TMG HOLDING
INVESTOR PRESENTATION – SEPTEMBER 2017 Disclaimer
Certain information disclosed in this presentation consists of forward looking statements reflecting the current view of the company with respect to future events, and are subject to certain risks, uncertainties and assumptions.
Many factors could cause the actual results, performance or achievements of the company to be materially different from any future results, performance or achievements that may be expressed or implied by such forward looking statements, including worldwide account of trends, economic and political climate of Egypt, the Middle East, and changes in business strategy and various other factors. Should one or more of these risks or uncertainties materialize or should underlying assumptions prove incorrect, actual results may vary materially from those described in such forward looking statements.
Investor presentation 2 Outline
Ø 1- TMG Corporate Profile Ø 2- Market and Operational Review • TMG at a Glance. • Macroeconomic Indicators, Real Estate Drivers. • Financial and Operational Review, Hotels & • Projects Development, Achievements Resorts Operational Review. and Growth Prospects.
• Share Data. Ø 3- Future Growth • Board of Directors and Corporate • Real Estate Development Plans And Projects Governance, Executive Team and Progress. Business Partners. • Real Estate Future Growth. • Hotels & Resorts Future Growth. • Strategy and Business Model, Quality
Control and Operating Systems. Ø 4- Investment and Risk Considerations
Investor presentation 3 1. TMG Corporate Profile
• TMG at a Glance.
• Projects Development, Achievements and Growth Prospects.
• Share Data.
• Board of Directors and Corporate Governance, Executive Team and Business Partners.
• Strategy and Business Model, Quality Control and Operating Systems.
Investor presentation 4 TMG at a Glance (TMGH.CA)
• Different styles and size of units that cater to changes of income levels, average household size, life style and consumer preference.
• Four operational large scale luxury hotel complexes including high-end residencies, shopping malls and office parks and soft launch of a fourth boutique hotel specifically tailored to business travelers.
• A sales backlog of EGP 28 BN at the end of September2017.
• Healthy financial position and minimal gearing: cash EGP 6.7 BN, debt EGP 5.7 BN, debt to equity ratio of 1:5 as at September2017.
Investor presentation 5 CITES & COMMUNITIES
6 HOTELS & RESORTS
7 Projects Development
TMG Project Overview
• Virgenia Beach • Al Rehab 1 ( phases: 1,2,3,4,5) • Al Rabwa 1 • Four Seasons Nile Plaza. Completed Projects • Four Seasons Sharm El Sheikh. • Al Rabwa Al Khadra • Kempinski Nile Hotel. • Four Seasons San Stefano • Mayfair
• Madinaty • Al Rehab 1 ( phases 6) Under Construction Projects • Al Rehab 2 • Al Rabwa 2
• Extension Four Seasons Sharm El Sheikh • Marsa Alam Resort Under Development Projects • Four Seasons, Madinaty • TMG Hotel & Building • Four Season Luxor
Investor presentation 8 Achievements
0.95% 0.48% 0.05% 0.37% 1.36%
Break of Sold Unit 0.54% 0.18%
14.45% • Sold over 77.6 thousand residential units.
• Developed over 9.6 MN SQM. residential BUA. 47.83% 34.13% • Sold 45.7% of Madinaty residential BUA, 97.6% of Al Rehab II and 99.7% of Al Rabwa II units.
• Award winning operational hotels.
virgenia May fair Rabwa Rabwa ii Sant stefano Four S. Sharm Nile Plaza Rehab ii Rehab i
Investor presentation 9 Growth Prospects
Breakdown of Land Bank
• Development rights of 45.4 MN SQM in Egypt .
• Master development of 6 MN of quality land for strategic non-residential developers 9% for value creation and knowhow.
• Sales backlog of EGP 28 BN to be delivered and recognized over next four years.
• 1,780 hotel keys and 2,464 attached residential units in various design and development stages, upcoming in next three to four years.
• Increase contribution of stable income from operating assets to reach 35% of total 91% revenue (a target of 5,000 hotel rooms).
• Maintain minimum of 35 MN SQM of land inventory through on going local expansion. City & Community Hoteles & resorts
Investor presentation 10 Share Data
Shareholders Structure Share Performance 450 440 430 420 410 EGX RE INDEX TMG 400 390 380 370 360 TMG RE & 350 340 330 320 Tourism 310 300 290 Investment 280 270 260 43.16% 250 240 230 220 210 200 190 180 170 160 150 Free Float 56.84% 140 130 120 110 100 90 80 70 60 50 40 30 20 10 0 7.2.13 8.5.13 8.4.13 2.4.14 5.5.14 8.6.14 6.8.15 9.8.15 3.6.16 1.6.16 9.4.17 15.2.12 28.3.12 15.5.12 27.6.12 12.8.12 25.9.12 21.3.13 6.19.13 9.18.13 11.7.13 3.18.14 6.18.14 9.17.14 11.3.14 1.29.15 3.12.15 4.27.15 7.27.15 12.8.15 1.21.16 17.4.16 19.7.16 30.8.16 12.1.17 26.2.17 25.5.17 12.7.17 24.8.17 29.12.11 11.11.12 24.12.12 12.19.13 12.15.14 10.27.15 18.10.16 29.11.16 12.10.17 *Including Talaat Mostafa Family and Others
Investor presentation 11 Board of Directors and Corporate Governance
Board of Directors • Executive and non-executive members with longstanding • Tarek Talaat Moustafa (Chairman) experience in real estate and construction in the MENA • Hisham Talaat Moustafa (CEO) region. • Hani Talaat Moustafa
• Independent and non executive members that are publicly • Yehia Mohamed Awad renowned in the economic, legal and commercial circles. • Mohamed Ali Akbar • Mohamed Shawky El Sayed • Audit, nomination and remuneration committees have been • Howayda Huessin- Misr Insurance Company appointed. representative
• The audit committee has the responsibility to review and • Hany Sarie-Eldin
approve related party transactions. • Mohamed Abdel Aziz
• Directors are bound by non-compete rules in Egypt. • Hossam Abdallah Helal (Chairman of the audit committee)
Investor presentation 12 Executive Management
Managing Director & Vice Presidents • In addition to the board, the executive management of • Hisham Talaat Mostafa (Managing Director) the company is composed of 9 Vice Presidents. • Sherif Ghoneim – V.P. Sales and Marketing, Joined: 1993 • A number of committees including the Steering • Jihad M. Sawaftah – V.P. Chief Financial Officer, Joined: 2004
Committee, Higher Management Committee and • Gamal El Guindy – V.P. Administration of the Chairman’s Office, Joined: 1983 Executive Committee support the Management decision • Ahmed Afifi – V.P. Madinaty Project Management, Joined: making process. 1995
• Mohamed Atef – V.P. Technical Affairs, Joined: 2005 • Over 3000 professionals are directly employed in the • Wael EL Dieb – V.P. Projects Management, Joined: 2014
various sectors and subsidiary companies of the Group. • Sami Mokhtar – V.P. San Stefano Project, Joined: 1992
• In addition, a workforce of approximately 60,000 • Mohamed Al Shazly – V.P. Sales, Joined: 2001 • Mohamed M. Noh –V.P Real Estate Affairs , Joined : 1980 technical staff is operational in the various projects’ sites.
Investor presentation 13 Business Partners
• The Four Seasons and Kempiniski :internationally reputable management chains of our hotels
• Top class worldwide contractors, master planners, designers of projects components and execution:
§ Main contractor for our completed projects as Joannou and Paraskavides, Hyundai, Murray and Roberts and Bin Laden.
§ The master planning of Madinaty was made by a group of consulting firms from the United States: Sasaki, SWA and HHCP and their Egyptian counterparts Cairo Group for planning and architecture.
§ Architects as HKS, USA for Sharm extension design WZMH, Canada for Luxor design, Studio Sergi, Italy for Marsa Alam design.
§ MEP companies as MMM Canada for Sharm extension.
§ Interior design companies as GA, UK for Luxor
§ Signature golf courses designers as Robert Trent Jones II and HHCP Design International.
Investor presentation 14 Strategy and Business Model
Geographical Integrated Integrated process capitalizing on brand diversification Development concept name, reputation and experience
Stable and recurring Scale and Land bank income from In-house Top Class Reputable Operating assets positioning Centralized Designers and Business Operations Contractors Partners
flexible phasing self financing real construction model estate units sales Flagship Developments
financing schemes catering Low risk,model: (sell Ongoing after sale integrated facilities to customers‘ affordability first then construct) management operations
Investor presentation 15 Quality Control and Advanced Operating Systems
• 2007: Application of the SAP Enterprise Resources Planning System (ERP) on all functions of the Group Subsidiaries. The result is a smooth process integration between sales, accounting and treasury, with facilitated financial and managerial reporting, streamlined accounting bookkeeping and consolidation, improved administration of internal controls, corporate governance and transparency, and an optimized cash management process.
• Feb 2008: qualified for the ISO 9001:2000 certification requirements for a quality management system and maintained the certificate upon renewal in 2010 where an organization:
1. needs to demonstrate its ability to consistently provide product that meets customer and applicable regulatory requirements, and
2. aims to enhance customer satisfaction through the effective application of the system, including processes for continual improvement of the system and the assurance of conformity to customer and applicable regulatory requirements.
Investor presentation 16 2. Market and Operational Review
• Macroeconomic Indicators
• Real Estate Market Drivers
• Financial Review
• Consolidated Operational Review
• Hotels & Resorts Operational Review
Investor presentation 17 Macroeconomic Indicators
• Real GDP growth was 3% during the (July, March) 2016-2017 compared to the same period last year; after changing the base year from 2006/2007 prices to 2011/2012 prices;
• Net International Reserves reached US $ 36 BN at the end of August, 2017.
• Annual headline inflation rate reached 32% in August, 2017.
• The CBE announced that the overnight deposit rate will be at 18.75 %, and the lending rate at 19.75% during September, 2017.
Investor presentation 18 Real Estate market drivers in Egypt
Population basics Graduates from local universities Annual marriage and divorce rates support long-term demand outlook Resident population at 95mn, as per latest census Public Institutes Private Marriages Divorces
Population growth at 5x that of developed and 2x of other developing countries 500 1,200 6.0% CAGR 400 1,000 18-29 years old represent 24% of population 800 300 600 27% live in urban areas 200
['000 cases] ['000 400 ['000 graduates] ['000 Population expected at 140mn by 2030 100 200 0 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 77% of the population occupies only 5% of the country’s area, one of the lowest 2009 2010 2011 2012 2013 2014 2015 worldwide Source: CAPMAS Source: CAPMAS Proxy demand and supply indicators point to a significant gap Note: Data beyond 2015 not available at source as of October Note: Increasing divorce rates contribute positively to rental, 2016 secondary demand c350k youths annually graduated from local universities in 2005-2016, over 25k obtain master and doctoral degrees per annum Branded supply over the next 3 years will not exceed 11-20k units in Cairo and Giza, leaving a c940k marriages and c192k divorces in 2016, creating demand for new dwellings significant and long-term supply/demand gap c209k marriages in Cairo/Giza in 2016 Stock Incremental supply
High-ARPU mobile subscriptions at c15% of total market 200
11 150 11 At least 30k marriages per annum in Cairo/Giza where the female has higher education 11 13 148 (potential indicator of middle/upper-middle real, branded demand) 8 137 100 20 126 105 113
['000 units] ['000 85 85 Market-wide investment demand historically at c20% of volumes, creating potential for 50 another c8k dwellings per annum 0 Family formation, outward migration and investment needs create total demand for 2013 2014 2015 2016 2017e 2018e 2019e c30-50k branded units per annum, c30-60% of which remains unfulfilled Source: JLL MENA, TMG
Investor presentation 19 Real Estate market drivers in Egypt
Remittances exceed USD17bn per annum Remittances from expat population supportive to local property demand 6 Almost 1 in 10 Egyptians resides abroad, non-resident population at c10mn, 5 as per latest census 4
Over 2/3 of Egyptian expats visit the country at least once per year 3 [USDbn] EGP devaluation in November 2016 lowered unit acquisition costs by c30% in 2 USD-terms despite subsequent price increases, improving its appeal 1 0 Quarterly remittances in USD-terms remain unchanged 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15 3Q15 4Q15 1Q16 2Q16 3Q16 4Q16 1Q17 2Q17 3Q17 4Q17 Recent EGP appreciation (8% since 2016 peak) is likely supportive to Source: CBE immediate demand, accelerating purchase decisions Note: Quarterly, for fiscal year ending June Expected declines in interest rates in 2018 should fuel the property market with additional liquidity FX dynamics are supportive of additional Historical CBE discount rates expat demand CBE discount rate at 19.25% since May 2017, the highest since 1992 25 25%
Reactionary increases of retail deposit rates to 16% and 20% for 3-year and 20 20% 18-month certificates locked significant liquidity in the in the banking system, in excess of EGP300bn 15 15%
10 10% Market-wide consensus on gradual declines to interest rates suggests [USD:EGP] additional liquidity fueling the market starting 2018 and peaking by 5 5%
2019/2012 0 0% 91 93 95 97 99 01 03 05 07 09 11 13 15 17 ------
Last “low” interest rate environment in 2000’s (CBE discount rate at 10%) Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan Jan coincided with last real estate boom Source: CAPMAS Source: CAPMAS Note: Data beyond 2015 not available at source as of October Note: Increasing divorce rates contribute positively to rental, 2016 secondary demand
Investor presentation 20 Financial Review
9M 2017 Key figures Assets Growth 80,000 • Total assets: EGP 72 BN 70,000 • Cash and cash equivalents: EGP 6.7 BN 60,000 • Total debt: EGP 5.7 BN 50,000 • A positive net Cash: 1 BN 40,000 • Debt to Equity Ratio: 1:5 30,000
20,000
10,000
- 1Q2008 4Q2008 4Q2009 4Q2011 4Q2012 4Q2013 4Q2014 3Q2017
Investor presentation 21 Financial Review
Revenue Contribution 9M 2017 Quarterly revenue recognition
Other Revenue 3,000 6% 2,750 Hotels 2,500 2,353 15% 2,250 1,977 2,000 1,750 1,500 1,286 1,250 1,000 750 Residential 500 79% 1Q2017 2Q2017 3Q2017 Consolidated revenue
Investor presentation 22 Consolidated Operational Review
Revenue Contribution 9m 2017 Quarterly profits 1Q2017 2Q2017 3Q2017 9M2017 Revenues breakdown Revenues from units sold 956 1,609 1878.7 4,443 - 500 1,000 1,500 2,000 2,500 Revenues from Hotels 237 256 326.68 820 Other revenues 93 112 147.44 352 506 1Q2017 383 Total consolidated revenue 1,286 1,977 2,353 5,616 289 COGS breakdown Real Estate & Construction Cost (562) (1,057) (1,273) (2,892) 675 Hotels Cost (154) (163) (197) (515) 2Q2017 460 Services Cost (64) (82) (134) (280) 384 Total cost of goods sold (780) (1,302) (1,604) (3,686) Gross profit 506 675 749 1,930 749 GP% 39% 34% 32% 34% 3Q2017 462 SG&A, Other income and expenses (123) (215) (287) (625) 386 Net profit before tax 383 460 462 1305 NPBT% 30% 23% 20% 23% 1,930 income tax and deferred tax (78) (69) (51) (197) 9M2017 1,305 1,059 Net Profit 305 391 411 1107 NP% 24% 20% 17% 20% Gross profit Net profit before tax Net profit Minority's share (17) (7) (24) (49) attributable to shareholders 289 384 386 1059 22% 19% 16% 19%
Investor presentation 23 Hotels & Resorts Operational Review
ARR and Rev Par Nile Plaza 600 52% 51% 60% 300 550 55% 500 50% 250 450 45% 200 400 40% 350 35% 150 281 300 30% 250 456 25% GOP % 100 203 200 20% 141 321 15% 50 110 150 100 10% Total Revenue (EGP Mn) - 50 5% 9m17 9m16 0 0% combined ARR 9m17 9m16 San Stefano Sharm El Sheikh 200 60% 200 25% 180 55% 180 20% 160 50% 160 20% 39% 45% 140 140 40% 120 38% 35% 120 15% 100 30% 100 GOP % 25% GOP % 80 10% 80 145 7% 60 20% 60 126 109 15% 40 10% 40 73 5% Total Revenue (EGP Mn) Total Revenue (EGP Mn) 20 5% 20 - 0% - 0% 9m17 9m16 9m17 9m16
Investor presentation 24 3. Future Growth
• Real Estate Projects Progress.
• Real Estate Future Growth.
• Hotels and Resorts Future Growth.
Investor presentation 25 3. Future Growth
Real Estate Development Hotels & Resorts
• Capitalizing on land-bank in existing projects. • The target is to build a stock of 5,000 hotel rooms with a minimum IRR of 18%, and increase the • Master Development and sale of prime land plots; contribution of stable income to 35% of total revenue value created through project development and units delivery over 10 ten year period. • Development of hotel projects in the pipeline, early launch of real estate sales to co-finance development • Looking for worthwhile opportunities to expand land- and enhance returns bank in Egypt. • Continue to grow through purchase of minorities • Expanding in the region with an eye on markets of when the opportunity arise shared similarities with the Egyptian real estate markets. • Looking for further local opportunities that enjoy prime location and have a market gap to increase • The target is to have a minimum land-bank of 35 MN weight of stable income from hotels operations. SQM at any point of time.
Investor presentation 26 MADINATY
27 Madinaty: development progress
Key statistics Madinaty - % of Sold Residential BUA Location New Cairo Total land size (m2) 33,600,000 BUA to be dev. (m2) 20,856,908** Land for mega developments 7,450,380 Sold BUA Expected population 600,000 45.7% Commence date July 2006 Available for % of sold residential BUA: 45.7%* sale 54.3%
* As per revised program area of April 2013 ** Including estimated BUA on land for mega developments
Investor presentation 28 Madinaty: development progress
Project description • Mix-use community designed by three prominent American companies
• Construction is to take place over 6 overlapping phases, each 3-4 years long
• Intended residential BUA of 16.82 million m2
• In addition to business district, international hospital, a university, 22 schools and 3 shopping malls
Investor presentation 29 Madinaty: progress to date (30-9-2017)
Updated Sep 30, 2017
Infra structure work Residential BUA work
12.5 MN m3 of digging and filling 21.25 MN m2 of Land levelling and roads preparation 2.30 MN tons of cement 8.85 MN m2 of roads levelling work 575 000 tons of steel 5.15 MN m2of base and sub base layers 6.21 MN m3 of concrete 465 km of borders works 16.67 MN meters of walls 3.51 MN m2 of asphalt work 9.98 MN meters of ceramics 750 km length of water, sewage and irrigation water pipes 1086 k meters of marble 5.03 MN of electricity cables 22.32 MN meters of paints 475 km of telephone cables
Updated Sept. 30, 2017 789 k pieces of windows and doors
Investor presentation 30 MADINATY Residential Units
31 Madinaty Phase I
Delivering residential units with completed community services
Key statistics USE Area Fadden Gross Land Area m2 Built Up Area total units
Zone 1 Apartment 266.5 1,119,300 1,111,754 6,524 Residential land area (m2) 9,358,440 Zone 2 Apartment 128.5 539,700 578,388 3,724
Facilities land area 2.456,534 Zone 6 Apartment 245 1,029,000 1,141,378 10,350
Total Apartment 640 2,688,000 2,831,520 20,598 Residential BUA 4,270,275 Zone (I)Villa Golf 506.7 2,128,140 391,763 1,105 Expected population 68,620 Zone (II)Villa Golf 698 2,931,600 564,848 1,381
Commence date Jan 2007 Zone (4)Villa 146 613,200 145,332 454
Delivery date April 2010- Dec 2014 Zone (5)Villa 237.5 997,500 336,812 1,455 Total Villas 1588.2 6,670,440 1,438,755 4,395
Investor presentation 32 Madinaty Phase II
Delivering residential units with completed community services
Key statistics Phase 2 Residential Units to be Delivered
Residential land area (m2) 3,135,300 Land Use Area / feddan Area / m2 Total BUA / m2 No. of Unit Facilities land area 315,810 Zone 3 Apartment 166 695,100 655,464 3,864 Residential BUA 3,133,423 Zone 7 Apartment 147 617,400 628,847 7,272 Expected population 67,192 Zone 8 Apartment 227 951,300 911,359 4,554
Commence date March 2008 Zone 11 Apartment 208 871,500 937,753 8,340 Delivery date April 2010- Dec 2014 Total Apartments 748 3,135,300 3,133,423 24,030
Investor presentation 33 Madinaty Phase II
Delivering residential units with completed community services
Services: Northern District Services: Southern District Other Facilities
Gross Land USE Area Fadden Gross Land Area m2 USE Area Fadden Area m2 Land Use Area / Fadden Area / m2
Language School 6.59 27,668 Retail (Restaurant, Commercial, etc) 8.77 36,834.00 Phase 1 of sports club 203 852,600 British School 7.17 30,133 Experimental School 4.09 17167.47
Medical Center 2.70 11,340 Buss Station 0.97 4,073.33 District centers 13.47 56,561 Bank Complex Medical Center 1.52 6,384.00 2.35 9880.43 Regional Services 273.9 1,150.380 office Telephone Exchange 1.60 6,733.33 Fire Station 0.36 1,527 Admin Building 0.76 3,210.00 Roads and City utility 14.35 60,270
Mosque 2.32 9,730 Police Station 0.70 2,950.00 Total 2,119,811 park and parking 18.38 77,196 Municipal Building 0.52 2,166.67
Total area 39.88 167,474 Mosque 2.14 9,006.67 Park and parking 19.22 80,724.00
Total area 40 169,249
Investor presentation 34 Madinaty Phase III
Delivering residential units with completed community services
Key statistics Services: District centre Phase 3 Residential Units to be Delivered
Area / Total BUA No. of Land Use Area / Feddan Area / m2 Land Use Area / m2 Residential land area (m2) 4,863,600 feddan / m2 Unit
Facilities land area 2,182,943 Commercial 0.71 3,000 Mixed used 200 840,000 2,268,000 Residential BUA 3,801,999 Day care 0.40 1,667 15,120 Expected population 67,192 Admin 0.40 1,667 Zone 10 Apartment 220 924,000 969,151 7,320 Mosque 1.19 5,000 Total apartment 420 1,764,000 3,237,151 22,440 Green areas & parking 3.30 13.860 Zone (III)villa golf 738 3,099,600 564,848 1,027
Regional services 499.4 2,097,480
Roads and City utility 14.35 60,270 Total 519.7 2,182,943
Investor presentation 35 Al REHAB
36 Al Rehab Development Progress
Key statistics* Al Rehab II - % of Sold Residential BUA
Location: New Cairo, an extension to Al Rehab I 1. Rehab I / Rehab II Total land size (m2) 9,900,400 2.35% Available Land size to be dev. (m2) 4,684,225 BUA to be dev. (m2) 2,839,834** Land for mega developments (m2) 687,971 Expected population 200,000 97.65% BUA sold Commence date Nov 1996 / Jul 2006 % of sold residential BUA (Rehab II) 97.65%
Project description
Al Rehab I:
• Only the shopping centre and phase 6 villas (633 villas) are yet to be completed. Out of which 22 villas are remaining to be sold.
• Rental revenue from two shopping malls (6,274 SQM) the British school as well as club fees (membership fees) and F&B.
Al Rehab II:
• Consists of villas (BUA 0.401 million m2), apartments (BUA 1.389 million m2).
• * As per revised program area of November 2009 ** including estimated BUA on land for mega developments.
Investor presentation 37 AL RAWA
38 Al Rabwa Development Progress
Key statistics* Al Rabwa II - % of Sold units
Location: Sixth of October City an extension to Al Rabwa I 0.3% Available Total land size (m2) 2,137,828 Land size to be dev. (m2) 819,028 (Al Rabwa II) BUA to be dev. (m2) 129,748 (Al Rabwa II) Expected population 4,965 99.7% Commence date January 2006 BUA sold % of sold residential BUA (Al Rabwa II): 99.7%
Project description
Al Rabwa I
• an exclusive compound targeting the high end.
• Construction is completed and consists of 648 villas, a shopping centre, 9 hole golf course and sports pavilion.
• The development is fully sold and covers a land area of 1,318,800 m2. Al Rabwa II
• Al Rabwa II will follow a similar model consisting of 386 villas and an interlinking 9 hole golf course. • Only 2 villas are remaining to be sold.
Investor presentation 39 Real Estate Future Growth:
Capitalise on Land with unrecognized value
2010 2012 – 2022 2012 – 2022 Estimated land sale of Delivery of residential units Master development and sale 500ksqm/annum at an completed with facilities and of SQM 8.14 MN land plots in estimated selling price of infra structure in Rehab II and prime locations for strategic Madinaty non residential use EGP 10K/SQM
• Master planning and development of high quality land plots all set with the required infrastructure. • Land value created as a result of the development progress and delivery of a full-fledged phase of the project. • To be sold to strategic partners that would bring a know-how, fill an existing gap in the area; e.g. medical projects, banking corporations, large exhibits, key service providers, etc. • The plan is to create more value to the project, enhance the operational cash flow and achieve more favourable project’s returns. • To be launched over a 10 years period starting 2012 after delivery of phase I units at an estimated average selling price of EGP 10,000 per SQM.
Investor presentation 40 Real Estate Future Growth:
Location of Land with unrecognized value
Al Rehab Madinaty
Investor presentation 41 Hotels & Resorts Future Growth:
Business line Diversification to increase the contribution of stable income to total revenue Targeted Future Growth
Reach 5,000 hotel rooms with a minimum IRR of 18%, and increase the contribution of stable income to 35% of total revenue. Steps taken to achieve targeted growth
• Acquisition of Marsa Alsadeed land in Sharm El Sheikh, upon which an extension of the existing Four Seasons resort will be constructed.
• Purchase of land in downtown Cairo to develop a high-end office and hotel complex.
• Purchase of Sednawy Villa adjacent to the Nile Hotel to develop an exclusive business club and parking that will also serve the hotel.
• Obtained a 50 years renewable concession agreement to develop a resort on Sultana Malak Land in a prime location in the historic city of Luxor.
• signed up Letters of Intent with the Four Seasons renowned chain to operate the hotels in Luxor, Madinaty, and Sharm Extension and appointed Kempinski to operate the Nile hotel.
• Raised ownership stake to 100% of the Four Seasons Sharm el-Sheikh Resort and Four Seasons Nile Plaza complex in Cairo by acquiring the minority stake held by Kingdom Hotel Investments (KHI) in both hotels.
Investor presentation 42 Build-up of 2,655 hotel rooms
2023 2022 TMG Building Operational: 875 rooms / keys Hotel 2021 Four Seasons Under development: 1,780 rooms / key 2020 Luxor Marsa Alam Four 2019 Seasons Four Madinaty 2010 Seasons Sharm 2007 Kepminski Extension 2004 Nile Hotel 2001 San Stefano Nile Plaza Four Seasons Sharm
200 566 684 875 974 1254 2254 2455 2655
Investor presentation 43 Upcoming projects
Open Air Mall Development Progress
Consists of 9 Buildings • To be developed over 3 phases Design was made by • Opening target date 2018 -2020 F+A architects Land area: 404k SQM BUA: 116k SQM
Four Seasons Sharm Extension Development Progress
Rooms/ keys : 99 • Purchased land. Residential properties: 114 • Finished design.
Operator: Four Seasons • Issued licenses and permits.
Land area 960k SQM • Appointed four seasons management company. BUA: 490 k SQM • Under Construction.
Investor presentation 44 Upcoming projects
Four Seasons Luxor Development Progress
• Signed concession agreement. Rooms/ keys: 201 • Finished design. Operator: Four Seasons Land area 20k SQM • Issued licenses and permits. BUA: 43k SQM • Appointed four seasons management company. • Floated tender documents.
Four Seasons Madinaty Development Progress
Rooms/ keys: 240 • In the design process
Residential properties: 100 • Appointed four seasons management company. Operator: Four Seasons Land area 175k SQM BUA: 49k SQM
Investor presentation 45 Upcoming projects
Marsa Alam Development Progress
Rooms/ keys :1000 • Purchased land Residential properties: 2250 • Finished design phase one : 474 units • Obtained TDA approval Land area 3.2 MN SQM • Issued licenses and permits BUA: 390k SQM Madinaty Medical City Development Progress
Rooms/ beds:450 • To be developed over 3 phases Contains Hospital, Children and • Phase 1 includes Main Hospital with 220 beds Women Hospital, Cancer Research centre, Transplantation centre, and • Opening target date 2017 Outpatient Clinics. In addition to Academy and a Hotel. TMG Building Hotel Development Progress
Rooms/ keys :200 • Purchased land
Operator: TBD • Finished design
Land area 2k SQM • Issued licenses and permits BUA: 16k SQM
Investor presentation 46 4. Investment Considerations
Real Market need
Concept and selling features
Experience and Track Record
Integrated low risk, self finance Business Model Investment Considerations Diversified products and markets
Guaranteed revenue and profitability (sales backlog)
Healthy financial Position
High Growth Prospects
Investor presentation 47 Risks and Mitigates
Risks Mitigates Entry barriers to prospective new comers: Competition from new entrants • Integrated Business Model. • First mover advantage.
• A diversified growth plan with no over-dependence on one revenue Failure to achieve overall growth segment.; Revenue growth in one segment is likely to offset sluggish target growth in another. • New products and land development ideas.
• Product features that meet customers needs and affordability. Difficulty to attract customers to the • A carefully planned promotion strategy that aims at introducing the new product idea product idea and publicizing its value to the target market.
• A safety cushion of a sales backlog that exceed EGP 18.8 bn to be recognized over next four years Economic Slowdown • Stable income from operating assets • Entering new markets with high growth potential
Investor presentation 48 Thank You