Mongolia Growth Group Ltd. · TSXV:YAK.H
Mongolia Growth — Non-Deal Roadshow (2014)
43 slides from Mongolia Growth's roadshow presentation, 2014
Slide 1: First Three Years of Success
MONGOLIA _ FIRST THREE YEARS OF SUCCESS GROWTH GROUP
Slide 2: Forward Looking Statement
FORWARD LOOKING STATEMENT Caution Regarding Forward-Looking Information This presentation contains statements that, to the extent that they are not historical fact, may Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors constitute "forward-looking infor
Slide 3: Key Economic Statistics
: JIABAA =H 3 JABXAP MONDAY -,SLIND*A JIABAA- HAM —__ 1:21ABXAP_ MONDAY SUNDAY LEVEL 1-2 10.0 diegtend Y BEY) A LEVEL 3
Slide 4: One of the Fastest Growing Economies
ONE OF THE FASTEST GROWING ECONOMIES 20 19 17.5 18 15.9 16 14.8 14 12.2 12.8 12 12 10.6 US$ bln 10 8.9 8.8 8 6.9 6.4 6 5.3 3.9 3.9 4 2 0.2 0 2008 2009 2010 2011 2012 2013 2014 2015 Mongolia’s Ministry of Economic Development forecasts Mongolia to continue enjoying double digit growth in the coming y
Slide 5: Recent Legal Advancements
RECENT LEGAL ADVANCEMENTS « New Foreign Investment Law « Securities Markets Law « Investment Funds Law « Reduced Gold Mining Royalty « Reduced Taxes On Small Businesses 5
Slide 6: Business Conditions Improving
BUSINESS CONDITIONS IMPROVING The World Bank Ease Of Doing Business Survey 2011 – 2014* 160 160 Outperforming Popular Emerging Markets In 2014 Annual Doing Business Rankings For Mongolia 140 140 134 120 120 116 108 100 96 99 89 100 80 80 80 76 80 60 60 40 40 20 20 0 2011 2012 2013 2014 0 China Vietn
Slide 7: Declining Corruption
DECLINING CORRUPTION Corruption Perception Index 2009 – 2013* 140 120 120 120 116 100 94 Global Ranking 83 80 60 40 20 0 2010 2011 2012 2013 2014 *Lower CPI Indicates Improvement CPI 7
Slide 8: Surrounded by Resource Consumers
SURROUNDED BY RESOURCE CONSUMERS Presentation By Mongolian Ministry Of Mining 8
Slide 9: Mega Projects Are Underway
MEGA PROJECTS ARE UNDERWAY Industrial & Infrastructure mega projects are underway Total investment: USD $56.96 bln 9 Presentation By Mongolian Ministry Of Mining
Slide 10: Property Landscape in UB
PROPERTY LANDSCAPE IN UB
Slide 11: Overall Trends in Downtown Commercial Space
OVERALL TRENDS IN DOWNTOWN COMMERCIAL SPACE RETAIL OFFICE Supply Occupancy New Requests For Space Rental Rates 11
Slide 12: International Brands Continuing to Enter the Market
INTERNATIONAL BRANDS CONTINUING TO ENTER THE MARKET Market Entrants Since 2013 12
Slide 13: Portfolio Highlights
MONGOLIA PORTFOLIO HIGHLIGHTS GROWTH GROUP
Slide 14: Strong Comparable Rental Growth
STRONG COMPARABLE RENTAL GROWTH 45% 40% NEW FOREIGN INVESTMENT 35% LAW PASSED 30% Comp Revenue 25% 20% 15% 10% 5% 0% Jan Feb Mar Apr May Jun July Aug Sept Oct Nov Dec Jan Feb 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2013 2014 2014 Change 14
Slide 15: Recently Signed Leases Indicate Market Strength
RECENTLY SIGNED LEASES INDICATE MARKET STRENGTH Recent Signings And Average Portfolio Lease Rates MNT Per Month 15
Slide 16: Continued Rental Growth
MNT Per Month 0 5000 10000 15000 20000 25000 30000 35000 40000 Jan-12 Feb-12 Mar-12 Apr-12 Jun-12 High Street Retail Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Jan-13 Feb-13 Mar-13 Apr-13 Jun-13 Secondary Street Retail Jun-12 Jun-13 Average Portfolio Rents Per Meter Jul-13 Aug-13 Sep-13 Oct-13
Slide 17: Vacancy Has Remained Low
VACANCY HAS REMAINED LOW 120% 100% 80% Occupancy Rate 60% 40% 20% 0% Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Primary Street Retail Secondary Street Retail Office Space 17
Slide 18: Some of Our Valued Tenants
MONGOLIA eee SOME OF OUR VALUED TENANTS YOUR TRUSTED FRIEND Group @Skytel sof MANDAL SB KHANBANK =_-ARCHETYPE” ‘Geological Expiration & Consulting Company AIR TRAVEL LLC 4) Sonoforte Group LLC International ticketing office
Slide 19: How Have We Performed Over the Past Year?
HOW HAVE WE PERFORMED OVER THE PAST YEAR?
Slide 20: Achievements Over the Past Year
ACHIEVEMENTS OVER THE PAST YEAR Disposed Of Mandal Insurance Continued To Build The Management Team Hired A Highly Experienced CEO Continued To Dispose Of Non-Core Assets 20
Slide 21: Mandal Insurance Sale
MANDAL INSURANCE SALE « Refocus The Business On Property Investment « Capital Released From Sale To Be Reinvested In Property Assets « Substantial Ongoing Savings To be Realized Starting In Q2/2014 « Simplify Corporate Reporting 21
Slide 22: The Core Team Has Been Hired
THE CORE TEAM HAS BEEN HIRED Total Employees 50 45 40 35 30 Employees 25 20 15 10 5 0 Q4 2011 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Corporate Property Management Facilities Support Personnel 22 Excludes Former Employees From Mandal Daatgal, The Company’s Former Insu
Slide 23: Experienced Team in Mongolia
EXPERIENCED TEAM IN MONGOLIA Tsolmon Davaadorj Talha Siddiqui Bayar Zorigt Director of Acquisitions Financial Controller Director of Development Munkhtuya Dimitrov Lhagvasuren Nyamjav Director of Property Management Head of Sales and Leasing 23
Slide 24: Experienced Board of Directors
EXPERIENCED BOARD OF DIRECTORS Harris Kupperman Jordan Calonego William Fleckenstein Executive Chairman Director & Corp.Secretary Lead Director Paul Sweeney John Shaw Byambaa Losolsuren Director Director Director 24
Slide 25: Disposing of Smaller Assets for Better Returns
DISPOSING OF SMALLER ASSETS FOR BETTER RETURNS 100 90 80 Available For Sale PPE 70 Number of Properties Renovation 60 Residential 50 Redevelopment 40 Office 30 Secondary Steet Retail 20 High Street Retail 10 0 Q1 2012 Q2 2012 Q3 2012 Q4 2012 Q1 2013 Q2 2013 Q3 2013 Q4 2013 Q1 2014 25
Slide 26: Renovations Add Value
MOoNGOLIA Sana RENOVATIONS ADD VALUE
Slide 27: Renovations to Date: Mandal Office Building
RENOVATIONS TO DATE MANDAL OFFICE BUILDING BEFORE AFTER 27
Slide 28: Renovations to Date: Anand Office Building
RENOVATIONS TO DATE ANAND OFFICE BUILDING BEFORE AFTER 28
Slide 29: Redevelopments to Date: Property Niislel
REDEVELOPMENTS TO DATE PROPERTY - NIISLEL BEFORE AFTER 210m2 368m2 29
Slide 30: Successful First 3 Years
SUCCESSFUL FIRST 3 YEARS « Listed MGG On TSX-Venture Exchange « Raised CDN $51 Million « Built The Only Institutional Property Investment Platform In Mongolia « Acquired One Of The Most Attractive Property Portfolios In Ulaanbaatar « Hired Professional CEO For Next Phase Of MGG’s Growth 30
Slide 31: CEO Transition
CEO TRANSITION CEO TRANSITION Paul Byrne • Joined As CEO on March 1, 2014 • Invested CDN $250,000 in shares on hiring • Extensive property experience on some of the world’s largest property projects Harris Kupperman • To Become Executive Chairman And Remain Active In The Business 31
Slide 32: Thank you
Thank you For more information please visit: www.MongoliaGrowthGroup.com or contact: Info@MongoliaGrowthGroup.com 32
Slide 33: Evolving Corporate Strategy
Evolving Corporate Strategy
Slide 34: Forward Looking Statement
FORWARD LOOKING STATEMENT Caution Regarding Forward-Looking Information This presentation contains statements that, to the extent that they are not historical fact, may Forward-looking statements involve significant risks, uncertainties and assumptions. Many factors constitute "forward-looking infor
Slide 35: Current Status
CURRENT STATUS « MGG Owns Property Assets MGG « To Grow The Business, MGG Must Either Issue Additional Equity Or Borrow Money « Only Leverage Is To The Property Assets Growth Of The Mongolian Economy 3
Slide 36: Where We Want to Be
WHERE WE WANT TO BE Current Future Leverage Existing Capability Into Higher Returns On Capital Utilize Other Investor’s Capital MGG MGG On Our Projects To Increase Returns To MGG Earn Stable Fee Based Revenue Property Assets Asset Management & Development Company Increase The Capital Base Without A
Slide 37: Services That We Intend to Offer
SERVICES THAT WE INTEND TO OFFER Strategic Property Advisory Acquisitions Advisory Leasing Property Sales Brokerage Third -Party Property Management Third-Party Asset Management Development Management of Projects High Return On Capital Fee-For- Services Business 5
Slide 38: Investment Funds Management
INVESTMENT FUNDS MANAGEMENT « Earn Multiple Stable Revenue Streams « Have Upside Participation In Property Appreciation « Offer Liquidity For Property Assets In Mongolia « MGG Intends To Be A Sizable Owner Of Funds 6
Slide 39: Property Development
PROPERTY DEVELOPMENT « Very High Development Margins Are Available In Mongolia « Ability To Own The Resulting High Quality Institutional Assets That Are Built To International Standards « Looking To Partner With Others For Capital While Supplying Land And Local Expertise « Own And Manage The Assets
Slide 40: Property Development & Funds Management—A Virtuous Cycle
PROPERTY DEVELOPMENT & FUNDS MANAGEMENT—A VIRTUOUS CYCLE Stabilized Property Assets Are Sold To The Property Fund Property Development MGG REIT Cash Is Recycled Into New Property Developments 8
Slide 41: Steps Towards Becoming an Asset Management & Development Company
STEPS TOWARDS BECOMING AN ASSET MANAGEMENT & DEVELOPMENT COMPANY Created MGG Properties LLC To Serve As An Asset Management and Property Management Company Initiated Preliminary Research On The Creation Of An In- House REIT New Strategy for the Development Business Contemplating the Possibil
Slide 42: Changing How the Market Sees MGG
CHANGING HOW THE MARKET SEES MGG CURRENT VIEW FUTURE VIEW • Difficult To Understand • Highly Profitable Asset Management & Development Company • Stabilized Yielding Property • Improved Transparency Of Stabilized Portfolio & Development Assets Cash Flow Property Assets Inside Of Are Comingled Propert
Slide 43: Thank you
Thank you For more information please visit: www.MongoliaGrowthGroup.com or contact: Info@MongoliaGrowthGroup.com 11