Alternative Investment

Real Estate Investment

Scheme
 Outline

Overview of Real Estate Sector

Traditional Real Estate Investment: method & challenges
GTBAM Real Estate Investment Scheme (REIS)

Features of REIS

How it works

Financing Structure

Benefit of REIS

Investment Case

Transaction Risk & Mitigants

Probable Subscribers

Contact
 Overview of Real Estate Sector

Real Estate has been one of the

highest yielding and fastest
growing sectors of the Nigerian
economy.

Investments in this sector have

consistently delivered high
yields and significant capital
gains through various economic
cycles.
 Overview of Real Estate Sector

Growth in this sector is currently affected by tighter liquidity

condition, slowing economic growth and lower FDI.
The high end of residential real estate
was most affected, as it was the target
of speculative activity.

However with the recovery of the

global economy the real estate
industry is steadily gaining
momentum again. Property prices
are attractive and present good
investment opportunity.
 Overview of Real Estate Sector

Attractive opportunities still exist in both residential and

commercial properties such as Malls, Markets, Office
complexes, etc.

The growth drivers for this

segment include: recovery of the
global economy, supply demand
imbalance, government reforms
and availability of mortgages.
Traditional Real Estate Investment: its challenges

It requires huge capital outlay

making it out of reach for
investors with minimal
capital.

Investors are fully exposed to

risks associated with
investing in real estate.

Return on investment is not

Single ownership of Real
optimised (as all eggs are in
Estate Assets
one basket).
 Real Estate Investment Scheme (“REIS”)

Special
Purpose
Vehicle

Multiple ownership of Real Estate Assets

 Real Estate Investment Scheme (“REIS”)

We propose two variants of the joint investment via the

REIS these are:

1. Build/Buy & Sell: Intended to provide investors capital

gains in form of profit after sale.

2. Build/Buy & Own: Intended to provide investors

annuity income in form of rental income.
 Features of REIS

Joint ownership of a piece of Real Estate Asset by multiple

owners.

Fund dedicated to “build/buy & sell” or “build/buy &

sell” Scheme

Investment horizon between 1 - 3 years or in perpetuity as

the case may be.

All profit arising from sale or rental will be shared by unit

holders prorata in the ratio of their investments.
 HOW IT WORKS
Property desirable for purchase or development is
identified by the scheme arranger (GTBAM).
 HOW IT WORKS CONT’D

Analysis on the income generating potential and value

of property is carried out by GTBAM.
 HOW IT WORKS CONT’D

Potential Off-takers are identified with irrevocable off-take

agreements signed.
 HOW IT WORKS CONT’D

Funds are pooled from investors (subscribers) and the

property is purchased or developed.
 HOW IT WORKS CONT’D

Each subscriber is given a REIS Note stating their investment

and holding in the property. A structure could be worked
out to make the note tradeable (OTC) and acceptable as a
security for bank loans.
 HOW IT WORKS CONT’D

Property is sold or let out to off-takers.

 HOW IT WORKS CONT’D

Sale/Rental income is distributed among REIS subscribers in

the ratio of their investment in the property.
 Financing Structure

Investors are Managers & Reputable Finished

pooled and an SPV Trustees to be joint Construction Housing Unit
is registered with signatory to the firm such as:
investors as project account Costain
shareholders. Stabilini
Disbursement to Visinoni
SPV funds are Contractor will be Dori
lodged into an SPV made in line with C & D, etc
Account. agreed timelines &
work completion
certification
 Benefits of REIS

Superior return on investment

Investors opportunity to
diversify risk associated with
real estate investments

Opportunity for investors with minimum capital to

partake in the ownership of Real Estate assets in choice
location.
 Benefits of REIS

A dedicated Professional management team is

responsible for project execution, providing the
investor with expertise beyond his or her own
knowledge base.

It has a lower correlation to

equities than many other asset
classes, providing portfolio
stability.

Convenient payment terms to

suit Investors cashflow
 Investment Case
For prospective subscribers, the REIS provides the
opportunity of:

» Earning alternative income from a relatively secure source,

real estate.
» Spreading of risks across a diversified portfolio of real estate
assets.
» Flexible payment and investment schemes.
» Obtaining mortgage finance from GT Homes.
» Liquidity from the secondary market that will be developed.
» Obtaining bank loans with REIS note as security.
 Transaction Risk & Mitigants

Risks Mitigants
Developer/Promoters diversion of Contributions by investors will be
fund. made into a project account with a top
rated Trust company being a Joint
signatory to the account.

Abandonment of project by Performance Bond will be given by

Contractor/late delivery of project Contractors

Poor quality of work by contractor Performance Guarantees will be

provided by the Contractor, in addition
proper monitoring of day-to-day
construction by a team of experienced
consultants.
Liquidity Risk Early marketing of the property to
ensure that it is sold on or before it is
completed. offtakers commitment will
be received in many instance.
 Probable Subscribers
Probable subscribers to the REIS include:
» Cooperatives
» Financial Institutions
» Organisations
» Individuals
» .........................etc
 Contact

• Wealth Management
• Your Investment
| Securities Partner
Brokerage | Trusteeship | Investment Advisory

• www.gtbassetmanagement.com
• Email us: investing@gtbassetmanagement.com | Call us: +234 1 44 888 88
• 37, Karimu Kotun Street, Victoria Island. Lagos