Actual

(in million)

CAGR
(06 - 09)
0%

2012
0
0.0%

2008
0

2009
0
0.0%

2010
0
0.0%

2011
0
0.0%

Total costs
% gross rentals

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0%

EBITDA
% margin

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0%

Depreciation & Amortization:

% gross rentals
EBIT

0
0.0%
0

0
0.0%
0

0
0.0%
0

0
0.0%
0

0
#DIV/0!

0
#DIV/0!

0
#DIV/0!

-15,357,700
0.0%

Increase/Decrease in NWC

Unlevered Free Cash Flow

-15,357,700

Gross Rentals
% growth

Taxes (12%)
Capex
% gross rentals

WACC
Discount Period

#DIV/0!

0
85.0%
0
2.5%
0

10.7%
1.0

Discount Factor

0.90

Present value of free cash flow

Terminal Value
Terminal Year Free Cash Flow
Perpetuity Growth Rate
Terminal Year EBITDA
Terminal Value
Implied Exit Multiple
Discount Period
Discount Factor
Present Value of Terminal Value
% of Enterprise Value

0
#DIV/0!

-13,870,937

1,351,800
3.0%
1,530,000
18,039,075
12.4x
21.5
0.1
2,020,581
-104%

(in million)
Net Working Capital
Account receivables
Inventory
Prepaid expenses and other
Total Current Assets
% gross rentals

2008
0
0
0
0
0.0%

Actual
2009
0
0
0
0
0.0%

2010
0
0
0
0
0.0%

2011
0
0
0
0
0.0%

0
0.0%

Account payable
Accrued Liabilities
Other Current Liabilities
Total Current Liabilities
% gross rentals

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0%

0
0%

0
0%

0
0%

0
0%

Net Working Capital

% gross rentals

Forecast period
2012

DCF model
Forecast period
2021
1,800,000
0.0%

2013
1,800,000
0.0%

2014
1,800,000
0.0%

2015
1,800,000
0.0%

2016
1,800,000
0.0%

2017
1,800,000
0.0%

2018
1,800,000
0.0%

2019
1,800,000
0.0%

2020
1,800,000
0.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

0.82

0.74

0.67

0.60

0.54

0.49

0.44

0.40

0.36

1,102,736

995,982

899,562

812,476

733,821

662,781

598,618

540,666

488,325

Forecast period
2013
2014

2015

2016

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0%

0
0%

0
0%

0
0%

Forecast period
2022
2023
1,800,000
1,800,000
0.0%
0.0%

2024
1,800,000
0.0%

2025
1,800,000
0.0%

2026
1,800,000
0.0%

2027
1,800,000
0.0%

2028
1,800,000
0.0%

2029
1,800,000
0.0%

2030
1,800,000
0.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

54,000
-3.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

1,530,000
85.0%

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

-178,200

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

0
0.0%

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

1,351,800

11.0

12.0

13.0

14.0

15.0

16.0

17.0

18.0

19.0

0.33

0.29

0.27

0.24

0.22

0.20

0.18

0.16

0.14

441,051

398,353

359,789

324,958

293,499

265,086

239,423

216,245

195,310

DCF model
2031
1,800,000
0.0%

2032
1,800,000
0.0%

54,000
-3.0%

54,000
-3.0%

1,530,000
85.0%

1,530,000
85.0%

-45000
2.5%
1,485,000

-45000
2.5%
1,485,000

-178,200

-178,200

0
0.0%

0
0.0%

1,351,800

1,351,800

20.0

21.0

0.13

0.12

176,403

159,325

Input
Wacc Calculation
Target Capital Structure (1)
Debt to Total Capitalization
Equity to Total Capitalization
Debt to Equity Ratio

29.6%
70.4%
44.5%

Cost of Equity
Risk-free rate (2)
Market risk Premium (3)
Levered Beta (4)
Size Premium (5)
Cost of Equity

6.6%
6.3%
0.66
1.7%
12.4%

Cost of Debt
Cost of Debt
Taxes
After Tax Cost of Debt

7.5%
12.0%
6.6%

WACC

10.7%

(1) Obtained from Beta and Capital Structure tab

(2) Difference between total risk premium and CBO discount rate
(3) Obtained from Ibbotson SBBI Valuation Yearbook
(4) Obtained from Beta and Capital Structure tab
(5) Low-Cap Decile size premium based on market
capitalization, per Ibbotson

DCF model

DCF model

Terminal Value
Discount Factor
Present Value of Terminal Value
% of Enterprise Value

18,039,075
0.11
2,020,581
-104%

Enterprise value
Less: Total debt
Plus: Cash and Cash Equi.
Net Debt

-1,945,948
6,834,176
0
6,834,176

Implied Equity Value

Outstanding shares
Implied share price

-8,780,124
10,000
-878.01

Implied multiples
Enterprise Value
SALES 2010
EBITDA 2010
Implied EV/SALES
Implied EV/EBITDA

-1,945,948
0
0
#DIV/0!
#DIV/0!

### #######
8.7%
9.7%
10.7%
11.7%
12.7%

2.0%
894,474
-843,572
-2,173,385
-3,219,767
-4,061,075

### #######
12.3%
13.3%
14.3%
15.3%
16.3%

-1.0%
-12,104,578
-11,964,845
-11,825,111
-11,685,377
-11,545,644

Annual rental growth %

-0.5%
-12,104,578
-11,964,845
-11,825,111
-11,685,377
-11,545,644

WACC

-3,966,529

EBITDA %

Output
Enterprise value
Present value of Free Cash Flow

Sensitivity Analysis
Perpetuity growth %
2.5%
1,188,719
-660,836
-2,055,482
-3,141,382
-4,007,685

DCF model
Sensitivity Analysis
Perpetuity growth %
3.0%
3.5%
1,534,587
1,946,968
-450,827
-206,945
-1,922,268
-1,770,551
-3,053,988
-2,955,935
-3,948,791
-3,883,495

4.0%
2,447,090
79,724
-1,596,190
-2,845,148
-3,810,695

Annual rental growth %

0.0%
0.5%
-12,104,578 -12,104,578
-11,964,845 -11,964,845
-11,825,111 -11,825,111
-11,685,377 -11,685,377
-11,545,644 -11,545,644

1.0%
-12,104,578
-11,964,845
-11,825,111
-11,685,377
-11,545,644

Comparable Companies Unlevered Beta

Company
Aldar Properties PJSC
Sorouh Real Estate Development
Qatar Real Estate Investment Co.
RAK Properties
Emaar Properties PJSC
Median
Mean

Levered Beta
(1)
0.82443
0.704
0.7301
0.51344
0.6582

Market Value of
Debt (2)
10153.4
699
1042.9
150
2218.6

Market Value of
Equity (3)
Debt/ Equity
74.4%
13649
28.3%
2469
62.0%
1681
32.2%
466
25.7%
8620

0.70
0.69

32.2%
44.5%

(1) From Bloomberg

(2) Book Value of Debt
(3) From Bloomberg
(4) Unlevered Beta = Predicted Levered Beta / (1 + Debt/Equity) x (1-t))

Relevered Beta

Target Company

Mean Unlevered
Beta
0.48

Mean Target
Debt/ Equity
44.5%

Target
Marginal
Tax Rate
12%

red Beta
Equity/ Total
Marginal Unlevered
Assets
Tax Rate
Beta (4)
57.3%
0%
0.47
77.9%
0%
0.55
61.7%
0%
0.45
75.6%
0%
0.39
79.5%
0%
0.52
75.6%
70.4%

Relevered
Beta
0.66

0.47
0.48