Presentatio Rent Russian Real Estate Investment Fund


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Presentatio Rent Russian Real Estate Investment Fund

  1. 1. Russian Real Estate Investment Fund (specialized in rent)
  2. 2. Approaches on doing business in Russian real estate market <ul><li>purchase of real estate with the following resale it at the better price </li></ul><ul><li>acquiring property and getting income from the lease payments </li></ul><ul><li>land purchase, construction and development with following sale of complete objects </li></ul><ul><li>REIT is the best solution to carry out all these types of business </li></ul>
  3. 3. Rent REIF <ul><li>Objectives </li></ul><ul><li>Commercial real estate property control optimization as well as protection of property against hostile takeover </li></ul><ul><li>Unit holders </li></ul><ul><li>Real estate owners </li></ul><ul><li>Investors – external financing </li></ul><ul><li>Term </li></ul><ul><li>From 3 to 15 years with possible prolongation </li></ul>
  4. 4. Advantages <ul><ul><ul><ul><ul><li>Totally legal tax reduction by 80 -100 %! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>No profit tax and property tax! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Possibility to reinvest the Fund income tax payment before the moment of unit redemption – deferred taxation ! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Securitization of different assets , combining them into unified property pool with rights proved by the securities ! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Possibility of staged quitting the project on the rims for the reregistration property rights – unit as a security increases liquidity of assets ! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Possibility of intermediate income payment ( same as dividend )! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Possibility to set up a new object into the Fund without withdrawing cash out of Fund upon completion of one project. In such case the term of the fund could be prolongated ! </li></ul></ul></ul></ul></ul><ul><ul><ul><ul><ul><li>Property protection from claims by third parties and raiders! </li></ul></ul></ul></ul></ul>
  5. 5. Multilevel protection of investor’s rights <ul><li>Activity of all Fund’s participants is carried out on the authority of the licences </li></ul><ul><li>Asset Management Company performance monitoring is carried out by : </li></ul><ul><ul><li>Inner controller of the Asset Management Company </li></ul></ul><ul><ul><li>Specialized depositary </li></ul></ul><ul><ul><li>Auditor </li></ul></ul><ul><ul><li>State regulatory authority – the Federal Financial Markets Service </li></ul></ul><ul><li>Management, register and custody functions are divided between the Asset Management Company and Specialized depositary </li></ul><ul><li>Fund’s property is registered by the Asset Management Company on the special balance and individual record is carried out </li></ul><ul><li>The Fund does not respond by it’s property for debts of the Asset Management Company </li></ul><ul><li>Legally speaking participation in the Russian Real Estate Investment Fund is equal to actual real estate possession </li></ul>
  6. 6. Tax advantages <ul><li>Increment of property value inside the Fund is exclusive of profit tax </li></ul><ul><li>Investor pays profit tax only in case of : </li></ul><ul><ul><li>Receiving income of redemption or sale of investment units ; </li></ul></ul><ul><ul><li>Receiving of intermediate income of Fund’s trust management </li></ul></ul><ul><li>Property depositing by the time of Fund establishment is exclusive of VAT . </li></ul><ul><li>By the Russian Real Estate Investment Fund establishment asset writes off the balance of the Trust Management founder. Unit (as a security) is given in return. The asset is no longer subject to the Property tax. Asset Management Company is not the property taxpaying agent , the Fund is not a taxpayer either in virtue of article 378 chapter 30 of the Tax Code of Russian Federation . </li></ul><ul><li>Asset Management Company is a tax payee as for the estimation, deduction and transfer of the personal income tax to the budget </li></ul>
  7. 7. Tax rates <ul><li>Tax rates for the unit possession in Russia : </li></ul><ul><li>resident individual 13 %, </li></ul><ul><li>non-resident individual 30 % </li></ul><ul><li>resident legal body 24 % ( Asset Management Company isn’t a tax payee ). </li></ul><ul><li>non-resident legal body without representation office in Russia ( Asset Management Company is a tax payee ). </li></ul><ul><li>Asset Management Company doesn’t estimate and deduce profit tax of the foreign companies, doesn’t perform it’s activity in Russia through permanent establishments in case of : </li></ul><ul><li>- Payment of incomes which in accordance with the Double Taxation Convention are not liable for taxes in Russia </li></ul><ul><ul><li>- Provision of the Asset Management Company with the confirmation of the foreign company’s permanent residence being in the state, which enters an international treaty with Russia, before the date of tax payment. </li></ul></ul>
  8. 8. Unit holders participation in Fund management <ul><li>Limitation of Asset Management Company’s rights on activity with the Fund’s assets by the means of unit holders reconciliation procedure . </li></ul><ul><li>Fund’s activity control by general meeting of unit holders : </li></ul><ul><ul><li>Decision making concerning Fund Investment Declaration changes </li></ul></ul><ul><ul><li>Amount and date of acquisition of intermediate income confirmation </li></ul></ul><ul><ul><li>Pre-term termination of Fund’s activity or change of the Asset Management Company </li></ul></ul>
  9. 9. Rent REIF. Stages of establishment. Up to 6 months ( ultimate tight schedule is possible ) <ul><li>Fund establishment : </li></ul><ul><li>Asset Management Company acceptance of the investment unit’s acquisition orders from the legal entities and individuals . </li></ul><ul><li>Cash and/or property contribution to the Fund for the investment units until the Fund reaches the amount defined by the Regulation Rules : </li></ul><ul><li>- Assessment of property by the Appraiser of the Fund ; </li></ul><ul><li>- Property transfer registration in the Agency of the real estate business registration </li></ul>1 month <ul><li>Registration of the Fund Regulation Rules in the Federal Financial Markets Service. </li></ul>2 weeks <ul><li>Fund Regulation’s setting up by the Asset Management Company . </li></ul><ul><li>Making contract with Specialized Depositary , Registrar , Auditor and Appraiser . </li></ul>
  10. 10. Rent REIF. Operational scheme. Lease Closed-ended Mutual Fund Investors – unit holders The Founder Initial unit holder ,100% AMC Object № 1 Development company Lease holders Unit holders of the Mutual Fund Commercial property in assets Fund’s filling during establishment Upgrading Closed-ended Mutual Fund management Contract of lease or real estate management Property management Rent payments Lease payments net of operational costs Stock market Bank deposit Real Estate Construction Possible investment directions of the Closed-ended Mutual fund income « Dividends » of the unit holders investment Sale of units Object № 2 Object № 3
  11. 11. Rent REIF. How-to scheme. Gross income from lease of the building amounts to $ 5 Mio a year . Building self-cost is $ 25 Mio . The overall area 10 000 м 2 (8 000 м 2 – useful area which brings income from lease ). Expenses incidental to operation and running of the building amounts to $ 200 000 a year . Spread : $ 1 152 800 ( 24,02% of gross income ) $ 1500 per 1 м 2 $ 2500 per 1 м 2 $ 625 per 1 м 2 Building entirely $ 15 Mio Book value ( understated ) Building entirely $ 25 Mio Marketable value Total $ 5 Mio Net rent a year 4 550 000 3 397 200 Net profit , $ - 1 072 800 Profit tax (24%), $ - 330 000 Property income (2,2%), $ 4 550 000 4 800 000 Gross profit , $ 250 000 - Commission for Fund management (1% net asset value a year ), $ 200 000 200 000 Management expenses , $ 5 000 000 5 000 000 Gross income , $ Mutual Fund Companies Index
  12. 12. Contact us +7 (495) 727-35-70, +7 (495) 235-52-51, +7 -800-200-52-51 Phone Brut Olesya Morozova Elena Kuchinsky Vladimir Lazareva Natalia www . neofitus . ru 123104, Moscow , Maliy Palashevsky , 5 50 meters from Pushkinskaya metro station [email_address] morozova @ neofitus . ru vkuchinsky @ neofitus . ru Director General Project managers [email_address] Chairman of the Board