Alternative Investment (Real Estate)

8/6/2019 Alternative Investment (Real Estate)

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Alternative Investment

Real Estate InvestmentScheme


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Outline

Overview of Real Estate Sector

Traditional Real Estate Investment: method & challenges

GTBAM Real Estate Investment Scheme (REIS)

Features of REIS

How it works

Financing Structure

Benefit of REIS

Investment Case

Transaction Risk & Mitigants

Probable Subscribers

Contact


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Real Estate has been one of thehighest yielding and fastestgrowing sectors of the Nigerianeconomy.

Investments in this sector haveconsistently delivered highyields and significant capital

gains through various economiccycles.


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Growth in this sector is currently affected by tighter liquiditycondition, slowing economic growth and lower FDI.

The high end of residential realestate was most affected, as it wasthe target of speculative activity.

However with the recovery of theglobal economy the real estate

industry is steadily gainingmomentum again. Property pricesare attractive and present goodinvestment opportunity.


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Attractive opportunities still exist in both residential andcommercial properties such as Malls, Markets, Officecomplexes, etc.

The growth drivers for thissegment include: recovery of theglobal economy, supply demandimbalance, government reformsand availability of mortgages.


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Traditional Real Estate Investment: its challenges

It requires huge capitaloutlay making it out of reachfor investors with minimalcapital.

Investors are fully exposed torisks associated withinvesting in real estate.

Return on investment is notoptimised (as all eggs are inone basket).

Single ownership of RealEstate Assets


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Real Estate Investment Scheme (REIS)

Multiple ownership of Real Estate Assets

Special

Purpose

Vehicle


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We propose two variants of the joint investment via theREIS these are:

1. Build/Buy & Sell: Intended to provide investors capitalgains in form of profit after sale.

2. Build/Buy & Own: Intended to provide investors

annuity income in form of rental income.

Real Estate Investment Scheme (REIS)


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Features of REIS

Fund dedicated to build/buy & sell or build/buy &sell Scheme

Investment horizon between 1 - 3 years or in perpetuity asthe case may be.

All profit arising from sale or rental will be shared by unitholders prorata in the ratio of their investments.

Joint ownership of a piece of Real Estate Asset by multipleowners.


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Property desirable for purchase or development isidentified by the scheme arranger (GTBAM).

HOWIT WORKS


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Analysis on the income generating potential and valueof property is carried out by GTBAM.

HOWIT WORKS CONTD


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Potential Off-takers are identified with irrevocable off-takeagreements signed.

HOWIT WORKS CONTD


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Funds are pooled from investors (subscribers) and theproperty is purchased or developed.

HOWIT WORKS CONTD


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Each subscriber is given a REIS Note stating theirinvestment and holding in the property. A structure couldbe worked out to make the note tradeable (OTC) andacceptable as a security for bank loans.

HOWIT WORKS CONTD


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Property is sold or let out to off-takers.

HOWIT WORKS CONTD


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Sale/Rental income is distributed among REIS subscribers inthe ratio of their investment in the property.

HOWIT WORKS CONTD


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Financing Structure

FinishedHousing Unit

ReputableConstructionfirm such as:

Costain

StabiliniVisinoni

Dori

C & D, etc

Managers &Trustees to be jointsignatory to theproject account

Disbursement toContractor will bemade in line withagreed timelines &work completioncertification

Investors arepooled and an SPVis registered withinvestors asshareholders.

SPV funds arelodged into an SPVAccount.


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Opportunity for investors with minimum capital topartake in the ownership of Real Estate assets in choicelocation.

Benefits of REIS

Superior return on investment

Investors opportunity todiversify risk associated withreal estate investments


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Benefits of REIS

A dedicated Professional management team isresponsible for project execution, providing theinvestor with expertise beyond his or her ownknowledge base.

It has a lower correlation toequities than many other assetclasses, providing portfoliostability.

Convenient payment terms tosuit Investors cashflow


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For prospective subscribers, the REIS provides theopportunity of:

Earning alternative income from a relatively secure source,real estate.

Spreading of risks across a diversified portfolio of real estateassets.

Flexible payment and investment schemes.

Obtaining mortgage finance fromGT Homes.

Liquidity from the secondary market that will be developed.

Obtaining bank loans with REIS note as security.

Investment Case


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Probable subscribers to the REIS include:

Cooperatives

Financial Institutions

Organisations

Individuals

.........................etc

Probable Subscribers


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Contact

You

rYou

r InvestmentInvestment PartnerPartnerWealth Management | Securities Brokerage | Trusteeship | Investment Advisory

www.gtbassetmanagement.comEmail us: [email protected] | Call us: +234 1 44 888 88

37, Karimu Kotun Street, Victoria Island. Lagos

Documents

Alternative Investment (Real Estate)