Amer Group
September 2014
Securitization Investor Presentation
Contents
Section
Amer Group Overview 3
Amer Group Sales and Collection Process 16
Originator’s Securitized Projects in Detail 20
Servicer’s Financial Highlights 29
Securitized Portfolio Analysis 31
Real Estate Market 38
Appendix 44
Amer Group Overview I.
Amer in Brief Land Bank Breakdown (sqm mn)
Amer Group Overview Amer Group in Perspective
4
Overview
Vision &
Mission
Shareholding
Structure
Amer Group is a leading Egyptian real estate
developer offering mixed-use, family-oriented resort
destinations, grouped under the “Porto” brand
Amer endeavors to continuously improve their
efficiency, quality and service standards while
ensuring that the integrity, safety and respectful
status of our group are never compromised
≡ Amer Group (“Amer” or the
“Group”) is a leading family-
oriented real estate and
hospitality developer based in
Egypt
≡ Amer Group is the creator of
Porto: The region’s leading
creator and operator of mixed-
use, family-oriented first- and
second-home communities.
Each Porto development offers
residential units, retail shops,
hotels, restaurants and
entertainment venues in one
convenient location.
≡ The Group has five lines of
business and multiple revenue
streams: Real Estate, Malls,
Restaurants, Hotels and Others
(including Porto Vacation Club,
facilities management, and
retail, among others)
≡ Real estate activities
contributed 70.6% of Group
revenues in 1H14
Egypt Abroad
1.9
9.3
2.6
1.7
0.3 0.6
0.2 0.8
1.2
North Coast
Ain Sokhna
Cairo Marsa Matrouh
Sharm El Sheikh
Syria Jordan Morocco Total
35.18%
14.54% 6.78%
3.51%
20.79%
11.90%
7.30% Sol Global Holding Limited
Amer Wakf Limited
Mohamed Al Amin
Fineby Estates Limited
Free Float
Lantness International Limited
Egyptian Wakf Limited
5 lines of business; multiple
revenue streams
EGP 6.95 bn Total backlog
EGP 2 bn New 1H14 Real Estate sales
(recognized over 2 years)
Six Countries Spanning North Africa, GCC
9.3 mn sqm land inventory— including 6 upcoming projects
in Egypt with total BUA of 5.6 mn sqm
EGP 42 bn unsold inventory (largest in Egypt)
First-Homes Market Decisive push into the first-homes
market
At a Glance
Diversified Business Lines
Amer Group Overview Business Segments
5
• 17 projects total in Egypt,
Syria, Jordan (launched)
and Morocco (new)
• Total land area of 9.3 mn
sqm in Egypt and MENA
• Backlog of EGP 6.95 bn
(recognized over 2 years)
• 1,879 units sold in 1H14
• 1,038 units delivered 1H14
• 16 total Meeting Point malls,
including:
• 8 completed and open in
Egypt
• 5 under construction in
Egypt and Syria
• 3 licensed and in the
planning stages
• 86,113 sqm GLA (actual for
rent) across all 8 fully open
and operating Meeting Point
malls
• 376 new tenants in 1H14
• 5 new restaurants launched
in Egypt in 1H14 — three
outlets at Porto Cairo Mall
and two at Cairo Festival
City in Egypt in addition to
one in Abu Dhabi, with
plans to open additional
new locations in Egypt and
the Gulf.
• 61 restaurants across the
region
• 9,241 seats
• EGP 114 average spend
per cover
• 6 hotels in operation since
the launch of Porto Matrouh
Beach in June 2014
• 835 keys currently
• 113,088 total room nights in
1H14
• Other Group activities
include the Porto Vacation
Club, Total Facilities
Management (Total FM,
which provides facilities
management and
maintenance for all Amer
Group developments), Porto
Home (home furnishing
retail), newly established
entities, special purpose
vehicles and holding-level
functions at Amer Group.
Restaurants Real Estate Malls Hotels Other
70.6% Group
1H14 Revenues
3.4% Group 1H14
Revenues
16.0% Group
1H14 Revenues
6.4% Group 1H14
Revenues
3.6% Group 1H14
Revenues
Continue with the timely execution of the roll-out schedules in
Egypt
Amer Group Overview Group Business Strategy
6
≡ Amer Group aims to be a
leading family-oriented resort /
residential destination,
providing a complete
entertainment, dining and
shopping experience
≡ Amer offers a unique
proposition, providing a service
designed and solely dedicated
to families
Highly Integrated Business Model… …Supporting the Group’s Strategy
Complemented by
Supported by
Maximum operational efficiency, providing operational flexibility
Minimum operational and development costs
Complementary businesses to ensure efficiency and customer
satisfaction
Capacity to manage growth
Ensure different income streams to support the core business
Expanding within the MENA Region: Porto World in Agadir,
Morocco is in the planning stage; on the Dead Sea in Jordan and
in Tartous, Syria are under construction
Develop and expand the brand’s image
Strengthen and develop sales efforts locally and internationally
Capture market share in the primary home market – Porto Cairo,
Porto Pyramids, Porto October & Porto New Cairo
Increase the Group’s recurring revenue streams
Amer Group Overview Business Model
7
Amer Business Model
≡ Amer has a proven track record
of executing and delivering its
projects over 2-3 years from the
time of booking (versus 4-5
years for its peers)
≡ This is carried out through an
efficient business model which
involves, a) securing
inexpensive land plots in
frontier locations that can be
developed immediately; b)
commencing with a pilot
project, which includes the hotel
and mall sections of the
development, where potential
customers can visit and get a
feel of what to expect; c) off-
plan sales, which secures the
cash flows early on
≡ This helps minimize the Group’s
exposure to cyclical downturns
relative to peers holding larger
and more expensive land banks
≡ In case of downturns in
construction, Amer can ensure
its ongoing success by
operating as a lessor for its
malls, offering facilities to
already delivered units
including electricity, water, and
maintenance, and providing
attraction, entertainment and
food services
Amer offers a unique business model whereby it does not only depend on its real estate segment for revenues – The Group
has several sources of income including hospitality, entertainment, mall management and food services.
Secure Land and
Design Projects
Construct Pilot
Project
Launch Sales of
Residential Units
Asset Management,
Customer Care &
Leaseback
Delivery of
Residential Units
Start Construction
of Residential Units
Used as a marketing tool to create
awareness about the project Sales are launched off-plan
Amer offers leaseback services to
customers willing to rent their
residential units
Units are delivered usually 2-3
years from time of booking
Construction commences once a
considerable level of booking is
achieved
Amer Group Overview Group Structure – Subsidiaries
8
Legal Structure
Egypt Syria KSA BVI
Tropicana for
Projects
Restaurants
Amer Raya 99.9% 95.0%
Delmar for Real
Estate
Development
Real Estate Development
99.7%
Deals 99.9%
Porto New
Cairo
99.9%
Porto 6 October 99.9%
Delmar for
Tourism
Development
Tourism
99.96%
Services
Amer Syria 99.9% Porto
Mediterranean
Investments
100.0% New Tropicana
for Tourism
Facilities
Tropi (2) for
Tourism
Development
99.9%
99.9%
Porto Pyramids 70.0%
Total FM 97.0%
Al Amer for
Malls
97.0%
Tropicana for
Food Industries
Porto Air
99.7%
98.5%
Porto Home 98.5%
Al Amer for
Construction
70.0%
Al Alamein for
Education &
Development
67.5%
Porto Hotels 97.0%
Food Processing
Air Taxi
Trading
Construction
Education
Marketing
Key: Group Principal Activity
Note: The subsidiaries are grouped by country of incorporation
for illustrative purposes
Transaction Subsidiaries
Porto World
Porto Club for
Investment
Gargat Misr
99.9%
99.0%
99.6%
Hospitality
Others
Amer Group Overview Organizational Structure
9
Administration &
Legal
Hassan Ezzat
CEO
Dalia El-Kordy
Delmar for Tourism
Audit
Salah Amer
CFO
Riad Refaat
Deputy Chairman
for Planning
Omar Amer
CEO
Gamal FathAllah
Deputy Chairman
Mohamed El-
Sayed
CEO
Nouh
Chairman
Mr. Mansour Amer
Porto Sharm
Golf Marina
Porto Marina
Porto October
Delmar Real
Estate
Medical
Porto Matrouh
Amer Syria
Porto Jordan
Porto Morocco
Tropi 2
Porto New
Cairo
Amer Raya
Restaurants
Porto Hotels
Amer Malls
Porto
Commercial
Total FM
Porto Vacation
Club
Porto Holidays Porto Cairo
Group Organizational Structure
CEO
Hisham AbdelKhalek
Porto Matrouh
CEO Tropi 2
Salah Amer
Name: Omar Amer
Title: Vice Chairman & Chief Business Development
Officer
Role: Marketing Strategy
Experience: Responsible for developing the Group’s
strategic plans and overseeing the implementation of the
Group’s risk management policies and procedures
Name: Mansour Amer
Title: Founder, Chairman and CEO
Role: Vision and Leadership
Experience: Started in real estate development in
1989. Creator of the Porto World concept and believed
to be the first to introduce full service dining chains in
the Middle East
Name: Salah Amer
Title: CEO, Auditing – Amer Group
Role: Audit
Experience: Holds a BA in Commerce from Cairo
University. Has over 9 years of experience with Accor
Hotels. Previously CEO of Tropi 2 (Amer subsidiary)
Amer Group Overview Management Team
10
Name: Mohamed El Sayed
Title: Vice Chairman
Role : Execution Experience
Experience: Previously responsible for developing
Porto World, 20 years of experience in Egypt and
abroad
Name: Haitham Mohamed
Title: CEO, Malls
Role: Mall Management
Experience: Holds an MBA, Graduate Diploma in
Human Resource Management and Bsc. in Commerce.
Over 15 years of global operational experience, 11
years as HR Director at Orascom Telecom Holding
Senior Management Biographies
Name: Riad Refaat
Title: CFO
Role: Financial Control
Experience: 31 years of experience in hospitality
financial management. Previously worked in Hilton and
Marriot, before joining Amer as financial controller in
1999. Holds a BA in Commerce and studied in the
School of Hotel Administration – University of Cornell
Name: Dalia El Kordy
Title: CEO, Delmar for Touristic Development
Role : Marketing and Sales
Experience: Holds an MBA from Maastricht
University, over 20 years experience in marketing and
sales. Previously worked as the Marketing Director at
Raya, Marketing Manager at Al Ahram Beverages and
Brand and Marketing Manger at El Khorafi Group
Name: Hassan Ezzat
Title: Group Legal Advisor
Nationality: Egyptian
Experience: Former Undersecretary in the Ministry of
Local Development, Member of the Administrative
Control Authority for over 30 years
1
2 3
4
5
6
7
Amer Group Overview Projects Portfolio – Geographic Presence
11
Geographical Footprint
Completed
Projects
Under
Construction
1 North Coast, Egypt
2 Ain Sokhna, Egypt
3 Greater Cairo, Egypt
4 Sharm El Sheikh, Egypt
5 Syria
Porto Marina
Golf Porto Marina
Porto Marina Residence
Porto Sokhna
Golf Porto Sokhna
Porto Tartous
Porto Matrouh
Porto South Beach(1)
Porto Cairo
Porto New Cairo
Porto October
Porto Pyramids
Porto Sharm
Sales Launch Timeline
2005 2006 2007 2008 2009 2010 2011 2012 2013
Porto Marina
Golf Porto Marina
Porto Sokhna
Porto Sokhna
Golf Porto Sokhna
Porto Cairo
Porto South Beach
Porto Marina
Residence
Porto Cairo Mall
Porto Tartous
≡ Amer Group has actively
worked to transform from an
Egypt-oriented real estate
developer into the MENA
region’s leading creator and
operator of mixed-use, family-
oriented communities. To do
this, the Group has expanded
from its roots as a real estate
company operating only in
Egypt into a company with 5
LoBs and projects throughout
the region.
Porto Matrouh
Porto Sharm
Porto Cairo Medical
Center
Porto October
Porto New Cairo
2014
onwards
Porto Cairo Mall
Porto Dead Sea
Note (1): The first stage of Porto South Beach is ready for delivery
6 Morocco
Porto Agadir
7 Jordan
Porto Dead Sea
Residential Real Estate Portfolio – Projects Overview
Amer Group Overview
12
Second Homes, Egypt
Golf
Project Overview
Location: North Coast
Land Area (Sq M): 68,000
Total BuA (Sq M): 179,779
Licensed Residential Units: 1,076
Built Residential Units: 1,076
Status: Complete
Project Overview
Location: Ain Sokhna
Land Area (Sq M): 2,174,969
Total BuA (Sq M): 643,373
Licensed Residential Units: 5,168
Built Residential Units: 3,831
Status: Incomplete
Project Overview
Location: Ain Sokhna
Land Area (Sq M): 245,980
Total BuA (Sq M): 155,700
Licensed Residential Units: 590
Built Residential Units: -
Status: Under Construction
Project Overview
Location: Sharm ElSheikh
Land Area (Sq M): 648,392
Total BuA (Sq M): 442,424
Licensed Residential Units: 3,087
Built Residential Units: -
Status: Under Construction
Project Overview
Location: North Coast
Land Area (Sq M): 18,000
Total BuA (Sq M): 79,800
Licensed Residential Units: 520
Built Residential Units: 416
Status: Complete
Project Overview
Location: Ain Sokhna
Land Area (Sq M): 151,244
Total BuA (Sq M): 367,306
Licensed Residential Units: 1,674
Built Residential Units: 1,674
Status: Complete
Project Overview
Location: North Coast
Land Area (Sq M): 1,820,609
Total BuA (Sq M): 1,441,300
Licensed Residential Units: 15,000
Built Residential Units: 5,543
Status: Incomplete
Project Overview
Location: Marsa Matrouh
Land Area (Sq M): 338,985
Total BuA (Sq M): 190,800
Licensed Residential Units: 2,269
Built Residential Units: 1,947
Status: Incomplete
Residential Real Estate Portfolio – Projects Overview Cont’d
Amer Group Overview
13
First Homes, Egypt First Homes, Syria
Amer Group expanded into the first-homes market three years ago, marked by the launch of its Porto October development
In the coming three months, Amer Group will start delivering in four projects, namely: Porto Matrouh, South Beach, Porto Sharm and Porto Cairo
Mall
Project Overview
Location: Syria
Land Area (Sq M): 186,000
Total BuA (Sq M): 511,500
Licensed Residential Units: 3,050
Built Residential Units: -
Status: Incomplete
Project Overview
Location: Cairo
Land Area (Sq M): 101,980
Total BuA (Sq M): 135,433
Licensed Residential Units: 910
Built Residential Units: -
Status: Under Construction
Project Overview
Location: Cairo
Land Area (Sq M): 54,549
Total BuA (Sq M): 209,326
Licensed Residential Units: 545
Built Residential Units: -
Status: Under Construction
Project Overview
Location: Cairo
Land Area (Sq M): 1,381,000
Total BuA (Sq M): 607,145
Licensed Residential Units: 2,195
Built Residential Units: -
Status: Under Construction
Project Overview
Location: Cairo
Land Area (Sq M): 88,175
Total BuA (Sq M): 43,455
Licensed Residential Units: 85
Built Residential Units: 70
Status: Complete
Hotels Portfolio – Overview
Amer Group Overview
14
Porto World Hotels Overview
Porto World
currently has six
operating hotels
Porto hotels are
used as a
marketing tool and
point of attraction,
to bring potential
customers to the
different project
locations
These hotels
mainly target
Egyptian families,
and therefore, the
hotels’
performance is not
dependent upon
tourism flows
Two new hotels are
expected to be
launched in 2015
Ex
isti
ng
Ho
tels
Project Number of
Rooms Operational Date Pictures
Note (1): This hotel is not owned by Amer Group, it is only managed by Porto World (it is included in Porto Vacation Club)
Up
co
min
g H
ote
ls
These hotels are not
operational yet, so there are
no available pictures for the
rooms and resort facilities
Location
330 2005 Porto Marina North Coast, Egypt
72 2009 Porto Golf Marina North Coast, Egypt
139 2007 Porto Sokhna Ain Sokhna, Egypt
88 2011 Porto Tartous Tartous, Syria
115 2009 Cancun(1) Ain Sokhna, Egypt
35 Q1 2015 Porto Sokhna El Gabal Ain Sokhna, Egypt
154 Q1 2015 Porto Sharm El Sheikh Sharm El Sheikh, Egypt
91 2012 Porto Matrouh Marsa Matrouh, Egypt
Amer Group Overview Restaurants Portfolio – Overview
Restaurant Portfolio Summary
Name Launch Number of
Outlets
Number of
Seats
Av. Spent /
Person (EGP)
Revenues
1H14
Brand Description Ownership
1994 20 4,229 95 53,097,068 Casual dining Tex-
Mex restaurants Franchise agreement
1996 10 1,573 135 26,435,499 Film-themed
Mediterranean grill
100% owned, Amer
Group brand
2006 6 1,184 139 9,088,140
Mediterranean-style
as well as some
Asian dishes.
100% owned, Amer
Group brand
2001 3 478 183 6,380,637 Seafood restaurant 100% owned, Amer
Group brand
2001 7 1,437 128 8,741,389 Traditional Italian
grill Franchise agreement
2002 5 340 64 1,115,276 French café and
patisserie Franchise agreement
2012 9 N/A N/A 1,552,089 Ice-pops Franchise agreement
HUM HUM 2014 1 0 0 76,209
Fast food chain
serving sandwiches
and desserts
100% owned, Amer
Group brand
Total 61 9,241 114
*As of 1H14
Amer Group Sales and Collection Process II.
Amer Group Sales and Collection Process Acquisition of Clients
17
Amer Sales Channels
≡ The Group has provided its
credit team with training by
banking specialists, to be able
to run a comprehensive in-
house credit assessment on
potential clients, a critical stage
that assesses the client’s ability
to meet their financial obligation
towards the Group
≡ Discounts on cash purchases
are available, with a rate that
never exceeds 10% to 15% of
the total unit price
Client Filtering Process
≡ Amer Group has one of the
largest sales teams in Egypt
≡ It reaches out to clients
through the following
methods:
Sales Offices
Network
1
Sales Offices
Abroad – Gulf
Region
2
Outdoor Sales
Team
3
Real Estate Brokers
4
Does the client have
previous delayed
installments?
Application
Down Payment
(10% of unit price)
Sign Authorization
for I-score Check
I-score Credit
Check
Deputy Chairman
and Budgeting &
Planning Manager
If applicant has a
negative score, usually
rejected but each case
is judged separately
Does the client have
any legal action?
Positive Score
No
Yes
Rejected
Yes
No Contracting
Department
Sign
Contract
Amer Group Sales and Collection Process Collection & Cancellation
18
Group Collection Reporting Structure
≡ Each one of the subsidiaries
has its own collection team,
which reports directly to the
Group’s CEO about the
collection rate and performance
≡ The team also reports to the
holding Group’s head of
collection department, who
oversees the collection
procedures for the entire group
CEO
Head of Collection
Tropi (2) for Tourism
Development
CEO
Delmar for Real Estate
Development
CEO
Delmar for Tourism
Development
CEO
Head of Collection Head of Collection Head of Collection
≡ The collection department is divided into two sections, collections and contract cancellation, each of which has a different role and objective
Collection Department Process Highlights
Collection Section
≡ The collection section follows up
on and collects installments from
clients:
= Banks provide each company
with daily collection reports
= Clients with delayed
installments are granted an
extension period to pay their
dues, after being approved by
the company’s CEO
= If the client fails to pay in a
one-month period, the case is
automatically forwarded to the
contract cancellation section,
which also reports to the
company’s CEO
Head of
Collections
Bounced
Checks
Manager
7-Member
Team
Contract
Cancellation
Manager
8-Member
Team
(external)
6 Member
Team
(internal)
Transfer cases
after a 1-month
extension period
Cancellation Section
≡ The contract cancellation section’s
main purpose is to recover the
units back from clients
≡ The recovery process starts by the
team contacting clients to inform
them about the intention to start
taking legal action against them
= First step of the process is to issue
an official court warning
= Clients are then banned to enter
any of Amer’s projects until the
dispute is settled
= During the same time, electricity
and water are cut off from clients’
units to pressure clients to pay,
especially since Amer is the main
utilities distributor in all of its
projects
Amer Group Sales and Collection Process Collection & Cancellation Cont’d
19
Contract Cancellation Timeline
≡ Amer Group has not had to
take legal action except in a few
extraordinary cases; when legal
action has become necessary,
the time frame for completing
the case is very hard to
estimate
5 Days 47 Days 54 Days 90 Days
≡ Banks send daily client
payment report to Amer
including completed
payments and bounced
checks
≡ Bounced checks take five
working days to be
reported to Amer
Banks Collection Team Contract Cancellation Legal Action
≡ The collection team starts
following up with clients
with bounced checks
≡ The team follows up with
clients for two weeks
≡ Delay exceptions require
an approval from the
Group's CEO
≡ The Group grants a one-
month period to settle
payments
≡ Delayed cases are
automatically forwarded to
the cancellation
department after the one-
month extension period
≡ Once the cases are
received clients are
banned from entering any
of the projects
≡ The recovery process
starts by the team notifying
the client with impending
court warnings (4-7 days)
≡ Cases are usually settled
before this stage as
clients understandably
prefer to keep their units
and are reluctant to
forfeit amounts already
paid
≡ Legal action has become
necessary with only
approximately 1% of the
Group's current portfolio
Originator’s Securitized Projects in Detail III.
Originator’s Securitized Projects in Detail Porto Marina
21
Masterplan
Project Factsheet
Built Up Area by Segment Built Up Area by End Use
65% 10%
16%
10%
Residential Commercial
Hotel Public Utilities
% of Project Included in the Portfolio
Total BuA (Sq M): 179,779
Launch Date 2005
Start of Operations Date 2007
Total Development Cost (EGP mn) 470
Land Area (Sq M) 68,000
Project Timeframe 2005-2007
% Complete 100%
Total Sales (EGP mn) 1,231
87%
13%
Sold Leased
A contemporary modern real estate development, featuring residential units, a
hotel, a mall, restaurants with a wide variety of amenities including: water
activities, cinemas, kids activities, spa complex, a private beach and a yacht club
Weight of Project in Portfolio:
39%
% of Project in Securitized Portfolio
9.7%
Originator’s Securitized Projects in Detail Porto Marina Cont’d
22
Average Unit Price (EGP/Sq M) Project Revenue Recognition (EGP mn)
Units Roll–out Schedule Units Sold
450
32 41 57
100 128
Before 2009
2009 2010 2011 2012 2013
142
192
94
47 40
86
56
2007 2008 2009 2010 2011 2012 2013
11,081
13,362
15,843
13,839
16,184 15,071 14,873
Before 2009
2009 2010 2011 2012 2013 H1 2014
622
6 3
79
164
103 95
Before 2009
2009 2010 2011 2012 2013 H1 2014
Originator’s Securitized Projects in Detail Golf Porto Marina
23
Masterplan
Project Factsheet
Built Up Area by Segment Built Up Area by End Use
97%
1% 2% 1%
Residential Commercial
Rental Public Utilities
Total BuA (Sq M): 1,441,300
A residential, shopping and golfing development set on a 1.8 mn sqm plot of land
that includes the following: an 18 hole golf course, 25 swimming pools, more than
180 retail stores, Aqua Porto, water sports, restaurants, hotel serviced
apartments, as well as various other activities and entertainments
Launch Date 2006
Start of Operations Date 2008
Total Development Cost (EGP mn) 1,411
Land Area (Sq M) 1,820,609
Project Timeframe 2006-2008
% Complete 100%
Total Sales (EGP mn) 2,175
99%
1%
Sold Leased
% of Project Included in the Portfolio
Weight of Project in Portfolio:
26%
4.1%
% of Project in Securitized Portfolio
Originator’s Securitized Projects in Detail Golf Porto Marina Cont’d
24
Average Unit Price (EGP/Sq M) Project Revenue Recognition (EGP mn)
Units Roll–out Schedule Units Sold
2,632
261 329 380 357 300
Before 2009
2009 2010 2011 2012 2013
129
1,129
756 738
431
332
2008 2009 2010 2011 2012 2013
4,095
5,596 5,720 5,423
6,789 6,553 6,295
Before 2009
2009 2010 2011 2012 2013 H1 2014
109
470 475
274 250
53
113
Before 2009
2009 2010 2011 2012 2013 H1 2014
Originator’s Securitized Projects in Detail Porto Sokhna & Golf Porto Sokhna
25
Masterplan
Project Factsheet
Built Up Area by Segment Built Up Area by End Use
Total BuA (Sq M): 1,010,679
Egypt’s first-ever mountain-top resort and golf course featuring residential units
and retail outlets with a number of facilities including : swimming pools, private
beach, 3 malls, water sports, as well as a variety of activities
Launch Date 2006
Start of Operations Date 2009
Total Development Cost (EGP mn) 2,489
Land Area (Sq M) 2,326,213
Project Timeframe 2006-2009
% Complete 100%
Total Sales (EGP mn) 3,462
96%
4%
Sold Leased
81%
4%
3% 12%
Residential Commercial
Others Public Utilities
% of Project Included in the Portfolio
2.6%
% of Project in Securitized Portfolio
Weight of Project in Portfolio:
24%
Originator’s Securitized Projects in Detail Porto Sokhna & Golf Porto Sokhna Cont’d
26
Average Unit Price (EGP/Sq M) Project Revenue Recognition (EGP mn)
Units Roll–out Schedule Units Sold
2,626
105 279
529 323 321
Before 2009
2009 2010 2011 2012 2013
3
749
316
899
674
299
2008 2009 2010 2011 2012 2013
5,276 5,893 6,133
6,830 7,404
5,824
8,478
Before 2009
2009 2010 2011 2012 2013 H1 2014
302
779 708
347 309
153 125
Before 2009
2009 2010 2011 2012 2013 H1 2014
Originator’s Securitized Projects in Detail Porto Cairo Mall
27
Masterplan
Project Factsheet
Built Up Area by Segment Built Up Area by End Use
Total BuA (Sq M): 72,719
58% 25%
17%
Residential Commercial
Parking Public Utilities
Located in New Cairo, next to the JW Marriot Hotel, Porto Cairo Mall is a full service
mall with a built-up area of 72,719 m2 and a parking capacity of up to1,000 car
slots. The mall will feature retail shops, a hyper market, restaurants, cafes, a theme
park, showrooms, kids playing area and a cinema
Launch Date 2010
Start of Operations Date 2013
Total Development Cost (EGP mn) 464
Land Area (Sq M) 38,277
Project Timeframe 20010-2014
% Complete 85%
Total Sales (EGP mn) 760
100% 100%
Sold Leased
% of Project Included in the Portfolio
% of Project in Securitized Portfolio
Weight of Project in Portfolio:
11%
4.2%
Originator’s Securitized Projects in Detail Porto Cairo Mall Cont’d
28
Average Unit Price (EGP/Sq M) Project Revenue Recognition (EGP mn)
Units Roll–out Schedule Units Sold
83
384
131
40
2010 2011 2012 2013
64
175
2010 2011 2012 2013
22,173
26,027 27,320 26,504
22,072
2010 2011 2012 2013 H1 2014
85
182
45
2010 2011 2012 2013 H1 2014
Servicer’s Financial Highlights IV.
Transaction Portfolio
Structure
Financial Performance
Servicer’s Financial Highlights Group Subsidiaries – Transaction Portfolio Companies’ Financial Performance
30
Revenue (EGP mn)
Porto
Cairo
Mall
Porto
Cairo
Villas
Porto
Cairo
Medical
Center
Transaction / Portfolio Projects
Gross Profit & Margin EBITDA & Margin Net Income & Margin
Tro
pi (2
) fo
r T
ou
rism
Develo
pm
en
t
Delm
ar
for
Real
Esta
te
Develo
pm
en
t
Delm
ar
for
To
uri
sm
Develo
pm
en
t
Net Income
(EGP mn) Margin (%)
Gross Profit
(EGP mn) Margin (%)
EBITDA
(EGP mn) Margin (%)
Net Debt / Equity (x)
86 83
128 131
2010 2011 2012 2013
37 35 51 51
43%
41%
40%
39%
2010 2011 2012 2013
32 17 34 49
37%
20%
27%
37%
2010 2011 2012 2013
26 14 26 36
31%
17%
21%
27%
2010 2011 2012 2013 -1.09
-0.44
-0.78
-0.47
2010 2011 2012 2013
802
735
383 337
269
2009 2010 2011 2012 2013
430 455 151 180 130
54%
62%
39%
53%
48%
2009 2010 2011 2012 2013
377 404 108 123 81
47%
55%
28%
36%
30%
2009 2010 2011 2012 2013
363 375 86 67 43
45%
51%
22% 20%
16%
2009 2010 2011 2012 2013
-0.01
0.20
0.22 0.22
0.12
2009 2010 2011 2012 2013
540 564
429 471
201
2009 2010 2011 2012 2013
204 305 241 314 140
38%
54% 56%
67% 70%
2009 2010 2011 2012 2013
135 225 170 235 65
25%
40% 40%
50%
32%
2009 2010 2011 2012 2013
157 208 168 141 35
29%
37% 39%
30%
17%
2009 2010 2011 2012 2013
0.5
0.4 0.4
0.1
0.0
2009 2010 2011 2012 2013
Securitized Portfolio Analysis V.
Securitized Portfolio Analysis Securitization Process Mechanism
32
Step I: Evaluation
Step III: Post Issuance
Step II: Bond Issuance
≡ The companies are evaluated from a risk point of view to assess their bankruptcy likelihood, especially since the
three companies that own the portfolios will act as the servicers of the securitized portfolio Originating
Companies
≡ Concentration of job sectors, governorates, income range and outstanding loans of the clients
≡ History of collections and delinquency
≡ Historical default rate
≡ Historical recovery rate
Collections
Performance
Po
rtfo
lio
Legal:
≡ All the agreements between the originator, the servicer, the custodian, the backup servicer and the rating agency
are reviewed by the transaction legal advisor to make sure the rights, terms and conditions are well stated and
defined
≡ Contracts between Amer and its clients are referred to the legal advisor to assess them
Operational:
≡ The portfolio is assessed in terms of expected cash inflows and delinquency rates
Process
≡ The bond issuance model is developed by the
transaction financial advisors, who structure the
model according to several factors such as the
portfolio cash flow, the discount rate, the
expected delinquency rate and the
collateralization required
≡ The auditor and the rating agency review the
transaction model and approve it after
discussions with the financial advisors
Servicing:
≡ The three originators act as the servicers of the portfolio
≡ The collection is executed through the custodian, which has all the collection
checks and will send them for collection through its checks collection
department. The custodian notifies the servicer with any bounced checks for
follow-up and collection, with all collections and settlements transferred to the
custodian
≡ All Amer Group collections are executed through checks and there are no
direct debit collections or collections by any other means
Auditing:
≡ The auditor performs its engagement to audit the portfolio on a quarterly basis
Rating:
≡ The rating agency performs a comprehensive assessment of the portfolio and
bond issuance performance on an annual basis. Also, a monthly assessment
will be performed
Customer’s Bank
1- Checks sent for
Collection
Custodian
2- Cash Collected &
Bounced Checks
Customers
Servicer Contact Securitization
Bondholders
5- Coupon Payments
7- Monthly Collection &
Bond Service Reports
7- Monthly Collection Reports
6- Collection of
Bounced Checks
4- Reimbursement of
Bounced Checks
3- Bounced Checks
Amer Securitization Process
33
Securitization Schematics
≡ The originating companies will
transfer their receivables by means
of true sale to a bankruptcy-remote
special purpose entity, the Issuer
≡ Transferring the receivables to the
Issuer ensures that the underlying
asset pool is held separate from
the other assets of the originator
≡ The Issuer issues notes (the
“Bond”) to interested investors (the
“Bond Holders”) and receives the
Bond proceeds
≡ The Custodian holds the
receivables (checks) for the benefit
of the Bondholders
≡ The custodian will be responsible
for the check collections on its due
date and the servicer will only be
involved in case of a bounced
check
≡ The Issuer pays the Bond Holders
their interest & principal based on
the Bond terms
≡ The proposed scenario to be
adopted for the collection of Amer’s
portfolio after securitization is such
that the three originators (i) Delmar
Tourism Development, (ii) Delmar
Real Estate; and (iii) Tropi 2, will
act as the servicers of the portfolio
Originators
Sarwa Securitization Co.
(Issuer)
Bondholders
1- Asset Pool (Accounts Receivables)
2- Bond Issuance
4- Cash Proceeds
3- Cash Proceeds 7- Bond Servicing
6- Collection
Proceeds
Tropi 2 Delmar
Tourism
Delmar
Real
Estate
Securitized Portfolio Analysis
Clients
5-Collection Proceeds
Servicers
(Delmar RE, Delmar TD, Tropi 2)
Custodian
CIB
Default recovery mechanism
≡ A parallel multilateral default recovery mechanism activated concurrently. The two layers of default recovery are activating credit insurance and trying to
sell the reposed property in parallel.
≡ The servicer will be paid a collection fee of 150,000 calculated and paid monthly from the outstanding portfolio accounts receivable balance
≡ Reserves are built up from the proceeds of the portfolio installments of the first three months, adjusted afterwards to equal 5% of the monthly outstanding
bond balance
Securitized Portfolio and Bond Overview
Securitized Portfolio Overview
34
Securitized Portfolio
Bond Structure
Project Porto Marina & Golf
Porto Marina Proto Cairo Mall
Porto Sokhna & Golf Porto
Sokhna Total
Originator Delmar for Tourism Delmar for Real Estate Tropi 2
Securitized Portfolio (EGP mn) 172.5 30.3 55.8 258.7
Weight 67% 12% 22% 100%
***Expected Coupon rate of the two tranche is subject to change according to prevalent market conditions
Tranche A Tranche B
Expected Size (EGP mn) 121 101
Expected Coupon*** 0.75% over 1 year T-Bills (net of tax) 2.3% over 1 year T-Bills (net of tax)
Tranche Weight 55% 45%
Tenor (months) 13 Up to 54
Frequency of Principal Payment Quarterly Monthly
Frequency of Interest Payment Quarterly Monthly
Bond Structure Pre-determined amortization Pass-through
Target Rating(1) AA A
Liquidity Reserve 5% 5%
Servicer Collection Fee 150K Monthly 150K Monthly
Securitized Portfolio Analysis
Note (1): The rating process is still being finalized; however, this is the bond’s target rating
The beginning of the transaction’s cash flow is September 2014. The originators are obliged to transfer any installments collected after September 2014 to the custodian,
after the financial closure of the transaction.
Securitized Portfolio Analysis Portfolio Analysis
≡ Amer’s portfolio consists of four
portfolios that represent the
receivables of four real estate
projects: Golf Marina, Porto
Cairo Mall, Porto Marina and
Porto Sokhna, with a total value
of EGP258.7mn:
= Average loan amount:
EGP 433,533
= Average tenor: 31
months
Breakdown by Expiry Date of Loan (EGP mn)
Breakdown of Portfolio Age Range
Breakdown of Outstanding Loan Amount
Breakdown by Governorates
35
53.8%
18.2%
13.6%
2.1% 1.9% 1.7% 1.4% 1.3% 0.8% 0.8% 0.6% 0.3% 0.3% 0.2% 2.8%
Cairo
Giz
a
Ale
x
Suez
Dakahliy
a
Port
Said
Ism
aili
a
Shark
eya
Dam
ietta
Monofe
ya
Gharb
eya
Kaly
oubia
Red S
ea
Fayy
oum
Oth
ers
4.5%
8.9%
6.1%
13.2%
33.0%
13.2%
5.8%
11.5%
0.8% 3.0%
< 1
00k
100-2
00K
200-3
00K
300-4
00K
400-6
00K
600-8
00K
800-1
000K
1000-1
500K
1500-2
000K
>2000K
1 11
51
8 3 1 9
77
22 3 8
46
6
3
8 19
5
1
2
2014 2015 2016 2017 2018
Golf Marina Porto Marina Porto Sokhna Porto Cairo Mall
15-25 26-35 36-45 46-55 56-65 66-75 75+
Golf Marina Porto Marina Porto Cairo Mall Porto Sokhna
Collection Process Overview
36
Collection Process
90 Working Days
Description
≡ The collateral checks will be transferred from Amer to the custodian
before the financial closure of the securitization transaction
≡ The custodian will send the checks for collection
≡ The custodian will notify the servicer through regular daily reports
showing the bounced checks, after sending returned checks for
collection a second time
≡ After receiving notification from the custodian about delinquent
customers, the servicer (Amer subsidiaries – the originators) will
start a follow-up with delinquent customers
≡ After receiving an official request from Amer to withdraw bounced
checks for the purpose of proceeding with legal actions, the
custodian will deliver the bounced checks to the servicer
≡ Amer shall send the custodian a copy of the court documents
≡ The servicer will activate credit insurance, and Deals will try to sell
the unit. Whichever pays the delinquent amount first, this ensures a
more reliable cash flow.
1
2
3
4
5
6
7
T+2
T+5
T+7
T+21
T
21 Working Days
30 Working Days
+2
1
+9
+
15
Checks sent out for collection
Servicer will take all legal actions to cancel the
contract legally
Notification of
insurance
Timeline and Key Milestones
Multiple Targeting
≡ After 30 days from delinquency, the servicer will both notify the insurance company and try to sell the unit. This offers multiple layers of
protection.
≡ If Deals fails in selling the disputed unit in 30 working days:
An independent real estate broker will be hired to sell the unit
Securitized Portfolio Analysis
Custodian will notify the Servicer with uncollected
installments
Bounced Checks sent out for collection a second time
Servicer will attempt to collect due checks
Servicer is notified about the collection process
Deals will try to sell
the unit
Payment by Insurance
Hire and independent
real estate broker
Multiple
Targeting
45 Working Days
+2
1
66 Working Days
60 Working Days
Securitized Portfolio Analysis Default Risk Mitigation
Default Risk Mitigation Process
37
≡ In case the client defaulted in one monthly installment or one quarterly installment or one semi-annual or annual installment,
the servicer will activate the Credit insurance mechanism Trigger for Credit
Insurance
1
≡ After fulfilling the documents required by Misr Insurance, the insurance company will pay Amer 90% of any due installments
within 21 days, after the submission of the required documentation
≡ A legal case will have to filed against the unit’s buyer in order for the credit insurance company to pay the installments
Documentation
2
≡ Credit insurance will be paid by the insurance company after executing the procedures listed in the credit insurance Terms
and Conditions Post Contract
Cancelation
3
≡ In this transaction we assume that after credit insurance is activated, the recoverable amount will not be received in full and
not received instantly, for conservatism. The full amount will be recovered after 1 year of activating the credit insurance Recovery of Due
Installments
4
Other Risks
Land Installments, Property Insurance and Credit Insurance
≡ Amer has the option to cover all future land installments, property insurance
and credit insurance through:
= Issuing a letter of guarantee equal to a percentage of the total bond size,
the LG amount will be determined by the rating agency; or
= Opening an escrow account
Liquidity Risk Mitigation
≡ The custodian is obliged to open an account to act as a liquidity reserve
≡ The balance of the reserve account will be held at a level of 5% of the
outstanding portfolio, to cover 6 months of interest and senior bond
expenses
Current Portfolio Loan to Value (LTV) Ratio
LTV No. of Units Asset Value
(EGP mn)
Portfolio
(EGP mn)
50% 348 372.91 72.54
50%-60% 35 39.55 21.31
60%-70% 122 117.20 77.22
70%-80% 70 92.77 71.33
80%-93% 15 18.82 16.33
≡ All the risk embedded in the transaction has been taken into consideration, and various risk mitigation techniques are included in the transaction structure and
financial model; this will mitigate the inherent risk in the transaction that might be recurring in the future
≡ All risk mitigation mechanisms have been deemed sufficient by the rating agency
Real Estate Market VI.
82
33 33 28
25
8 4 3 2
2% 1% 1%
2%
3%
5%
3%
2%
6%
Population (mn) Growth (%)
2% 6%
17%
25%
50%
High Higher Middle
Lower Mid Upper Low
Lower Low
Real Estate Market Demographics and Sector Fundamentals
Source: Central Bank of Egypt, IMF, World Bank
Note (1): 2012 Figures
Note (2): High Income level group: Monthly Salary > 20,000 EGP, Higher Middle: Monthly Salary 8,000 – 20,000, Lower Middle: Monthly Salary 3,000 – 8,000, Upper Low:: 1,400 – 3,000, Lower Low: Monthly Salary < 1,400
≡ Egypt’s demographics remain
intact helping fuel future growth
despite inflationary pressures
≡ Upside in the real estate industry
is further amplified by the
increasing annual marriages and
the prevailing under-penetration
of consumer credit in Egypt
≡ Its large and young population is
expected to continue contributing
to the long term health of Egypt’s
economy
≡ Moreover, the country’s evolving
rural/urban dynamics and
changing social trends are
constantly creating new market
opportunities for real estate
developers
Coupled With Supportive Demographics
68%
65%
62%
59%
58%
57%
56%
56%
57%
57%
57%
57%
57%
56%
32%
35%
38%
41%
42%
43%
44%
44%
43%
43%
43%
43%
43%
44%
19
50
19
55
19
60
19
65
19
70
19
75
19
80
19
85
19
90
19
95
20
00
20
05
20
10
20
15
% of Rural Population % of Urban Population
Attractive Industry Dynamics with Room For Further Growth
Annual Marriages (‘000) Mortgage Penetration Rate Retail Loans Penetration
1
1
590
450 500
570 580 560 555
630 670
780 850
2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
8% 9% 11% 16% 18% 20% 20% 22%
58%
78%
2% 2%
5% 6% 6%
8%
15%
17%
≡ With annual marriages reaching 850k in 2010,
demand on real estate, with strong emphasis
on the urban residential units, is expected to
amplify going forward
≡ The current low mortgage and retail loan penetration rates reflect further growth prospects in the real estate
market going forward; increased availability of liquidity through further mortgage penetration will enable the
pent-up demand to materialize
39
21%
22%
20%
13%
11%
7%
4%
21%
23%
19%
13%
11%
7%
4%
25% 5% 15%
<10
10-20
20-30
30-40
40-50
50-60
60-70
>70
Female Male
Population(1) Population Age Brackets Urbanization Income Level(2)
≡ Egypt’s current young yet growing population of 80mn is coupled with an urban population of 43%; this demand for urban real estate is bound to increase significantly
≡ Population segmentation illustrates unmatched growth opportunities in the middle to low segments of the real estate market
World Average: 1.2%
2% 2%
Real Estate Market An Underserved Market with Significant Growth Potential
Source: Central Bank of Egypt, EFG-Hermes Research, Brokers’ Reports, JLLS, EFSA, Brokers’ Reports
≡ The country’s robust real estate
demand drivers, coupled with
its changing social trends, has
created a significant supply
shortage, especially in the
middle income segment of the
market which currently offers an
unmatched growth opportunity
for real estate developers
195 280
331
611
85
Urban Supply
Urban Demand
Rural Demand
Total Annual
Demand
1
1
The urban real estate
market is currently
faced with a supply
shortage of c. 85k units
p.a
≡ Increased demand with respect to urban
residential units will further aggravate the current
shortage, inducing real estate industry players to
boost up new project developments
265
272
280
289 293
2009 2010 2011 2012 2013
Urban Residential Housing Demand With Urban Demand Outstripping Supply
40
≡ Real estate investments’ attractive returns and the growth prospects on the
back of strong demographics have helped drive further investments in the
sector, this has been reflected through the historical increased annual
contribution to Egypt’s GDP
≡ Historically, the construction and real estate sectors of the economy have
outperformed the country’s rate of overall economic growth
≡ Such attractive growth rates are expected to continue going forward
Construction & Real Estate Contribution To GDP Construction & Real Estate Growth vs GDP Growth
Continuous Sector Growth
Urban Demand Outstripping Supply (Units ‘000)
8.0% 8.2%
7.2% 7.4%
7.7% 8.0% 8.1%
7.0%
04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12
5% 7% 7% 7%
5% 5%
2% 2%
5%
14% 16% 17%
11% 13%
4% 3%
04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12
GDP Growth Sector Growth
569
1,237
1,261
1,376
1,400
1,867
1,973
4,066
4,383
7,021
10,300
13,862
15,933
19,500
Cairo
Beirut
Amman
Johanesberg
Kuala …
Istanbul
Marrakech
Dubai
Warsaw
Madrid
Beijing
Paris
New York
London
Apartment Prices / Sq M (US$)
Annual Residential Units Supply & Demand
Upscale Middle Low-end
Supply Demand Shortage
5,000 50,000 70,000
Amer’s target market
Competitive Landscape
≡ Amer successfully
positioned itself in a niche
market, targeting middle
to upper classes while
offering a variety of other
complementary services /
products through its Porto
World brand that set it
apart from the other
developers
≡ Amer has no disputed
land plots unlike a number
of its Egyptian peers
Real Estate Market
Market Players
41
High None
Developer Land Bank
(mn sqm)
Land
Concentration
Disputed Land
Plots
Product
Positioning
11-12 Unit
Cancelations
Second Home
Offerings
Leasable
Space
Hospitality
Segment
Low Significant
Note (1): Calculated on YTD basis
Source: Bloomberg, Brokers’ Reports
MCAP (US$
mn)
49 East
Cairo 1,723
8.6 West
Cairo Not Yet 287
41 Sahl
Hasheesh Anchor
Developers N/A 152
9.8 East
Cairo N/A 446
Heliopolis
Housing
40 East
Cairo N/A 388
12.3 NA 282
Restaurant
Segment
23.2 West
Cairo 503
Industry Trends
≡ Post political unrest, real
estate players have
adjusted to the changing
environment shifting their
focus to cater for client
needs and have
undertaken significant
measures to reinstate
healthy operational
progress
≡ The effects are likely to
reap rewards in 2014-15
Real Estate Market
Positive Sector Outlook & Trends
Source: Bloomberg, Central Bank of Egypt, EFG-Hermes Research, Brokers’ Reports
42
Outward Movement Likely to
Continue New Incentive Schemes Strong Construction & Deliveries Shift in Product Offering
≡ Conditions in central Cairo remain
challenging due to intensifying
traffic, lack of parking spaces and
security disruptions
≡ Businesses and individuals will
continue their steady movement to
the outskirts as more high quality
commercial space is being delivered
in Cairo’s satellite cities
≡ During 2013 deliveries of new retail
and entertainment outlets in these
areas facilitated additional demand
and created further incentives for
buyers in these areas
≡ Given minimal changes in 2013 in
local credit conditions and stringent
bank financing requirements, real
estate companies are poised to
stretched payment terms
≡ Local developers are expected to
continue to play on the affordability
of their products, extending
payments beyond delivery dates,
lowering the size of down payments
and relaxing cancellation policies
≡ Marketing efforts are expected to
stress on track record, with a shift in
payment policies geared towards
delivery dates
≡ Strong deliveries are expected in
2014 as most real estate players
make up for the delay in deliveries
during post 2011
≡ Deliveries will impact the
companies’ 2014 financial
statements and cash generating
abilities allowing for a continued
enhanced construction pace
≡ This should reflect positively
enhancing customer confidence in
the sector
≡ Given numerous project launches
prior to 2011 that were geared
towards the upper income bracket,
supply / demand prospects have
become unfavorable in this
segment
≡ Real estate players have adapted
by shifting the unit offerings to cater
to the under-supplied middle /
lower-middle segments by offering
smaller units of the same quality
Current Previous
Built Up Area
Land Area
Price per Sqm
Recent Outskirt Facilities
International Schools
Global Banks
Commercial / Retail
Low/Smaller High/Larger
Real Estate Becoming a More Attractive Investment Class
Lack of High Return Investments…
Decline in Stock Market Attractiveness 1
Restrictions on Money Markets Funds 2
Foreign Currency Restrictions 3
…Leading to Renewed Interest in Real Estate Investments
7,125 11,373
6,227 6,884 8,260 13,818
7,497 8,211
New Cairo - Apartment
New Cairo - Villa 6th of October - Apartment
6th of October - Villa
Q42012 Q12013
≡ The increase in net sales levels for real
estate developers showcases the
investors shift to real estate as a
significant investment class in anticipation
of the foreseen currency depreciation and
increased inflation, given real estate’s
nature as a hedge against currency
depreciation and domestic inflation
Challenges and Potential Risks
Real Estate Market
Sector Risks
43
Impact of Political
Situation
≡ Post the revolution, many real estate developers suffered from 2 main issues:
= Increased cancellations or delinquencies, due to decreased wealth, low investment appetite in times of socio-economic
uncertainty and more tightened spending in fear of a deteriorating economy
= Execution risk, due to frequent worker strikes and restrictive curfews
≡ Although the political situation has improved recently, any unexpected political event could possibly have negative
implications on the sector’s performance
Cancelations (EGP mn)
Implementation of
New Real Estate
Tax Law
≡ The new real estate tax has been heavily criticized and several previous governments were unable to implement it in fear of
public discontent
≡ There have been rumors that the new law however will be ratified by the new parliament and hence may be implemented
soon
≡ The new law obligates new homeowners to pay a 10% tax on 70% of the total value of any property, with the exception of
units worth less than EGP2mn
≡ Commercial and retail properties will also be included in the new real estate tax law
0%
10%
Old Law New Law
Real Estate Tax Rate
Limited
Availability of
Financing
≡ The mortgage market is still immature, with Egypt having the lowest mortgage penetration rate among most Arab countries
≡ If the mortgage market does not pick up during the coming few years as planned by the government, growth in demand for
new housing will be constrained due to the limited availability of financing
≡ Continuous inflationary pressure is also going to impact the growth of the mortgage market negatively, as a result of
increasing interest rates
2% 2% 5% 6% 6% 8%
15% 17%
Mortgage Penetration
Regulatory Risks
on Land
Agreements
≡ Many real estate developers have faced lawsuits related to their acquisition of land; Amer however, did not face any notable
legal disputes regarding their projects’ land plots
≡ Some of these lawsuits were settled by fining the developer while others were forced to return the plots of lands under
dispute
≡ Further legal disputes and risks of changes in regulations, especially with the election of a new president and appointment of
a new government, may result in the annulment of other land agreements
No disputes Has disputes
Increasing
Construction
Costs
≡ The real estate sector is directly affected by inflation, since commodity prices, such as steel and cement, affect real estate
developer costs
≡ These hikes in costs are either passed on to the consumers, making properties less affordable (especially since the supply
shortage mainly stems from demand from middle to upper middle income groups), or are absorbed by the real estate
developers, decreasing their margins 3,189 3,756 4,738 4,535 5,107
2009 2010 2011 2012 2013
Steel Average Price (EGP/ton)
300
500
700
Jan-10 Jan-11 Jan-12 Jan-13
Cement Price (EGP/ton)
Amer TMG SODIC
2010 2011 2012 2013
Appendix
Hospitality Sector Brief
≡ Following the revolution, Egypt’s
hospitality sector was severely
affected due to political instability
and security concerns
≡ As the political scene stabilizes,
the number of tourists coming to
Egypt are expected to increase
and the sector’s performance is
projected to improve, as is evident
from the increasing hotel
occupancy rates during the first
half of 2013 in Cairo and other
major touristic cities such as
Hurghada and Sharm El Sheikh
Source: BMI, Ministry of Tourism
Appendix
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Jun
-12
Jul-
12
Au
g-12
Sep
-12
Oct
-12
No
v-12
Dec
-12
Jan
-13
Feb
-13
Mar
-13
Ap
r-13
May
-13
Jun
-13
Cairo Hurghada Sharm El Shaikh
Total Number of Tourists (‘000s) Hotel Occupancy Rate
12,293
13,758
11,931
10,953
2008/2009 2009/2010 2010/2011 2011/2012
123
136
125
132 10.0 9.9
10.4 12.0
2008/2009 2009/2010 2010/2011 2011/2012
Total Number of Nights (Millions)
Average Stay (Nights)
74.0%
15.9%
4.0%
2.6%
3.4%
0.2%
European Countries Middle Eastern Countries
African Countries Americas
Asia and the Pacific Other Countries
45
Tourist Length of Stay
Tourist Arrivals by Region (2011/2012)
31
34
38 35
38 40
42
46
50
2008 2009 2010 2011 2012 2013 2014f 2015f 2016f
8
10
11 12
13 13
14
15
16
2008 2009 2010 2011 2012 2013 2014f 2015f 2016f
Domestic Travel & Tourism Spending
(USD bn)
Travel & Tourism Total Contribution to
GDP (USD bn)
Appendix Consumer Food Service Sector Brief
Breakdown of Consumer Foodservices (Number of Outlets) 2011
Leading Chained Consumer Food Service Companies
Breakdown of Foodservices Outlets 2011
≡ The consumer foodservice market
includes all food sales services such
as: restaurants, cafés, fast food
chains, etc…
≡ In the late 1980s, the concept of
western chained fast food outlets was
introduced in Egypt as a result of
liberalization; KFC and Pizza Hut
franchised via Americana group, were
amongst the first brands to be
introduced to the Egyptian market
≡ Since then, franchising in the
consumer foodservice industry has
been driving the growth of the total
market size
≡ Amer introduced homegrown
concepts, in addition to the franchises
it operates
≡ The consumer foodservice sector remains underpenetrated with branded chains comprising 3% of the total market size
≡ The society’s continued exposure to the western habits and the profound demand for premium and value added services will
act as key catalysts for the growth in the number of organized/branded foodservices outlets in the medium term
Source: Euromonitor Foodservice Egypt
15%
42% 3%
36%
0 5%
Home Delivery Cafes Restaurants Fast Food Street Stalls
97%
3% Independent Chained
Company Brands Number of Outlets Market Share (2012)
Mo’men Group
230 17.0%
63
86
71 3.6%
4.2%
4.8%
35 3.3%
Food Consumption per Capita
(USD)
490 521 566 590
719
2010 2011 2012 2013f 2014f
46
2,797 3,062
3,470
3,939
4,464
5,029
5,560
2011 2012 2013f 2014f 2015f 2016f 2017f
174
202 219
265
309
358
406
2011 2012 2013f 2014f 2015f 2016f 2017f
43 49 55 60 66
78 92
107 121
138
2012 2013 2014 2015 2016
Non-food Retail Food Retail
37 41
53 60
78 85
93 99
112 116
2003/2
004
2004/2
005
2005/2
006
2006/2
007
2007/2
008
2008/2
009
2009/2
010
2010/2
011
2011/2
012
Q3 2
012
≡ The retail market has proven its
resilience throughout the recent
political and economic turmoil in
Egypt during the past 3 years
≡ Private consumption has grown
by a 2011-2013 CAGR of 12%
but is expected to recover to its
high growth levels to record a
CAGR of 17% between 2013 and
2017
Appendix Retail Sector Brief
Source: IMF, CBE, Jones Lang LaSalle
Egypt Retail Loans (EGP bn) Retail GLA / Capita
Retail Sales (USD bn) GDP Per Capita USD Private consumption (USD bn)
CAGR 12.5% CAGR 16.7%
CAGR 13.1%
CAGR 15.0%
47
Retail Space (GLA in ‘000sqm)
578
761 773 773
1,044
271
291
2010 2011 2012 2013F 2014F
Completed Stock Future Supply 1.1
0.6 0.6
0.4 0.4
0.2
0.1 0.1
Dubai
Bahra
in
Qata
r
Om
an
Abu D
habi
Kuw
ait
KS
A
Cairo
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EFG Hermes Holding SAE has its address at Building No. B129, Phase 3, Smart Village – KM 28 Cairo Alexandria desert road and has an issued capital of EGP
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SARWA Capital, a company incorporated under the laws of Egypt law #159 for 1981, commercial register # 37933, has its address at Km.28 Cairo-Alexandria
Desert Road 6th October, Egypt
48