Karen Water

PROPOSED SPV‐
KAREN WATER

MYKENYAHOUSE PROPERTIES LIMITED &
GOLD BRYCE REAL ESTATE LIMITED

INVESTING IN
RELATIONSHIPS
THAT EXCEED
EXPECTATIONS

KAREN WATER

SUMMARY

MyKenyaHouse Properties Limited and Gold Bryce Real Estate
Limited has put in place agreements to develop 52 acres of prime
land in Karen through Karen Water Development Limited (“KWDL”) a
dynamic company to be incorporated specifically to purchase the

land from the current vendors – Kenya Commercial Bank.

The proposed development ‐ Karen Water, will comprise of 96
exclusive homes for sale together with a commercial and leisure
zone, comprising a 100 bed hotel, 30 serviced apartments, a top of
the range spa, 2 restaurants, a shopping arcade within the hotel and
14 shops.

The development will present a unique opportunity for domestic and
international buyers to acquire either an attractive water front home
or exclusive town houses with views of the lake against a
background of the Ngong Hills at very competitive prices. Karen
Water will provide home owners with the ability to combine privacy
with access to extensive parkland and club facilities all in a secure,
friendly and family oriented environment.

The homes are expected to attract strong rental demand and

thereby offer buyers the ability to combine home ownership with

attractive rental yields if desired.

MyKenyaHouse Properties Limited and Gold Bryce Real Estate
Limited and its partners in this project have committed to facilitate
provision of development finance and are seeking to raise a
minimum additional Kshs.850 Million to complete the land

acquisition and commence the development.

2
| INVESTING IN RELATIONSHIPS THAT EXCEED EXPECTATIONS

KAREN WATER

The development will be managed by Karen Water Limited
Partnership a dynamic company incorporated specifically for this
purpose. The acquisition of the Land is expected to be completed
during the second quarter of 2010 and construction will commence
during the third quarter. The project duration is anticipated to be 36
months from the closing of the land acquisition.

Through this Information Memorandum (the“IM”) MyKenyaHouse
Properties Limited and Gold Bryce Real Estate Limited are seeking to
raise Kshs. 850 Million from investors through the sale of 100
participations of Kshs.8.5 Million each.

Interested investors can request for a Subscription

Application Form from Mr. Mwangi Murage of Armstrong

and Duncan Project Management Limited. Immediate

requests are encouraged as there is already strong interest to

purchase the land.

3

KAREN WATER

The Project: Karen Water

Karen Water is a proposed hybrid property development
constituting of both commercial and residential master planned

zones to be developed across a 27, 900 m² parcel of land in Karen,

Nairobi, Kenya.

In a unique architecture inspired by the heart keeping in mind the

evolution of Karen and the undulating soft forms of the
“The future belongs to environment, the architects set about creating a sustainable and self
those who see supporting Eco‐System around a 15 acre constructed wetlands

where the triangular topography directed the shape.
possibilities before they
become obvious.” The site is triangulated by two key roads and is unremarkable with
the exception of raw sewage emanating from sewerage lagoons of
the Nairobi City Council, black cotton soil to depths of 1.5 meters

,few trees of great importance, no sewerage, reliable power and

water supply ;the proposed Karen Water development will stand
out as the pioneer community in East and Central Africa by having a
constructed self supporting water supply that drains into a
constructed draining wetland system from portable and recycled
water moving through three acres designated for sewerage
treatment creating a green environment for Karen Water.
The Karen Water community will encompass;
Residential
 30 Waterside 5 Bed roomed Houses.
 30 Semi ‐ Detached Town Houses

 36 Terraced Town Houses

Commercial
“Priceless Urban Space
 14 Shops
without the Maddening  Shopping Arcade (Within the Hotel)
pace”  2 Restaurants
 A Wharf

4

KAREN WATER

Hotel and Apartments

 Hotel (100 rooms)
 30 fully serviced Apartments
 Spa

Community
 Kindergarten
 Management Offices
 Residents Club

 There will be 100 % standby power and water storage ;An

Eco security wall 3m high by 2m thick with a security site

boundary bund built from materials excavated from the
wetlands which will aid in reducing noise and pollution.

 Access to all houses is through one security point enclosed

by bund. Shopping centre, hotel and serviced apartments

accessible off Langata (major) road .Residents have

controlled foot access to shops and also to future offices.
Houses have a plot on parking; in addition there is an extra
secure parking for up to 850.

 Houses will be for sale with the target group being the
emerging upper middle income market. Construction
materials selected are neutral stone, cultivated softwoods

and clay tiles.

 The attractive homes will be built to several different
designs based on floor plans ranging from approximately
318 to 474 square meters.

 Each home will be carefully sited to ensure its privacy and

to maximise ocean views. The homes will have two to five

bedrooms, attractive bathrooms, spacious living areas and
verandas and private pools. Each home will be completed to
the highest standards with excellent finishes.

5

KAREN WATER

 One of the unique features of Karen Water is its ability to

combine homes with access to a range of recreational and

luxurious facilities to suit every member of the family. The

development will benefit from a club house, hotel each with

its own feature pool, spa facilities and restaurant.

Home ownership structure for buyers

 The head title for the entire 52 acres that comprises Karen
Water will be held in Karen Water Development Limited
(KWDL) ‐ a company that will be wholly owned by the home
owners and in which each home owner will have a
shareholding. Individual homes will be sold on a sub‐lease
against the head title.

 Each home owner will also have one share in the proposed
residential management company.

Residential Management Services

 The proposed residential management company (Karen
Water Residential Services Limited) will collect a modest
service fee from each home and will manage or outsource
the upkeep and maintenance of infrastructure, services and
communal areas. The management company will oversee
the security provision at Karen Water and will provide other
services including lettings, on‐site reception, housekeeping
and other services.

 The services provided by the management company give
buyers the opportunity to own a home without the hassle
and cost of full time personnel, gardens, security and pool
maintenance. The costs of the services of the management
company will be very reasonable compared to the costs of
owning a single plot.

 The residential management company will also run the Club

House on behalf of the residents

6

KAREN WATER

Hotel and Commercial Management Services

 It is our intention for the Hotel and Apartments (hotel,
serviced apartments and spa) to be run by a reputable Hotel
Chain; the commercial zone (restaurant, shops and wharf)

and kindergarten will be managed by Karen Water Limited
Partnership.

 Completion The development is expected to be completed
within 36 months of the purchase of the land.

The Two Phase Strategy
I. Acquisition of Land
The proposed development land is a 52 acre plot. The plot is
currently on offer at a conservative price of Kes.16 Million per acre.

Based on the high but manageable offer cost we propose a “vulture
fund” model to raise capital for the investment with the aim of
achieving capital appreciation by taking advantage of the current

proposed Karen Water Community.

II. Development Finance

In forming a partnership MyKenyaHouse Properties Limited and Gold
Bryce Real Estate Limited will co‐ordinate on the already existing
relationships and liaise with the respective stakeholders both

financially and technically to make the project a success.
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KAREN WATER

PROPOSED KAREN WATER DEVELOPMENT LIMITED
P.O. Box TBA
Nairobi, Kenya

1. Privately Held Kenyan Limited Company formed to purchase and own the 52 acres of land.

2. The company will issue 100 shares worth Kshs. 8,500,000 each.

3. Investors may invest in one or more participations of Kshs. 8,500,000 each. Priority will be given to
investors applying for more than one participation.

4. Additional incentives will be offered to investors acquiring more than one participation as follows:
a) Investors acquiring two participations will have the right to purchase one Karen Water Home
at a discount of 7%.
b) Investors acquiring three participations will have the right to purchase one Karen Water
Home at a discount of 12.5%.

5. The procedure envisaged for the purchase of the land is as follows:
a) Interested investors are invited to request and complete a subscription form, obtainable
from Amstrong &Duncan (A&D) Project Managers.
b) Once an application is accepted, a 10% deposit will be paid by the interested investor into an
escrow account held by Ranja and Co. Advocates (legal advisors for MyKenyaHouse
Properties Ltd and Gold Bryce Real Estate Ltd)
c) Ranja and Co. Advocates will make a bid on behalf of the investors for the land in Karen
d) Ranja and Co. Advocates will administrate the process of purchase of the land. They will also
negotiate the other payments due to the vendors of the land.
e) At appropriate intervals, Ranja and Co. Advocates will call for the remaining funds from each
investor so as to complete the fundraising required for purchase of the land.
f) Upon completion of the fundraising for the land, Ranja and Co. Advocates will satisfy
themselves that the transfer of the land has been completed satisfactorily.
g) Each individual investor will then be due their respective share allocation within Karen Water
Development Limited.

6. In the event that the land purchase transaction does not occur, all monies held in escrow by Ranja
and Co. Advocates will be returned to the investors without any deduction together with any interest
accrued.

8

KAREN WATER

PROPOSED KAREN WATER LIMITED PARTNERSHIP
P.O. Box TBA
Nairobi
Kenya.

1. Privately Held Kenyan Limited Partnership
General Partner: MyKenyaHouse Properties Limited and Gold Bryce Real Estate Limited
Limited partners: Karen Water Development Limited.

2. Ownership:
Karen Water Development Limited 70% Equity
MyKenyaHouse Properties Limited & Gold Bryce Real Estate Limited 30% Equity

Equity Participation
1. Karen Water Development Limited – Value of land and title.

2. MyKenyaHouse Properties Limited and Gold Bryce Real Estate Limited – Joint developer and
organiser of finance and technical team. MyKenyaHouse Properties Limited will appoint Armstrong
and Duncan Project Management to manage the Development from inception to completion.

3. Consultants – current consultants would remain on the project. A&D PM would be appointed the
Project Manager on behalf of the new consortium.

Provision of Overall Development Finance ‐ Deal Summary
1. Karen Water Development Limited, MyKenyaHouse Properties Limited and Gold Bryce Real Estate
Limited form Karen Water Limited Partnership.

2. Karen Water Development Limited writes letter of Authority to A&D PM and A&D’s Legal Adviser
allowing both parties to set in motion Development process.

3. A&D PM receives copy of title of land to initiate negotiations with Contractor’s agent.

4. A&D PM forwards development details (Drawdown and other financial information) to Contractor.

5. On receipt of Letter of Intent, A&D PM on behalf of consortium initiates the process of obtained Bank
Guarantee from ABC Bank Ltd.

6. Once terms of Bank Guarantee are agreed with ABC Bank Ltd, Karen Water Development Limited
transfers the title of the 52 Acres into the newly formed SPV.

7. On completion of all required documentation, the Contractor takes possession of site and constructs
the proposed housing development. A&D PM to supervise the construction of the development.

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KAREN WATER

a) Limited Partnership Structure

Proposed

Karen Water Limited Partnership

MyKenyaHouse Properties Karen Water
Ltd /Gold Bryce Real Development Limited
Estate Ltd
Limited Partner
General Partner
(70%)
(30%)

b) Proposed Project Structure
KAREN WATER LLP

ABC Bank Ltd Karen Water MyKenyaHouse
Development Properties &
Limited GoldBryce Limited
(Limited Partner) (General Partner)

Karen Water
Armstrong &

Financial Guarantee Development
Duncan Project
Limited Nominee Managers

Technical Team Legal & Financial Estate Agent (s)

QS, Architect, Engineers Team
& Other Development
Consultants

Contractor
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KAREN WATER

PROPOSED PROJECT STAKE HOLDERS

Development Team

1. Karen Water Development Limited ( SPV company to be

formed to purchase the land)

2. MyKenyaHouse Properties Limited (Joint Developer)

3. Gold Bryce Real Estate Limited (Joint Developer)

4. Armstrong and Duncan (A&D) Project Management Ltd

(Project Manager)

5. Planning Systems Services Limited (Architect)

6. Ranja and Co. Advocates (Legal and Land Investor

Transaction Advisors)

Contractors Agent

1. Gold Rock International Enterprises (Kenya) Ltd

Local Bank Partners

1. Kenya Commercial Bank (KCB)
2. African Banking Cooperation (ABC) Bank Ltd

POTENTIAL PROJECT RISKS

1. At the onset of the land buying process, we recommend that
Karen Water Development Limited obtain as much
information from the vendors of the property on the level of
debt that will be cleared by the purchase of the land in
question. This will avoid the risk of court injunctions from
other parties who may be creditors of the original land
owners.

2. We would advise Karen Water Development Limited to enter
into a sale agreement that requires full disclosure of all
matters that may affect their enjoyment of the land in future.
If any issues are discovered post sale, the Karen Water
Development Limited should have their funds returned in
full.
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KAREN WATER

COMPARABLE HOUSING PROJECTS

1. Kihingo Village – a gated community housing project
situated in Kitsuru, Nairobi. The development consists of 55
Nr large and spacious executive houses divided into 4

different types as follows:
a) Niara – a five bedroom executive house measuring

approximately 776 sq. m. There are three such
houses in the scheme. Each was sold for
approximately Kshs. 80 million.

b) Dafina – a four bedroom executive house measuring
430 sq. m. There were 22 such houses in the
scheme. Each was sold for approximately Kshs. 54

million.
c) Masara – a three bedroom entry level house
measuring approximately 368sq. m. There were 6

such houses in the scheme. Each was sold for
approximately Ksh. 48 million.
d) Lulu – a four bedroom house measuring

approximately 481 sq. m. There were 24 such
houses in the scheme. Each was sold for

approximately Kshs. 60 million.

2. Great Valley Villas – A gated community housing project

situated in Karen Nairobi. The development consists of 9

executive houses with 5 bedrooms; each house was sold at
Kshs.45 Million. Construction began in 2008 October and will
be completed in mid 2010

3. Windsor Park – A gated community adjacent to Windsor

Hotel and Golf Course. The development consists of 38, 3
bedroomed units, the initial sale price was Kshs.29 Million
but they are currently selling at Kshs.60million plus a

compulsory Kshs.60, 000 monthly service charge. So far 18
units have been sold and construction is expected to be
completed by early 2011.

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KAREN WATER

The Financials Karen Water (For the Period Year One to Eight)
SCENARIO 1
a) Sale of Houses
Sale Of Houses Kshs
30 Waterside Houses @ 60M 1,800,000,000.00
30 Semi attached Town House @ 41M 1,230,000,000.00
36 Terraced Town houses @ 44M 1,584,000,000.00
TOTAL 4,614,000,000.00
Cost Of The Building Being Sold
Construction Cost 1,574,142,698.00
Infrastructure Portion 350,380,150.00
Professional fee 6.5 % + VAT 145,109,023.00
Contingency 5% 103,481,594.00
Project management cost 86,924,538.00
Financing Cost 452,007,600.00
Land portion of the houses sold 526,013,014.00
Total Cost of the houses 3,238,058,617.00
Gross profit from sale of houses 1,375,941,383.00
Less: sales commission 138,420,000.00
Net profit before Tax 1,237,521,383.00
Less : Corporation Tax 370,356,415.00
Net profit after Tax 867,164,968.00

b) Interest on Deposits

Interest On Deposits ( Scenario I ) Kshs
YEAR 1
Deposits 1,845,600.00 @ 5% for 6 months. 46,140,000.00
YEAR 2
Year 1 deposits 1,845,600.00 for 6 months. 92,280,000.00
Year 2 deposit 2,307,000.00 for 6 months. 57,675,000.00
149,955,000.00
YEAR 3
Year 2 deposits 1,845,600.00 @ 5% for 6 months. 92,280,000.00
Year 2 deposit 2,307,000.00 for 6 months. 115,350,000.00
Year 3 deposit 461,410,000.00 @ 5% for 6 months 11,535,000.00
219,165,000.00
Scenario
All houses are sold within the first three years with effect from the commencement of construction.
( c) Month Revenues Computations
Services apartments 30 units @ Kshs 160,000 50% Occupancy 2,400,000.00
Area sq m
Shops and restaurant
1,259
Less Auxiliary ( Public Toilets)
(123)
The taxable area
1,136
at Kshs 2,200 per sq m 80% Occupancy 1,999,360
Shopping Arcade and Spa
at Kshs 2,200 per sq m 80% occupancy 1,575 m sq x 2058msq 6,394,080
Total Monthly Income 10,793,440
( d) Service Charge
96 Houses @ Kshs 25,000 pm 2,400,000
(e) Management Expenses per month 3,600,000

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KAREN WATER

c) Investment Performance Analysis
Investment Performance Analysis Kshs
Equity Investment Analysis
Karen Water Development Limited 865,000,000
Joint Developer and Organiser 370,714,286
Total Equity 1,235,714,286
A. Income from Sales of residential Houses
1. Net Profit before Tax 1,237,521,383
2. Net Profit after Tax 867,164,968
Investment received from sale of residential houses
Before Tax return on investment 100%
After return on investment 70%
Investment return from Hotel, rent of shops, commercial centre and restaurant.
YEAR 4 5 6 7 8
Kshs Kshs Kshs Kshs Kshs
Annual before tax profit 177,233,280 193,870,944 205,148,491 216,845,916 227,688,212
Annual after tax profit 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213
Annual before tax return on investment 0.14 0.16 0.17 0.18 0.18
Annual after tax return on Investment 0.12 0.13 0.14 0.14 0.15
Net profit from sale of houses 867,164,968
Net profit from operation 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213
Cumulative return 1,012,957,864 1,171,483,605 1,339,044,433 1,515,991,302 1,701,785,515
Payback period is 6 years and 5 months (Inclusive of the 3 year Construction Period)
14

KAREN WATER

d) Project Cost
PROJECT COST
Residential Cost
Kshs
30 Waterside Houses 640,675,862
30 Semi Detached Town Houses 444,096,807
36 Terraced Town Houses 489,370,028
Total 1,574,142,697
Commercial
Shops & Restaurants 43,313,600
Wharf 42,504,000
Total 85,817,600

Hotels & Apartments
Hotel (100 rooms) 654,500,000
30 Serviced Apartments 69,646,500
Total 724,146,500

Community
Kindergaten 7,590,000
Commercial Area 2 113,850,000
Management Offices 10,626,000
Residents Club 73,257,800
Total 205,323,800
Construction cost before infrastructure 2,589,430,597
Infrastructure Works 576,367,748
Professional fee 238,701,196
Contingency 313,213,958
Total Construction cost 3,717,713,499
Cost of financing for three years 587,040,000
Total cost of project before land 4,304,753,499
Cost of land 865,280,000
Total project cost 5,170,033,499

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KAREN WATER

e) Tax Computation
Corporation Tax Computation
YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8

Kshs Kshs Kshs Kshs Kshs

Business Income 203,153,280 213,310,944 223,976,491 235,175,316 246,934,082
Service Charge 17,280,000 25,920,000 28,800,000 31,680,000 33,264,000
Total Income 220,433,280 239,230,944 252,776,491 266,855,316 280,198,082
Less Hotel Income 72,432,000 76,053,600 79,856,280 83,849,094 88,041,549
Management 43,200,000 45,360,000 47,628,000 50,009,400 52,509,870
Total Taxable income 104,801,280 117,817,344 125,292,211 132,996,822 139,646,663
Corporation Income @ 30% 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999

Income before tax 177,233,280 193,870,944 205,148,491 216,845,916 227,688,212
Income after tax 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213

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KAREN WATER

f) Rent Deposits and Income Analysis
(SCENARIO I)
KAREN WATER
MONTHLY INCOME AND RENT DEPOSITS PROJECTION FOR THE PERIOD 3 ‐ 8 YEARS
DEPOSITS
For 3 months YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5
Kshs. M Kshs. M Kshs. M Kshs .M Kshs .M Kshs M Kshs M
1 .Serviced Apartments
30 Units @ 160,000 x 0.5
Occupancy increases by 5% annually
170,000 x 0.6 Occupy 2.4 2.5 2.65 2.78 2.92
2. Shops and Restaurants
including Wharf 80 % occupy 5.998 1.99936 2.099 2.2043 2.3145 2.4302
3. Commercial centre 80% Occupy 19.2 6.3941 6.7 7.05 7.40 7.77
4. Hotel‐ Income per month 17.5
Less VAT (2.41)
15.09
Less : Costs and expenses 50% (7.55)
Net profit 7.55
Net profit share
Management 20% 1.51
Owner 80% 6.04 6.036 6.338 6.6547 6.9874 7.3368
5. Kindergarten 0.30 0.1 0.1 0.11 0.12 0.12
TOTAL MONTHLY INCOME 25.480 16.929 17.776 18.665 19.598 20.578

TOTAL ANNUAL INCOME 203.2 213.3 224.0 235.2 246.9

KAREN WATER

g) Interest Calculation
KAREN WATER
INTEREST COMPUTATION
1. FOREIGN LOAN TOTAL AMOUNT KSHS 3,718,000,000
YEAR 1
1st Month 2nd Month 3rd Month 4th Month 5th Month 6th Month 7th Month 8th Month 9th Month 10th Month 11th Month 12th Month TOTAL
Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs. Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million
Monthly Drawdown 100 100 100 100 100 100 100 100 100 100 100 100
Cumulative 100 200 300 400 500 600 700 800 900 1,000 1,100 1,200
Foreign financing interest 4% p.a
0.33 0.67 1.00 1.33 1.67 2.00 2.33 2.67 3.00 3.33 3.67 4.00 26.00
Total 0.33 0.67 1.00 1.33 1.67 2.00 2.33 2.67 3.00 3.33 3.67 4.00 26.00
YEAR 2
13th Month 14th Month 15th Month 16th Month 17th Month 18th Month 19th Month 20th Month 21st Month 22nd Month 23rd Month 24th Month
Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million
Cumulative 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000 2,100 2,200 2,300 2,400
Foreign financing interest
4% p.a 4.33 4.67 5.00 5.33 5.67 6.00 6.33 6.67 7.00 7.33 7.67 8.00 74.00
Total 4.33 4.67 5.00 5.33 5.67 6.00 6.33 6.67 7.00 7.33 7.67 8.00 74.00

KAREN WATER

YEAR 3
25th Month 26th Month 27th Month 28th Month 29th Month 30th Month 31st Month 32nd Month 33rd Month 34th Month 35th Month 36th Month
Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs. Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million Kshs.Million
Cumulative 2,550 2,700 2,808 2,917 3,018 3,118 3,218 3,318 3,418 3,518 3,618 3,718
Foreign financing interest
4% p.a 8.50 9.00 9.36 9.72 10.06 10.39 10.73 11.06 11.39 11.73 12.06 12.39 126.40
Total 8.50 9.00 9.36 9.72 10.06 10.39 10.73 11.06 11.39 11.73 12.06 12.39 126.40
GRAND TOTAL 226.40
2. LOCAL BANK GUARANTEE FEE 2% P.A FOR THE LOAN. Kshs 3,718,000,000
Year 1 2% of Kshs 3,718,000,000 7.4360
Year 11 2% of Kshs 3,718,000,000 7.4360
Year 111 2% of Kshs 3,718,000,000 7.4360
Total 22.308

KAREN WATER

h) Year( 1‐3) Cash Flow Scenario 1
(SCENARIO I

KAREN WATER CASHFLOW PROJECTING THE 1ST THREE YEARS

RECEIPTS YEAR 1 YEAR 2 YEAR 3 TOTAL
Kshs Kshs Kshs Kshs
Capital Injection 965,280,000 965,280,000
Foreign loan 2,000,000,000 1,717,713,499 ‐ 3,717,713,499
Sale of houses 1,845,600,000 2,307,000,000 461,400,000 4,614,000,000
Interest on Deposit 46,140,000 149,955,000 219,165,000 415,260,000
Rent Deposit 25,480,000 25,480,000
TOTAL 4,857,020,000 4,174,668,499 706,045,000 9,737,733,499
PAYMENTS
Land purchase 865,280,000 ‐ ‐ 865,280,000
Construction cost 1,607,645,777 1,558,152,087 ‐ 3,165,797,864
Professional fee 200,000,000 38,701,196 ‐ 238,701,196
Contingency 85,112,488 85,112,489 ‐ 170,224,977
107,241,735 35,747,724 ‐ 142,989,459
Agency fee 92,942,838 ‐ ‐ 92,942,838
Cost of financing 74,360,000 74,360,000 438,320,000 587,040,000
Loan repayment ‐ ‐ 3,717,713,499 3,717,713,499
Tax Payment ‐ 200,000,000 170,356,415 370,356,415
Total 3,032,582,838 1,992,073,496 4,326,389,914 9,351,046,248

Balance c/f 1,824,437,162 2,182,595,003 (3,620,344,914)
Balance b/f ‐ 1,824,437,162 4,007,032,165 386,687,251
Balance c/f 1,824,437,162 4,007,032,165 386,687,251 386,687,251

KAREN WATER

i) Year( 4‐8) Cash Flow Scenario 1
SCENARIO I
KAREN WATER CASHFLOW SUMMARY FOR YEAR 4‐8
RECEIPTS YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TOTAL
Kshs. Kshs. Kshs. Kshs. Kshs. Kshs.
Business Income 203,153,280 213,310,944 223,976,491 235,175,316 246,934,082 1,122,550,113
Service Charge 17,280,000 25,920,000 28,800,000 31,680,000 33,264,000 136,944,000
Total 220,433,280 239,230,944 252,776,491 266,855,316 280,198,082 1,259,494,113
PAYMENTS
Management Expenses 43,200,000 45,360,000 47,628,000 50,009,400 52,509,870 238,707,270
Corporation tax 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999 186,166,296
74,640,384 80,705,203 85,215,663 89,908,447 94,403,869 424,873,566

Surplus 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213 ‐
Bal B/F 680,923,251 826,716,147 985,241,888 1,152,802,716 1,329,749,585 1,515,543,798
Bal C/F 826,716,147 985,241,888 1,152,802,716 1,329,749,585 1,515,543,798 1,515,543,798

KAREN WATER

SCENARIO 2
a) Sale of Houses
Scenario 2
SALES OF HOUSES
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 TOTAL
Kshs Kshs Kshs Kshs Kshs Kshs
10% 20% 30% 30% 10%

Amount Received 461,400,000 922,800,000 1,384,200,000 1,384,200,000 461,400,000 461,400,000
Cumulative
Amount 461,400,000 1,384,200,000 2,768,400,000
‐
‐
‐
Interest in current year
6 months for current year 11,535,000 23,070,000 34,605,000
‐
‐ 69,210,000
12 months for previous year ‐ 23,070,000 69,210,000 ‐ ‐ 92,280,000
Total 11,535,000 46,140,000 103,815,000 ‐ ‐ 161,490,000
Scenario2 Assumptions
( i) Houses sold in 5 years period
( ii) Obtain local loan of Kshs 11,260,000
( iii) Local Loan interest at the rate of 15% pa

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KAREN WATER

b) Year( 1‐3) Cash Flow Scenario 2
SCENARIO 2
KAREN WATER CASHFLOW PROJECTION FOR THE 1ST THREE YEARS
RECEIPTS YEAR 1 YEAR 2 YEAR 3 TOTAL

Kshs Kshs Kshs Kshs

Capital Injection 865,280,000 ‐ ‐ 865,280,000
Foreign Loan 1,200,000,000 1,200,000,000 1,318,000,000 3,718,000,000
Sale of houses 461,400,000 922,800,000 1,384,200,000 2,768,400,000

Interest on Deposit 11,535,000 46,140,000 103,815,000 161,490,000
Rent Deposit ‐ ‐ 60,864,000 60,864,000
Local Loan ‐ ‐ 1,260,000,000 1,260,000,000
Total Receipts 2,538,215,000 2,168,940,000 4,126,879,000 8,834,034,000

PAYMENTS
Purchase of Land 865,280,000 865,280,000

Construction cost 1,200,000,000 1,200,000,000 1,318,000,000 3,718,000,000
Interest on Forign Loan ‐ ‐ 226,400,000 226,400,000

Interest on Local Loan 74,360,000 74,360,000 74,360,000 223,080,000
Foreign Loan Repayment ‐ ‐ 3,718,000,000 3,718,000,000

Sales Commission 13,842,000 27,684,000 41,526,000 83,052,000
Total Payments 2,153,482,000 1,302,044,000 5,378,286,000 8,833,812,000
Surplus 384,733,000 866,896,000 (1,251,407,000) 222,000

Bal B/F ‐ 384,733,000 1,251,629,000 ‐
Bal C/F 384,733,000 1,251,629,000 222,000 222,000

KAREN WATER

c) Year( 4‐8) Cash Flow Scenario 2
SCENARIO2
KAREN WATER CASHFLOW SUMMARY FOR YEAR 4‐8
RECEIPTS YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TOTAL
Kshs. Kshs. Kshs. Kshs. Kshs. Kshs.

Sale proceeds 1,384,200,000 461,400,000 ‐ ‐ ‐ 1,845,600,000
Business Income 203,153,280 213,310,944 223,976,491 235,175,316 246,934,082 1,122,550,113
Service Charge 17,280,000 25,920,000 28,800,000 31,680,000 33,264,000 136,944,000
Total 1,604,633,280 700,630,944 252,776,491 266,855,316 280,198,082 3,105,094,113
PAYMENTS

Local Loan repayment 1,000,000,000 150,280,000 ‐ ‐ ‐ 1,150,280,000
Interest on Loan 149,536,400 11,271,000 ‐ ‐ ‐ 160,807,400
Management Expenses 43,200,000 45,360,000 47,628,000 50,009,400 52,509,870 238,707,270
Tax on sale of houses 299,210,000 138,420,000 ‐ ‐ ‐ 437,630,000
Corporation tax 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999 186,166,296
Total Payments 1,523,386,784 380,676,203 85,215,663 89,908,447 94,403,869 2,173,590,966
Surplus 81,246,496 319,954,741 167,560,828 176,946,869 185,794,213 ‐
Bal B/F 382,000 81,628,496 401,583,237 569,144,065 746,090,934 931,885,147
Bal C/F 81,628,496 401,583,237 569,144,065 746,090,934 931,885,147 931,885,147

KAREN WATER

A. APPROVAL FROM : NATIONAL ENVIROMENT MANAGEMENT AUTHORITY (NEMA)
25

KAREN WATER

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KAREN WATER

B. APPROVAL FROM: KAREN AND LANGATA DISTRICT ASSOCIATIONS

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KAREN WATER

Conclusion
In a building market where the norm is to suspend reality and
promote false dreams this is an above board opportunity to invest in
a landmark that will set the yardstick in architectural performance,
development execution, ingenuity and service in Kenya and East
Africa as a whole.
For Further Enquires and Detailed Information:

Mwangi Murage
Armstrong and Duncan Project Management Limited.
. +254_020_2715380
+254 ‐717664187

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Karen Water is a proposed hybrid property development

constituting of both commercial and residential master planned

those who see supporting Eco‐System around a 15 acre constructed wetlands

materials selected are neutral stone, cultivated softwoods

buyers the opportunity to own a home without the hassle

Technical Team Legal & Financial Estate Agent (s)

a) Niara – a five bedroom executive house measuring

houses in the scheme. Each was sold for

2. Great Valley Villas – A gated community housing project

3. Windsor Park – A gated community adjacent to Windsor

Kshs Kshs Kshs Kshs Kshs

Annual before tax profit 177,233,280 193,870,944 205,148,491 216,845,916 227,688,212

Annual after tax profit 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213

Annual before tax return on investment 0.14 0.16 0.17 0.18 0.18

Annual after tax return on Investment 0.12 0.13 0.14 0.14 0.15

Net profit from operation 145,792,896 158,525,741 167,560,828 176,946,869 185,794,213

Cumulative return 1,012,957,864 1,171,483,605 1,339,044,433 1,515,991,302 1,701,785,515

Corporation Income @ 30% 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999

Year 1 2% of Kshs 3,718,000,000 7.4360

Year 11 2% of Kshs 3,718,000,000 7.4360

Year 111 2% of Kshs 3,718,000,000 7.4360

Total 3,032,582,838 1,992,073,496 4,326,389,914 9,351,046,248

RECEIPTS YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TOTAL

Kshs. Kshs. Kshs. Kshs. Kshs. Kshs.

Business Income 203,153,280 213,310,944 223,976,491 235,175,316 246,934,082 1,122,550,113

Service Charge 17,280,000 25,920,000 28,800,000 31,680,000 33,264,000 136,944,000

Total 220,433,280 239,230,944 252,776,491 266,855,316 280,198,082 1,259,494,113

Management Expenses 43,200,000 45,360,000 47,628,000 50,009,400 52,509,870 238,707,270

Corporation tax 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999 186,166,296

74,640,384 80,705,203 85,215,663 89,908,447 94,403,869 424,873,566

Bal B/F 680,923,251 826,716,147 985,241,888 1,152,802,716 1,329,749,585 1,515,543,798

Bal C/F 826,716,147 985,241,888 1,152,802,716 1,329,749,585 1,515,543,798 1,515,543,798

RECEIPTS YEAR 1 YEAR 2 YEAR 3 TOTAL

Sale of houses 461,400,000 922,800,000 1,384,200,000 2,768,400,000

Total Receipts 2,538,215,000 2,168,940,000 4,126,879,000 8,834,034,000

Interest on Forign Loan ‐ ‐ 226,400,000 226,400,000

Foreign Loan Repayment ‐ ‐ 3,718,000,000 3,718,000,000

Total Payments 2,153,482,000 1,302,044,000 5,378,286,000 8,833,812,000

Surplus 384,733,000 866,896,000 (1,251,407,000) 222,000

Bal C/F 384,733,000 1,251,629,000 222,000 222,000

RECEIPTS YEAR 4 YEAR 5 YEAR 6 YEAR 7 YEAR 8 TOTAL

Kshs. Kshs. Kshs. Kshs. Kshs. Kshs.

Business Income 203,153,280 213,310,944 223,976,491 235,175,316 246,934,082 1,122,550,113

Service Charge 17,280,000 25,920,000 28,800,000 31,680,000 33,264,000 136,944,000

Total 1,604,633,280 700,630,944 252,776,491 266,855,316 280,198,082 3,105,094,113

Interest on Loan 149,536,400 11,271,000 ‐ ‐ ‐ 160,807,400

Management Expenses 43,200,000 45,360,000 47,628,000 50,009,400 52,509,870 238,707,270

Tax on sale of houses 299,210,000 138,420,000 ‐ ‐ ‐ 437,630,000

Corporation tax 31,440,384 35,345,203 37,587,663 39,899,047 41,893,999 186,166,296

Total Payments 1,523,386,784 380,676,203 85,215,663 89,908,447 94,403,869 2,173,590,966

Surplus 81,246,496 319,954,741 167,560,828 176,946,869 185,794,213 ‐

Bal B/F 382,000 81,628,496 401,583,237 569,144,065 746,090,934 931,885,147

Bal C/F 81,628,496 401,583,237 569,144,065 746,090,934 931,885,147 931,885,147

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