Project Hrazdan
Investment Highlights Organization name: “National Social Housing Association” Foundation (hereinafter ASBA or Foundation) Sector: Social and affordable housing Stage of Development: Initiation Investment Sought: ASBA now seeks a 30 year loan of AMD 434.7 million to expand its project pipeline.
Business Overview “NATIONAL SOCIAL HOUSING ASSOCIATION” – FOUNDATION, founded in 2010, is a non-governmental, not-for-profit organization, registered in the Republic of Armenia (“Armenia”) in the legal form of foundation in accordance with the laws of Armenia. Revenue model: ASBA develops the real estate property (dwellings), operates it, and collects rental fees and apartment sales amounts. The municipality is interested to promote and develop the social and affordable housing program in Hrazdan town to satisfy the housing needs of local population. ASBA offers investors a unique investment opportunity in the area of social and affordable housing in Armenia, particularly in Hrazdan community. The concept of social and affordable housing was developed in Armenia during last years by ASBA Foundation. ASBA has professional team and partners with Armenian local governance authorities and European prominent social housing organizations. ASBA is an associate member of CECODHAS Housing Europe, the European Federation of Public, Cooperative and Social Housing organizations.
Governance and Management The supreme Governing and Supervisory body of ASBA is the Board of Trustees (the “Board”). The Board members are prominent leaders and experts from Armenia and the Netherlands. The Chairman of the Board, Rudy de Jong is experienced professional in the Dutch social housing sector for 30 years. ASBA staff includes small team of experienced employees supported by a wide net of professional consultants and experts. The Executive Director and co-founder of ASBA, Ara Nazinyan is an experienced manager with proven track record in organizational development and management, housing and infrastructure, international development and private-public partnership. ASBA Advisory Board includes distinguished experts from Netherlands, Armenia and Switzerland, who provide advice and expert opinion on ASBA strategy, programs and projects, support expansion of ASBA network and partnership.
Market Opportunity and Target Customers The existing housing stock in Armenia is quickly deteriorating, particularly in regional towns; there is an increasing demand for new, affordable and quality housing solutions. ASBA has identified target customers through survey conducted in partnership with Municipality of Hrazdan. ASBA targets upper segment of low and middle income families in Hrazdan in a proposed project.
Product Offering/Service/Solution ASBA is planning to develop and manage residential stock by promotion of standards for well-managed, good quality, energy efficient and affordable dwellings. Within the scope of this project ASBA is planning to build 20 new dwellings of terraced housing type and to remodel the existing building provided by the municipality to produce 28 new apartments. Total number of planned dwellings is 48. Business proposal developed by ASBA Foundation is fundamentally different to other initiatives in the market. Its primary differentiators are: o Innovations for affordable housing, including low-cost construction, energy efficiency and use of renewable energy, o Customer oriented approach – consideration of needs of low and middle income families in line with the overall development of the municipality and community.
Financial Projections (as at December 31, in AMD millions) 250
200
150
100 Revenue 50 EBITDA - Net cash flow -50 2013 2015 2017 2019 2021 2023 2025 2027 2029 2031 2033 2035 2037 2039 2041 2043 -100
-150
-200
Development Overview Hrazdan is one of the most industrialized cities in the Republic of Armenia, approximately 50km North-East from the capital Yerevan. The city operates one of the biggest thermo-electrical power stations in the region. The cement factory of Hrazdan is one of the largest enterprises in the Caucasus. Hrazdan is the administrative capital of Kotayk province. It is the fourth largest city in Armenia with 60,000 inhabitants. ASBA signed a Partnership Agreement with the Municipality of Hrazdan which is committing to provide to ASBA an abandoned building with adjacent land plot. The building has been transferred to residential housing stock about 10 years ago with a purpose of reconstruction into a multi-apartment building. The suggested area is located in the city-centre, in the neighborhood of residential multi-apartment buildings, with all necessary infrastructures and service units available at the distance of 50-100 meters. In the course of development of the property the book value of buildings will reach its maximum, AMD 301 million, in 2015. The property being developed may be pledged to the lender as collateral.
Master plan of Hrazdan project
New developments (terraced housing)
Existing building
Funding requirement
To cover all financing needs of the project’s preparation and construction stage ASBA is planning to secure a 30 year loan financing of AMD 434.7 million. The loan proposes an 8% annual interest rate.
______ASBA Contacts 18 M. Baghramyan ave, apt. 2, Yerevan 0019, RA Tel: +374-10-581604, E-Mail: [email protected], Web: www.asba.am