Mahkota Madani Residence

COMMERCIAL BANTEN, INDONESIA EthisCrowd.com is an award-winning Property Islamic Crowdfunding platform.

The EthisCrowd community invests directly into social impact property and infrastructure projects. Our community includes crowdfunders investing in smaller amounts, larger investors in our Lead Investor Program (register at this link) and Islamic Banks and Institutions from around the world.

Ethis is headquartered in , with offices in Jakarta, , and Dubai. Our focus is Indonesia - a hotspot for international investors.

Here are details of the Mahkota Madani Residence Campaign. 04 08 14 24 About Ethis Introduction Executive Project Group to Indonesia Summary Partners

29 32 36 38 Market Risk Profile Legality Investment Overview Structure & Exit Strategy collaterals

4 5 Umar Munshi Maritz Mansor Founder, Ethis Group COO, Ethis Group CEO, EthisCrowd Chief Investment Officer Chairman, IFT Alliance

Datuk Radzif Yunus Ronald Wijaya Abdul Majed Ahmad Chairman, Ethis Group Founder, Ethis Group Product Manager Former MD SME Bank CEO, Ethis Indonesia EthisCrowd, (Malaysia) Advisor, Kapital Boost Entrepreneur and former Indonesia Ethis’ due diligence and structuring

6 Shariah Advisors

Shariah Consultant

Yousuf Sultan Certified Shariah Advisor & Auditor (CSAA, AAOIFI, Bahrain) CIFE (Ethica, Dubai) PhD Candidate (INCEIF, Malaysia) Certified Mufti (Jamia Shariyyah, Bangladesh)

7

With a population of 262 Million, Indonesia is one of the fastest growing countries in the world. The YoY GDP growth is 5.2%. This puts the country in top 3 positions amongst the G20 countries and above major developed countries such as the United States and many European countries.

Source: OECD statistic 2018 Growth of real gross domestic product (GDP) in the G20 in 3rd quarter 2018

The growth in GDP is followed by growth in various sectors, including property development. The soaring residential property index indicates high demand with low supply.

https://www.statista.com/statistics/278735/gross-domestic-product-gdp-growth-in-the-g20-states/ Indonesia Housing Price Index

The index increased to 208.22 points in the first quarter of 2019 from 207.35 points in the fourth quarter of 2018. It averaged 160.87 index points from 2006 to 2019, reaching an all-time high of 208.22 points in the first quarter of 2019.

Tradingeconomics.com

13 Introduction

Indonesia continues to grow strongly, projected to be the 5th largest economy in the world by 2030. Huge investment is required to fulfil the needs of its large and emerging lower-income population. There is a critical shortage of 11.4 million , a need that needs to be addressed urgently.

The project developer is pleased to offer you the opportunity to invest directly in the Mahkota Madani Residence, in Tangerang City, Banten.

This housing estate will provide for 16 Families and benefiting from the attractive location in term in property value gain.

14 To provide funds to PT Barokah Bangun Sejahtera for the of 4 (out of 16) housing units in the Mahkota Madani commercial housing estate

Istisna’: A contract of sale of specified items to be manufactured or constructed. Payments are made in stages based on agreed milestones. The completed unit is handed over to Ethis upon completion.

Murabahah: A sale transaction in which the seller expressly discloses the profit margin.

Wakalah Letter: A letter to appoint an agent to carry out specific duties or projects.

SGD 259,747 12% Retail 8-9 months 3-4 months (USD 187,164) 13% Lead (Construction) (Sale and payout)

Ethiscrowd will charge 12.5% of the gross projected returns as a Wakalah Fee (Agency Fee). For further details, please refer to the Principal Wakalah Agreement. Tangerang city, Banten, is the growing regency which located 18 KM from the main city of Jakarta. Kota Tangerang, Banten

Total population: 2, 139,891People as spillover from Jakarta, favourite place to live.

● GDP Growth 5.91% - ● No. of Schools: ● No. of Health facilities : above National level 5.2 % 473 Elementary school More tha 100 Public health 196 Junior high school centre 220 Senior high school 28 Hospitals 18 The Project

Mahkota Madani Residence is located in Larangan, Kota Tangerang, Banten. It is classified as a commercial housing unit for medium to high income household in Indonesia. The development is consisted of 16 units with a total area of 2,019 Sqm. Out of 16 units, 4 units have already been booked by potential buyers. PT Barokah Bangun Sejahtera (PT BBS) has started the land and foundation development of the 4 units.

Ethis investors’ involvement in this project is limited to the construction of the 4 booked housing units. The project developer targets to complete the construction of these units in 8-9 months. Sales and payment processing for payouts is expected to take an additional 3 to 4 months. As of early August 2019, the process of land development and levelling has been ongoing. The foundation for 4 housing units have also started.

The targeted buyer group is generally medium to high income household. Government employees and private institution workers who commute daily to and from Jakarta are potential buyers of the units in Mahkota Madani Residence. This is due to the short distance to the highway and the capital city. Southeast ’s largest economy and one of the most stable emerging markets in the world.

Opportunity to invest in a sector with large and growing natural demand.

Long term prospects are good with significant future growth expected.

PT Barokah Bangun Sejahtera has several years of experience in the development of medium to high end housing complexes and offices.

While catering for social needs, investors are entitled to a healthy projected returns in 1 year. This project will provide 16 medium to high income families with new houses.

A strategic location with fast-growing population in Banten, Indonesia.

4 booked units by potential end buyers. The units in the project will be collateralised to the investors in the project.

A reputable property developer..

PT Ethis Modal Indonesia (PT EMI)

PT EMI is a licensed real estate developer, contractor and agency in Indonesia with an authorised capital of IDR 15b (appx USD 1.1 m).

PT EMI acts as the representative for the investors to safeguard investors’ interest in this project. PT EMI will be monitoring and tracking the project and providing reports to investors on the utilisation of the funds until the project is successfully completed. The presence of EMI is essential in this project in order to execute foreign investment in Indonesia.

Husni Muhammad Badjamal CEO, PT Ethis Modal Indonesia Mohammad Hafiz

Mr Mohammad Hafiz has 10 years experience from private institution companies in Indonesia as a marketing manager and Human resource management. Mr Hafiz last experience was at PT Riau Andalan Paper & Pulp (Paper one) one of the biggest paper company in Indonesia. Mr Hafiz then starting PT BBS in 2017 and since then the company has executed 5 project including renovation of public hospital and residence development

Azis Wira Andhika Arjoso

Mr Azis Wira Andhika Arjoso is the commissioner and shareholder of PT BBS, with experience in business operation Mr Azis task mainly to oversee the management of PT BBS. Mr Azis has been with PT BBS since its inception and managed to supervise the 5 projects of PT BBS. PT. BAROKAH BANGUN SEJAHTERA (PT BBS)

Established in 2017, PT BBS is a property development company focusing on residency development, commercial property renovation, and supply of construction equipments to property development companies.

TRACK RECORD

2017 2017 2017 2018

RSI Residence Cijantung Pesona Damai Jatisari Residence Kranggan Renovation of Atma Jaya development Residence, Bekasi development. Hospital, Pluit, Jakarta GDV: SGD 350,000 GDV: SGD 180,000 SGD 150,000 SGD 69,000

Government Spending on Infrastructure (IDR trn)

The world’s fourth largest population, Increase Indonesia has high demand and a of IDR 29.5 trn massive shortage of houses.

Increase of This housing crisis affects approximately IDR 27.1 trn 11.8 million Indonesians who do not have homes till today.

Source: PWC, Indonesian Infrastructure Stable foundations for growth, 2016 To cope with this housing shortage, the Shift on State Budget Allocation, 2011-2017 (Rp trillion) Indonesian government launched the One Million Homes programme in 2015. This programme targets to reduce the housing shortage from 11.4 million to 6.9 million homes.

Housing falls here Note: 2016 and 2017 figures are based on projections Source: Ministry of Finance Source: PWC, Indonesian Infrastructure Stable foundations for growth, 2016

Source: Setkab.go.id

Sale of Units

The price of units is projected to be IDR 1.1Bl (SGD 108,024). Housing units in this price range are considered as commercial. This makes the opportunity to buy accessible to medium and high income household. The units are easily marketable due to strategic location of the project. The main risk of this project is delays in the processing and sale of the units to the end buyers.

Mitigation strategy

PT Barokah Bangun Sejahtera (PT BBS) has secured 4 ready buyers. Ethis team has verified the booking of the four units. These units will also be collateralized to the investors in the project as a protection to their initial investment capital. The project developer has provided the following as collateral: ❖ PPJB - Conditional Sale and Purchase certificate of the 4 housing units ❖ Post dated cheque with a total value of the crowdfunded amount ❖ Personal guarantee from the director of CEO of PT Barokah Bangun Sejahtera ❖ Land of the project

Before disbursing the funds received from the investors in the project to the project developer, the ownership of the units in Mahkota Madani Resident housing project will be transferred to PT EMI using "PPJB". PT EMI will hold on to the PPJB certificates on behalf of EthisCrowd investors until the units are sold.

Investors may transfer in their respective currencies, which will then be converted to Singapore Dollar (SGD) for this investment. The SGD amount received will be reflected in the investment contract. We have provided the projected ROI for this project based on projections at current exchange rates. Your profits may be higher or lower due to currency fluctuations.

Mitigation strategy: The project developer has committed to cover a depreciation of up to 5% of the principal amount of the Indonesian Rupiah (IDR) in relation to the SGD over the duration of the project period. Please refer to section 7.5 of the sample wakalah agreement for more details. The construction of units is expected to be completed in 8 to 9 months from the first disbursement of investor funds to the project developer.

It is expected to take up to 3-4 months to market the units and complete the sale and purchase process with the end buyers’ financing bank.

Thus, the total duration expected to complete the whole process is between 12 and 13 months.

Unavoidable circumstances such as recession, political instability, or natural disasters may affect this project. Indonesia has experienced socio-political stability for more than a decade, and this is expected to continue. There are also regulatory risks that may Other Risks affect the housing sector, such as stricter conditions imposed on ownership or changes in the financial regulations for bank disbursement policies. This is however highly unlikely, since in recent years the focus has been for the government to relax regulations and facilitate home ownership.

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Investors sign an Agency Agreement (Wakalah) with PT EMI as the agent and representative of investors to engage with PT EMI and monitor the project. The agreement is based on Singapore law. PT EMI will work closely with the project developer to provide accurate and timely updates to the investors in the project.

PT EMI has assessed the commercial viability of this project in line with its internal screening standards. Interested investors are encouraged to conduct their own due diligence or obtain professional advice before investing in this campaign.

Risk Statement: In all real-world projects, there is always the risk of losing your capital. In our past real estate crowdfunding campaigns, the main risk has been delays. Invest only what you can afford and consider diversifying to reduce risk.

There are 2 main contracts used for this investment, the Istisna’ and the Murabaha.

Financing of Houses ● Istisna’ is when a buyer makes an order to a manufacturer. Here, Ethis investors through PT Ethis Modal Indonesia (PT EMI) place a work order with the developer PT Barokah Bangun Sejahtera (PT BBS) to construct 4 housing units in Mahkota Madani Resident. ● Murabahah is a cost-plus sale or trading transaction. Constructed houses are sold at a profit to end home buyers. ● The execution of the Istisna' and Murabahah will be done by PT EMI on behalf of the crowd via the Wakalah (agency) Agreement. Additional Arrangements ● Ethis investors first assign PT EMI as its representative to allow PT EMI to enter into both the arrangements above on behalf of the crowd. Having PT EMI as the contracting party is important as it creates greater legal authority in the investment, due to its status as a licensed real estate developer registered in Indonesia. Ethis investors sign a Wakalah (agency) Agreement with PT EMI to authorise it to execute the Istisna’ and Murabahah agreements. ● The sale of houses to the end buyer is through bank financing or cash payment, where it will purchase the houses first before selling them to the end buyers .

37 Agreements (Grey arrows) Money and Project Flow (Green arrows)

4. PT EMS

Sale of units on behalf of PT EMI

PT EMI (WAKEEL) The project developer is expected to complete the construction and sale of all the 4 units in 12-13 months.

The payout is expected to start on the 10th month upon receiving the money from the financing bank or cash from the sale of the units to the end-buyers. SGD 259,747 (USD 187,164)

12-13 months

SGD 1,000 SGD 20,000

Gross Projected Returns (ROI) Gross Projected Returns (ROI) 12% 13%

Ethiscrowd will charge 12.5% of the gross projected returns as a Wakalah Fee (Agency Fee). For further details, please refer to the Principal Wakalah Agreement. [email protected] +6018 2645160 +65 8250 2854

15 August 2019