NBK Capital 2015

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Real Estate – Mazaya December 21, 2015
Figure 7 Overview of Mazaya’s Kuwait Commercial Investment Properties
Kuwait Commercial Investment Properties Description
Location Kuwait City
Size 75K sqft NLA
Current annual rent KD 3.1 million
As % of Mazaya's total rental income Around 50%
Contribution to our gross EV Around 35%
Source: Asteco, NBK Capital
Figure 8 SOTP Valuation for Mazaya
Development properties E V 24,305
Recurring income business E V 81,022
Total E V 105,327
Adjustments:
Net debt (at 4Q2015F B V) (45,773)
Undeveloped land bank 21,852
Associates/JV (at 4Q2015F B V) 12,923
AFS (20% discount to 3Q2015 B V) 9,051
Minorities (at 4Q2015F B V) (6,557)
Net direct investment in Turkey (at 3Q2015 B V) 7,338
Other liabilities (at 4Q2015F B V) (674)
Net equity value 103,486
Outstanding shares 000s (ex. treasury) 619,589
Per share fair value (KD) 0.165
Current market price (KD) 0.104
Upside 58.7%
SOTP KD 000s
Source: NBK Capital
Unlike the general Kuwait
commercial property market, which
has been struggling with high
vacancy rates, Mazaya enjoys almost
full occupancy due to its product
offering, which caters to small and
mid-sized corporate tenants
Our SOTP is the result of two
DCFs, adjusted for other assets
and liabilities, with recurring
income contributing the bulk of
our valuation. The stock currently
trades at a 0.6x price-to-book
ratio (trailing), which we consider
attractive. Hence, we maintain
our Buy recommendation