XYZ Feasibility Report

Transcription

1 Feasibility Report Firm Website Address X

2 Table of Contents Page No. Executive Summary.. 3 Macro Overview. 4 Tourism in Kenya Mount Kenya Holiday Homes X. 26 Financing And Cash Flow Projections Conclusion Appendix

3 Executive Summary Kenya Macro Kenya displays strong macroeconomic fundamentals and strong demographics with a young and ethnically diverse population. Real disposable income in Kenya is on the rise and FDI inflows are expected to strengthen over the next five years, on the back of increased government reforms. Tourism Growth Tourism in Kenya is on an upward trajectory, with the sector s total contribution to GDP increasing by % in from. High net-worth individuals are demanding more and more luxury residences. A booming tourist destination, Mount Kenya offers a multitude of adventures activities and exquisite beauty of flora and fauna, making it an attractive real estate destination. Salient Features of the Resort Holiday Homes is a mixed use residential and holiday homes with planned development of 67 villas, 214 town houses/apartments and 75 hotel suites. Currently owned by X. and its sister company, it will be managed and operated by X, a global hospitality company. Currently, a funding of KES mn (USD mn) is being sought to complete the first phase of construction 19 villas, of which as of date, 11 villas are contracted and 8 villas are in inventory. Other major attractions include a 9 hole golf course, extensive biodiversity in the region, various recreational activities and a boutique hotel. Financial Viability A robust cash flow for Holiday Homes is projected even under extreme circumstances. 3

4 MACRO OVERVIEW 4

5 Kenya Macroeconomic Overview Strong Macro Fundamentals Robust GDP Growth 1 Increasing GDP Per Capita (USD) E 2016E 2017E 2018E 2019E 2020E 1. IMF World Economic Outlook, 2. African Economic Outlook, 3. Trading Economics Controlled Inflation E 2016E 2017E 2018E 2019E 2020E E 2016E 2017E 2018E 2019E 2020E Highlights Kenya s GDP growth has been primarily driven by expansion in construction, manufacturing, finance and insurance, information, communications and technology, and wholesale and retail trade 2. The Government has implemented relatively sound macroeconomic policies in recent years, resulting in stable macroeconomic fundamentals, as demonstrated by: o Stable and manageable inflation of under % in o Controlled fiscal deficit of under % in 3. 5

6 Demographics Growing Consumer Base Stable Population Growth (mn) 1 Favourable Demographics (% of Total) 2 2.8% Ages % Ages % Ages 65 and above E 2016E 2017E 2018E 2019E 2020E Highlights Population growth remains high, expected to grow at a CAGR of % over -X, compared to % in East Africa 1. Kenya has made significant strides in achieving universal primary education. The net enrolment ratio increased from % in to % in, while the gross enrolment ratio in amounted to % 3. The literacy rate of the total population over 15 years of age, stood at % in and the education expenditure stood at % of GDP in 4. Kenya s emerging middle class is wealthier than peers in developed economies such as Britain and the United States and saves six times more than their American and British financial peers in the West 5. The number of high-wealth Kenyans is rising rapidly, and the country is now among the top five in Sub-Saharan Africa with a high number of dollar millionaires. It has 8,500 millionaires, the largest number in the East African region IMF World Economic Outlook, 2. World Bank, World Development Indicators 3. African Economic Outlook, ; Net Enrolment: The share of children of official primary school age that are enrolled in primary school; Gross enrollment: The share of children of any age that are enrolled in primary school 4. CIA World Factbook 5. Daily Nation 6. Daily Nation 6

7 Consumer Spending and External Investment Growing Consumer Spending Growing Household Consumption (USD) 1 Growing Gross National Savings (% of GDP) Foreign Direct Investment (USD mn) World Bank, World Development Indicators (Per Capita) 2. IMF World Economic Outlook, 3. Euromonitor 4. Biz Connect 5. Trading Economics E 2016E 2017E 2018E 2019E 2020E Highlights Kenya s real disposable income stood at around USD bn in and is expected to grow at a CAGR of % over - 3. Since, Kenya received 5% of Africa s total FDI for new projects and % of capital invested. As the hub of East Africa, it has seen robust investment growth, especially into manufacturing-led and consumer-facing activity 4 : o In, foreigners invested in at least 78 projects including a social impact energy project where the largest wind farm in Africa is being set up in Turkana. 7

8 Business Climate Favourable Business Environment Monetary Policy The Central Bank of Kenya (CBK) has pursued prudent monetary policy stance, and has been able to provide relative stability in domestic prices and exchange rate since. To control inflation, the CBK retained the central bank rate of % between May and March. The lending rate was reduced from % in to % in 1. Ease of Doing Business Kenya has a relatively market-friendly business environment, due to strong financial inclusion and small-business access to credit. The country ranked 108 th out of 189 economies in the World Bank Doing Business ranking, which is an improvement of 21 positions from 2. Reforms Taxation The Government has mainly focused on bureaucratic and fiscal reforms, and has been able to bring down corruption in the country s public sector. It has also focused on business reforms and has taken steps to make the process of starting a business, getting credit and electricity and registering property easier, especially for small and medium businesses 3. In, the Government undertook VAT and other taxation reforms, leading to higher revenues 1. The Government is providing a wide range of tax incentives to businesses to attract greater levels of Foreign Direct Investments into the country and exports. It is granting tax incentives in the form of enhanced investment deductions and allowance structured according to lead and priority sectors which include agriculture, agro based industries, manufacturing, mining 4. Tax incentives for real estate are available in the form of tax breaks, remissions and allowances. 1. African Economic Outlook, 2. World Bank 3. World Bank Doing Business 4. Fortune of Africa Tax Incentives 8

9 TOURISM IN KENYA 9

10 Kenya Travel and Tourism Industry Tourism Industry on a Growth Trajectory Overview Kenya is known for its safari holidays, coastal resorts & well-developed tourism infrastructure. It enjoys the status of a safe destination with good facilities for the risk-averse travellers. It is one of the more diversified tourism markets in Africa, attracting visitors across the globe, making the hotel industry a lucrative market for investors. A number of prominent international hospitality chains operate in Kenya. The sector s total contribution to GDP, including both direct & indirect activity, was over USD bn in, around % of GDP, a % increase from (USD bn, % of GDP) 1. The tourism industry is the third biggest foreign exchange earner for Kenya, behind tea exports & remittances from Kenyans living abroad. Government Initiatives Kenya s tourism sector has been negatively affected by the country s economy and terrorist attacks in recent years. President Uhuru Kenyatta is expected to drive the growth of the country's tourism industry and tackle challenges in the sector, since he was a former chairman of the Kenya Tourism Board. In, the Government announced a number of plans to boost tourism, including the lifting of visa fees for children younger than 16, extending incentive packages for charter operations and lowering entrance fees to national parks. Key Developments In, Kenya was voted the world's leading safari destination at the World Travel Awards, a recognition that could boost the tourism sector. The Masaai Mara National Reserve won a World Travel Award in for being Africa's leading National Park, and Diani Beach won Africa's leading beach destination. The Government is investing heavily in air travel, and there have been talks about further increasing Kenya's air links, with the country expecting the start of direct flights to and from the United States, possibly by. 1. Oxford Business Group 10

11 Kenya Travel and Tourism Industry Forecasts Increasing Tourist Arrivals Contributing to Growth International Tourism Receipts (KES bn) 1 Tourist Arrivals ( X) E 2015E 2016E 2017E 2018E 2019E 2020E 2015E 2016E 2017E 2018E 2019E 2020E Highlights Inbound tourism is forecast to grow from. Over the long term this growth will increase at a faster pace than previously expected, with total arrivals projected to hit mn by 1. High-end travelers are increasingly seeing Kenya as a favoured tourism destination, which is expected to boost tourism receipts and arrivals after. The Kenyan Tourism Board (KTB) is working on a USD mn global tourism campaign, targeting markets in Asia, Europe, Africa and the US. It has also recently identified regional markets such as Ghana and Nigeria as potential source markets and has been working on promotional campaigns to boost their interest. These steps are expected to help the sector recover after the recent years of decline 1. Europe is set to remain the largest regional source market for Kenya, with 316,650 arrivals expected in. North America is the second largest, with 294,190 arrivals expected in Kenya Tourism Report, BMI Research, 11

12 Kenya Hospitality Industry Luxury Accommodation Sector Showing Positive Signs Hotel and Restaurant Industry Value (KES bn) 1 Luxury Hotel Market International hotel chains are continuing to expand into the market, focused on attracting business and higherincome leisure travellers, reflecting the growing demand for luxury accommodation in Kenya. Kenya is beginning to be seen as a preferred destination for high-end travellers. As international receipts are expected to grow during -, it is important to consider the rise of the luxury tourism market in Kenya and the growing demand for luxury resorts. 2014E 2015E 2016E 2017E 2018E 2019E 2020E Highlights Hotel industry investors are finding room for growth in the luxury accommodation sector, particularly in Nairobi's business district, as seen by recent expansions by major international chains. More low-cost chains are looking to expand outside of the capital, with Asian hotel chains showing particular interest. In, 870 hotels and establishments were present in Kenya, expected to increase by % to 910 in. There are a number of hotel chains planning to enter the market (or expand their presence) 1. Most international hotel groups are located in Nairobi and cater to the business traveller market, while smaller domestic groups dominate the safari and wildlife markets. By, the higher number of inbound tourists will push international tourism receipts up, to KES bn. 1. Kenya Tourism Report, BMI Research, 12

13 Kenya Real Estate Luxury Real Estate Attracting Increased Investments Overview Kenya dominates the East African property market because of its stability and investment opportunities. A recent positive development in the country s real estate sector is the implementation of the Real Estate Investment Trust (REITs) structure and tax dispensation for companies, indicating that the listed property market in the country has developed markedly over the past few years. From here on, more REITs are expected to list on the Nairobi Stock Exchange. Mixed-use developments have entered into the market, with the construction of several malls. The growing middle class, willing to pay premium prices for quality goods and services, has driven the development of these mixed-use complexes. Luxury Real Estate Prices of high-end homes in Kenya rose by % in from the marginal % in 1. The two major factors that supported this growth were: o luxury homes considered to be an attractive investment by high net-worth individuals after other investment classes such as equities underperformed. o demand outstripping supply for luxury homes 1. Kenya has a mixed market, predominately attracting tourists through its beaches and safari offerings as well as business travellers, principally to Nairobi. Real Estate Investment Kenya was upgraded to middle-income status last year by the World Bank, following a recalculation of its GDP. Kenya s attractiveness as an investment destination for luxury properties is driven by: o a burgeoning middle and upper middle class that is demanding western-style goods. o increase in the number of foreign investors coming to the country and requiring high-end living spaces. o attractive returns in the luxury homes space. 1. Cytonn Investments 13

14 MOUNT KENYA 14

15 Mount Kenya - Overview Mount Kenya Houses a Variety of Flora and Fauna Mount Kenya is an extinct volcano that lies immediately south of the Equator. The second highest mountain in Africa after Kilimanjaro, it is located in central Kenya, about 16.5 kilometre south of the equator, and 150 km north-northeast of Nairobi. The highest peaks of the mountain are Batian (5,199 metre), Nelion (5,188 metre) and Point Lenana (4,985 metre). Mount Kenya is the main water catchment area for two large rivers in Kenya: the Tana, which is the largest river in Kenya, and the Ewaso Ngiro River. The ecosystem provides water for over 2 million people. There are several retreating glaciers on Mount Kenya. In less than 30 years the mountain may be completely free of ice. The mountain houses ecological diversity with 81 species of plants found nowhere else in the world. Among the wildlife sighted in the forest zone is buffalo, elephant, sykes monkey, bushbuck, hyena, leopard, buffalo and civet cats. The mountain has a typical equatorial mountain climate with large daily temperature fluctuations. The mountain receives direct sunlight which causes the temperatures to rise quickly during the day. At night, the sky is usually clear with winds blowing down the valleys. 1. Kenya Tourism Report, BMI Research, 15

16 Mount Kenya - Overview The Region Offers Plenty of Tourist Attractions The mountain attracts over 30,000 enthusiasts every year 1. While Lenana can be reached by any reasonably fit person, the twin peaks of Batian and Nelion are accessible to only those with technical mountaineering and rock climbing experience. Mount Kenya is in fact considered to be more technically challenging than the higher Kilimanjaro (5,894 metre). Hotels, lodges and tented camps have proliferated all around the mountain in the last fifty years, providing base accommodation for mountaineers and for other tourists. The Mount Kenya National Park protects the region surrounding the mountain and is a UNESCO Biosphere Reserve. The national park and the forest reserve, combined, became a UNESCO World Heritage Site in. The park attracts over 16,000 visitors each year 2. Although hiking and mountaineering are popular here, wildlife viewing and bird watching are also popular activities at the park. About 340 species of birds can be seen here. The National Park s major attractions include wilderness, lakes, tarns, glaciers, geological variety, forest, mineral springs, rare and endangered species of animals, alpine vegetation with 11 species of endemic plants. 1. Kenya Travel Ideas 2. Primary Facts 16

17 Mount Kenya - Nanyuki Attractive Tourist Destination with Proximity to Nairobi Overview The town of Nanyuki, which is about 190 km north of Nairobi by rail, lies at the northwestern foot of the mountain. The climate in this region is sought to be the best in Kenya, enjoying a temperature range of 10 C- 28 C and an average rainfall of 68 mm. The development site is located 24 km from Nanyuki and is easily accessible by road and by air. There is also a local airport at Nanyuki, a 20 minutes drive from the site which is served by daily domestic flights from Wilson Airport, which takes about 35 minutes from Nairobi. Tourism and Competition One of the most popular tourist attractions in Nanyuki is Mount Kenya National park at the heart of Mount Kenya. It houses wilderness with lakes, tarns, glaciers and dense forests. Ol Jogi Wildlife Conservancy is located in the heart of Nanyuki, Laikipia and has a magnificent wildlife and stunning scenery. In Nanyuki, a strong competitor is the Fairmont Mt. Kenya Safari Club that serves the same market segment. The hotel offers a total of 120 rooms and charges over USD 300 per night for double occupancy. Real Estate The Nanyuki Mall is in the heart of the town and rents out spaces at KES 140 per square foot. Other buildings coming up in the vicinity sell at an average of KES 60 to 80 per square foot 1. Land prices increase as one gets nearer the town. Further from the town, an acre of land can go for anything between KES to KES mn, while nearer the town an acre fetches between KES mn to KES mn 1. New developers flocking the area have seen land prices rise as much as ten-fold, with an eighthacre selling at between KES 700,000 and KES mn in from KES in 2. Many holiday home developments have come up, spurred by demand from expatriates, foreign buyers and wealthy Kenyans. 1. Minto Real Estates 2. Star Kenya 17

18 HOLIDAY HOMES 18

19 Holiday Homes 123-acre Holiday Homes and Golf Resort A mixed use residential, holiday homes and golf resort located in the foothills of Mount Kenya offering outstanding natural beauty with spectacular views of preserved natural forest areas in Central Kenya. The development site is located 24 km from Nanyuki and consists of a triangular plot of approximately 123 acres of gently undulating and sloping well drained land. The outstanding beauty of Mount Kenya and the easy access to the site location are excellent selling features which will appeal to an international audience. The project offers 3 and 4 bedroom apartments giving owners value for their investment and residents a luxury break from the everyday. Other recreational facilities include restaurants, villa spa, golf club house, gym, swimming pool and car park. The property is owned by X Ltd and its sister company X. It will be operated and managed by X, a global hospitality company catering to business and leisure travellers. The Company is seeking a funding of KES mn (USD mn) to complete the first phase of construction of 13 Batian and 6 Nelion villas, of which, as of date, 11 villas are contracted and 8 villas are in inventory. 19

20 Holiday Homes Overview About the Site A total of 123 acres divided into: o 17 acres for the nature reserve. o 50 acres for the golf course, the hotel and roads, car parking etc. o 56 acres for development of apartments and villas bedroom villas for sale, each on their own self-contained plot of 0.5 acre, and up to 214 town houses/apartments. Boutique hotel with initial capacity of 75 suites. Accessibility Nestled at the heart of Mount Kenya, the largest mountain in Kenya and the second largest mountain in Africa. Located approximately km by road from X, taking hours to reach from Nairobi CBD. Also, it is located only 15 minutes away from X with 20-minute flights from X. Key Attractions Spectacular views of Mount Kenya and The Aberdare. Traditional safari and lifestyle activities such as bird watching, bush spa, etc. A nine hole international standard Executive Golf Course. Club House, ample parking and Helipad. High quality boutique hotel with leisure facilities such as a gym, swimming pool and spa. Abundant natural reserve with animal attractions such as zebra, ostriches, etc. 20

21 Holiday Homes 3 and 4 Bedroom Units with Exquisite Natural Beauty Home owners at Holiday Homes & Golf Resort have a selection of 3 beautiful house designs to pick from; Grand Batian, Exquisite Nelion and Cozy Lenana. Batian Design Nelion Design Lenana Design Batian is a 4 bedroom holiday home. It comes with elegant interiors and contrasting textures which makes the luxury home characterful. It provides a 262 square meter vintage country style décor against the backdrop of Mount Kenya. Nelion is a 240 square meter 4 bedroom home offering rustic exteriors and fine finishing. Its wood-clad ceilings and rustic stone walls create a mountain lodge appeal. It also has a double vault window in the living room. Nelion owners will enjoy views and open spaces. Lenana is the 3 bedroom 200 square meter home styled offering with exposed beams, wooden floors and rustic exteriors. A distinguishing feature about Lenana is its fireplace in the master bedroom providing for perfect evenings. 21

22 Holiday Homes Exclusive Facilities Offered A Golfer s Dream The golf course is set in the valley between Mount Kenya and The Aberdares. A 9 hole golf course, with double tees, enabling 18 holes to be played. International standard Bent grass greens have been established and will provide some of the finest putting surfaces in the country. The construction is complete and the course is due to open in. The gold club the golf club will have its own changing rooms, pro shop and an equipment storage area. Biodiversity Lush green forests, mountains, sapphire lakes and meadows awash with wildflowers of Mount Kenya create a beautiful landscape and experience for the home owners. It is home to over 100 species of birds and wildlife. At its centre, the site incorporates a natural reserve of 17 acres fully fenced with indigenous species such as zebra, gazelle, dik diks, ostrich as well as a range of birds. This nature reserve is supported by the Kenyan Wildlife Service and enhances the green and ecological attributes of the development. 22

23 Holiday Homes Exclusive Facilities Offered Recreational Activities Holiday Homes, will offer a wide array of lifestyle options to relax, refresh and rejuvenate the mind. Lifestyle options will include health spa situated in the forest, gym, sauna & steam facilities, picnic and recreational facilities and indoor sports and games facilities. Inhabitants can also enjoy various recreational activities such as catch and release fishing at the dam, nature walks amongst the wildlife and bird watching, cozy log fires, camping, and jogging at 2,000 m above sea level. Provision for Boutique Hotel The Company has now acquired further land on the south-east boundary of the site for the hotel. The new location enables a stand-alone hotel to be constructed with attractive views of Mount Kenya and the wildlife conservatory. Its location will also ensure easier access and management of the town house and apartment accommodation, with better operational access to the outdoors areas earmarked for weddings and other functions. Initial plan for the hotel is 75 suites. 23

24 Holiday Homes Competitive Properties This is a first of its kind property in the region combining hotel, luxury homes, conservancy with animals and golf courses, giving it a competitive edge over other properties. X Club Located approximately 20 km from Holiday Homes, X Club is a 15- minute drive from the Nanyuki Airport. Has a 9 hole golf course, a bar and offers a wide range of cuisines. It has a total of 120 rooms 1. X Lodge X Lodge is located on a private wildlife sanctuary, X reserve, between Mount Kenya and Aberdare Mountains, directly north of Nairobi. It is home to a diverse population of wildlife, including both black and white rhino and is few minutes drive from Holiday Homes. It is a small and intimate camp with only six rooms 2. X Lodge X lodge is located in the X Group Ranch in the north of Lewa Wildlife Conservancy, north-west of Nanyuki. It has 6 individual cottages, which can hold a maximum capacity of 17 guests 3. The lodge offers guests a variety of activities cultural visits to villages on foot or by camel, swimming, game drives, sundowners. 1. Booking.com 2. Go2Africa 3. Eco Tourism Kenya 24

25 Holiday Homes Current Status The partnership with X will result in a global brand recognition, international quality standards driving demand for Holiday Homes. X Partnership X, a global hospitality company, and Holiday HomesLtd. have announced their commitment by signing a MoU on th X,. As per the agreement, they will co-develop a resort with a total of 67 villas, 214 apartments and townhouses and a 75 suite hotel. The deal is in the final stage and is expected to be finalized by mid. The project will then be called X Holiday Homes. Development Status The project operates on a build and transfer model whereby deposits are collected from the home owners and then constructed by the developer. Phase One of the project started in the for the construction of 19 homes (6 Nelion and 13 Batian). Each house is at a different stage of completion. 11 houses are under contract and 8 are held as inventory for resale. Increasing Demand and Prices Increasing demand has resulted in an increase in prices recent sale at KES mn, a 12% increase from the first contract at KES mn. The recently announced partnership with X will lead to global branding and international quality of facilities and services. This combined with the increase in demand for luxury homes and foreign visitors in Mount Kenya will further drive demand and prices expected to increase to upto KES mn. 25

26 X 26

27 X A Hospitality Company with Swiss Values at its Core The X Hospitality Commons is a global hospitality company catering to the up scale to upper up scale market for business and leisure travellers. Its international services center is located in Ras Al Khaimah, UAE, which gives the Company easy access to fast developing markets. The Company is centered on Swiss values and believes that it needs to strive to involve these values in its own initiatives, as well as in the member hotels of the X Hotels & Resorts and the hotels operated by the Company. X envisions to expand globally via strategic co-operations and alliances. It has signed several co-operations across the globe in more than 50 countries: Asia (Greater China, Southern Asia). Africa (Western and Eastern Africa). Middle East and North Africa. Europe (Southern, central and Northern). 27

28 X Brands and Concepts X s portfolio of own brands and partnerships. The Brands Company Company Company Company Company Food and Beverage Company Company Company Company Company Meetings and Events, Leisure Company Company Company Loyalty Program Company Company Company 28

29 X Advantages of X High level of prestige, trust and experience in the market. Powerful global distribution and revenue management systems. Advanced sales, marketing and social media initiatives undertaken. Continuous support and customized services to its partners which includes extensive commercial and operational business support sessions. Global team of professionals with local expertise enhancing the output. Flexible design capable to adapt to a range of site needs, constraints and geographic locations. Appealing existing portfolio of hotels and food and beverage. 29

30 FINANCING AND CASH FLOW PROJECTIONS 30

31 Financing Financing to Help Fast Track Completion Financing The Company is seeking a funding of KES mn (USD mn) to complete the first phase of construction of 13 Batian and 6 Nelion villas, of which, as of date, 11 villas are contracted and 8 villas are in inventory. The homes are for sale, and can either be used for residential or rental purposes, which adds to their value in terms of both an investment and a fulfilling living experience. The rental and leasing out process will be managed by X to maximize rental income for home owners. Financing is required to fast track development and overcome the challenges of erratic payments and cash flow constraints. The Company has financed KES mn so far. Mr X has financed an additional KES mn for the golf course, dam, irrigation, electric fence and generator. Balance Sheet as at (KES mn) Phase 1 Cost Summary (KES mn) Equity Bank Deposits Payments Presales Contractor payments Owner Equity Management expenses Consultant payments Government taxes Bank charges Total Bank Deposits Total Payments Bank Balance: Phase 1A 1B 1C Total Certificates Presented* Balance to Complete *Refer to Appendix II for detailed breakup; The total contractor s certificates received is KES mn and the total paid is KES mn. Note: In addition to the cash deposits of KES mn, the owner has built the golf course entirely from his personal cash amounting to approximately KES mn, which brings the total equity to KES mn. The costs exclude cost of land. 31

32 Cash Flow Projections Base Case Interest Rate % In the base case scenario, the Company will generate a cash flow surplus of KES mn in X years. (in KES mn) Total Cash Inflows Houses on sale Inventory houses Golf club inflows Loan draw down Total Cash Inflows Month Cash Outflows Contractors payment Unpaid bills Office expenses Payments to consulants Interest paid Principal repaid Total Cash Outflows Surplus / Deficit (0.1) (0.6) (7.9) (31.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4) Balance b/f Bank Balance c/f Loan Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) % - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - - Interest paid Principal repaid Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0)

33 Cash Flow Projections Scenario 1 One Month Sales Delay The company will generate a Cash flow surplus of KES mn over years, with month delay in sales. (in KES mn) Total Cash Inflows Houses on sale Inventory houses Golf club inflows Loan draw down Total Cash Inflows Month Cash Outflows Contractors payment Unpaid bills Office expenses Payments to consulants Interest paid Principal repaid Total Cash Outflows Surplus / Deficit (0.1) (0.6) (7.9) (31.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4) Balance b/f Bank Balance c/f Loan Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) % - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - - Interest paid Principal repaid Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0)

34 Cash Flow Projections Scenario 2 - Two Months Sales Delay With a month delay in sales, the Company would comfortably pay down the loan as per terms. (in KES mn) Total Cash Inflows Houses on sale Inventory houses Golf club inflows Loan draw down Total Cash Inflows Month Cash Outflows Contractors payment Unpaid bills Office expenses Payments to consulants Interest paid Principal repaid Total Cash Outflows Surplus / Deficit (0.1) (0.6) (7.9) (3.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4) Balance b/f Bank Balance c/f Loan Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) % - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - - Interest paid Principal repaid Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0)

35 Cash Flow Projections Scenario 3 - Interest Rate Spike to % With Two Months Sales Delay The Company will generate a cash flow surplus of KES mn over years, at higher interest rates and months delay in sales. (in KES mn) Total Cash Inflows Houses on sale Inventory houses Golf club inflows Loan draw down Total Cash Inflows Month Cash Outflows Contractors payment Unpaid bills Office expenses Payments to consulants Interest paid Principal repaid Total Cash Outflows Surplus / Deficit (0.1) (1.6) (8.8) (3.8) (3.8) (21.8) (24.4) (21.0) (20.6) (23.2) (19.8) 0.6 (2.4) Balance b/f Bank Balance c/f Loan Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) % - - (0.6) (1.1) (1.5) (2.0) (2.5) (2.9) (3.1) (3.5) (3.7) (3.7) (3.7) (3.3) (2.9) (2.6) (2.2) (1.8) (1.5) (1.1) (0.7) (0.4) - - Interest paid Principal repaid Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0)

36 CONCLUSION 36

37 Conclusion Holiday Homes is a Promising Investment Opportunity Strong Macroeconomic Landscape Growing Tourism Industry Favourable Location Competitive Attractions Kenya s economy has experienced a strong GDP growth and increase in household consumption. The number of high-wealth Kenyans is rising rapidly, and the country is now among the top five in Sub-Saharan Africa with a high number of dollar millionaires. Kenya is beginning to be seen as a preferred destination for high-end travelers with total tourist arrivals projected to increase to from mn in to mn in The hotel and restaurant industry is expected to grow at a CAGR of % from to Mount Kenya attracts over 30,000 enthusiasts every year owing to favourable climate and beautiful landscapes. Located at the foothills of Mount Kenya, Holiday Homes offers homes with natural beauty with spectacular views of preserved natural forest areas in Central Kenya. The outstanding beauty of Mount Kenya and the easy access to the site location by air and road are excellent selling features which will appeal to an international audience. Holiday Homes, a one of its kind offering a combination of luxury homes, golf course and hotel suites, has a competitive advantage in the region. Along with 3 beautiful house designs with its own unique characteristics, it offers various exclusive attractions such as a nine hole international standard golf course, traditional safari and lifestyle activities, high quality boutique hotel and abundant natural reserve of flora and fauna. X Advantage Strong Financials X, having managed a vast portfolio of hotels and various brands worldwide, will bring high level of prestige, trust and experience in the market, resulting in global branding for Holiday Homes It offers powerful global distribution and revenue management system and advanced sales, marketing and social media techniques. A strong positive cash flow is projected ensuring debt servicing even under extreme scenarios. As of date, all expenses have been financed through equity and money raised from deposits and no debt has been raised. 37

38 APPENDIX 38

39 Appendix I - Site Map Strategically Located and Easily Accessible Homes Map of Holiday Homes Holiday Homes is located at the heart of Kenya in the valley between the beautiful Mount Kenya and The Aberdare ranges. It is well connected by air and road, providing ease of access. 39

40 Appendix II - Phase 1 Total Certificates Phase 1 Cost Summary (KES mn) Total Certificates for Phase 1 Total Payments Balance payable as at Phase 1A Cost Summary (KES mn) Certificate Valuation No. 01 Valuation No. 02 Valuation No. 03 Valuation No. 04 Valuation No. 05 Valuation No. 06 Valuation No. 07 Valuation No. 08 Total Certificates Amount Phase 1B Cost Summary (KES mn) Certificate Valuation No. 01 Valuation No. 02 Valuation No. 03 Valuation No. 04 Total Certificates Amount Phase 1C Cost Summary (KES mn) Certificate Valuation No. 01 Valuation No. 02 Valuation No. 03 Valuation No. 04 Total Certificates Amount Note: The total contractor s certificates received is KES mn and the total paid is KES mn. 40