Investment Note – The Pavilion II, Bangalore

December 2019

Private and Highly Confidential

Investment Overview
There is an opportunity to purchase 24,392 sf in The Pavilion, Bangalore tenanted to Aurbis Business Parks
for an all-in cost of Rs. 33,43,00,000 (Rs. 12,500 per sf) implying a 8.86% yield for pre-book investors and
17.80% IRR.
•  Aurbis is a Singapore-based co-working company and is locked-in for 5 years.

5 year lock-in A+ tenant #1 Location

8.86%
Yield

17.80%
IRR (1)

2.05x
Multiple (1)

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(1) Projected IRR and MoIC. Please see financial model for more details Private and Highly Confidential
Key Investment Highlights
This is a unique opportunity to acquire a leased Grade A asset in Bangalore’s largest and fastest growing
micro-market.

•  c. 9.4% y-o-y rent growth over the last 7 years.(1)

ORR •  Low vacancy of 1% (2)
Location
•  47% of office stock in Bangalore (2)

5 year •  Tenant is locked-in for 5 years

Lock-in

A+
Tenant •  Singapore-based managed office provider

8.86%
Yield •  High going-in yield for a Grade A asset on ORR

17.80% | 2.05x
IRR (3) | Multiple (3) •  High projected returns with low downside risk

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(1)  Source: Jones Lang LaSalle Bangalore Market Overview (Oct ‘18)
(2)  Source: Cushman & Wakefield Bangalore Report (Sep ’19)
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(3)  Projected IRR and MoIC. Please see financial model for more details. Private and Highly Confidential
Select Asset Pictures (1/2)
The Pavilion is a newly-built c. 210,000 sf Grade A office asset on Outer Ring Road, Bangalore fully leased
to Aurbis Business Parks. Aurbis has in-turn leased to blue-chip tenants including Tata Technologies,
Livspace, PhonePe and iQuanti among others.

FACADE ENTRANCE

MAIN LOBBY

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Select Asset Pictures (2/2)

MAIN LOBBY MAIN LOBBY

OFFICE LOBBY OFFICE LOBBY

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Select Office Pictures (1/4)
Aurbis has leased the space to multinational and Indian tenants like Tata Technologies, Livspace and
PhonePe among others.

WORKSTATIONS BREAK-OUT AREA

PANTRY PRIVATE OFFICE

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Select Office Pictures (2/4)
All fit-outs have been done by Aurbis increasing stickiness over long-term for investors.

WORKSTATIONS WORKSTATIONS

MEETING ROOM WORKSTATIONS

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Select Office Pictures (3/4)

WORKSTATIONS PRIVATE OFFICE

WORKSTATIONS PRIVATE OFFICE

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Select Office Pictures (4/4)

BOARD ROOM WORKSTATIONS

BREAK OUT AREA

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Location
The Pavilion is located on Outer Ring Road, the largest and fastest growing office market in Bangalore.

THE PAVILION

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Location
Outer Ring Road is the largest office market in Bangalore with headquarters of tenants like Microsoft,
Goldman Sachs, JP Morgan, Northern Trust, Cisco, Oracle, Wells Fargo and Linkedin among others.

Divyasree Technopolis

Deloitte, CGI, Sequoia,

Reuters

Prestige Tech Park

JP Morgan, Oracle,
SanDisk, Schneider

Embassy Tech Square

Goldman Sachs InMobi, AT&T, Cisco,

Sony

Wells Fargo Centre Embassy Tech Village

Xiaomi, Flipkart,
Swiggy, Quest

The Pavilion
RMZ Ecospace
Mariott
Accenture, Wipro,
Capgemini, HP,
Intel, Northern Trust Global Tech Park RMZ Ecoworld

Linkedin, SAP, KPMG, ANZ,

Microsoft Mapletree Morgan Stanley, Intel
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Floor Plan
The proposed units are spread across Ground, 2nd, 4th and 6th floors.

g Road
Outer Rin 6th Floor

Proposed Units 4th Floor

Total Area
24,392 sf 2nd Floor
Ground Floor

3,276 sf

13,729 sf

785 sf
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6,601 sf Private and Highly Confidential
Lease Overview
The entire building has been leased to Singapore-based managed offices player Aurbis Business Parks
backed by Avila Capital.

Lease Terms Tenant Overview

Rent Commencement Oct '19

Monthly Rent (Rs/sf/mth) Rs. 86.1

•  Aurbis is a managed offices player backed by Singapore-

Escalation Every 12 months
based Avila Capital which was founded by the Chairman of
Assetz Property Group Singapore.
Escalation % 4.5%
_  Headquarters: Bangalore and Singapore

Security Deposit 10 months _  Key Tenants: Tata Technologies, Livspace,

PhonePe and iQuanti among others.

Lease Duration 10 years

Lock In Period 5 years

Lock In Ends Sep '24

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(1) Source: Company websites, public portal.
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Lease Structure
The lease escalates by 4.5% every year with the next one due in Oct ’20.

Rent Start Current Lock-in end Lease

Date Date Date End Date

Oct’ 19 Dec’ 19 Sep’ 24 Sep’ 29

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Recent Leases on Outer Ring Road
Aurbis rents are at a c. 1.6% discount to recent leases signed in the last 6 months on Outer Ring Road.

Recent Leases
(Rs / sf / mth)
Area Leased Rent
No. Date Tenant Property (sf) (Rs / sf / mth)
1 Sep-19 Here Solutions Ecospace Business Park - 1C 25,588 Rs 83.0
2 Jul-19 Firstsource Pritech Park SEZ - Block 12 34,434 85.0 Wt. Avg
3 Jul-19 Joulon Services Indiqube Edge 2,500 105.0 87.5 psf
4 Jun-19 CA India Technologies Ecospace Business Park - 1B 21,412 95.0
5 Apr-19 APMSE Software Pritech Park SEZ - Block 5 82,562 78.0
6 Apr-19 Intuit Software Ecospace Business Park - 4A 5,138 85.0
7 Apr-19 Societe Generale Pritech Park SEZ - Block 11 63,835 61.0
8 Mar-19 Piktor Innovation Indiqube Edge 10,950 89.0
9 Mar-19 Akridata Indiqube Edge 2,150 98.0
10 Feb-19 Symbol Technologies Ecospace Business Park - 3B 1,18,735 77.0
11 Feb-19 Protiviti Divyasree 77 Town Center 5,709 80.0
12 Jan-19 HSBC EDP Ecospace Business Park - 1A 3,19,956 80.0
13 Jan-19 Visteon Pritech Park SEZ - Block 11 26,611 73.0
7,19,580 Rs 78.4

Proposed Unit 29,185 Rs 86.1

Premium (%) 9.8%

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Source: Propstack data of rent for Bellandur rents. 15
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Bangalore Office Market
Bangalore comprises 35% of total office leasing in India with demand exceeding supply for the last 5 years.
Per broker reports demand will continue to be higher for the next 3-4 years leading to strong rent growth.

Demand Vs. Supply (1)

(sf in millions)
16 14
12 12 12 12
11
12 9.5 10
9 8.5 8.4 8.8
7 7 7.5
8 5.5

0
2013 2014 2015 2016 2017 2018 2019 (F) 2020 (F)

Absorption Supply
Rents (SBD) (1)
(Rs./ sf/ mth)
100 90
85
78
80 74
68
58
60
48 48

40

20
2012 2013 2014 2015 2016 2017 2018 2019 (F)
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(1)  Source: Jones Lang LaSalle Bangalore Market Overview (Oct ‘18)
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Purchase Price Break-up
The All-in purchase price of Rs. 13,706 per square feet (PSF) includes stamp duty & registration, legal fees,
brokerage and contingency reserve.

All-in Price
(Rs.)

Rs. Comments
Purchase Price Rs 30,48,95,668 • Rs 12,500 PSF
Add: Stamp Duty 2,01,23,114 • 6.6% of Purchase Value
Add: Brokerage 60,97,913 • 2% of Purchase Value
Add: Legal Fees 10,00,000
Add: Reserve 21,83,305 • Contingencies (Refunded on sale)
Total Purchase Price Rs 33,43,00,000

Area (SF) 24,392

Purchase Price PSF Rs 13,706

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(*) Brokerage payable to third-party property consultants and may include sourcing fee payable to Property Share Online Platform. 17
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Yield
The investment sets-up to a gross yield of 8.86% (incl. 1% enhanced yield for pre-book investors) in the first
year. The lease is due for a c. 4.5% increase in Oct ’20.

Rental Yield
(Rs. Per SF)
Year 1 Comments
Property Share
Rent Rs 1,033 • Rs 86.1 / sf / mth will provide an
Add: Enhanced yield 137 • 1% enhanced yield for pre-book investors enhanced 1%
yield in Year 1 for
Add: Interest on SD 43 • 5.5% on actuals
pre-book
Total Rent Rs 1,214 investors.

Less: Management Fee (137) • 1% of purchase price per year

Net Rent Rs 1,077

Total Purchase Price Rs 13,706

Gross Yield 8.86%

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Yield
The yield will increase to 9.26% by Year 5 due to 4.5% annual rent escalation.

5 Year Rental Yield

(%)
Avg 5-year Yield: 8.74%

11.00%

10.00%
9.26%

9.00% 8.86% 8.88%

Enhanced 8.53%
1.0% Yield 8.18%
8.00%
7.86%

7.00%

6.00%
Year 1 Year 2 Year 3 Year 4 Year 5

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Investment Returns
An investment of Rs. 25,00,000 will see Rs. 1,76,780 (net of TDS and fees) getting credited to the investor
account every year (Rs. 14,732 per month) of which TDS may be set-off at the end of the year.

Yearly Cash Flow

(Rs.)
Net Yield distributed: 7.07%

Rs 1,76,780 Rs 25,000 Rs 19,642

Distributions to investor a/c 1% Management 10%

Fee TDS

Cash Distributions Vs. Investment

(Rs.)

Investment Amount Yearly Monthly

Rs 25,00,000 Rs 1,76,780 Rs 14,732
50,00,000 3,53,561 29,463
75,00,000 5,30,341 44,195
1,00,00,000 7,07,122 58,927

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(*) TDS for NRI investors may vary depending on tax residency status. 20
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Indicative Financial Model
The investment is projected to return 17.80% IRR and 2.05x multiple of invested capital (MoIC) over 5 years
without assuming any debt.

Financial Model and Returns (*)

Day 0 Year 1 Year 2 Year 3 Year 4 Year 5 Total
Investment Rs (33,43,00,000) Rs (33,43,00,000)
Rent Received (1) 2,52,06,841 2,63,00,965 2,74,44,326 2,86,39,137 2,98,87,715 13,74,78,984
Enhanced Yield (Pre-book) 33,43,000 33,43,000
Interest on deposit (2) 10,58,796 10,58,796 10,58,796 10,58,796 10,58,796 52,93,980
Sale Value (3) 53,83,93,493 53,83,93,493
Total Rs (33,43,00,000) Rs 2,96,08,637 Rs 2,73,59,761 Rs 2,85,03,122 Rs 2,96,97,933 Rs 56,93,40,004 Rs 35,02,09,457

Profit Rs 35,02,09,457
IRR 17.80%
MoIC 2.05x

Notes
(1)
Rs. 86.1 PSF rents and 4.5% escalation every 12 months.
(2)
5.5% interest on security deposit.
(3)
Assumes 10% annual growth rate.

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(*) Excluding management fees

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Sensitivities
Even at a conservative 5% capital appreciation, the investment will return 13.3% IRR and 1.71x MoIC.

• At a 15% capital appreciation, the returns will be 22.3% IRR and 2.45x MoIC.

Sensitivities
5.0% 7.5% 10.0% 12.5% 15.0%
IRR 13.3% 15.6% 17.8% 20.1% 22.3%

MoIC 1.71x 1.87x 2.05x 2.24x 2.45x

Profit (Rs in cr) Rs. 23.85 Rs. 29.17 Rs. 35.02 Rs. 41.42 Rs. 48.42

Sale Price PSF Rs. 17,492 Rs. 19,676 Rs. 22,073 Rs. 24,698 Rs. 27,567

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(*) Excluding management fees

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Sources and Uses
The property will be funded 100% with investor funds.

Sources & Uses

Sources Rs. % Uses Rs. %
Investor Funds Rs 33,43,00,000 100% Purchase Price Rs 30,48,95,668 91%

Stamp duty, registration 2,01,23,114 6%

Brokerage 60,97,913 2%

Legal fees, reserves 31,83,305 1%

Total Sources Rs 33,43,00,000 100% Total Uses Rs 33,43,00,000 100%

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(*) Brokerage payable to third-party property consultants and may include sourcing fee payable to Property Share Online Platform.
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APPENDIX

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Current Portfolio
Current portfolio includes properties across Bangalore, Mumbai and Pune.

The Capital - BKC, Mumbai L&T Seawoods Grand Central, Mumbai IBC Knowledge Park, Bangalore

Tenants:

Brigade Tech Park, Bangalore Miraya Rose, Bangalore Sky Vista, Pune

Tenants:

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Client Profile
Investors on our platform are predominantly in the 30-50 year age bracket and working in technology and
financial services.
Investor Age Resident Status

100% 100%

>60 50-60 40-50 30-40 <30 Resident NRI

Sector Investment Amount

100% 100%

Technology Others Financial Services Entrepreneur 10 Lakhs 20 Lakhs 20-50 Lakhs >50 Lakhs

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Where Investors Work

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Dashboard (1/4)
Property Share investors get access to an online dashboard where they can view all their investments,
returns and property documents.

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Dashboard (2/4)
Our proprietary dashboard provides analytics around your investment including estimated current values,
yield etc.

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Dashboard (3/4)

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(1) Sample for illustrative purposes only 30
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Dashboard (4/4)

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Risks
Investing through Property Share eliminates almost all risks normally embedded in real estate investing.

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

▪  Property Tours
Purchase / Sale
▪  Drafting sale deeds
▪  Registration of property

▪  Leasing
▪  Tenant background checks
Property Management
▪  Rental negotiations
▪  Drafting lease deeds
▪  Renovations

•  Access to an online dashboard

Owner Services
•  Monthly rent distribution
•  Quarterly updates

Others •  Society payments / meetings

•  Property tax payments

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

Equity Invested in Indian

>$1 bn Real Estate

Institutional Real Estate

Investing Experience >7 years

Portfolio managed
>30 mn sf across Bangalore

IRR achieved on exits >25%

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The Team
Property Share has a strong founding team with deep experience in institutional real estate investing and
technology.

KUNAL MOKTAN, HASHIM KHAN,

Co-founder and CEO Co-founder and CTO

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

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

•  MBA from IIM Ahmedabad

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Founding Team Prior Investment Experience

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Investor Backing
Property Share is backed by reputed venture funds – US based Lightspeed Investment Partners, Japanese
tech investor BEENEXT, Pravega Ventures, a fund started by ex SAIF Partners investment professionals,
and Asuka Global, a Japanese asset management firm.

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