Investment Note – Commercial Office, Bangalore

January 2017

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Private and Highly Confiden3al
Investment Overview
There is an opportunity to purchase a 6,000 square feet commercial office space in Umiya Business Bay
within the Cessna Business Park on Sarjapur Outer Ring Road, Bangalore for an all-in cost of Rs. 6,00,00,000
(Rs. 9,954 per sf).

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Select Pictures
PERSPECTIVE

FASCADE LOBBY

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Sample Office Spaces

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Project Master Plan
Umiya Business Bay is located within the Cessna Business Park which houses the HQs of CISCO and offices
of LG, InMobi, Flipkart, Akamai among others.

UMIYA

CISCO CAMPUS

Private and Highly ConfidenCal

LocaCon
Sarjapur ORR is the largest office market in Bangalore (40 million sf, 35% of total Bangalore market) with
offices of JP Morgan, CISCO, Accenture, Cognizant, Wipro, Oracle, Intel, Honeywell, SAP, HSBC, KPMG,
ADOBE, Sony, Goldman Sachs, Flipkart among others.

UMIYA
BUSINESS BAY

JP Morgan, CISCO, InMobi, LG

ADOBE

NOKIA
INTEL, GE,
Goldman Sachs KPMG

SONY, KPMG, Wells Fargo, Flipkart,

Honeywell
HSBC, Intuit

Accenture, Oracle, Cognizant

eBay, Cap Gemini

Wipro

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Private and Highly ConfidenCal
Purchase Price Break-up
Property Share’s all-in purchase price of Rs. 9,954 per square feet (PSF) includes registraCon & stamp duty,
legal fees, capex reserve and brokerage.

All-in Price
(Rs.)
Rs. Comments
Purchase Price Rs 5,46,90,000 • Rs 9,115 PSF
Add: Stamp Duty 27,89,190 • 5.1% of PP
Add: Brokerage 10,93,800 • 2.0% of PP
Add: Registration 5,46,900 • 1.0% of PP
Add: Cess 2,73,450 • 0.5% of PP
Add: Legal Fees 1,50,000
Add: Reserve 4,56,660 • Contingencies (refunded on sale)
Total Purchase Price Rs 6,00,00,000

Area (SF) 6,000

Purchase Price PSF Rs 9,954

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Private and Highly ConfidenCal
Rental Yield
The investment will yield a gross rental return of c. 8.36% in the first year which increases to 9.61% by Year
4 due to contractual rent escalaCons.

Rental Yield
(Rs. Per SF)

Year 1 Comments
Rent Rs 780 • Rs. 65 per sf
Add: Interest on SD 52 • 8% on 10 months rent
Total Rent Rs 832

Less: Management Fee (100) • 1% of Purchase Price per year

Net Rent Rs 732

Total Purchase Price Rs 9,954

Gross Yield 8.36%

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Private and Highly ConfidenCal
Rental Yield
The rental yield increases to 9.61% by Year 4 due to contractual rent escalaCons.

3 Year Rental Yield

(%)

10.00%
15% escalaCon in 3
9.50% years (contracted) 9.61%
9.00%

8.50%
8.36%
8.00%

7.50%
Year 1 Year 3

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Private and Highly ConfidenCal
Investment Highlights
We believe the pricing, locaCon and quality of the development will lead to significant upside over the next
3-4 years.

A.  ATTRACTIVE PRICE

–  Rs. 9,954 PSF for a completed rented office building on ORR

–  Lot sizes of 100 sf makes it liquid

B.  LOCATION:

–  Bulls-eye locaCon in India’s largest office market

–  Part of a campus with MNC tenants like CISCO, LG, KPMG

C.  HIGH RENTAL YIELD(1): 8.36% gross rental yield (tenant already in-place)

D.  STRONG CAPITAL APPRECIATION

−  At a 10% CAGR on exit, the returns are 17.5% and 1.81x

________________________________________________
(1)  Yield = Rent / All-in Cost 10
Private and Highly ConfidenCal
IndicaCve Financial Model
The investment will return 17.5% IRR and 1.81x mulCple of invested capital (MoIC) over 4 years without
assuming any debt.

Financial Model and Returns (*)

Day 0 Year 1 Year 2 Year 3 Year 4 Total

Investment Rs. (6,00,00,000) Rs. (6,00,00,000)
Rents (1) 46,80,000 46,80,000 46,80,000 53,82,000 1,94,22,000
Interest on deposit (2) 3,12,000 3,12,000 3,12,000 3,12,000 12,48,000
Sale Value (3) 8,78,46,000 8,78,46,000
Total Rs. (6,00,00,000) Rs 49,92,000 Rs 49,92,000 Rs 49,92,000 Rs 9,35,40,000 Rs 4,85,16,000

Profit Rs. 4,85,16,000

IRR 17.5%
MoIC 1.81x

Notes
(1)
Rs. 65 PSF rents and 15% escalation post 3 years
(2)
Assumes 10 months security deposit at 8% interest
(3)
Assumes 10% annual growth rate

________________________________________________
(*) Excluding management fees 11
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APPENDIX

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Risks
InvesCng in Property Share eliminates almost all risks normally embedded in real estate invesCng.

Risk DescripCon Property Share

• Zoning Risk • Land zoned for use other than residenCal

ý
• Title Risk • Land Ctle not clear
ý
• Planning Risk • Development plans not approved by government
authoriCes (BDA, BBMP, MoEF, AoA) ý
• Development Risk • Delays in construcCon
ý
• Cost Risk • Increase in costs of construcCon
ý
• Financing Risk • Increase in interest rates
ý
• CompleCon Risk • Occupancy cerCficate not received
ý
• Leasing /Sale Risk • Lease or sell to third-party
þ
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Private and Highly ConfidenCal
FracConal Ownership Vs 100% Ownership
FracConal ownership through Property Share provides diversity of investment, higher liquidity, fewer hassles
and professional management.

PROPERTY SHARE FULL OWNERSHIP

þ  No development, approval, construcCon risk ý High risk of delays, approvals, Ctle etc.

þ  Smaller Investment Amount ý High upfront investment

þ  Diverse ownership ý Concentrated risk

þ  Higher liquidity ý Low liquidity

þ  Professional management and operaCons ý Personal management and operaCons

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Property Management Services
Property Share helps owners in taking purchase / sale decisions and acCvely manages the properCes.

§  Property Tours
Purchase / Sale §  Draqing sale deeds
§  RegistraCon of property

§  Leasing
§  Tenant background checks
Property Management §  Rental negoCaCons
§  Draqing lease deeds
§  RenovaCons

§  Access to an online dashboard

Owner Services §  Monthly rent distribuCon
§  Quarterly updates

Others §  Society payments / meeCngs

§  Property tax payments

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Private and Highly ConfidenCal
Dashboard
Property Share owners get access to an online dashboard where they can view all their investments, returns
and property documents.

• Owners get access to all property documents, tenant credit reports, financials and returns through the dashboard.

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Property Share Founders CredenCals
Founding member of Blackstone Real Estate’s India office helping it become the 2nd largest office landlord in
India.

Equity Invested in Indian

>$1 bn Real Estate

InsCtuConal Real Estate

InvesCng Experience >7 years

Portolio managed
>30 mn sf across Bangalore

IRR achieved on exits >25%

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Private and Highly ConfidenCal
The Team
Property Share has a strong founding team with deep experience in insCtuConal real estate invesCng and
technology.

KUNAL MOKTAN, HASHIM KHAN,

Founder and CEO Co-founder and CTO

•  >7 years experience buying, •  Head of IT in a mulC-billion

managing and selling real
estate with The Blackstone
Group, the world’s largest real
estate fund
•  Invested and managed
properCes worth $4 billion in
India
dollar middle eastern
conglomerate with >13 years
experience in managing and
implemenCng technology and
processes
•  B. Tech from IIT Kanpur and
MBA from IIM Ahmedabad

•  MBA from IIM Ahmedabad

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Private and Highly ConfidenCal