vishal@n2vinc.com9810050982

vishal@n2vinc.com9810050982

India can be a leading destination for real estate business globally. It is estimated that the size of the real estate sector may increase five-

fold to reach USD676 billion by 2025. Indian Urban population equivalent to the total population of the USA &

UK, estimated 10 million people moving into cities annually. Phenomenal growth expected to provide strong opportunities to global

real estate stakeholders as significant technical and financial support lacks in India.

Landmark reforms – To Open up the retail sector to Global investors

Streamlined & Easy On Line “Approval Mechanism” A ‘Real Estate Regulator’, facilitating the setting up of Real Estate

Investment Trusts (REITs) Relaxed FDI norms in real estate and agriculture sector.

Demographic Statistics

Government of India – To Promote Growth

The Indian real estate sector has been a major beneficiary of the strong economic growth witnessed in India since the year 2000.

The growth in the sector, supported by series of reforms, has not only resulted in significant residential and commercial real estate, but also complemented the development of physical and social infrastructure of the country.

India’s Strong Economic Performance

Key Facts About India

Land Area 3.3 million sq km

Population (2011) 1’210 million

Urban population (2011) 377 million

Average household size (2011) 4.8

Nominal GDP per capita (2013) USD 1’414

Overview

Since 2000, Indian GDP has quadrupled to reach USD 1.8 trillion in 2012 and is expected to become the third largest economy worth USD 6.6 trillion by 2028

The Liberal Economic policies, aimed at improving private participation, adopted by the Indian Government has helped in capitalizing the strong fundamentals of the India economy which include young population, rising urbanization and a growing middle-class population.

India’s recent economic growth and Foreign Direct Investment (FDI) inflowIndia and developing economies GDP growth India and developing economies FDI inflows

Infrastructure spendingIndia’s infrastructure investment (USD billion)

•Management Network•Brokers•Investment Bankers•Charted Accountants•Lawyers•BOV Clients/ Projects•Corporate/ Landlords

1. Deal Origination

•Evaluate as per market knowledge and financial assessment

•Investment team•CIO

Go ahead • Managing Partner

2. Filter

•Site visit Landlord meeting •Preliminary Legal DD•Detailed underwriting•Preparation of preliminary

offer•Preliminary negotiationsCIO’s team & M. Partner

3. Deal Engagement

•Detailed DD•Tax and legal

structuring •Signing of

Agreement / sale deed

•Management •Legal Team•CIO

6. Deal Closure & Documentation

•Submission of brief note to all heads, i.e., marketing, Construction, Finance & managing partner by the CIO and his team

Go ahead• All Heads & M. Partner

4. Pricing Meeting

• Signing of MOU with land lord / Term sheet

• Circulation of note to IC members – M. Partner

• IC Meeting Go ahead – IC members

5. IC Meeting

1 2 3 4 5 6

N2V Inc – ProcessN2V Inc – Process

N2v Inc carries out a through investment assessment for all it’s investments. The investment analysis consist of the following modules

Demographic analysis Demand & Supply analysis Property price trends Product differentiating factors Special Design considerations

Zoning Laws FSI applicable Applicable Tax laws Stamp and other duties Time taken for sanctions and

process

Best use assessment Design Fit of the site Pricing alternatives

Equity required Saleability , timeline & const. costs Return on capital in various scenarios Deal negotiation dynamics Best and worst case scenarios Risk Mitigation strategies Optimization of design & pricing Exit mechanism and horizon

Market Dynamics Partner & Deal Terms Infrastructure Site and soil conditions Returns and Risk mitigation feasibility

All above have equal weight and to undertake a project any project must score at least 80 %

Market Assessment Product Mix Assessment By-laws, Tax & Environment

Financial Assessment N2V Inc Underwriting/ Score card

N2V Inc – Investment Analysis N2V Inc – Investment Analysis

Key Activities

Land Acquisition/

Joint Development

Development

Planning Development Marketing Sales PropertyManagement

Land Acquisition/

Joint Development

Development Planning

&Approvals

Development

24xR Participation

Typical 24xR Projects Marketing Sales

Timetable0-2 months 2-6 months Development Mgmt. : 6-24 months

Sales & Marketing: 6-24 months

Project Stages

Exit&

Handover

24-36 months

Handover

• End of 24th Month• 100% Project Equity Returned

• End of 36th Month• 100% Profits Realized

• Land-lord provides land & working capital

• Best Use Analysis• Tax Planning• Financial Modelling• Consultant Engagement• Vendor Engagement• Contracts/ Approvals

• Master Planning & Design Mgmt.

• Construction Mgmt.

• Financial Mgmt.

• Branding Strategy • Advertising• Channel

Development• Begin test-

marketing

• Pre-Launch• Channel Mgmt.• Customer Sales• Customer

Support

N2V Inc – Execution Strategy & TimelineN2V Inc – Execution Strategy & Timeline

Advisory Board and Investment Committee

$ 5 Million (Phase – I)+

$ 10 Million (Phase – II)

24x R Partners

0-36 Months

Development Manager

12-48 Months

48-60 Months

N2V Inc Ventures LLP

Managing Partner

18-21% return

Projects 2nd Phase

Projects 1st Phase

Projects 3rd Phase

Investment Period – 3 years Capital commitment – 5 years

N2V Inc – StructureN2V Inc – Structure

International Expansions

N2V Inc Exposure In International Market / Investor Expansion N2V Inc Exposure In International Market / Investor Expansion

Venturing into European Market

90% respondents agree that the European core markets will remain investment hot-spots over the next five years, aided by debt availability and the emergence of sovereign wealth funds and globally-operating pension funds.

Investors more willing to capitalize on under valued or distressed assets, a confidence returns to the global economy

The European real estate market is expected to see consolidation due to regulations

such as the Alternative Investment Fund Managers Directive (AIFMD), and the existing Basel III and Solvency II directives.

The survey identified three investment preferences among investors – Domestic (investing in their own country)

Regional (investing in specific economic regions)

Global (investing in different countries/regions).

Global and Regional are pegged as popular investment strategies.

Pursuing a Global, Regional & Domestic investment strategyPursuing a Global, Regional & Domestic investment strategy

Interest of Large Global Funds

Qatar Investment Authority Canada Pension Plan Investment

Board Abu Dhabi Investment Authority Standard Chartered Bank Proprium Capital Partner Hayat Invest and Clearwater Capital Blackstone

Prominent PE deals in the Indian Real Estate Sector in 2013 and 2014

Investor Type of ASSET Description

GIC Commercial Office assets

Golden State Capital (GSC) Commercial Invest in office space through REITs

Blackstone Commercial Acquisition of a business park in Bengaluru along with Embassy Group

Abu Dhabi investment Authority Residential Committed funds to invest in residential projects in metro cities

Canada Pension Plan Investment Board Commercial

Acquire stake in let out commercial office space across metro cities in India

Canada Pension Plan Investment Board Commercial Invest in office space through REITs

StanChart RE ResidentialInvestment in two luxury real estate projects in Gurgaon and Bengaluru

Qatar Investment Authority Commercial Acquisition of IT parks in India

Blackstone SEZ Acquired a stake in an IT SEZ in Pune

The Real Estate Sector which is deeply linked to the economic performance is expected to be a major beneficiary in the expected strong Indian economic growth.

Real Estate Sector value-add (USD billion)

Expected Growth

Drivers supporting Real Estate SectorUrbanizationRising Income LevelYoung population & growing number of Nuclear familiesStrong expected growth in the manufacturing and service sector

Real Estate sector Share in national GDP6.3 per cent in 2013 to 13 per cent by 2028 Seven times to USD 853 billion in 2028 from USD 121 Billion in 2013

The residential segment which contributes about 80 per cent to the real estate sector is expected to grow significantly over the next few decades. India needs to develop almost 45-50 million housing units by 2028

Mid-Income HousingFor households where income ranges USD 3,000-28,000 per annum. The mid-income housing market is expected to account for 7 per cent of the total housing demand till 2028 which is 3-3.5 million houses.

Luxury housingThe luxury housing fastest growing segment.2008-2012, luxury projects launched worth USD 30 billion. worth individual population. Require 1.5 million luxury houses over the next 15 years.

Residential development till 2028 (billion square feet)

Residential

Commercial Real Estate

Commercial Real EstateThe commercial real estate market comprises of office, retail and industrial segments. It is primarily dependent on growth in services (IT/ITeS and BFSI) and industrial (logistics, warehouse, and manufacturing) sectors of the economy.

OfficeAIT/ITeS sector is absorbing 52 % office space which came up since 2010.According to NASSCOM, the revenue from IT/ITeS sector is expected to reach USD 300 Billion by 2020, a growth of 177 per cent from 2012

RetailRetailing expected to increase at a CAGR of 8 % from USD518 billion in 2012 to USD957 billion by 2020The Organized retail is expected to increase from USD41 billion to USD191 billion

IndustrialThe Indian government is taking significant measures to promote growth in manufacturing sector, a key driver of industrial real estate

The new expectations could require strong technical and financial support which is currently lagging in India. We believe that this gap is a promising opportunity for global organizations and professionals associated with the real estate sector.

Several global firms have ventured in the Indian Real Estate Sector over the last decade.

These firms have been instrumental in bringing New Technical capabilities, improving efficiencies, enhancing quality and providing funds in real estate development.

However, there is likely still a biggap between the demand and supply, opening a sizable opportunity for global participants.

Areas where intervention is requiredOpportunities For Global Investors

OpportunityDeveloper/Investors Several renowned private equity investors and developers ventured Since the sector was opened for global investors in 2005. Further FDI Norms Relaxed – Expected Huge Investment. Government is evaluating opening up of foreign investment in Agricultural Land

Architects Demand of Architects specializing in designing golf townships, branded luxurious residences, green building, international airports, hospitality projects, hospitals etc.Global firms Established - U.S. based HOK Architect, U.S. based Pei Cobb Freed & Partners, DP Architects and Hellmuth Obata Kassabaum Inc

Design, engineering and construction Demand for International firms with Expertise on reduce construction costs, reduce construction time, provide high-rise building solutions, help to reduce construction waste and provide higher level of automation. Global Firms Established - UK Severfield Structures Fluor, Bechtel, Brookfield, AECOM

Contd

Project Management consultants Developers appointing independent project monitoring firms, to implement leading practices for project schedule, cost management, monitoring standards, Management Information System (MIS) reporting and greater level of coordination.Global firms Established: MACE, Parson Brinkerhoff, Louisberger

Material Suppliers/Vendors The Industry is gradually shifting from cost towards quality. Look Out for suppliers/vendors who can provide high quality material which results in operational or efficiency improvement. In addition to supplying materials, firms are also getting into the asset management business to provide post-sale services. Global firms Established: Otis, PERI, Hilti, etc.

Urbanization is a trend which probably cannot be reversed or avoided in India.

Having realized the potential and need for an adequate urban development strategy, the Government has taken significant steps by allocating significant amount of funds towards urban infrastructure, the fruits of which are now visible.

The constant focus on development is expected to support a strong growth for the real estate sector.

As a growth enabler, it is essential to develop the real estate sector to support the growth of over 300 other sectors and employment.

However, a key challenge is the lack of technology and funding, where a massive gap exists. Realizing the challenge at hand, several key reforms have been introduced recently and many more are lined up to improve global inflow of funds and promote growth of the sector.

vishal@n2vinc.com9810050982

vishal@n2vinc.com9810050982