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

Page 19: Africa REIT

Hardy West End Hardy West End –– Nairobi CBD Nairobi CBD

1919

Page 20: Africa REIT

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

Page 21: Africa REIT

1. Wood Avenue Apartments 1. Wood Avenue Apartments ––

KilimaniKilimani, Nairobi, Nairobi

2121

Page 22: Africa REIT

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

Page 23: Africa REIT

Dennis Dennis PrittPritt –– KilimaniKilimani, Nairobi, Nairobi

2323

Page 24: Africa REIT

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

Page 25: Africa REIT

Athi River Housing ProjectAthi River Housing Project

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Page 26: Africa REIT

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

Page 27: Africa REIT

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

Page 28: Africa REIT

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