Advisory Services for Real Estate Investors and Developers for Asset Allocation Optimization and Enhanced ROI

1. Real Estate Advisory Services
Investment flexibility, Compliance assured, Due Diligence improvements, Capital cost
efficiencies, Asset allocation and selection perfected
Transactions managed, Returns Optimized and Enhanced
Hema Luqman
BA Hons, MBA, CMI
http://sa.linkedin.com/in/hemaluqman

2. Contents
• A Picture Tells A Story
• Executive Summary
• Customer Outcome Secured
• Owner’s Pain – New Entrant Dilemma
• Why need an advisory service?
• Industry Structure
• Real Estate Advisory Services Industry
• Current Leaders
• Strategy
• Critical Success Factors
• Strategy, Objectives & Solutions
• Methodology and Process
• Meeting Customer’s Outcomes
• Process
• Customer & Income Targets
• Income and returns
• Customers, Partners and Asset Opportunities
• Team size
• Services
• Hema Luqman

3. Contractor
,Consultant
Design, Build & Operate
Build
Design and Build
Requirements & Design
Inception, Feasibility & Engineering
Strategy
Preconstruction
Construction
Facility Start and Management
Property Life Cycle
Owner
Engineer,
Designer
Owner&
FacilitiesManager
Engineer,
Designer
Commission & OperateOpportunity & Obj.
Project Construction & Contract Management
Advisory – Investment – Transaction - Management
Opportunity

4. Executive Summary
• Growth industry, with global real estate transaction topping $1 trillion per annum.
• Niche market aligned with key strength for region =>> Shari’a Compliant.
• Increasing infrastructure and housing requirements in GCC (local knowledge and
distribution strength).
• Enhanced attractiveness of grass roots development potential of region.
• Lack of focus and management led to failures (delivery, returns, opportunities
lost…)
Market size and scale requirements are clear, with only 21 funds set up in the GCC
with an asset value of US$3.2bn.
• Ambition
• Build and define the Shari’a Compliant Property Advisory market
• Establish a $2bn business over ten years across the property life-cycle.
• Strategic choice to
• Start small (product and solutions only HNWI and Retail),
• Scale fast with developers (logistics/housing) and government (infrastructure/pensions),
• Collaborate to gain with key international names to provide access to international
market opportunities for Shari’a Compliant investment products.
• Income enhancement
• Gross Returns on investment in Direct Developments for sale (35%-45% 18 months)
• Gross Returns in lease/BOT for Government infrastructure 12-18%.
• Identify and Build it
• Achieve Returns
• Ensure Sustainability
• Redevelopment opportunities
• Exit

5. Customer
Outcome Secured

6. Owner’s Pain – New Entrant Dilemma
• Who is responsible? - Client’s representative.
• Who is managing the construction and contract
process? - Deliver the client’s idea from
requirements to commissioning and handover.
• What is my risk of scope failure, time delay and
budget over run? – Mitigation and compliance.
• Why are requirements not met? - Manage the
stakeholders and ensure the project is fit for
purpose.
• How sustainable is this project? - Define the
engineering strategy (construction method, material
choice, procurement and sustainability)
Fit for
Purpose?
Scope
Delivery?
Budget Over-run?
Control?
Quality
Performance?
Time?
Prioritization?
Why this project?

7. Why need an advisory service?
• The real estate and property market is witnessing:-
• Battle for assets led by sovereign and institutional funds with sales
surpassing $trillion in 2013 (E&Y).
• Growth in specialized niche, secondary city and mixed use developments.
• Increasing capital intensity due to mega nature of infrastructure and
housing needs brought about by massive urbanization
• Growing number of cross border joint ventures and collaborations leading
to a 55% increase in global stock of investment property to $45.3 trillion
by 2020 (PWC)
• Real Estate and property stakeholders are:-
• Wrestling with government shift towards personalized retirement plans
• Facing tightening regulations and insolvency requirements
• Combating increased commercial risks and construction complexity
leading to more insolvency and delays.
• Cross border legal and risk challenges.
• Stakeholders are seeking integrated solutions that will :-
• Provide Safe, Secure and Transparent transactions
• Add flexibility and lower transaction costs
• Enable them to meet sustainability and regulatory requirements
• Allow them to deliver developments that integrate life, work, and play.
• Manage portfolio risks and enhance its returns

8. Industry
Structure

9. Real Estate Advisory Services Industry
• The industry permeates the very fabric of every
state, city, town and village across the globe
(politically, bureaucratically, socially and financially).
• Current industry landscape has several entry points
and gate keepers that can be summed up as REIMs,
Asset Managers, REITs, Global Banks and Big 4
Consultancy.
• These players provide a complex web of capabilities,
expertise, solutions and services that extend
through the life-cycle of a property/real estate life-
cycle.
• Services scope revolves around structuring,
transactions and compliance.
• Growth (global and local) in integrated or “one-stop-
shop” service providers, or regional local
knowledge.
Shari’a Compliant and Sukuk provide a major niche to
be exploited

10. Current Leaders
Globally
• Commercial real estate services and investment
management
• CB Richard Ellis, Colliers International, Jones Lang
LaSalle, Newmark Grubb Knight Frank, Cushman
& Wakefield, DTZ, Cassidy Turley
• Big 4
• PWC – 350 UK based
• E&Y – 350 UK and NY based
• Asset and Fund Managers
• Standard Life – 120 UK based
• Aviva – 220, 8 locations
• Regional
• GCC Banks (fund products)
• National Commercial Bank
• QNB
• Bank Muscat
• UAE Banks (fund products)
• ADCB – traditional investment banking products
• Emirates NBD – UAE Real Estate fund
• Recruiting for Head of Advisory
• Large Family concerns (investment opportunities)
• SEDCO
• ……
• Investment Management
• Abraaj Capital
• Shuaa Capital
• Markaz
• Sidra Capital
• Jadwa Investments

11. Strategy

12. Critical Success Factors
1. Understanding the economic,
financial and demographic shifts.
2. Establishing unique capability and
industry leadership.
3. Access to a global platform with
local knowledge and technology
enabled.
4. Innovative culture that integrates
experts, deal makers and product
innovators.
5. Financial scale and efficient cost
management structure.
Culture
Customer Experience
Excellence
Agility & Change

13. Strategy, Objectives &
Solutions
Built on Heritage
Inspired by the Brand
Defined by the Mission & Vision
• Customer’s trust
• Islamic Banking
• Simplicity
• Mutual Benefit
• Safe, Secure and Transparent
• As easy as possible
• High quality solutions and
services
• Global expertise
• Shari’a Compliant
Mission: Integrated real estate and property advisory service and
product line across the bank’s platform with one methodology
Vision: To be the leading provider of shari’a compliant
real estate advisory services and solutions.

14. Strategy
think Big, start Small and scale FAST
• Shari’a compliant services and solutions.
• Initiate shari’a compliant funds to meet investor
diversity challenges
• Add value at key investment process points
• Base on fundamental and technical analysis
• Process multiple scenarios for stock selection and
asset allocation/management
• Identify best fit returns/risk profile
• Embed risk evaluation to minimize volatility
• Collaborate to compete and innovate.
• Establish a network of specialists.
• Build an ecosystem of service and solution providers
share our vision for the benefit of our customer’s and
stakeholders.
• Seamless and efficient mobilization of all our assets
(people, services, risk management…)
• Access Bank’s client base.
• Build track record through existing deal funnel.
• Seek superior risk-adjusted returns for our clients by
targeting all formats
• Direct asset holdings
• Listed RE companies
• Hybrid Portfolio / SPVs
• Derivatives
• Create broadly diversified and actively managed
portfolios (growth, income, risk and Liquidity).
• Private Portfolio
• Pool Portfolio
• Private sales
• Manage investments across the real estate
investment spectrum
• Low risk core diversified products
• Higher risk value added solutions
• Opportunity sales / developments
• Benchmark against the best
• Accuracy of forecast
• Returns attained

15. Methodology and
Process

16. Shari’a Compliant
Real Estate Advisory – Investment – Transaction - Management
Planning and
Structuring
Capital
Prod InnovationTransaction
Public
Sector &
Govt.
REITs, Dev
Cos, Land
Owners
HNWI
Pension
Funds &
Insurance
Cos
Retail,
Personal
Retirement
Plans
Opportunity Due
Diligence
Entertainment – Hospitality – Logistics – Infrastructure – Medical & Health – Parking – Self
Storage – Housing – Education – Commercial – Retail - Retirement
Opportunity
Customers
Know Your Customer – Understand Objectives and Needs – Assess and Align
Capability and Infrastructure
Direct asset holdings - Listed RE companies - Hybrid Portfolio / SPVs - Derivatives

17. Process
Identify
Due
Diligence
Plan
Structure
and Analyze
Transact
Integrate &
Review
Strategic Decisions
acquisition, restructuring, disposals, M&A, redevelopment, joint development, resumption and regeneration strategy assessment
Creating Investment Value
Leverage assessment, IPOs, PE, capital restructuring, development scenarios, securitization
Shari’a Compliant
Leadership and Ownership - product and solution innovation and development
Research
Fundamental and technical analysis, research, analysis and opinion
Safe, transparent and secure investment
due diligence [buyer, vendor and asset], commercial reviews, risk assessment and M&A benefit analysis
Know your client
Understand the client’s priorities, investment objectives, income v value
Ecosystem services
tax, legal, construction cost management, facilities management, sustainability, dispute management
Cost of Capital
funding costs and investment return assessment,

18. Customer &
Income Targets

19. Income and returns
• Four sources of income
• Advisory fees
• Joint investment and shared returns
• Cross selling opportunities with ecosystem partners
(assurance, compliance, tax etc…)
• Management of GCC Family real estate
• Due to nature of GCC – returns expected to beat
the 12% target rate from a mixed fund covering
development, management and advisory.
• KSA witnessing 40-50% returns in property
development gains within 12-14 months
• Rental income has increased by 30% in last 2 years.
• BOT infrastructure returns showing returns 12-18%

20. Customers and Partners and Asset Opportunities
Target Customers?
Provide real estate investment products (wealth,
wholesale, corporate, retail) to:-
• Public and Government
• Real estate owners
• REITs, developers and homebuilders
• Financial Investors
• Retirement Funds
Ecosystem (Partners, Collaborators & Stakeholders)
• Auditors
• Real Estate Tax advisors
• Regulatory
• Assurance and Compliance
• Asset Managers
• Entertainment and Hospitality
• Logistics
• Infrastructure
• Medical & Health
• Parking
• Housing
• Education
• Commercial
• Retail
• Retirement
Sector Opportunities

21. Team Size
• Year 1 & 2 - Staff size 12
• Engineers / PM
• Transaction / Credit
• Financial modelling
• Analysts / Admin
• Research
• Year 3 & 4 – Staff +5
• SPV managers
• Capital restructuring
• Research International

22. Services

23. • Structuring
• Tax
• Capital Allowances
• Property development and investment
• Transactions
• Corporate Governance
• Transparency
• Debt advisory and Fund raising
• Accounting
• M&A, Disposals, Restructuring
• Compliance and Assurance
• Regulatory demands (Basel III, AIFMD
• Sustainability
• Risk Management
• Audit
• Business recovery/Insolvency
• Transaction services include financial and tax due
diligence in connection with acquisitions, private
company sales and divestitures
• Mergers and acquisitions advisory services include
private company sale and divestiture advisory
services and acquisition advisory services
• Capital raising includes assistance in raising senior
debt, subordinated debt and private equity
• Special situations include financial restructuring,
interim management, capital raising, protection
from creditors, and sale and purchase advisory
services
• Valuations include business valuations for financial
reporting and regulatory requirements, intangible
assets and IP, litigation support and dispute
resolution, transaction advisory and tax purposes

24. Hema Luqman
http://sa.linkedin.com/in/hemaluqman
@hml1924

25. Track record and capabilities
Track Record – 324,000 sqm in 8 years
• Capabilities
• Project and Structured Finance – HSBC London
• North Sea Oil
• London Property
• Property Development – MMLC
• Jeddah Tower – 45% ROI 18 months
• Basateen Suburb Villas – 81 villa construction
management on behalf of developer
• 183 apartment redevelopment for owner for rental
- 22% ROI rental
• 26 villa compound – 21% ROI rental
• Shopping Mall – 35.7% ROI rental
• Skills & Experience
• 24 years of business leadership, transformation
and commercial management
• 15 years covering the real estate development and
construction sector
• BA Hons, MBA, CMI

26. Additional

27. References
• Real estate’s ‘battle for assets’
• http://www.pwc.com/gx/en/asset-management/asset-management-insights/etre-global-outlook-
2014.jhtml
• Real Estate 2020: Building the future
• http://www.pwc.com/gx/en/asset-management/publications/real-estate-2020-building-the-
future.jhtml
• Asset management’s game changers for growth
• http://www.pwc.com/gx/en/asset-management/asset-management-insights/asset-managements-
game-changers-for-growth.jhtml
• Capitalizing on Recovery
• EY
• Property Authorized Investment Funds
• EY
• PWC One Stop Solution
• Goldman Sachs Real Estate Transactions