RETAIL
Retail is a strategic sector for the IFC because of its high economic developmental impact. Increased competition arising from the growth and modernization of retailing results in lower prices, thereby raising living standards of people in developing countries, where a high proportion of household budgets is spent on food. Retail is also employment generative both within the consumer facing end but also in upstream activities such as food processing and wholesale distribution.
Since entering the retail sector in 1994, IFC has financed over 35 projects in 20 countries. We have more international experience than most international retailers and good understanding of strategic, operational, market and information systems issues, which we share with our clients. As of December 2005, IFC's retail portfolio stood at close to $500 million comprised mostly in Latin America and Central and Eastern Europe. Many of our clients are small to medium sized retailers in developing countries, but we have also financed large regional and international groups. In several cases IFC supported projects have included expansion into other developing countries in the client country’s region.
Subsector Categories:
- Distribution Centers
- Franchise
- Food Retailing
- Non-Food Retailing
- Shopping Malls
- Wholesale
Examples of IFC investments:
- Ramstore (Russia): IFC has completed 3 investments since 1998 totaling US$100 million for the development of shopping centers anchored by Ramstore hypermarkets. IFC’s role: Long term financing and “political umbrella” role.
- Doverie Brico (Bulgaria): $9.5 million loan and quasi equity in 2001 for green field development of DIY chain. IFC’s role: LT financing and mobilization role.
- Disco/Cencosud (Argentina): Equity investment of US$40 million in 2003 in financing US$315 million sale of Disco supermarket chain by Royal Ahold. IFC’s role: Catalyst and honest broker to the consortium led by Cencosud, one of Chile's leading retailers.
- Wumart (China): In 2003 IFC invested $6.3 million equity in the IPO of this Beijing based supermarket chain. IFC’s role: Stamp of approval and demonstration to other investors.
HOTELS
Since 1956, IFC has invested in over 231 tourism projects in 78 countries, for approximately US$1.75 billion (including syndications). IFC's current tourism portfolio is valued at US$420 million of which 90% is from debt financing.
Subsector Categories:
- Accommodation
- Amusement Parks
- Cruise Ships
- Eco-Tourism
- Management Services
- Offices
Examples of IFC investments:
- Orient Express (Russia, Peru, Global Facility): The Project is to finance the refurbishing of the 3-star 32-room Machu Picchu Sanctuary Hotel and the 123-room 5-star Monasterio Hotel in Cusco besides converting an attached building to the Monasterio Hotel (las Nazarenas Convent) to a 58 suite, 5-star hotel. The Project will also finance purchase of furniture, equipment and installation of environmental and fire and safety features.
- Occidental (Mexico, DR): Through the proposed investment IFC will support the establishment of what is likely to become an important regional hotel company in Mexico and Central and South America, following a market downturn. IFC will provide a financing package with long maturities which the market cannot provide and will help put the company on a sound long term footing.
- Reval (Estonia): Expansion, strategic development, and financial restructuring of Reval Hotel Group, a leading hotel operator in Estonia with three hotels under management, and achieving solid occupancies and operating results.
PROPERTY DEVELOPMENT
Since inception in 1956, IFC has indirectly financed a large number of projects which incorporate substantial investments in Commercial Property Development, including retail stores, shopping centers, hotels, and office buildings. Beginning in 2005, GMS incorporates a new sector dedicated to non-speculative Commercial Property Development, to build upon its experience, acquire specific expertise in the sector and focus its efforts to assist private sector development in IFC's markets by investing directly in this sector.
Examples of IFC investments:
- Metrocentro (El Salvador): IFC provided US$25 million A Loan in 2003 to finance the construction of Multiplaza Panamericana, a US$52 million shopping mall in San Salvador. The project is the first phase of a large mixed use development, which will comprise shopping mall, offices, residential complex, park and a hotel at a later stage.
- Astana Towers (Kazakhstan): IFC invested US$5 million A loan in 2002 to finance the development of a business and shopping center in Astana, Kazakhstan for a total project cost of US$22 million.
- Eastwood (Philippines): In 2002, IFC's US$20 million A Loan investment was utilized to finance the US$53 million expansion of the Eastwood urban economic zone, a mixed use facility incorporating office and commercial developments, residential and lifestyle, and an IT school in Manila, Philippines. IFC is providing a US$12.5 million A Loan to finance Eastwood's second expansion, which includes the construction of a ten story tower with total 35,000 square meters of leasable office space.
