haldane mccall equity real estate investment trust the reit will be managed by professionals with...
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Haldane McCall Equity Real Estate Investment Trust
DISCLAIMER
This Investment Teaser (“Teaser”) has been prepared by The Lead Issuing House, Goldbanc Management
Associates Ltd and Co-Issuing Houses, BGL Capital Ltd, Capital Bancorp Plc, Greenwich Trust Ltd, LeadCapital Plc
and Planet Capital Ltd (“Issuing Houses”) in respect of the proposed Haldane McCall Equity Real Estate
Investment Trust (“HMK REIT”).
The information contained in this Teaser is selective and is subject to further update, expansion, revision and
amendment. It does not purport to contain all the information that recipients may require. No obligation is
accepted to provide recipients with access to any additional information or to correct any inaccuracies
which may become apparent. Recipients should conduct their own investigation and analyze the
information contained in this Teaser and are also advised to seek their own professional advice on the
legal, financial, taxation and other consequences of investing in the HMK REIT.
The Issuing Houses and any of their associated/subsidiary companies or employees are under no obligation
to accept any liabilities that may arise from the use of any part of this Teaser.
The views expressed in this teaser have not been influenced by any third party or induced by any incentive
from any quarters.
HMK REIT ASSET COMPOSITION
RESIDENTIAL 1, IKOYI
RESIDENTIAL 3, GRA IKEJA
RESIDENTIAL 2, GRA IKEJA
COMMERVIAL 2, GRA IKEJA COMMERCIAL 3, OPEBI ALLEN IKEJA
COMMERCIAL 1, GRA IKEJA
STRUCTURE OF THE REIT
STRUCTURE OF THE REIT
STRUCTURE DIAGRAM
Unit Holders
HMK REIT
Management Services
Management Fees
Trustee Fees
Acts on behalf of Unit Holders
Trustees
Cash Custodian
Real Estate Assets
Custodian services
Bank
ENHANCEMENT OF THE REIT
REIT INCOME INVESTMENT HIGHLIGHT
REIT income shall be multi-faceted and shall be
competitive as obtainable for residential and
commercial properties in Nigeria. The identified REIT
assets all command optimal tenancy level with good
tenancy (corporate) profile. Additionally the REIT will
also invest in other Real estate assets and money
market instruments that offer competitive returns to
ensure liquidity. Combinations of these ascertainunrivalled returns to investors in the HMK Equity REIT.
A cross-section of the enhancements include:
Insurance of REIT Assets:
The assets of the REIT highlighted in the Prospectus shall be insured against losses. The insurance classes with regard to
the assets include fire policy, public liability insurance and Business Interruption risk due to damage by flood, fire and
windstorm which would lead to loss of income for the period during which the property is undergoing repairs.
Guarantee of the REIT income:
In the event that there is a shortfall in occupancy below 60%, the guarantor will pay 16.40% of the rental income to the REIT investors.
A Market Maker will be appointed by the NSE to
facilitate the liquidity of the REIT. The Market Maker
will ensure continuous trading of the REIT on the floor
of The NSE by ensuring steady supply or purchase to
investors. This provides comfort to investors of theliquidity of the units.
HMK REIT INVESTMENT OVERVIEW
INVESTMENT HIGHLIGHT
A’ grade investment properties. Properties strategically located in the heart of Ikeja
GRA and Ikoyi, Lagos. 100% Committed Occupancy with high quality
tenants.
HMK KEY STATISTICS
REITS Value N13, 390m
Real Estate Properties N9, 450m
Other Assets:
(Including liquid assets) N3, 550m
Forecast Year FY Sept 2015:
Net Property Income N915m
Net income Yield (Yr 1) 8.51%
Distribution Yield (Yr 1) 7.65%
5 years Average Growth in Yield 10.56%
8.519.25
10.38
11.62
13.02
SEPT 2015 SEPT 2016 SEPT 2017 SEPT 2018 SEPT 2019
Projected Earnings yield on HMK REITS (%)
Yield on HMK REITS (%)
13,11113,232
13,369
13,524
13,700
SEPT 2015 SEPT 2016 SEPT 2017 SEPT 2018 SEPT 2019
Projected HMK REIT Net Asset Growth (N'm)
HMK REIT INVESTMENT OVERVIEW
PROFIT FORECAST: Year ending 31st September 2015 2016 2017 2018 2019
Opening Net Asset Value
N’m
13,000
N’m
13,111
N’m
13,232
N’m
13,369
N’m
13,524
Total Income 1,479 1,586 1,756 1,936 2,147
Total Expenses 372 374 381 382 387
Net Asset Value at year end 13,111 13,232 13,369 13,524 13,700
Earning Yield (%) 8.51 9.25 10.38 11.62 13.02
Distribution Yield (%) 7.65 8.32 9.35 10.47 11.71
INVESTMENT RATIONALE IN HMK REIT
OCCUPANCY GUARANTEE
INVESTMENT OPPORTUNITY IN
THE NIGERIAN REAL ESTATE
INDUSTRY
LIQUIDITY WITH MARKET MAKERS
ATTRACTIVE RETURN ON INVESTMENT
EXPERIENCED AND CREDIBLE
ASSET MANAGERS TRUSTEE COMPANY
PORTFOLIO DIVERSIFICATION
Attractive Return on InvestmentWith the boom in the Nigerian real estate sector which presently
commands premium rent in select areas like those of the HMK REIT. Stable
and regular distribution of at least 90% of the net income accruing from
diversified portfolio of real estate and real estate related assets across
residential and commercial properties and money market instruments
Investment Opportunity in the Nigerian Real Estate Industry
This projects presents a viable means of participation in the gains
present in the Nigerian real estate industry which has over the years
proven to be a very lucrative means of investment for both long and
short term objectives of investors.
Experienced and Credible Asset Managers and Trustee Company
The REIT will be managed by professionals with great care, top skill,
prudence and diligence. Rent from the Commercial properties
which allows the Fund Manager concentrate on the management
of the REIT.
Occupancy Guarantee
Existing long term leases with tenants. Diverse corporate tenant
profile with staggered rental renewal periods which prevents mass
vacancy at any one period.
Liquidity with Market Maker
A Primary Market Maker will be appointed by The Nigerian Stock
Exchange to ensure liquidity of the units by facilitating continuous
trading of the REIT on The NSE
Portfolio Diversification
Investing in the REIT allows for diversification of your investment
portfolio thereby reducing risks.
ASSET VALUATION AND TRANSFER
VALUES TO THE REITASSET VALUATION AND TRANSFER VALUES TO THE REIT
PROPERTY Noof Units
Age(Years)
Net LettableArea (sq.m)
Open Market Value
N(million)A
Transfer Value to the REITN (million)
ProjectedOccupancy Rate(%)
Year ofValuation
Arizona Court,(GRA) Ikeja 12 2 5,949.26 1,420 800 100 2013Arkansas Court,(GRA) Ikeja 14 2 5,946.54 1,500 800 100 2013IKOYI 12 10 3,598.83 2,200 1,800 100 2014
PROPERTY No of Rooms Age(years)
Net LettableArea
Valuation in N(million)
A
Transfer Value to the REITN(million)
ProjectedOccupancyRate (%)
Year ofValuation
Commercial 1Opebi Allen, Ikeja 112 3 2,610.83 5,200 4,200 60 2013Commercial 2(GRA) Ikeja 35 1 2,200 1,385 1,000 100 2014Commercial 3 2floor office
and a bungalow 1.8 3,750 1,000 850 100 2014
RESIDENTIAL
COMMERCIALL
INVESTMENT OUTLET
ASSET TYPE %Real Estate and Real Estate Related Assets 90
Money Market Instruments 10
OVERVIEW OF THE OFFER
INDICATIVE TERM SHEET
THE OFFER 2,600,000,000 units at N5.15 at par in the HMK REIT
METHOD OF OFFER Offer for subscription
OFFER PRICE N5.15 per unit
MINIMUM SUBSCRIPTION 10,000 units and multiples of 2,000 thereafter
OFFER SIZE N13,390,000,000 (Thirteen Billion Three Hundred and Ninety Million Naira Only)
PAYMENT TERMS In full on application
UTILIZATION OF OFFER
PROCEEDS
The proceeds of the REIT will be applied as consideration for the purchase of the
initial assets of the REIT from the Sponsor and the third party agents while the
balance will be utilized in investment in other real estate, real estate related assets
and money market instruments.
OPENING DATE xx, 2014
CLOSING DATE xx, 2014
STATUS The units qualify as securities in which Pension Fund Assets can be invested under
the Pension Reform Act, 2004 and securities in which Trustees may invest under the
Trustees Investments Act, Cap T22, Laws of the Federation of Nigeria, 2004.
DISTRIBUTION A minimum of 90% of the income earned in any financial year will be distributed
to unit holders every financial year
RATING The N13.3b Haldane McCall Real Estate Investment Trust is assigned a ‘BBB’ rating
by Global Credit Rating Company Limited.
OVERVIEW OF THE OFFER
PARTIES TO THE OFFER
FUND MANAGER: FSDH Asset Management Ltd
FINANCIAL ADVISER / LEAD ISSUING HOUSE: Goldbanc Management Associates Limited
CO-ISSUING HOUSES: BGL Capital Ltd
Capital Bancorp Plc
Greenwich Trust Ltd
LeadCapital Plc
Planet Capital Ltd
TRUSTEE TO THE TRUST: SKYE Trustees Ltd
CUSTODIAN: UBA Plc (Global Investors Services Division)
SOLICITORS TO THE TRUSTEE: Austen–Peters & Co
SOLICITOR TO THE OFFER: Detail Commercial Solicitors
REPORTING ACCOUNTANTS:
STOCKBROKERS:
Akintola Williams Deloitte
Afrinvest Securities Ltd
Capital Assets Ltd
GTI Securities Ltd
ICMG Securities Ltd
Resort Securities Ltd
WHY INVEST IN HMK REIT
WHY INVEST IN REITS?
While gradual reduction in interest rates in
Nigeria is foreseeable and will inevitably lower
bond yields , REITs remain a consistently
growing security
REITs offer steady and consistent returns
because the underlying assets are real estate
assets which appreciate over time.
Inflation and interest rates do not normally
impact negatively on REIT assets instead
hedges inflations.
REITs offer mandatory dividend distribution of
at least 90% of annual net income
REITs offer opportunity for Investment portfolio
diversification which reduces risk
Double taxation is avoided in REITs as REITs
are pass-through vehicles
REIT’s are listed on The Nigerian Stock
Exchange (NSE) and trade like stocks.
WHY INVEST IN HMK REITS?
Access to first class properties in prime areas at discounted
prices.
Rent from the Commercial properties which allows the Fund
Manager concentrate on the management of the REIT.
Diverse corporate tenant profile with staggered rental renewal
periods which prevents mass vacancy at any one period.
Existing long term leases with tenants.
A Primary Market Maker will be appointed by The Nigerian
Stock Exchange to ensure liquidity of the units by facilitating
continuous trading of the REIT on The NSE
Investing in the REIT allows for diversification of your investment
portfolio thereby reducing risks
Bank guarantee of part of the projected rental income
The REIT will be managed by professionals with great care, top
skill, prudence and diligence.
Access to the experience of professionals of diverse skills and
indepth knowledge in real estate investment and operations
that make up the Investment Committee.
Deposit of pre-executed agreements (Deed of Assignments,
Deed of declaration of Trust) with the Custodian by the Sponsor
prior to the offer.
The REIT is transparently structured and backed by reputable
organizations including FSDH Asset Management Company,
Skye Trustees, UBA Plc (Global Investor Services Division),
Leadway Assurance etc
Stable and regular distribution of at least 90% of the net income
accruing from diversified portfolio of real estate and real estate
related assets across residential and commercial properties and
money market instruments.
»Thank you