Brenda Mbathi CEO, Two Rivers International Finance & Innovation Centre TRIFIC Part 1

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[00:00:00]Hi, and welcome to the Trading Bell. We are right here [music] at Tatu City SEZ.

[00:00:04]What are they all about and the likes?

[00:00:05]Make sure you tune in to the Trading Bell for that conversation. They are now in the market with [music] a rate offering for you the investor. You don't want to miss this. Welcome to the Trading Bell.

[00:00:19]>> [music] [music] [music] >> Hi, Brenda.

[00:00:38]Hi. How are you? Very well. It's good to have you on set. Thank you. Thank you.

[00:00:42]And welcome to the Trading Bell.

[00:00:44]I'd like us to start from the definitives for people to understand. We talk a lot about SEZs, Tatu City SEZ.

[00:00:53]Could you help us understand first, even for business persons who could be watching this for the first time, and probably are missing out on the opportunity. Help us understand just the genesis and what's happening here at Tatu City SEZ.

[00:01:04]Thank you. So, let me start by saying what is Tatu City SEZ.

[00:01:09]Tatu City stands for Two Rivers International Finance and Innovation Centre.

[00:01:14]Tatu City >> Yeah. That's the acronym. And then SEZ stands for Special Economic Zone. Zone, yes. So, we are the first privately owned bespoke to business services. So, we only look at business services special economic zone here in Kenya.

[00:01:31]Wow, that's very nice. And what is the incentive for businesses? What are you [clears throat] offering so that they come over here?

[00:01:40]Well, there are many things that are on offer. Yeah.

[00:01:42]>> Before I go to the regulatory space, I'll start with what we offer here within the Two Rivers ecosystem.

[00:01:49]>> Yeah. So, we are based at the Two Rivers ecosystem. All right. The Two Rivers ecosystem is based within the UN diplomatic blue zone. So, a very prestigious event uh base great location.

[00:02:03]And as I said, what we offer is a special economic zone governed by our regulator. It's actually a very good regulator called special economic zone authority. And what they give um to entities that are eligible, um they offer strategic incentives.

[00:02:21]That's what I would call them. So, incentives that allow for those who are eligible, you must be eligible to benefit from the strategic incentives as they look to export their services uh to the rest of the world.

[00:02:35]>> You're right. So, within um Two Rivers, um the location, we've we really benefit from the great infrastructure that has been [clears throat] accorded to us. It has been invested in by the Two Rivers Land Company Special Economic Zone.

[00:02:52]So, not just the address, but the amenities that you should get uh when you're within this location. Great roads, access to good power. We have our own power plant um with two separate uh 66 kV lines that come into um the zone. We also have our own water plant.

[00:03:13]>> Yeah. Um we recycle 85% of our our water here. Yeah. Um which is great. We're committed as you know, we're going to talk about in green I-REIT.

[00:03:22]>> You're right.

[00:03:23]>> Committed to keeping the space as green etc. etc. So, there's a lot on offer when you >> There could be a lot to talk about.

[00:03:29]You're right. Speaking about that, let's now get into, you know, uh the green part of things and what you want to offer Kenyans. Could you explain to the people why you want to come to the market and what are you offering?

[00:03:43]So, what we're offering is a chance for someone to invest in an income REIT um as we list the product on the Nairobi Securities Exchange.

[00:03:55]>> Yeah. On the main market.

[00:03:56]>> Yeah. So, by bringing this to the market, we allow people to invest, to own [clears throat] a part of this terrific North Tower where we are.

[00:04:07]>> And um, to to benefit from the success that that we have today. Wow. And when we talk about it being green, our building is green edge I guess see certified.

[00:04:21]>> [clears throat] >> It's green certified according to the CMA rules.

[00:04:25]I talk about um, where we're located. We have 63 acres which are part of the special economic zone. Mhm. Of um, the 63 acres, we've committed to keeping 30% of that space green.

[00:04:40]>> Yeah. Um, we also um, access power using solar power.

[00:04:45]>> Mhm. [clears throat] Um, and we currently have actually doubled that capacity from 1.2 MW to 2.4. Mhm. And so there's just a lot going on in our ecosystem that allows us to attribute it to being green. And we're committed to that. Um, it's very important for investors. It's important to our tenants, to to the tenants that we've been able to attract to be in our space.

[00:05:10]>> Yeah. Who are blue chip tenants. And you know, it all sort of fits in. Okay.

[00:05:17]Lovely. Let's speak more about the rate that you're offering which is dollar dominated. And I don't know how much you're looking for from the people.

[00:05:26]And probably also you could also talk about the motivation as well behind this and why you also chose for it to be dollar dominated.

[00:05:33]So, first of all it's dollar don- denominated because we operate in a dollar denomi- denominated zone. Yeah.

[00:05:40]Of course. That's why it's special. Um, yeah. It's special. Um, as I said, the people who operate in this zone are exporting their services >> Yeah. um outside of Kenya. Um we collect all our rent in US dollars.

[00:05:56]So with that we're able to then offer it um to investors as a dollar denominated REIT.

[00:06:02]>> Yeah. Um in terms of you asked me the question, what are we looking to raise?

[00:06:07]>> Yes. So we're looking to raise $39.7 million.

[00:06:12]>> Okay.

[00:06:13]Of but we as Tatu City will retain 20%.

[00:06:18]So actually what we're looking to raise is $29 million. Okay. From the market.

[00:06:24]Um the good thing is that by law we retain the 20% and by us retaining the 20% we um we still have a stake in the game. Okay.

[00:06:36]I love that and I believe that you will get that money. Uh one of the quick things I wish [laughter] I I should have asked this earlier is the journey, the journey that we have had so far in in terms of since you started this offering to especially BPOs and the likes.

[00:06:52]Uh the last chat I had I think with your group MD we were looking for customers to come by. How has the journey been? Do we have some here? Well, first of all, thank you for coming and being part of our journey.

[00:07:02]>> Yes.

[00:07:03]>> [laughter] >> Seeing us at the beginning and then hopefully what you see today you can really see the transformation. You're right.

[00:07:09]So we now [sighs and clears throat] have 30 tenants, we'll call them 30 members.

[00:07:13]Wow. Cross spectrum of tenants um from different sectors. Um mainly blue chip uh tenants and we're really grateful and thankful for that. But it is also what we're able to offer in this space, in this zone. Um it's the infrastructure, it's the support we give as Tatu City, and indeed it is the strategic incentives from the regulator. Wow.

[00:07:38]Yeah. So I'm assuming the majority are the BPOs that you had hoped to have?

[00:07:43]Yes, I remember when we first started we discussed BPOs. So, BPOs, that stands for business process outsourcing. Also known as part of the GBS, so global business services. And indeed we are truly really fortunate. We We host [sighs] the number one BPO in the world, which is Teleperformance, otherwise known as TP.

[00:08:07]They are our anchor tenant. And yes, I think they found a home here. And they continue to expand. So, yes, we have TP.

[00:08:16]We also have other BPOs in this space.

[00:08:20]But also a little bit about the BPO GBS sector in this country. It's It's growing.

[00:08:27]It's growing because our great Kenyan talent is recognized. And services as an industry now contributes more and more to our GDP. I think it's something that's forgotten. People don't realize what it it contributes. And indeed we now have structured, you know, the BPO sector, the GBS sector has structured themselves into formal associations, so they're able to come together and have one voice. And this genuinely shows maturity in the market. You're right.

[00:08:58]For any investor who is investing and putting in the money into a rate like the one you're asking to, definitely the question of where the returns. I would like you to speak a little bit about that and you know, what are you projecting, especially for the return side of things?

[00:09:13]Okay, we we are hoping and expect a growing return. It will start off at 8% as the yield.

[00:09:21]This will be paid twice a year, so semi-annually. Again, in dollars.

[00:09:27]The way you can invest is one unit is $1. The minimum investment is $1,000.

[00:09:34]$1,000. Okay.

[00:09:36]And I love the projection. You said 8% in two tranches in a year, right?

[00:09:40]>> Yes, and and it's in US dollar denominated. Yes, and I think that shows that it gives you a better return than a lot of the other instruments that may be on offer currently.