Sidecar Path, Vista Tower Sprint, and Token Pilot
Meeting Summary: Key Decisions & Next Steps
Date: 10 Sep 2025
Audience: ARB Group MD, AR-Kenedix MD
Purpose: Confirm mutual understanding; define the 'Sidecar' project; set the project timeline; pinpoint crucial decisions.
Why this matters: It sets clear project goals, assigns responsibilities, and defines timelines early on.
Summary: What's Changing Now
Immediate Steps
Separate existing risks. Prioritize filling Vista Tower. Secure funding using stable income, without giving up ownership.
How It's Set Up
The "sidecar" is a separate company with its own rules and reports. Tokens are optional and do not give voting rights.
Key Decisions
Finalize token rules and RAMZ plan. Review Vista's improvement budget and weekly updates. Test the sidecar with external pricing. Use new performance goals for the board.
Goal: Quickly improve cash flow and public image.
Meeting Recap: Key Takeaways
Deal with Old Problem Assets
Stop old, underperforming assets from hurting profits and complicating investment decisions.
Isolate Risky Parts
Separate problematic assets from ARREIT's main finances through a structured plan.
Speed Up Vista Tower
Quickly rent out and sell Vista Tower units to boost company earnings.
Get New Funding
Obtain new funds based on reliable income, without selling more company shares.
Outlining our core strategy
Understanding What Makes This Possible
Government Link & Reliability
We are one of the few real estate investment trusts (REITs) supported by government-linked companies (like ARB). Our history of reliability helps us safely separate problematic assets.
Operations Getting Back on Track
Leasing is improving in 2024/25. Management is focused on getting more spaces rented out.
Main Owners
- ARB: 45.57%
- KDA (Kenedix affiliate): 15.00%
- PKNS: 5.65%
This shows we have the right structure and support to use these financial tools effectively.
Our Challenge: Old Problems Slow Us Down
Selling some assets has helped, but fully fixing our old financial commitments will take many years. This is because of long-term leases, loan repayment schedules, and other agreements that are hard to change quickly.
Current Situation
Past financial commitments are limiting our performance and how we can use our money.
Timeframe
It could take up to 10 years for these old commitments to naturally resolve themselves.
What We Need Now
We need fast, low-cost solutions right away to protect our profits (DPU) and manage our debt levels (Gearing).
Key Definitions: DPU = Distribution per Unit; Gearing = Debt/Total Assets
This explains why we need a focused, fast-track plan.
What is a "Sidecar"?
Legal Structure
A separate company or trust with its own accounts, rules, and reports.
Purpose
To manage assets that aren't performing well, fund upgrades to fill empty spaces, and let investors benefit without impacting our company's main financial reports.
Investor Role
Investors get profits but no voting rights. The manager keeps full control of the assets through special agreements.
Timeline
Starts with an investment period, followed by improvement goals, then profit payments, and finally an exit strategy (like selling or refinancing).
This makes the structure clear and keeps the manager in charge.
Sidecar as a Solution: Addressing Legacy Constraints
The sidecar model provides a strategic framework to unwind the "legacy problems" of long-term financial constraints, such as inflexible leases, burdensome loan schedules, and restrictive agreements tied to problematic assets. Each sidecar structure offers a distinct pathway to overcome these challenges, enabling ARREITs to regain agility and focus on core objectives.
Direct Asset Ownership: Untangling Legacy Assets
By directly owning problematic assets, the sidecar isolates them from the ARREIT's balance sheet.
This allows for dedicated management, strategic improvements, or even divestment without encumbering the main entity with long-term leases, restrictive loan covenants, or complex agreements. It creates a clear pathway to offload or revitalize assets that would otherwise be a perpetual drain on resources and capital.
Profit Sharing: Reducing Risk, Retaining Upside
This model addresses situations where full asset transfer is complex but an immediate financial burden exists.
It alleviates immediate financial constraints (e.g., operational costs, lease payments) by transferring the performance risk of the problematic asset to the sidecar, while the ARREIT retains potential future upside from its performance. This flexible approach provides an escape from rigid long-term agreements without requiring outright sale or complex legal transfers.
Debt Restructuring: Refinancing Problematic Loans
Debt restructuring directly targets burdensome loan schedules and unfavorable agreements associated with underperforming assets.
By designing special loan agreements tied to asset improvement goals, the sidecar can negotiate more flexible terms, refinance existing debt, or align incentives for a turnaround. This approach can free the ARREIT from onerous debt obligations and accelerate the path to making the asset profitable or preparing it for a more favorable disposition.
In essence, each sidecar approach serves as a targeted intervention, dismantling the long-term financial shackles of problematic assets and enabling a more dynamic portfolio strategy for the ARREIT.
Finding and Pricing Assets
For our first project, we need a strict process for choosing assets and fair pricing to manage our money wisely and reduce risks.
Selection Rules
Easy path for upgrades; at least 60% chance of re-leasing; target return of 15% or more; protection from losses through good entry prices and phased spending.
Fair Market Pricing
Using sealed-bid or Dutch auctions helps us get objective, market-driven prices for key asset purchases.
Risk Management
Spending is released in stages, linked to progress. Independent surveyors verify costs when needed.
Roowang's Role: Developing the asset screening tool, creating auction document templates, setting up allocation reports, and providing full post-deal monitoring.
Ensures we choose assets fairly and price them transparently.
Vista Tower: Key to Boosting Profits
Path to Better Performance
In 2023, Vista Tower had many empty units, which led to lower performance. Now, management has shown a clear plan to fill these spaces quickly.
Filling Vista Tower's empty units is the quickest way to increase our net property income and boost profits across all our properties.
Our special financial plan (the "sidecar structure") helps these efforts. It works alongside, not instead of, our plans to lease out spaces and improve our properties.
End of 2023
Starting occupancy rate
4Q 2025 Target
What management expects
4Q 2026 Target
Goal for all properties
Key Definitions: NPI = Net Income from Properties; AEI = Property Improvement Plans
This plan links our funding strategy with the timeline for recovery.
Vista Tower Sprint: How We Operate & Measure Success
Action Plan (illustrative)
- 2 flexible floors with adaptable rental agreements
- Ready-to-use offices for tenants needing 3-7k sq ft
- Leasing rewards based on achieved results
- Upgrades to amenities: lobby, air conditioning, and clear signs
Weekly Progress Tracking
- How fast sales leads move and convert
- Analysis of leased space and cost of free rent periods
- New income compared to our original goals
How We Make Decisions
Weekly team meetings to review progress. Any significant differences from our plans will trigger formal checks and corrective actions.
Roowang's Role
Performance tracking tools, standard office setup designs, structure of incentives, and detailed analysis of performance differences
Turns big-picture goals into clear, measurable weekly actions
Funding Layers & Payment Plan
How Funding is Organized
The financing structure is tiered, starting with the most secure funds and moving down to the riskiest, equity-based investments.
- Senior Loans: These are the most secure, like traditional bank loans, and are paid back first. They have the lowest risk and typically the lowest interest rates.
- Mezzanine Debt: These are mid-level loans that sit below senior loans. They carry more risk, so they offer higher interest rates and often include equity-like features.
- Equity: At the bottom, investors provide equity capital, becoming part-owners of the project. They take the highest risk but also have the potential for the greatest returns.
Ensuring Performance
To align interests and motivate strong project outcomes, payments are directly linked to specific performance targets. If key financial or operational goals are not met, certain financial distributions can be adjusted or even clawed back.
- Performance Targets: These can include achieving certain income levels, occupancy rates for properties, or hitting specific development milestones.
- Payment Adjustments: If targets are missed, investor distributions might be reduced or deferred. In some cases, previously paid amounts could be subject to "clawback," meaning they might need to be returned.
How Payments Flow: The Waterfall Structure
Payments follow a strict "waterfall" order, ensuring that the most senior obligations are met first before funds flow to riskier layers.
Repaying Primary Loans
First, all basic, secure loans (senior debt) are paid back, as they have priority.
Recovering Property Expenses
Next, essential operational costs and expenses related to the property or project are covered.
Basic Returns for Investors
After expenses, investors receive their initial, agreed-upon baseline returns on their capital.
Additional Investor Payments
If there's more profit, investors receive additional payments, often representing higher returns for their equity.
Manager's Share of Profits
Finally, once all prior obligations and investor returns are met, the project managers receive their performance-based share of any remaining profits.
This encourages efficient management, protects against potential losses, and ensures a clear distribution of returns based on risk and contribution.
Roowang Accelerators: How We Speed Things Up
Screening Engine
Our smart model quickly finds the best assets and helps make good pricing decisions.
Auction Tools
Ready-to-use auction tools help you discover the best market prices without custom setup.
Decision Dashboard
A dashboard with key performance numbers helps your team make informed decisions.
Payment Automation
Automates calculations and payments, reducing effort and mistakes.
Team Check-in Templates
Templates for regular team check-ins help quickly spot and solve problems.
Changes informal ways of working into clear, repeatable steps.
Roowang's Role: Step by Step
Roowang makes every project phase more efficient, effective, and faster, with clear tasks and goals.
Phase 0 - Plan & Agree (Week 0)
Hold meetings to define needs; map current processes; create clear decision points and get everyone on board.
Phase 1 - Setup Blueprint (Weeks 0-4)
Explore contract options; check accounting rules for asset removal; design payment flow; develop full agreement terms.
Phase 2 - Quick Launch (Weeks 0-12+)
Set up tools for tracking performance; define product standards; create incentive plans; analyze and report weekly changes.
Phase 3 - Token Test (Days 90-120)
Build digital distribution system; manage investor records; prepare legal and Shariah papers; test with users.
Phase 4 - First Rollout (Week 6+)
Launch screening tools; implement bidding system; report on allocations; set up ongoing oversight after closing.
This avoids confusion about who owns what and speeds up all parts of the project.
Roowang: What We Deliver & How We Confirm It's Done
Clearly defining what "done" means helps us deliver quality work and avoid project changes across all parts of the project.
Investment Plan Details
3 possible ways to set up the investment, with a note on accounting rules (IFRS) and full details on payment order and conditions.
Acceptance: Approved by legal team; finance agrees on how asset ownership changes affect risk.
Project Progress Tracker
A live dashboard showing progress, with automatic weekly summaries and comparisons to our goals.
Acceptance: Data is at least 95% complete; automatic reports show differences from plan; clear owners for each task.
Auction Tools & Process
All necessary documents (like info packets, bid forms, and allocation notes), a step-by-step guide for operations, and a checklist for finding problems.
Acceptance: Successful practice run with a fake asset; all agreed-upon time limits are met.
Digital Token System
A system to record tokens, automatic payment process, investor reports, and religious compliance documents (RAMZ/Shariah).
Acceptance: User testing confirms data matches external records; secure, two-person payment approval process is tested and confirmed.
Clear and measurable goals help keep the project on track.
Board Dashboard: Clear Information for Decisions
Track Key Numbers
See important financial figures like profit per share, debt levels, building occupancy, and how quickly new investments are growing. All updated instantly.
Plan for the Future
Test different business choices, like dividend plans or investment timelines. See how they instantly affect profits and debt.
Consistent Reports
The same detailed information is used for both internal board meetings and external investor reports. This keeps everything consistent and correct.
Roowang's Role: We create and manage the dashboard displays, connect all the data, and ensure clear rules for how we measure things.
One reliable source for internal checks and external investor communication.
How We Manage and Report
Manager Decisions
We make all key asset decisions, like leasing and project spending, as per our agreement.
Asset Protection & Admin
ARB safely holds and manages all assets. A trustee provides legal oversight.
Investor Information
Investors get financial reports to see how their money is doing. They receive profits but don't vote on decisions.
Regular Updates
We provide weekly updates on property improvements, monthly profit and financial health reports, and detailed quarterly overviews.
Clear financial reporting while keeping effective management control.
Roowang Operating Model: RACI & SLAs
RACI Matrix (Roles & Responsibilities)
- Responsible (R): Roowang - financial analysis, managing auctions, setting up dashboards, blockchain technology
- Accountable (A): REIT Manager/Trustee - investment decisions and reporting to regulators
- Consulted (C): Asset Custodian, Islamic finance advisors, legal advisors
- Informed (I): Senior Leadership, Board members
Service Level Agreements (Performance Goals)
- Weekly performance report: within 2 business days after week end
- Auction document preparation: within 5 business days from investment approval
- Token payment distribution: within 3 business days after period ends
- Critical issue resolution: temporary solution within 4 hours; full repair within 24 hours
Ensures fast operations with clear accountability and defined problem-solving steps
Roowang's Risk Controls: Moving Fast, Staying Safe
Managing Ownership Risk
We review ownership rules early to prevent loss of control. We also carefully manage outside investments.
Ensuring Data Accuracy
We check all data twice. We keep detailed records and ensure that important transactions cannot be changed.
Meeting Regulations
We ensure clear financial reporting that meets regulatory standards. We also document our ethical compliance.
Handling Our Workload
We manage our workflow to handle tasks efficiently. We have clear steps for solving problems and monitor how resources are used.
We protect against risks while keeping our work moving fast.
Roowang Value Creation Timeline
This timeline highlights key milestones, detailing the "when, where, how, and how much" value is generated throughout our project phases.
Phase 1: Blueprint & Foundation
When: Weeks 0-4
Where: Roowang HQ (Strategy & Legal)
How: Establishing clear legal structures, accounting frameworks (IFRS alignment), and defining payment flows.
Value: Reduced legal/compliance risk by ~15%, enabling streamlined future transactions and building early investor confidence.
Phase 2: Quick Launch & Metrics
When: Weeks 0-12+
Where: Operations & Tech Teams
How: Implementing performance tracking tools, setting product standards, and creating incentive plans for early performance gains.
Value: 5-10% improvement in operational efficiency, quicker problem detection, leading to faster asset monetization and early revenue streams.
Phase 3: Digital Token System
When: Days 90-120
Where: Tech & Compliance
How: Developing a secure digital distribution system, managing investor records, and ensuring legal/Shariah compliance papers are ready.
Value: 20% reduction in administrative costs for investor management, opening access to a broader investor base and enhancing market innovation.
Phase 4: First Asset Rollout
When: Week 6+
Where: Asset Management & Sales
How: Launching screening tools, implementing a transparent bidding system, and reporting on asset allocations.
Value: Optimal asset sale prices, potentially 2-5% above traditional market methods, accelerating capital deployment and investor returns.
Ongoing: Portfolio & Reporting
When: Post-first rollout
Where: Management, Finance, Legal
How: Continuous asset management decisions, robust asset protection mechanisms, and transparent investor reporting.
Value: Consistent profit distribution, sustained asset value growth, and maintaining high investor satisfaction (90%+ retention target).
Each milestone is designed to deliver quantifiable benefits, building value incrementally and ensuring project success.
Key Decisions: Clear Approval Process
The board must quickly approve these four important decisions. Each decision has a clear owner, deadline, and next steps to ensure progress.
Token Rules & RAMZ Compliance
Approve the rules for non-voting tokens, with ARB as the manager and ensuring RAMZ compliance.
Special Purpose Vehicle Pilot
Start a pilot program for the sidecar Special Purpose Vehicle, using clear selection rules and external pricing auctions.
Vista Tower Improvement Budget
Approve the budget for Vista Tower enhancements, with mandatory weekly reports on leasing activity.
Board Dashboard Metrics
Confirm the standard metrics for the board dashboard and set up a formal schedule for reports.
Ensures key decisions lead to action with clear responsibilities.
Proposed Supporting Documents
Important supporting materials, organized into seven key areas, to help with setup and future reference.
A - RAMZ/Shariah Rules
Details on how RAMZ applies, the company's legal setup (Labuan), who can invest, required disclosures, identity checks (KYC/AML), Shariah board oversight, linking digital and physical records, and automatic payment systems.
B - Agreements & Terms
What's included in the main offer document, standard agreement templates, and conditions like protecting cash, controlling large expenses, handling ownership changes, and reporting deadlines.
C - Vista Tower Upgrade Plans
Details on lobby, HVAC, and signage improvements; standards for fitted office spaces; flexible lease terms; estimated renovation costs; expected increase in value; and how quickly costs will be recovered.
D - Auction Guide
Steps for sealed-bid or Dutch auctions, how bids are assigned, settlement timing, investor eligibility, identity and anti-money laundering checks, and post-auction reporting schedules.
E - Top 10 Risks
Key risks identified (e.g., regulatory issues, low occupancy, project delays, staffing, tech delivery, investor interest, market concentration, interest rates, supplier reliance, reputation). Each includes warning signs, limits, solutions, and assigned owners.
F - Glossary & Data Rules
Clear definitions for common terms like AEI, DPU, NPI, P/NAV, RAMZ, SPV, DRP, mezzanine, promote; specifying "as of" dates for all numbers; and distinguishing between estimated guidance and actual results in all reports.
G - Roowang Business Model
Fixed fees for each phase (Blueprint, Auction Setup, Monitoring) plus a monthly fee for ongoing operations; maximum cost limits; payment triggers based on milestones; what's not included; and how changes are managed.