Issuance of 14% per annum, Medium-Term Note Programme Issued by Acorn Group / Siyara Properties LLP 22 nd September, 2014 �
Table of Contents I. Introduction to Acorn Group II. What does a Developer do? III. Real Estate Investment Opportunity IV. Project Karen Ololua Ridge V. Transaction Overview VI. Q & A � 2
I. Introduction to Acorn Group �
Introduction to the Issuer - Acorn Group Limited Acorn is the leading Real Estate Developer & Project Manager in the Region Leading real estate developer and project manager in the East African Region 2011 having been involved is some of the most iconic projects in the last decade such as Coca-Cola East & Central Africa Headquarters, Deloitte East Africa Head Office, 2012 Equity Centre, Britam Tower, Acorn House among others Largest deal pipeline – with over KES 40 Billion of projects 201 3 Integrated and differentiated key capabilities in real estate : Development, Project Management, Property & Facilities Management, Sales & Letting, Market Research Experience with delivering institutional investment grade real estate developments � 4
Acorn’s Flagship Projects Acorn is the leading Real Estate Developer & Project Manager in the Region Coca-Cola Headquarters East and Central Africa Role of Acorn: Project Management 2011 No. of Storeys: Three 6,214 m 2 Total built-up area: 4,100 m 2 Total gross floor area: 2012 3,853 m 2 Total Lettable area: Start Date: Oct – 2007 Practical Completion: Sep – 2008 Construction Cost: KES 1,000 Mn Deloitte East Africa Head Office 201 Role of Acorn: Project Management 3 No. of Storeys: Four 8,291 m 2 Total built-up area: 3,608 m 2 Total gross floor area: 3,067 m 2 Total Lettable area: Start Date: July – 2008 Practical Completion: May – 2010 Construction Cost: KES 850 Mn � 5
Acorn’s Flagship Projects Acorn is the leading Real Estate Developer & Project Manager in the Region Acorn House Role of Acorn: Developer 2011 No. of Storeys: Three 6,905 m 2 Total gross floor area: 6,284 m 2 Total Lettable area: 2012 Start Date: Feb – 2011 Practical Completion: Oct – 2012 Project Cost: KES 700Mn 36.4% Project IRR: Equity Centre 201 Role of Acorn: Project Management 3 No. of Storeys: Ten 14,500 m 2 Total built-up area: 7,900 m 2 Total Lettable area: 2008 Completed Project Cost: KES 900Mn � 6
Acorn’s Flagship Projects Britam Towers 2011 Role of Acorn: Project Management No. of Storeys: Thirty 68,751 m 2 Total built-up area: 60,617 m 2 Total Gross Floor area: 2012 31,591 m 2 Total Lettable area: Nov – 2012 Start Date Estimated Practical Completion July – 2016 Construction Cost: KES 7,000Mn 201 3 � 7
Acorn’s Track Record is A Strong 37.5% Annualized Return Strong record of executing projects across various real estate themes with 37.5% IRR (all figures in millions of KES) 2011 Equity IRR Project Duration Project Description Role of Acorn Project Size Equity Size (Months) Residential Project Managers & Forest Edge 167.0 61.6 51.5% 38 2012 (Town-houses) Development Partners Commercial Mixed Project Managers & Tiara Properties 1,584.0 343.2 29.6% 108 Use Development Partners Commercial Mixed Project Managers & Gumba Investments 554.4 167.2 31.2% 56 Use Development Partners 201 3 Retail Office Park Project Managers & Prism Properties 352.0 52.8 36.4% 49 Development Partners Retail Office Park Project Managers & Stables Development 158.4 35.2 38.8% 35 Owners Grand Total 2,816.0 660.0 37.5% 57 � 8
Real Estate Investment: We Take A Thematic Approach High Growth of Growing Youth Bulge Rapid 2011 Economic SMEs and Middle Class Urbanisation Growth Informal leading to Sector Urban Sprawl Midscale Hotels √ √ √ 2012 Suburban/Outlet √ √ √ √ Malls Mixed Use √ √ √ √ Developments 201 Commercial √ √ 3 Offices Masterplan √ √ √ √ Developments Site and Service √ √ √ √ Schemes � 9
II. What does a Developer do? � 10 10
A Real Estate Developer Acorn is the leading Real Estate Developer, but not everyone can be a Developer • A real estate developer is a multi-faceted business that coordinates various high risk 2011 activities that convert ideas on paper into Real Property in a profitable manner 2012 • Examples of Institutional Real Estate Developers are: EMAAR – one of the most successful developer in the Middle East, 201 Liberty Properties – South Africa, 3 Lend Lease – Australia, Swire Properties – Hong Kong KB Homes – USA � 11 11
The Core Competencies Of A Real Estate Developer Acorn embodies key competencies that are critical in the role of a Real Estate Developer 1. Market Knowledge - Experience in the Real Estate Industry is critical, as well as understanding the Market 2011 Pulse, Demographics and Trends 2. Finding Suitable Sites For Development - to assess a wide variety of sites against a future vision for a 2012 successful project 3. Creating Powerful Concepts - Creating a strong concept matched with exceptional architecture and aesthetic appeal 201 3 4. Negotiating Planning And Other Statutory Approvals - Developers also need to be highly creative and work with planners to present their applications in an appropriate and strategic way 5. Resolving Legal Issues - Real Estate Development comes together with a myriad of legal issues ranging from title and ownership documentation issues & various legal challenges � 12 12
The Core Competencies Of A Real Estate Developer, Continued Acorn embodies key competencies that are critical in the role of a Real Estate Developer 6. Developing A Strong Business Case - a strong business case demonstrates strong financial and market 2011 viability, and is a prerequisite for funding 7. Sourcing, Negotiating And Structuring Funding - For a development to succeed, it is very important to 2012 Structure all sources of funding (Equity, structured finance and Debt) properly 8. Delivering The Project On Time, Budget And Quality - Execution and Completion delays, cost over runs and poor quality are the biggest risks associated with development 9. Marketing And Creating Strong Brands - Institutional Developers Build Branded Real Estate Products, 201 which are then packaged and promoted 3 10. Letting And Selling Of Properties - Unlike most other products, 70% of the Decision to buy or Let a Property is made at the Point Of Sale, hence a strong Team is needed for Sales 11. Property And Facilities Management - Many of the leading developers understand that the attractiveness of developments depends on how well the properties are maintained and managed � 13 13
III. Real Estate Investment Opportunity � 14 14
Real Estate Investment: We Take A Thematic Approach High Growth of Growing Youth Bulge Rapid 2011 Economic SMEs and Middle Class Urbanisation Growth Informal leading to Sector Urban Sprawl Midscale Hotels √ √ √ 2012 Suburban/Outlet √ √ √ √ Malls Mixed Use √ √ √ √ Developments 201 Commercial √ √ 3 Offices Masterplan √ √ √ √ Developments Site and Service √ √ √ √ Schemes � 15 15
Thematic Approach: A Practical Application Each of the 5 themes was carefully chosen to target a solution to a real problem The Problem The Solution The Opportunity 2011 Master Planned Communities & 1 Nairobi and most urban centers are suffering Decant the growing floating middle class into Mixed Use Developments from urban sprawl (the development of adhoc master planned communities unstructured, un-serviced and unplanned urban centers) 2012 2 The demand for retail and entertainment by Construction of decent and aspirational shopping Suburban / Outlet Malls the Middle Class and Youth is growing faster malls which service the middle class outside the with limited options currently available urban sprawl and allows high traffic and provides retail, entertainment and food outlets 3 201 The demand for commercial space for To provide small commercial offices for SME’s and Commercial Mixed Use (Retail, growing middle to small businesses that wish informal sector together with rental residentials Offices & Residential) 3 to occupy entire buildings for the Youth 4 Requirement for efficient and functional office Experience in office development creates the Commercial Office Parks space to cater for SME growth and their ability to replicate the product for varying markets transition into Medium and Large corporates 5 Lack of affordable and well-placed budget Provision of affordable, decent accommodation Budget hotels hotels which cater to the growing business suiting the needs of a growing business clientele clientele � 16 16
Recommend
More recommend
