Draft for Discussion Purpose Only

INTRODUCING

ANKAA ETHICAL
REAL ESTATE FUND - I
 CONTENT

Investment Theme

Selection Criteria

Market Environment

Promoter & Advisory Board

Investment Proposition

Reach Us
 1.
INVESTMENT
THEME
Equity (Or Equity type) Investment in Real Estate

Geography Type of Project

Mid market Residential, Strategically located

Mumbai Metropolitan Region
Office & Retail spaces
 DEAL STRUCTURE

 Early stage entry with high margin of  Low Direct Equity combined with OCD
safety (enabling higher upside, low or NCD structure
downside risk)
 Zero Debt in SPVs (or Max 20% of
EBIDTA)
 Adequate control mechanism (escrow, cash
flow waterfall, appropriate rights &  Max 75% of Total Fund to be in Meissa
protections) Group (MG) Projects

 Development Manager (DM) model

 Proven management with strong trust
offered to MG on Revenue Sharing or
comfort
Fixed Fee per sq ft to ensure alignment of
interests
 Preferred Direct Asset Ownership
 ASSET MIX

Direct Asset Ownership

Rental Annuity
Ownership/ through SPV/ 3rd
Assets
Projects party
0-50% of
0-50% of 0-50% of
Fund Value
Fund Value Fund Value
 FUND STRATEGY

Mumbai Metropolitan Region (MMR) Asset backed Investments

 Largest Real Estate Market in India  Direct Ownership of asset provides control &
 Consist of Mumbai, Thane & Navi Mumbai lowers investment risk
region providing a large canvass  Acquisition of assets at market prices reduces
 Proposed Development Plan to generate new premium demanded by developers & improves
opportunities margin of safety

Mid market Control on Project Development

 Focus on mid market allows consistent deal  Focus on mid market allows consistent deal flow
flow and steady performance across market and steady performance
cycles
 Selective investment in Office & Retail
opportunities
UNIQUE BUSINESS MODEL
 2.
SELECTION
CRITERIA
DEVELOPER’S
 2+ million sq ft PROFILE
of complete/ delivered development

 Min 10 completed projects

 Operating Cash Inflow of 100 cr+ p.a.

 10+ years of business experience

 Transparency

 Execution Team

 Systems/ Processes/ Control

PROJECT
 SELECTION
Clear title, Zoning, DP Validation

 SPV/ JDA/ JV agreement review

 5 Year Financials (Cash Flow, Balance Sheet & P&L) review

 Physical Site Checks

 Established Location/ Area

 Infrastructure & Connectivity

 Local Demand & Supply gap

INVESTMENT SECURITY
 Cash Flow cover

 Security Cover

 Step-In rights

 Operational

 Margin of Safety

 Sensitivity to velocity/ price/ timely execution

 Corporate & Personal Guarantees

 DEAL SOURCING STRATEGIES
Proprietary Deals alongside Warehousing by Promoters

Personal Business Network of Developers,

Investors, Land/ Asset Owners

Brokers/ Consultants

International Property Consultants

ARC/ NBFC/PE Network

 CASE STUDY – 1.8 MIL SOUTH MUMBAI PROJECT
Rapidly Developing Neighborhood of Sewri

Project Synopsis Economics

 4+ acre plot  Revenues ~ Rs 1500 cr

 Total development of 1.8  Cost ~ Rs 1000 cr
million sq ft  Cash Surplus Rs 500 cr
 Rehab ~ 2.5 lac sq ft and Sale  Peak Investment ~ Rs 100-
towers ~ 9 lacs 125 cr
 60 habitable floors, along  Investment to Surplus Ratio:
with 7 levels of podium 4-5x
USP: parking and modern amenities  Top Line to Investment Ratio:
Low Entry Investment
like swimming pool, club 10
High margin of safety
since sale rates in the house, high speed elevators,  Margins: 33%+
vicinity are higher than etc
what is used for feasibility
assumptions
 CASE STUDY – DISTRESS ASSET
Asset Available ~1/3 of Total Investment till Date with assured bank funding

Project Synopsis Economics

 ~ 7600 sq mtrs  Revenues ~ Rs 600 cr

 475 keys hotel (Originally
Proposed)  Cost ~ Rs 450 cr
 Construction of 5 basements (30  Takeover Value of Assets @ ~
mtrs) + Ground Floor completed 175 cr
 Investment in Land,  Cash Surplus Rs 150 cr
Construction & IDC till date ~
Rs 500 crs  Peak Investment ~ Rs 50 cr
 Originally owned by PE Fund,  Investment to Surplus Ratio: 3-
now NPA with Banks 4x
USP:  Reworked Saleable Area ~ 3.4
Low Entry Investment,
 Top Line to Investment Ratio:
lacs
Bank Funding for 12
 Proposed Developed into Retail
Construction along with + Commercial Office  Margins: 25%+
takeover of NPA
 CASE STUDY – SINDHI COLONY, CHEMBUR
Project Available with 90 crores of investment till date; assured funding; vacant
plot for development

Project Synopsis Economics

 Plot area 14,000 SQM  Revenue Rs. 750 crores
 Saleable area approx 5.50 lac sq ft
 Construction of 21 storey 2BHK and  Cost Rs. 490 crores
3BHK sale residences and 21 storey  Surplus Rs. 260 crores
rehab bldgs  Peak Investment: Rs. 50 crores
 Investment in Plot vacating, one
rehab bldg. construction and  Investment to Surplus Ratio: 5x
approvals till date - Rs. 90 crores  Top Line to Investment Ratio: 15
 Plot vacated, construction of one  Margins: 35%+
Rehab bldg. completed and OC
obtained, Sale bldg. IOD and CC
obtained
USP:
Vacant Sale plot for development,
 Further investment proposed for
1 Rehab bldg with OC construction of other Rehab and Sale
Sale wing IOD and CC obtained bldgs. of the project
Go live with construction of sale
bldg. on Day 1
 3.
MARKET
ENVIRONMENT
 MMR has been consistently the largest and most attractive market

Source: PropEquity, BFIN (Q3-2017)

 Mid Market units has been consistent performers

Due to high residential capital values, MMR-Mumbai and

Pune are the only major cities in the country with a strong
preference towards 1-BHK units. 47% and 37% of the units
sold in MMR-Mumbai and Pune respectively during Q3-
2017 were 1-BHKs

Capital values have remained flat across most markets

during 2017 with corrections witnessed in the premium and
luxury housing segment. Thane and Navi Mumbai despite
being relatively affordable markets witnessed stagnation of
capital values due to higher unsold inventory
With the implementation of RERA, the pace of new
launches has declined significantly as developers are
focusing on having their existing projects RERA compliant.
Growth in capital values will be impacted by the pace of
new launches and demand offtake in a lower home loan
rates environment.

Source: PropEquity, BFIN (Q3-2017)

 4.
PROMOTER’S &
CORE TEAM
PROFILE
Naqeeb Patel (Sponsor)

3rd Generation Family member of the Dudhwala Group, 12+

years of Real Estate experience
Expertise in Opportunity Identification
Investor Network across Middle East, Africa & EU
Anil Bilawala

20+ years of Senior Management

experience focussed on Real Estate
Investment, Development and Management.
Asset Management expertise
Investor Network across India, Middle East &
Zulfiqar Shivji Americas

Co-founder and senior partner with BDO India & MZSK &
Associates heading the Transaction Advisory Services for
more than 13 years
2+ decade of experience handling & leading
engagements around M&A Tax, Corporate Restructuring,
Mergers & Demergers, Private Equity Support, DDRs,
Valuations and Corporate Finance
 5.
INVESTMENT
PROPOSITION
 SUPERIOR VALUE PROPOSITION

LEGACY WAREHOUDING OF DEALS

• Sponsor has a 50 year legacy of being in the • Willingness of the sponsor to warehouse deals in
Real Estate business with AUM of INR advance of fund raising, providing access to
1000+ cr distress deals with short funding timelines, and
• Proven track record of sourcing high quality quick deployment of investments, immediate
deals/ assets accrual of returns
• Investor & Buyer trust

ALIGNMENT OF INTEREST Co-investment

• Strong alignment between Sponsor and Fund • Co-investment by Sponsor group increasing
Investors through 10% sponsor commitment stakes for the sponsor and alignment with
to fund as against market norm of 2-3% Investors
sponsor commitment treated at par with all
investors
 TOP CLASS TEAM

TRUSTEES APPROVED
TRUSTEES

AUDITORS (Proposed)

LEGAL COUNSEL
 FUND -1 STRUCTURE

Investment Manager Offshore

Overseas Fund
Investors

Project 1 Project 2
Investment Advisory

Investee Companies

Overseas

Eligible Investments Maximum 25% of India

Investible Funds*

Project 1 Project 2
Investee Companies

Investment Manager

Domestic
Investors
AIF
Trustee | Tax | Legal | Registrar
 FUND -1 SYNOPOSIS

Fund Name Ankaa Ethical Real Estate Fund - I

Target Corpus INR 200 crores with Green-shoe option of up to INR 100 cr

Fund Tenure 6+ (2 extension of 1 year) from Interim Close

Target Returns 24%+ IRR (Gross)

Strategic Focus Geographic: Mumbai Metropolitan Region, a large market with growth and strong market understanding
Type of Project: Mid market Residential, Strategically located Office & Retail spaces
Deal Structure: Early stage entry with high margin of safety (enabling higher upside, low downside
risk), adequate control mechanism (escrow, cash flow waterfall, appropriate rights & protections)
 FUND -1 SUBSCRIPTION TERMS

Minimum Commitment Min INR 1 crores & additional in multiples of 25 lacs

Initial Contribution 10% of Commitment Value

Draw Down Tenure 2+ (extension of 1 year) from Interim Close

Hurdle Return 12% per annum

Fee Structure Class of Capital Contribution One-Time Managemen Profit Share

Units Set Up Fee t Fee %
A 1 cr – 10cr 2% 2% 20%
B 10 – 25 cr 1.5% 1.5% 15%
C 25 + cr 1% 1% 10%

Investor Exit Mapped to disinvestment in investee companies / Third party sale

Investment Valuation Yearly valuation by leading third party property consultant

Sponsor Commitment 2.5% Contribution

 DISCLAIMER
"This presentation has been prepared exclusively for information and discussion purposes only and is not, and does not constitute an offer to
sell or a solicitation of an offer to buy Units of the Ankaa Ethical Real Estate Fund I proposed Alternative Investment Fund
(“Fund” or “Proposed Fund”). This presentation does not contain any direct, indirect and/or deemed offer of any securities to the public as
such or otherwise and does not constitute or form part of any offer or invitation to subscribe for, underwrite or purchase securities. A private
offering of the units of the Proposed Fund will be made pursuant to a confidential private placement memorandum and the definitive Fund
documents, which will be furnished to qualified investors on a confidential basis at their request for their consideration of such offering. The
information contained herein is proprietary and for recipient’s internal use only and is qualified in its entirety by reference to the private
placement memorandum and the Fund documents. The recipient is provided the information contained herein on a confidential basis which
should not be disclosed to third parties or duplicated or used for any purpose other than the purpose for which it is provided.
Application/necessary filings are proposed to be made to the Securities and Exchange Board of India (SEBI) for registering the Fund as an
Alternative Investment Fund and the private placement of units in the Proposed Fund would be strictly subject to receipt of requisite SEBI
approvals.  
 
The information herein is subject to change without notice. Prospective investors should do their own evaluations of the information contained
herein. The information contained herein does not purport to contain all of the information that may be required to evaluate the Proposed Fund.
Each prospective investor should examine the underlying Fund documents including the confidential private placement memorandum and the
contribution agreement and consult its own attorney, business adviser and tax adviser as to legal, business, tax and related matters concerning
the information contained therein, before making any investment decision."
Ankaa Capital Advisors LLP
Mumbai | Dubai | Mauritius

[Link]
connect@[Link]