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“I am a Stock Exchange Person,

THE SLUM DWELLER IS MY CUSTOMER”

The Social REIT & THE CAPITAL MARKET

Dr DARIN GUNESEKERA

Capital Markets for the Marginalized (CMM)

All Business has Needs

The lower the scale; the more powerful the Need

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THE SLUM DWELLER IS MY CUSTOMER

We have Obligations and Responsibilities by our Customers

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Global Crisis

Donor Housing Loans

Founder On Risk

Decent Housing

Shortage of Over 50% of current stock

Slums Shanties Grow

Faster than Economy

Growth City =

Rich get Richer Poor get Poorer

Donors World Bank

Keep People in Slums Through

Onsite Upgrade

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UNHABITAT’s Biggest Slum in the World

Kenya - Nairobi - KIBERA or KIBR. It is located on a Tribal Homeland whose demarcation was not finalized by the Colonial Government Commission.

Is this a Planning Issue?5

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THE INSIGHT - SEE & DO

The Capital Market is not Working

We Need A Stock Exchange for These Needs

Start with HOMES

Look at all elements of the process with the best standards agreed upon as Socially Desired

Then find the Financial Solution

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Land Cycle Process.(The Observation referred to above)

First vacant or acquired land (Trust 1) 1

Occupied Estates:(Trust 2, 3 of Cycle 2)

2 3

Occupied Estates:(Trust 4..7 of Cycle 3)

4 5 6 7

Land Cycle 1

Land Cycle 2

Land Cycle 3

– projects exchanges new units for vacant possession of old units– New units must be more attractive to encourage the move

Slums occupy 600+sq ft ground cover/ unit; planned units only 110 sq ft

THE REIT

• trusteesdeveloper

Land in -Certs out

Cash in-Certs out

investors

Condo Sales

market

Primary market

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Social Real Estate Investment Trusts - I

TRUST Authority Social

HousingResident

Land

Shares

VacantPossession

Shares

• Start with a compact city area re-development project plan• Existing Social Housing residents approve the plan• This facilitates a Trust market deal between the landowner

(Authority) and social housing residents. • The deal is shown above

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The People’s Stock Exchange

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S-Reits II Trust is financed by investors and home buyers. Shares may convert to

homes

TRUSTInvestors

Cash via Investment

Banks

Shares*

* Includes right to ownership of a specific house / flat

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S-Reits III - A stock exchange

Trade via Investment

Banks *

Shares

Investors(Authority,Individual,

Institutional)

On – goingSTOCK EXCHANGE

Market:

EXCHANGE

EXCHANGE Regulates Information Flow

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RESULT = Pilot Project I■ 675 apartments in first time

ever high rise occupation by slum/ shanty dwellers in “Streets in Sky” design voted for by them.

■ Corresponding 8 sites (4000 persons) in same neighborhood vacated

■ Land/ built space market given to regeneration.

■ (See 5-2)

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Project Results■ FINANCE

■ Total Investment = SLRs600M ■ Outside Community Sales (Financial Return)

= SLRs1700M ■ SOCIAL

■ Self sustaining 675 homes paying rates ■ Lives transformed from Shanty to Middle

Class ■ Regenerated Neighborhood ■ All Children go to School

Financial Returns：Unlocking the Profit in the Land

Investment: SLRs600M (USD6M)

Outside Community Sales (Financial Return): SLRs1700M (USD17M)

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Project Results■ BEFORE AFTER

■ video

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The Past and Present seen by independent video production.(6 years later; long after project period; 5 years after full Condo hand over).

• The Stock Exchange STARTS by turning the searchlight on to REALITY

• Example Benares

• Example Cinnamon

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The LIVING Stock Exchange

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In Benares, India: Constructive Social Action

• The transformative POWER • Land Prices in Colombo poor areas

• Even the two small cases - Money created

• The Stock Exchange is a LIVING SOCIAL INSTITUTION

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The LIVING Stock Exchange Transforms Tomorrow

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• Look for • Queues • The Poorest in large numbers • The Desperate in large numbers

• THEY NEED the LIVING STOCK EXCHANGE

• Forget • Dead Letters, Laws, Regulations • Yesterday’s Ideas

• The Stock Exchange is a LIVING SOCIAL INSTITUTION

• Your Duty is to Find Your Customers from those WHO NEED THE STOCK EXCHANGE

• Go There and Make them Your Customers

• Join our Movement • CAPITAL MARKETS FOR THE MARGINALIZED

• https://darincapitalmarkets.wordpress.com

LIVE The LIVING Stock Exchange

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Kibera Elders Council’s Social Action for Financing

■ The tribe whose “homeland” is Kibera, called by UNHABITAT the worst and largest Slum in the world. (Nubians of Kenya) meet to get financial advice