Company Presentation May 2021 - Housing Development Corporation
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Company Presentation May 2021
Table of contents
1. Introduction to HDC
2. Key credit highlights
3. Financial highlights
4. ESG and Sustainability Bond Framework
This is the file reference containing the file name/path or docs number
1
Presenters
Ahmed Shaam Mohamed Sharah Ahmed Aslam
Chief Accountant
Chief Financial Officer Financial Controller
Over 14 years experience in finance and Over 7 years experience in finance and Over 10 years experience in finance and
accounting accounting accounting
Certified ACCA affiliate member with a MSC Finance from Thammasat ACMA and CGMA holder with a Master’s
Bachelors Degree in Accounting and University, Thailand and BBA, Finance Degree in Islamic Finance Practice from
Finance from NUS The Global Institute of Islamic FInance
2
1. Introduction to HDC
3
Overview of HDC
Housing Development Corporation Limited (“HDC”) overview HDC manages the development of Hulhumalé and nearby islands
Largest state owned enterprise (“SOE”) in the Maldives
Hulhumalé
by assets and serves as the master developer, builder, (Phase II)
and regulator to foster the development of the Greater Malé
region
Hulhumalé
Master developer: HDC is the master developer, (Phase I)
builder and regulator for the development of Hulhumalé
(combined 428 hectares for Phases 1 and 2), Gulhifalhu
Thilafushi, and Gulhifalhu
Thilafushi
Builder: Investing in infrastructure necessary for
quality living and business prosperity
Sinamalé
Regulator: Oversees detailed planning, architectural Malé Bridge
guidelines and building regulations (Capital)
Initially established in 2001 to undertake the Hulhumalé
development project, with housing, real estate, and
infrastructure added to its mandate in 2009
Maldives merged Greater Malé’ Industrial Zone Ltd (“GMIZL”) Hulhumalé Mini Neighborhood 3
into HDC in September 2009, adding the development and Mall Project School
management of the nearby islands of Gulhifalhu and
Thilafushi into HDC’s overall mandate
Being a wholly owned SOE that plays a critical role in the
development of Maldives, HDC has obtained the same
credit rating (B3 negative rating from Moody’s) as the N3 Commercial Phase I Central
Government of Maldives in March 2021 Block Project Park
HDC is a strategically important state-owned enterprise that enjoys strong government support and is critical
to meeting the existing and future housing, industrial and commercial development needs of Maldives
Source: Company information.
4
Key development and milestones
1 3 5 7 9 11
Phase I Completed Phase I Completed 1,000 Initiated the landmark 7,000 social Sinamalé Bridge was Mandate
reclamation of reclamation and social housing unit housing unit development project opened, connecting the road expanded to
Hulhumalé coastal structure development network of Hulhumalé to include the
began in the development project Obtained financing from international Malé development of
Hulhulé– banks backed by sovereign guarantee Greater Malé’
Farukolhufushi of Maldives Awarded the “Master Plan Region following
Lagoon (HFL) Project Award” at the the merger with
US$34m loan from Export Import Bank Cityscape Emerging Markets GMIZL
of India for infrastructure development Awards and the “Calix
Innovation Award” at the
Innovation in Next
Generation Networks
1997 2001 2002 2005 2012 2015 2016 2017 2018 2019 2020
2 4 6 8 10
Hulhumalé Ownership of HFL was Additional 240 Started Hulhulé-Hulhumalé Link road project Fahi Dhiriulhun Corporation Ltd
Development transferred to HDU which hectares in took over HDC’s social housing role
Unit (HDU) was was incorporated as Hulhumalé US$80m loan from Ministry of Finance and in Hulhumalé(1) pivoting HDC’s
established with Hulhumalé Development Phase II was Treasury for infrastructure development focus towards developing
the mandate of Corporation Limited reclaimed by the US$369m loan from Industrial and Commercial infrastructure / commercial projects
developing Company Bank of China for 7,000 housing units project in Hulhumalé
HDC was awarded the
Hulhumalé
mandate to undertake US$159m loan from China Development Bank Ministry of National Planning and
housing development for 1,530 housing units project Infrastructure committed to develop
projects in Hulhumalé and transfer 6 government offices
US$31m loan from Industrial and Commercial to Hulhumalé
Bank of China for Hulhulé – Hulhumalé -
Airport Link road project and US$65m loan
from Credit Suisse AG for 7,000 housing units
project
Source: Company information.
(1) HDC will continue with and own its existing social housing projects; FDC will only takeover upcoming social housing projects.
5
HDC’s vision and mission
VISION
THE FIVE PILLARS
A Leader in
Redefining Quality
Living
Economic drivers and creation of
1
catalyst projects
MISSION
Regulatory body promoting
To be a Pioneer in establishing 2
institutional frameworks`
higher standards of living
through intelligent, innovative
and sustainable developments
in the Maldives Establishing catalyst for hard and
3 soft infrastructure
CORPORATE VALUES
Development of a consonant
4 community and socio-economic
equity
Responsible Harmony Excel
Transformative Innovative Visionary
5 Green initiative
Source: Company information.
6
Development plan/strategy - Hulhumalé
Phase I Phase II
Malé
Hulhumalé
Source: Company information.
7
Thilafushi and Gulhifalhu – new additions to HDC’s
mandate in 2020
Overview of Thilafushi and Gulhifalhu Key statistics of Thilafushi and Guhifalhu
Gulhifalhu is a reclaimed island c.6km to the west of Malé, which has Thilafushi Gulhifalhu
been earmarked by the government to develop an industrial hub to cater
Reclaimed area 21 hectares 17 hectares
to the needs of the industrial sector in Greater Malé region
Thilafushi is a reclaimed island c.7km to the west of Malé, which initially Proposed reclamation 128 hectares 185 hectares
served as a municipal landfill site but is now earmarked as a key
industrial zone in the Greater Malé region Number of tenants 204 56
HDC’s acquisition of GMIZL brings the development of Hulhumalé, Lease plots 322 43
Gulhifalhu and Thilafushi under one corporate group, providing avenues
for improved cohesiveness and efficiency Average monthly income(2) MVR12.8m (c.US$0.83m)
Additional reclamation and infrastructure development (e.g. roads, water Total debt No long term debt
and sewage, electricity, and communication networks) is envisaged to
realise the master plan for the islands Total assets as at 23 Sep 20 MVR4.5bn (c.US$285m)
Gulhifalhu Strategically located close to Malé and Hulhumalé
(1) Hulhumalé'
16.9 / 201.9 (Phase I)
Land bank (hectares)
Hulhumalé'
(Phase I)
Thilafushi Gulhifalhu Hulhulé
Malé
Thilafushi (Capital)
(1)
20.7 / 148.7
Land bank (hectares)
Sinamalé
Bridge
HDC’s acquisition of GMIZ provides an enlarged asset base, rental income and more
opportunities for development with no increase in debt
Source: Company information. FX of USD/MVR 15.42 used.
(1) Post land reclamation
(2) Computed based on income for the period of 1 Jan 2020 to 23 Sep 2020 on an annualized basis
8
2. Key credit highlights
9Key credit highlights
1 Strong government support given HDC’s strategic importance to Maldives
2 Well-positioned to benefit from Maldives’ economic recovery
3 Strategic geographic location of Hulhumalé, Thilafushi and Gulhifalhu
Proven project management capability to ensure timely and on-budget
4 project completion
Key anchor tenants and upcoming commercial projects to generate
5 recurring revenue and improve profitability
6 Robust cash flow generation capability and repayment profile
7 Highly experienced board of directors and management team with proven track record
101 HDC is wholly owned by the Ministry of Finance,
which provides it with strong financial support
Corporate and shareholder structure
Key regulators As a SOE, HDC performs its duties in conjunction
with the support received from the Ministry of
Government of Finance (Maldives) (“MoF”)
President Office of the
Maldives MoF provides assistance to HDC in multiple areas,
Maldives
(GoM) including financial and technical expertise as well as
consultancy
Ministry of National
MoF has provided sovereign guarantees for a significant
Planning, Housing and portion of HDC’s debt and also provides refinancing facilities
Infrastructure to HDC to help service its existing debts
HDC works closely with key regulators such as the President
Ministry of Economic Ministry of Finance Office of the Maldives, Ministry of Housing and Urban
Development (Shareholder) development, Ministry of Economic Development as well as
Ministry of National Planning and Infrastructure, to
implement the various development projects across
Hulhumalé
100% ownership There exists a high likelihood of extraordinary support from
the Government of Maldives through MoF, as well as very
high default dependence between the two entities
HDC has full land planning and real estate
HDC development capabilities, where it maintains and
develops the master land use plan for Hulhumalé
HDC also manages and implements its own projects
in Hulhumalé
In-house 3rd party contractors/ For large projects, HDC will engage 3rd party
development team consultants contractors/developers as well as consultants to assist
with construction and development of buildings given the
additional level of expertise required
Source: Company information.
111 Strong financial support from the Maldives
government
HDC receives strong financial support from the government
The GoM has provided unwavering financial support to ensure the continual growth and development of HDC
HDC received significant financial assistance from the GoM
− As of November 2020, HDC accounted for US$796m of the total active sovereign-guaranteed debt amount of US$2.3bn. This was the highest amount out
of all the beneficiaries of the sovereign guarantee
− Capital injection totaling c.US$87m from 2018 - 2020
− Loans totaling c.US$34m from 2018 - 2020
About 82% of HDC’s total debt as of November 2020 is guaranteed by the sovereign. Strict cross default clauses exist for the sovereign-guaranteed debt by
MoF, with the lowest cross-default threshold at US$1m, implying strong incentive for GoM to ensure the timely and full repayment of HDC’s guaranteed and
non-guaranteed debt on an ongoing basis
Breakdown by types of borrowings (as of November 2020) State Owned Enterprises Sovereign-guaranteed debt by MoF
(US$m)
Others HDC Other State Owned Enterprises (SOEs)
3.6%
From MoF
14.3%
1,869
723 1,073
US$695m
601
218
187 796
Sovereign
414 505
guaranteed
82.1%
2018 2019 2 Dec 2020
Maldives government has shown long term commitment to support HDC through long-term guarantees of its financing
through provision of long-term guarantees of its financing as well as direct loans and capital injections
Source: Company information, Maldives Ministry of Finance. FX of USD/MVR 15.42 used.
121 HDC plays a strategic role in the development of
Maldives
HDC’s strategic mission from the Maldives government Recent developments
HDC has received consistent support from the government in spite of the
HDC’s mandate to develop Hulhumalé is of utmost national change in regimes. The current president Ibrahim Mohamed Solih,
importance and addresses the pressing housing needs of the elected in 2018, has mentioned HDC’s projects as the key projects
Maldivian, especially given c.10% of Maldives population is located in towards achieving the goals of provision of social housing in his 2020
Hulhumalé presidential address
Apart from housing units, HDC also provides supporting facilities and
infrastructure in a socially responsible and commercially viable manner A total of 15,000 housing units are envisioned to be built in Phase II of
for the country to relieve the current over-congestion in Malé which HDC is currently developing two key housing projects:
7,000 social housing project under Phase II is completed and
The successful track record of HDC is further augmented with the expected to be fully allocated in 2022
ongoing development of commercial projects which are expected to 1,530 affordable housing project under Phase II is a mixed-use
provide HDC with more profitable revenue streams and provide housing project with no social housing allocation. The project is
Maldivians with gainful employment expected to be completed by the end of December 2021
Following the government directed merger of HDC and GMZIL, HDC’s
mandate has expanded to include the islands of Gulhifalhu and In 2020 – 2021, HDC has awarded the development of 12 projects worth
Thilafushi, which are expected to boost industrial activities in the US$185m spanning the following segments:
Greater Malé’ Region
Council and affordable
Mixed residential building
housing units
According to the Strategic Action Plan for 2019-2023 published by GoM,
Commercial building Office building
provision of affordable housing is one of the most important pledges of
the current government. Key policy priorities include increasing the
housing supply and provision of social housing through Batching plant Café court
institutional and legal reforms
Recreational center
HDC’s continued success is critical to housing development in Maldives and continual growth
and diversification of the local economy
Source: Company information.
132 Well-positioned to benefit from Maldives’
economic recovery
Improving medium-term outlook for the economy as real
GDP growth is expected to recover post 2020 Inflation rate expected to remain stable and low
(Real GDP, US$bn)
22.3% 2.8%
18.3%
7.2% 8.1% 7.0% 0.2%
(26.4%) (0.1%) (1.4%)
2017 2018 2019 2020E (1)
4.7 5.0 5.3
4.3 4.4 Inflation Rate (%)
3.7
2020E inflation is expected to decrease because of policy measures taken by the
government due to Covid-19
The expected increase in 2021E inflation mostly due to low base effect, as the
2017 2018 2019 2020E 2021E 2022E policy measures taken in 2020 will be reversed
Growth (%)
Driven by the recovery in tourism as travel restrictions
ease… …as well as recovery in non-tourism sectors
(Number of tourist arrivals, m) (Tourism sector real GDP, US$bn) (Real GDP for non-tourism sectors, US$bn)
78.6% 10.3% 9.7% 13.2% 41.4% 62.5%
34.1% (15.5%) 11.6% 19.1%
(63.5%) 6.2% 7.6% 4.9%
8.0% 6.8% 14.7%
(66.8%)
1.3 4.1
1.2 1.1 3.5 3.7 3.5
1.1 3.3 3.1
1.7
1.4 1.5 1.4 0.7
0.8 0.5
0.6
2017 2018 2019 2020A 2021E 2022E 2017 2018 2019 2020E 2021E 2022E 2017 2018 2019 2020E 2021E 2022E
Tourism Arrivals Growth (%) Tourist Real GDP Growth (%) Growth (%)
Source: National Bureau of Statistics, Ministry of Finance, Ministry of Tourism, Maldives Monetary Authority, MOF Budget 2021.
Note: FX of USD/MVR 15.42 used. Forecasts based on best case scenario.
(1) As of 31 January 2021.
142 Well-positioned to benefit from Maldives’
economic recovery
Strong population growth… …coupled with a rise in income
(ppl)
557,426
530,953 9,472 10,245 10,541
515,696 9,123
496,402 6,741
475,513
2016 2017 2018 2019 2020 2016 2017 2018 2019 2020
Steady labor force participation rates(1) Maldivian average income in-line with target market
Average monthly income per earner (MVR)
Average monthly income range of HDC's target market (MVR)
67.0% 66.4%
63.9% 65.0% 66.0% 65.5% 65.1% 65.4% 65.6% 66.0% Average income of buyers of HDC’s
62.9% projects ranges from MVR 7,000 – 14,000
14,000
7,000
11,154 14,150
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Maldives Male
Rise in income of Maldivians increases the affordability and serviceability of HDC’s housing
projects
Source: World Bank, Maldives National Bureau of Statistics, Maldives Monetary Authority (MMA), IMF, EIU.
(1) World Bank estimate. Measures % of total population ages 15+ that is economically active: people who supply labor for the production of goods and services.
.
153 Hulhumalé is the largest strategic large-scale
development in Maldives
Upon completion:
Hulhumalé Phase I Hulhumalé Phase II
Hulhumalé
Covers a total land area of 188 hectares Extension of Phase I covering a land area is expected to house half the population of
of 240 hectares Maldives, providing Maldivians with affordable
First settlement officially inaugurated in May
2004 with the resident population growing Connecting bridges to Phase I completed in social housing as well as improved living conditions,
from 1,000 in 2004 to 50,000 in 2019 April 2020 with less congested traffic and pollution
Completed projects include 704 social Completed projects include 7,000 social Smart City of the Maldives
housing unit project, Hulhule-Hulhumalé- housing unit projects and upcoming projects Introduction of Fibre Optic GPON network to replace
Airport link road, Hulhumalé N1 Primary include 1,530 affordable housing unit traditional cables alongside a transport master plan
and Secondary School and Fahiveni project which includes smart city components such as
Community Center Smart Traffic Management Systems, Automatic
Land allocation and construction expected
Land allocation and construction expected to be completed by 2030 and 2035 Surveillance
to be completed by 2025 and 2030 respectively
respectively
Strategic position in Maldives with direct road access to Malé Phase II expected to triple capacity
Phase I Phase II
Hulhumalé
20 minutes Residents
speedboat 90K 120K Phase II
Capacity:
ride to top
188 214
resorts in Area:
hectares hectares
Maldives
15 minutes Phase I
drive to
Airport Velana
Internation
5-20 al Airport
minutes
drive to the
capital city
of Malé Malé
Sinamalé Bridge
Hulhumalé is developed as an expansion of Malé City and is positioned as the next smart city
Source: Company information. GPON refers to Gigabit-capable Passive Optical Networks.
163 Strategic location also supported by GOM’s plans
to develop the Greater Malé Industrial Zone
Map of Maldives(1) Yacht Marina & Cruise Terminal Tourism Island
One of its kind in Maldives, with the capacity Mega hotels, resort condominiums and
Legend to handle world’s largest cruise ships. Yacht serviced apartments of different scales
Marina will include 300 berthing facilities for
Capital Kulhudhuffushi private yachts
Major cities Population: 8.4k
Knowledge
and IT parks,
Hulhumalé CBD
Hub for
Fifth Power Development Project regional/global
New power plant will have the capacity to ICT firms
generate 50MW of power to Malé, Hulhulé
Malé and Hulhumalé, via the Sinamalé Bridge Academic
Population: 154k District
Airport upgrade and expansion
US$800m project since 2015 to expand and Industrial
upgrade the airport which would involve building Zone
a brand new runway and a seaplane terminal
Warehouses
Relocation of Sinamalé Bridge
harbor
Development of the Greater Malé Industrial Zone
The GOM unveiled a US$488m development project in July 2019 that involves relocating the
Thinadhoo commercial harbour from Malé to Gulifalhu as well as shifting all warehouses in the capital to Thilafushi
Population: 5.2k
6.7km bridge project connecting Malé – Vilimalé – Gulhifalhu – Thilafushi expected to strengthen the
Fuvahmulah strategic location and accessibility for industries on the islands to potentially increase economic activity
Population: 8.5k
Addu City
Population: 17.5k
Hulhumalé is expected to benefit greatly from the further development of the Greater Malé
Industrial Zone
Source: Maldives Bureau of Statistics, The Edition, Company information.
(1) Population figures based off 2014 census.
173 Synergies expected from the addition of nearby
Thilafushi and Gulhifalhu to HDC’s portfolio
Gulhifalhu island Thilafushi island
A new cluster of residential, commercial and industrial real estate Established industrial zone comprising key industrial activities such
developments in the greater Malé region as boat manufacturing, cement packing, methane gas bottling and
various large scale warehousing
Prime location in close proximity to Malé, international airports and
Hulhumalé High demand for industrial land in Thilafalhu due to a lack of space
for such activities in greater Malé
Well connected with ferry services between Malé' to Gulhifalhu
Located in close proximity to Malé and Hulhumalé
80
No. of
53
No. of
5 YEARS
Average
366
No. of
248
No. of
16
Average
YEARS
leased plots tenants lease period leased plots tenants lease period
c.729k c.5.9m
(1) (1)
Leased area (sqft)
16.9 / 201.9 Leased area (sqft)
20.7 / 148.7
Land bank (hectares) Land bank (hectares)
With the merger, HDC will oversee the development of the Greater Malé' Region, enabling
development plans of GMIZ to be more cohesive and benefit from HDC’s expertise
Source: Company information, World Bank, The Economic Times.
(1) Post land reclamation.
184 Proven project management capability to ensure
timely and on-budget project completion
Proven project management methodology Strong project management track record
HDC has managed to execute its projects in a reliable and Completion date: Completion date:
timely manner, with minimal delays and cost overruns for Dec 2003 Dec 2008
projects since inception Total cost: Total cost:
USD13.3m USD14.9m
Contractor: Contractor:
For smaller scale projects, HDC has an internal Sino-Thai Engineering AIMA Construction
development team which coordinates with local contractors and Construction PCL Company Pvt. Ltd
280 Social 504 Social
Housing Unit Completed on time Housing Unit Completed on time
Project with zero cost with zero cost variation
For projects of a larger scale such as the 7,000 social housing variation
Project
project, HDC relies on external contractors who provide
assurance of quality, and are more willing and flexible to
cater to HDC’s needs Completion date: Completion date:
Dec 2016 Oct 2019
Total cost:
USD67.3m Total cost:
For external projects, HDC takes on a supervisory role and Contractor:
USD38.6m
inspects three key elements – quality, time and cost. The China National Contractor:
company has a dedicated team to monitor and ensure that the Machinery Equipment Hunan No. 6
Import & Export Engineering
technical specifications and timeline are well defined 704 Social Corporation Hulhule- Construction Limited
beforehand in the contract and enforces it during execution Housing Unit Completed on time Hulhumalé-
Project with zero cost variation Airport link Completed on time
road with zero cost variation
HDC has a strong record in completing projects within allocated budgets in a timely manner
Source: Company information.
194 Upcoming commercial projects to diversify
revenue base and improve profitability
Commercial units
Revenue stream: Land lease Revenue stream: Develop and lease
Plot area: 21.5k sqm / 231.4k sqft Leaseable area: 179.5k sqft
Project description: A pedestrianized strip designed to Tower
accommodate a variety of commercial and recreational Revenue stream: Develop and lease
Commercial
activities, including regional and global retail brands. Tourism Leaseable area: 110.4k sqft
Spine
Island
(Commercial Project description: Offer various tourist services and facilities
units and Tower) such as hotels, apartments, and commercial units providing
Revenue stream: Pre-sale and develop food and beverage, shopping and recreational areas
Plot area: 32.0k sqm / 344.4k sqft
Project description: Located in Hulhumalé Phase II, a 15 to
20 minute drive from Velana International Airport, a vibrant
luxury community with private beaches, scenic views, Revenue stream: Land lease
Premium oceanfront strolls, a clubhouse, accessibility to premium Plot area: 16.1k sqm / 173.8k sqft
Villas support facilities and urban tourist attractions within the city
Project description: A world class research hub in ICT, the
IT Park not just provides state of the art facilities, but also a
leisurely work environment in the center of the Maldives. The
Revenue stream: Land lease
park will be affiliated with international techparks providing
IT Park trainings, R&D services, incubator services, technology
Plot area: 43.8k sqm / 471.5k sqft
commercialization, techno-preneurship, development of
Project description: A special economic zone with added applications, facilitating market linkages and grants
amenities to create a financial hub catering to various
International financial institutions and other businesses
Finance Centre
Revenue stream: Land lease
Revenue stream: Land lease
Plot area: 137.7k sqm / 1,482.1k sqft
Plot area: 94.0k sqm / 1,011.8k sqft
Project description: A planned hybrid mixed development
Project description: Located in Farukolhufushi, a resort that caters to cruise liners and yachts within the Greater
island created from the reclamation of Hulhumalé Phase II. Marina/ Malé region. This will include berthing, a cruise terminal, a
Heritage and
The district will consist of an amphitheater, a heritage center, Cruise yacht club, food and beverage outlets and other supporting
Cultural
cultural activity huts, an event space, restaurants, preserved Terminal facilities.
District
buildings, guest villas and a botanical garden
HDC has a strong pipeline of commercial projects to establish a diversified revenue base
Source: Company information.
Note: Projects do not include upcoming projects in Thilafushi and Gulhifalhu as HDC is in the process of finalising the masterplans
205 Growing recurring income base
Lease income from upcoming projects set to increase …with commitments from local and international anchor
steadily… tenants
Tourism Island
Commercial Spine (commercial units and tower)
Coca-Cola The Manhanttan Bank of
Lease tenure: Fish Market Maldives
15 years Lease tenure: Lease tenure:
10 years 21 years
Premium Villas IT Park
Red wave Sonee Ensis Fisheries
Lease tenure: Hardware Lease tenure:
25 years Lease tenure: 25 years
25 years
Marina / Cruise Terminal Financial District
State Trading Bank of Ceylon State Bank of
Organization Lease tenure: India
Lease tenure: 5 years Lease tenure:
25 years 5 years
HDC has secured a number of large-scale companies to long-term tenancy agreements, and
continues to attract many other businesses, which will underpin the ramp-up in lease income
Source: Company information.
(1) 2020 breakdown not available, US$18m is total lease revenue.
216 Healthy balance sheet with strong financial
support from the government
Financing ability
14 existing loan facilities from the Ministry of Finance (MoF)
Government loans
MoF is expected to continue refinancing until HDC becomes
financially independent
Sovereign Debt of US$689m (99% of current debt) are either financed or
guaranteed loans guaranteed by the Government of Maldives
Largest portion of sovereign guaranteed loans among all SOEs at
34%
Cash flow from
operations Implicit support by GoM, given existence of cross default clauses in
existing agreements (lowest threshold of US$1m)
Future opportunities for HDC to tap directly onto international bond
Overseas bond markets
markets
Breakdown of financing (as of November 2020) Total debt / Total assets
Others (%)
3.6%
From MoF
14.3%
US$695m
32.1%
29.7%
Sovereign
guaranteed 26.8%
82.1%
2018 2019 11M2020
HDC benefits from healthy capital structure and steady lease income with strong financial
support from government
Source: Company information, Maldives Ministry of Finance.
227 Majority independent Board of Directors
providing strong oversight
Mohamed Jaish Ibrahim Suhail Ahmed
Chairman, Independent Director Managing Director
MBA in International Business – Specialization in Projects Bachelors of Science (honors) in Building Management
Over 15 years of Project Management experience Over 30 years of real estate experience
Ahmed Athif Shathir Abdul Rahman
Deputy Managing Director Chief Operating Officer
Bachelors of Science (honors) in Accounting Ex-Deputy Managing Director of Greater Malé’ Industrial Zone Limited
Over 10 years of accounting experience Over 20 years of management experience
Hassan Muneer Ibrahim Afraath
Independent Board Director Independent Board Director
Board member for the National Aviation Company for 6 years Member of the Elections Committee for 6 years
Over 15 years of business management experience Over 15 years of marketing experience
Abdulla Miad
Abdulla Rameez
Independent Board Director
Independent Board Director
Bachelor of Economics
Bachelor of Civil Engineering
Ex-Board Director of Southern Utilities Limited & Greater Malé’ Industrial Zone
Involved in many major projects in the Hulhumalé masterplan
Limited
Abdul Munnim Mohamed Manik Mohamed Jalal
Independent Board Director Independent Board Director
Associate member of Chartered Institute of Management Accountants (CIMA) Entrepreneur and a businessman
Over 10 years of accounting experience Over 10 years of business management experience
Representative from the Ministry of Finance
Mariyam Shawadin Abdulla
Board Director
Master of Law (International Banking & Finance)
Over 5 years of legal experience
HDC’s Board of Directors are recommended by The President’s Office of Maldives. The
Privatization and Corporization Board appoints them after reviewing their suitability
237 Highly experienced management with proven
track record
Ahmed Shaam Fathimath Nihaya
Chief Financial Officer Director – Procurement & Warehouse Management
Certified ACCA affiliate member Bachelor of Commerce
Ex-Associate General Manager at Maldives Airports Served at HDC for over 15 years
Mohamed Ilham Mohamed Rasheed
Director – Human Resource Management Director – Projects Management & Development
BA (Hons) in Human Resource Management Bachelor of Technology (Hons) in Construction Management
Recognized among top 50 most talented HR leaders in Maldives Over 10 years of project management experience
Ismail Shan Rasheed Adam Azmee
Director – Real Estate Management Director – Municipal Services
Bachelor of Applied Science (Architectural Science) Graduate Certificate in Management and Masters in Business Administration
Over 10 years of architecture experience Over 10 years of management and operations experience
Dr. Fathimath Shiuny Hussain Ziyath
Director – Corporate Legal Affairs Director – Planning and Development
Ph.D in Law, Masters in Comparative Law Masters of Arts in Urban Design & Planning
Over 10 years of legal experience Vice president of Architects Association Maldives
Mohamed Solah Areen Ahmed
Director – Corporate Affairs, Administration & ICT Director – Business Development, Marketing & Sales
Bachelor of Computer Applications Master of Business Administration
Over 10 years of ICT and management experience Over 10 years of Business development experience
Ahmed Nafiz
Director – Business Solutions and Smart Infrastructure
MBA, National and International Diploma in Telecom Engineering
Over 20 years of experience in the telecommunication industry
243. Financial highlights
25Financial overview of HDC
Total debt, Total assets, and Total debt / Total assets Adjusted EBITDA(1) and Adjusted EBITDA margin(1)
(US$m, %) (US$m, %)
27% 32% 30% n.m. 90% 65%
2,341
1,964
1,812
220.8
631 695
486 33.0
19.6
2018A 2019A 11M2020 2018A 2019A 11M2020
Total assets Total debt Total debt / Total assets EBITDA EBITDA margin
Adjusted EBITDA(1) / Finance costs DSCR
(x) (%)
33.0x
119.0% 120.0%
111.0%
2.8x
1.6x
2018A 2019A 11M2020 2018A 2019A 11M2020
Healthy financial metrics that are consistently within loan covenants
Source: Company information, FX of USD/MVR 15.42 used.
Note: Figures for 2018, 2019, 11M2019 and 11M2020 are not prepared on a pro-forma basis accounting for the GMIZL merger.
(1) Adjusted EBITDA represents EBITDA as adjusted for costs that are considered by management to be not reflective of the Company’s core operations. EBITDA margin for 2018
exceeds 100%, deeming it not meaningful. 26Debt profile
HDC weighted average interest rate(1) HDC types of borrowings (as of November 2020)
Type of borrowing Interest rate (%) Others
From MoF 3.6%
14.3%
Sovereign guarantee 5.8%
From MoF 6.3%
US$695m
Others 8.8%
Sovereign
guaranteed
All 6.0% 82.1%
HDC debt repayment profile as of 30 Nov 2020
(US$m)
265
193
149
92
Less than 1 year 1 to 2 years 2 to 5 years More than 5 years
Source: Company information, FX of USD/MVR 15.42 used.
(1) Weighted average interest rate based on gross loan amount and not loan amount outstanding.
274. ESG and Sustainability Bond
Framework
28HDC is at the start of its ESG journey and puts strong emphasis
on establishing policies to meet international standards
Compliance with environmental policies
While there are no specific environmental regulations that apply to HDC,
the company adheres to the guidelines provided by the Environmental
Protection Agency (EPA)
In 2017, HDC collaborated with BREEAM in UK, the world’s leading
sustainability assessment method for master planning projects,
infrastructure and buildings. HDC is currently in the process of
integrating the BREEAM standards and green components in planning and
developmental guidelines Rain-Water Smart Waste
Harvesting Management
Systems Solutions
Environmental risks and climate resilience
HDC takes environmental and climate considerations seriously, and sees Environmental
threats such as global warming, pollution and depletion of resources to be Risk Mitigations
of paramount importance to the sustainability of the region
To deal with these issues, the government is implementing projects
which include solar energy as well as waste management projects in
collaboration with World Bank. A rain-water harvesting project is in the
pipeline, as it is being assessed by World Bank on how it can be
implemented. A study on potential public transport models for Maldives is
also underway, which would aid the government in pushing for public Establish Data Achieve Maximum
transportation to reduce vehicle pollution Collection Energy Efficiency
Mechanism
Hulhumalé was specially reclaimed to be at least 2 metres above sea
level(1) so that it would be less vulnerable to the increase in sea level.
Hulhumalé has the highest above mean sea level in all of Maldives, as
most islands are only 1-1.2 metres above sea level
Source: Company information.
(1) After the tsunami that struck Maldives in 2004, 2 metres above sea level is regarded as the safe standard.
29Overview of HDC’s Sustainability Bond Framework
HDC has established a Sustainability Bond Framework outlining the eligible projects and process under which the company aims to issue
Sustainability Bonds. The Framework addresses the four key pillars of the International Capital Market Association (ICMA) Green Bond
Principles 2018, Social Bond Principles 2020 and Sustainability Bond Guidelines 2018
Process for Project
Use of Proceeds Management of Proceeds Reporting
Evaluation & Selection
An amount equivalent to the Initial evaluation of planned Sustainable Bond issuance Publishing of allocation and impact
proceeds of the Sustainability Bond projects by internal Bid proceeds to be credited to and reporting at the project-level on an
issuance will be used exclusively to Evaluation or Proposal tracked through a dedicated annual basis, and at least until the
finance or refinance, in whole or in Evaluation Committee sub-account full allocation of the net proceeds
part, eligible Green and/or Social
Projects. HDC Management Board to Balance of tracked proceeds will Allocation reporting to include:
opine on initial analysis and be adjusted monthly to match
Eligible Green Project Categories present to HDC’s Board of the Eligible Project allocations Eligible Projects financed or
Directors for final decision on refinanced
Green Buildings project selection All Sustainable Bond issuance
proceeds to be allocated to Amounts allocated to Eligible
Renewable Energy Environmental and social Eligible Projects within one year Projects
Energy Efficiency controversy monitoring related of issuance Proportion of proceeds used for
to Eligible Projects to be financing vs. refinancing
Sustainable Water and conducted throughout the life of
Wastewater Management any Sustainability Bonds issued % of co-financing for Eligible
Projects
Eligible Social Project Categories
Balance of any unallocated
Affordable Housing proceeds
Affordable Basic Infrastructure Types of placements and uses
Socioeconomic Advancement for temporary unallocated funds
and Employment Generation Verification of allocation reporting
and impact metrics and data by an
independent external third party
until full allocation and in case of
any material changes
30Eligibility Criteria
Eligible Green Project Categories
The development and construction of office, commercial or residential buildings meeting the below criteria:
1 Green Buildings
BREEAM “Very Good” certification or above.
Measures to increase the usage of renewable energy sources, including:
2 Renewable Energy
The installation and maintenance of solar charging stations in parking areas for battery bikes/cycles.
Measures to increase the efficiency of energy used throughout Hulhumalé, including:
The installation and maintenance of energy efficient lighting in residential buildings, institutional buildings, and open spaces,
3 Energy Efficiency achieving a saving in energy consumption of at least 50%;
Infrastructure, equipment, technology and processes related to the implementation of energy efficient deep water source district
cooling systems.
Sustainable Water
Expenditures related to rainwater harvesting projects, i.e. capture and storage of rain and storm water, to improve the overall usage
4 and Wastewater and efficiency of water use in Hulhumalé. Desalination plants are explicitly excluded from the Eligible Green Project Category
Management
Eligible Social Project Categories
Affordable Construction of social housing projects for the population of the Maldives, with eligible persons for specific projects determined by a
1 Housing committee formed under the Ministry of National Planning, Housing and Infrastructure
Construction, installation and maintenance of affordable infrastructure, including:
Fire hydrant systems across public spaces for the population of Hulhumalé and Thilafushi;
Affordable Basic
2 Public road and bridge infrastructure connecting Hulhumalé and Thilafushi with surrounding islands including Malé, Hulhulé,
Infrastructure
Villigili and Gulhifalhu to support commercial, industrial and socioeconomic development;
Rollout of Open Access Gigabit Passive Optical Network (GPON) for the population of Hulhumalé.
Projects to support socioeconomic advancement and increase employment for the population of Hulhumalé, including:
Socioeconomic
Development of commercial buildings to support local employment generation and industrial development in Hulhumalé,
Advancement and
3 including museums, exhibition centres, retail locations and warehouse shells;
Employment
Generation Vertical farming opportunities on social housing projects to provide solutions for small-scale food producers, increase agricultural
productivity, and reduce urban heat effects.
Look-back Period
The look-back period for eligible projects will be 48 months for projects related to housing and 36 months for all other eligible projects.
31Disclaimer
This document and any related presentations have been prepared by the Housing Development Corporation (“HDC”). This document and any related presentations are being given
solely for your information and for your use and may not be taken away, reproduced or redistributed to any other person. By attending this presentation, you are agreeing to be
bound by these restrictions.
The information contained in this document and any related presentations (the “Information”) is strictly confidential and has been provided by HDC and has not been independently
verified. No representation or warranty express or implied is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the Information
or opinions contained herein. It is not the intention to provide, and you may not rely on this document as providing, a complete or comprehensive analysis of HDC’s economic, fiscal
or financial condition. The inclusion of such data in this document or any related presentation should not be regarded as a representation or warranty HDC, its advisors or
representatives or any other person as to the accuracy or completeness of such Information and should not be relied upon when making an investment decision.
Certain statistical, economic and other information included in this document is the latest official data of HDC that is available at the date of this presentation. Some of this
information and data have not been made available to the public and/or are preliminary and are subject to revision or adjustment as additional or amended information becomes
available. HDC cannot provide any assurances that material changes will not be made or that the information provided is complete. HDC is not obligated to distribute such revised
data and information to any investor.
Certain data in this document was obtained from various external data sources, and HDC has not verified such data with independent sources. Accordingly, HDC and its advisors
and representatives make no representations as to the accuracy or completeness of that data, and such data involves risks and uncertainties and is subject to change based on
various factors.
Certain statements contained in this document, including any information as to our strategy, plans or future financial or operating performance constitute “forward-looking
statements”. These forward-looking statements can be identified by the use of forward-looking terminology, including the terms “believe(s)”, “estimate(s)”, “anticipate(s)”, “expected
to”, “project(s)”, “expect(s)”, “intend(s)”, “aim(s)”, “plan(s)”, “predict(s)”, “may”, “will”, “seek(s)”, “would”, or “should” or, in each case, their negative or other variations or comparable
terminology, or by discussions of strategy, plans, objectives, goals, future events or intentions. These forward-looking statements include all matters that are not historical facts. They
include statements regarding the intentions, beliefs or current expectations of HDC concerning, amongst other things, HDC’s results of operations, financial condition and
performance, prospects, growth and strategies and the industry in which HDC operates.
By their nature, forward-looking statements address matters that involve risks and uncertainties because they relate to events and depend on circumstances that may or may not
occur in the future. Forward-looking statements are not guarantees of future performance and HDC’s actual results of operations and financial condition, and the development of the
business sector in which HDC operates, may differ materially from those suggested by the forward-looking statements contained in this document. In addition, even if HDC’s results
of operations and financial condition, and the development of the industry in which HDC operates, are consistent with the forward-looking statements contained in this document,
those results or developments may not be indicative of results or developments in subsequent periods.
This document and any related presentation does not constitute or form part of an offer, solicitation or invitation of any offer, to subscribe for or purchase any securities and nothing
contained herein shall form the basis of, or be relied on, in connection with any contract or commitment whatsoever. Any decision to purchase securities in the context of any
proposed offering undertaken in the future by HDC, if any, should be made on the basis of information contained in the offering document published in relation to such an offering.
Any securities offered by HDC will not be registered under the Securities Act and may not be offered or sold in the United States absent registration under the Securities Act or an
applicable exemption to registration.
The distribution of this document and any related presentation in other jurisdictions may be restricted by law and persons into whose possession this document or any related
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other jurisdiction.
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