Talk on the Social REIT as a Stock Exchange led activity by Dr Darin Gunesekera

1. (c) CMM 2016
1
“I am a Stock Exchange
Person,
THE SLUM DWELLER
IS MY CUSTOMER”
The Social REIT & THE CAPITAL
MARKET
Dr DARIN GUNESEKERA
Capital Markets for the
Marginalized (CMM)

2. All Business has Needs
The lower the scale; the more powerful the Need
2(c) CMM 2016

3. THE SLUM DWELLER IS MY CUSTOMER
We have Obligations and Responsibilities by our Customers
3

4. (c) CMM 4
Global
Crisis
Donor
Housing
Loans
Founder
On Risk
Decent
Housing
Shortage of
Over 50% of
current stock
Slums
Shanties Grow
Faster than
Economy
Growth
City =
Rich get Richer
Poor get
Poorer
Donors
World Bank
Keep People in Slums
Through
Onsite Upgrade

5. (c) CMM
UNHABITAT’s Biggest Slum in the World
Kenya - Nairobi - KIBERA or KIBR. It is located on a Tribal Homeland whose demarcation was
not finalized by the Colonial Government Commission.
Is this a Planning Issue?
5

6. (c) CMM 2006
6

7. THE INSIGHT - SEE & DO
The Capital Market is not Working
We Need A Stock Exchange for These Needs
Start with HOMES
Look at all elements of the process with the best standards agreed
upon as Socially Desired
Then find the Financial Solution
7

8. (c) CMM 2006
8
Land Cycle Process.
(The Observation referred to above)
First vacant or
acquired land (Trust 1)
1
Occupied Estates:
(Trust 2, 3 of Cycle 2)
2 3
Occupied Estates:
(Trust 4..7 of Cycle 3)
4 5 6 7
Land Cycle 1
Land Cycle 2
Land Cycle 3
– projects exchanges new units for vacant possession of old
units
– New units must be more attractive to encourage the move
Slums occupy 600+sq ft ground cover/ unit; planned units
only 110 sq ft

9. THE REIT
• trustees
developer
Land in -Certs out
Cash in-Certs out
investors
Condo
Sales
market
Primary
market
9

10. (c) CMM 2006
10
Social Real Estate Investment Trusts - I
TRUSTAuthority
Social
Housing
Resident
Land
Shares
Vacant
Possession
Shares
• Start with a compact city area re-development project plan
• Existing Social Housing residents approve the plan
• This facilitates a Trust market deal between the landowner
(Authority) and social housing residents.
• The deal is shown above

11. 11

12. (c) CMM 2006
12
The People’s Stock Exchange

13. (c) CMM 2006
13
S-Reits II
Trust is financed by investors and home buyers. Shares may convert to
homes
TRUSTInvestors
Cash via
Investment
Banks
Shares*
* Includes right to ownership of a specific house / flat

14. (c) CMM 2006
14
S-Reits III - A stock exchange
Trade via
Investment
Banks *
Shares
Investors
(Authority,
Individual,
Institutional)
On – going
STOCK EXCHANGE
Market:
EXCHANGE
EXCHANGE Regulates Information Flow

15. (c) CMM 2006
15
RESULT = Pilot Project I
■ 675 apartments in first time
ever high rise occupation
by slum/ shanty dwellers in
“Streets in Sky” design
voted for by them.
■ Corresponding 8 sites
(4000 persons) in same
neighborhood vacated
■ Land/ built space market
given to regeneration.
■ (See 5-2)

16. 16

17. (c) CMM 2006
17
Project Results
■ FINANCE
■ Total Investment = SLRs600M
■ Outside Community Sales (Financial Return)
= SLRs1700M
■ SOCIAL
■ Self sustaining 675 homes paying rates
■ Lives transformed from Shanty to Middle
Class
■ Regenerated Neighborhood
■ All Children go to School

18. Financial Returns：Unlocking the Profit in the Land
Investment: SLRs600M (USD6M)
Outside Community Sales (Financial Return): SLRs1700M (USD17M)
18

19. (c) CMM 2006
19
Project Results
■ BEFORE AFTER

20. ■ video
20
The Past and Present seen by independent video
production.(6 years later; long after project period; 5
years after full Condo hand over).

21. • The Stock Exchange STARTS by turning the searchlight
on to REALITY
• Example Benares
• Example Cinnamon
21(c) CMM 2016
The LIVING Stock Exchange

22. (c) CMM
22
In Benares, India: Constructive Social
Action

23. • The transformative POWER
• Land Prices in Colombo poor areas
• Even the two small cases - Money created
• The Stock Exchange is a LIVING SOCIAL INSTITUTION
23(c) CMM 2016
The LIVING Stock Exchange Transforms Tomorrow

24. 24
• Look for
• Queues
• The Poorest in large numbers
• The Desperate in large numbers
• THEY NEED the LIVING STOCK EXCHANGE
• Forget
• Dead Letters, Laws, Regulations
• Yesterday’s Ideas
• The Stock Exchange is a LIVING SOCIAL INSTITUTION
• Your Duty is to Find Your Customers from those WHO NEED THE STOCK EXCHANGE
• Go There and Make them Your Customers
• Join our Movement
• CAPITAL MARKETS FOR THE MARGINALIZED
• https://darincapitalmarkets.wordpress.com
LIVE The LIVING Stock Exchange

25. (c) CMM
25
Kibera Elders Council’s Social Action for
Financing
■ The tribe whose “homeland” is Kibera, called by UNHABITAT the worst
and largest Slum in the world. (Nubians of Kenya) meet to get financial
advice