Captain Nikolas CORAL VILLAGE ILHA DA CROA, ALAGOAS, BRAZIL OPPORTUNITY FOR EQUITY INVESTMENT FEBRUARY, 2011

Transcription

1 Captain Nikolas CORAL VILLAGE ILHA DA CROA, ALAGOAS, BRAZIL OPPORTUNITY FOR EQUITY INVESTMENT FEBRUARY, 2011 Escritório/Office Ed. Sir Winston Churchill Av.Paulista, 807/ Cj. 1014/ São Paulo-SP/Brasil Tel/Fax:

2 TABLE OF CONTENTS. PAGE 1.0 INTRODUCTION DESCRIPTION OF PROPERTY & PROJECT MARKET FOR DAY VISITORS INVESTMENT OPPORTUNITY FINANCIAL PROJECTIONS. 09 Annexes A ARCHITECTURAL CONCEPT. 10 B. MAPS AND PHOTOGRAPHS. 11 C. CALCULATION OF TOURIST DAY VISITORS

3 1.0 INTRODUTION This document has been prepared for potential investors in Captain Nikolas Coral Village. The property, which was purchased in 1993 by Cap. Nikolas Zacharopoulos, owner of NZ Exotic Paradise Hotels Ltda. Alagoas, Brazil, today consists of 39 luxury chalets (developed as a pilot plan) with a further phases of development. At presented the hotel is leased and operated as a boutique resort. On a separate parcel of the property with beach frontage on to clear sea with coral reefs and natural swimming pools is planned the CN Coral Village. 2 The project is located on the Dourado Coast on Rodovia Al-101 Norte, km-40, Ilha da Croa, Barra de Santo Antônio, Alagoas, Brazil. 1.2 The team shown below prepared the data in this offering. Cap Nikolas Zacharopoulos Owner and Developer. J. Colin Evans Project Managers and Hotel Consultants. CEA. Associados SC Ltda. Constantinos Tselios. Marketing Data. Ronaldo S. de Souza Engineering Consultant NZ Exotic Paradise Hotels Ltda (Captain Nikolas Island Ecological Resort Hotel) is owned 100% by Cap. Nikolas Zacharopoulos. The company has a paid up capital of Euros 23,000,000 and has no encumbrances or debt.

4 2.0 DESCRIPTION OF PROJECT. 2.1 Location The property is located at Barra de Santo Antonio on the southern peninsular of Ilha da Croa in the municipality of Barra de Santo Antonio, fronting the beach Praia Captain Nikolas which is approximately 37 kms north of Maceio, in the NE of Brazil Land. The land consists of approximately 224,739 m2 with 375 metres of frontage to the white sand beach of the Atlantic Ocean. There is an average depth of 290 metres between the beach and the highway AL 101, with a further average depth of 160 metres between the highway and the river Rio Santo Antonio Grande The land has frontage to a white sand beach called "Praia Captain Nikolas" of the Atlantic Ocean extending for 15 kms with coconut and tropical fruit trees (manga etc) trees growing next to the sea. Three miles off the coast there are spectacular coral reefs and natural swimming pools. The rear of the property ends at the Santo Antonio River, with mangroves where over 2,000 species of crabs can be found. 2.3 Access The river is ideal for boat trips and ecotourism. The highway AL 101, on the riverside, divides the property. The access from Maceio to Barra de San Antonio is good, being along highway AL 101, and approximately 37 kms from Maceio. The driving time from the airport to Barra de Santo Antonio is approximately 50 minutes. From the urban centre of Barra de San Antonio, to Ilha da Croa, the bridge is now open facilitating the transport of large groups to the resort which is a just a 2 km drive from the bridge arrival on Ilha da Croa. 2.4 Scope of Project. Within the property, on a rectangular parcel of land with 70 metres of beach frontage and 270 metres of depth it is proposed to build facilities for the day visitor principally from Maceio. This project will consist of three phases as

5 shown below and take advantage of the excellent beach, the spectacular coral reefs, natural swimming pools some 3 kms off-shore. 2.0 DESCRIPTION OF PROJECT. PROPOSED PROJECT PHASING Phase Description Existing Resort Guest cottages (39) reception/administration building, restaurant service areas, sauna, gym, conference/night club, boutique, tennis, volley and basket courts, pool, bar and beach kiosks.(this has been leased to an independent operator who will operate as a boutique hotel) 1 Captain Nikolas Coral Village Phase 1 Facilities for visiting tourist - day trippers consisting of beach and bar facilities with two boats for sea trips, restaurant for 300 covers complete with own kitchens, staff and administration facilities, shops plus sports courts, pool, visitor car parking etc.. In addition 12 Condo-hotel rooms will be built for long term rentals.. 2 Captain Nikolas Coral Village Phase 2 Expansion of restaurant up to 600 covers in total and Condo-hotel room expansion for sale and rental. 3 Captain Nikolas Coral Village Phase 3 Further hotel room expansion for sale and rental. 4 This is shown in more detail in section 6.0 of this study

6 3.0 MARKET FOR DAY VISITORS 3.1 The Market The facilities are designed to capture the large tourist market that stay in hotels principally in Maceio and who make day trips to neighboring beaches and tourist attractions in guided tours arranged by the local tour operators who have connections and arrangements with all the local hotels Number of Tourist Visitor to Maceio In the past the visitors to the NE of Brazil were domestic and foreign, especially from Europe and other South American Countries. Today the visitor is mainly domestic as the Brazilian middle class prospers. Most of these visit key tourist locations like Maceio through group packages, especially with tour operators like Tam viagens and CVC ( Recently sold to USA investment group Blackstone ).These tour operators who work with most of the hotels arrange day visits to desirable beach locations which cater for the visitor offering lunch, beverages and other excursions like boat trips. There are in Maceio some 43 hotels representing 3,156 hotel rooms. Assuming an average occupancy of 70%, room use of 1.8 persons and a factor of 75% being tourist, this equals some tourist visitors in Maceio at any one time. ( See annexo C).This number is also substantiated by CVC who brought in over 140,000 visitors in the year to January 2010 which considering an average length of stay of 5 days would equate nearly 2,000 tourist daily, plus all other air carriers and visitors by road from Recife, Sergipe and elsewhere. International tourists include Portuguese, Italian and Chilean all on direct flights to Maceio. 3.3 Day Trips The largest tour operator CVC, which has a relationship with over 10 local tourist companies who arrange the day trips. The principal trips organized by them and others are: City Tour of Maceio and Praia(Beach) do Frances South Coast - Praia do Gunga,Foz de Sao Francisco,Coruripe North Coast - Maragogi, Paripuera, Sao Miguel dos Milagres and. Ilha da Croa 3.4 Potential of Coral Village Of the average of 3,000 daily visitors to Maceio we feel it reasonable that the subject property captures 20% of this potential market which is equal to an average of 600 persons per day, if all tourists take day trips. If we assume that

7 50% do so, then this is a potential market of 300 persons per day being higher in peak season and less in medium and low season. In our financial projections we have assumed for the first year of operations the following covers 3.0 MARKET FOR DAY VISITORS 3.4 Potential of Coral Village Covers Days Visitors Total Peak Season High Medium Low Day Trips The principal receptive centers with restaurant and other facilities are Proposed Facility - Coral Village Facilities Restaurant Excellent Beach Snorkeling & Sea Trips Price Lunch 20 Beverages Extra Boat Trip 50 Location Ilha do Croa Fronting one of Brazil s Best Beaches Capacity 300 Covers - Hibiscus Sea Food Restaurant Good Ambience Lunch 47 Praia de Ipioca 20 km from Maceio Phase 1 Service Self Service Poor Service Mar & Cia Receptivo Sea Food Restaurant Lunch 40 plus Estrela Azul Sea Food Car Trips to Carro Qubrado Beach Lunch 40 plus Paripueira Barra de Santo Antonio Mar Azul Sáo Bemto Sea Food Lunch 40 plus Dunas de Mara Pé Self Service Lunch 40 plus Maragogi 80 km South of Maceio 200 Covers 300 Covers Poor Medium Medium Service Service Service Cannot meet market demand

8 Benefits Better facilities including beach and reefs than competitors Difficult access through residential sub division Natural Swimming Pools Good Marketing 4.0 INVESTMENT OPPORTUNITY. Captain Nikolas Zacharopoulos, is offering participation in the Coral Village to investors on the following basis: EQUITY INVESTMENT 1. The value of the freehold land is appraised as 18, m2 = This will be contributed by CN as his equity investment for 50% of the Coral Village project The capital expenditure with construction,furnishings and equipment is estimated as 3,213,000 and an investor is invited to make this contribution for the remaining 50% of the project. 3. The IRR to the investor is 44% including the residual value. Based on the total capital expenditure of 6,426,, In addition there is the land value available for the development of a further Condo-hotel units. NOTE TO READER- YEAR 2016 Please note that sums and projections are based on statistical and other information valid for the Years 2008 and 2011 only: -EXCHANGE RATE OF EVALUATION and APPRAISAL OF We have now a new exchange rate as well as a new evaluation: *2016 August Rate of Brazilian Reais to Euro is *In the current land evaluation the rate per m2 is 300 According to the above results, figures and statements should be updated with the new figures.

9 8 5.0 FINANCIAL PROJECTIONS (the projections are in Brazilian Reais - there being 2.31 per Euro (2011).

10 CN Coral Village Proposed Scope of Project M2 PHASES Total AREAS - ASSUMPTIONS LAND Total CONSTRUCTION INFRASTRUCTURE Clear Site m Earthworks m Water - Tank Nbr 1 - Distrubution m Wells Nbr 2 Paved Roads - Hardcore m Stone Paving m Kerbing m 400 Car Parking & Paths etc Hardcore m Chippings m Kerbing m 150 Service Conduit - Security,Hi Fi etc m2 600 Landscape m BUILDINGS m2 Guard House m2 10 Electrical Substation 20 Restaurante - Phase Covers 1, Bar, - Self Service Areas Restaurante - Phase Covers 1,2 360 Toilet Block 10 8 m2 80 Kitchen & Storage - Phase m2 Reduced from 216 Drawing Size Kitchen & Storage - Phase m2 120 Staff Block m2 300 Bar & Kiosk m2 100 Shops & Offices m ,5 m m2 75 Rooms - including veranda 3,5 9,5 Module 33,25 - Phase Phase 2 40 Reduced from Drawing Size

11 - Phase 3 40 EXTERNAL WORKS Adult Pool m2 80 Childrens Pool m2 25 Deck m2 150 Beach Volley & Football Courts Nbr 2 Multi Purpose Court Nbr 1 FURNISHINGS & EQUIPMENT Boat Nbr 1 Car - Goods Purchase Nbr 1 Kitchen Equipment Nbr 1 Storage Nbr 1 Restaurant - Tables Nbr 75 Restaurant - Chairs Nbr 300 Bar - Internal Nbr 1 Bar - External Nbr 1 Computer Equipement Nbr 4 Office Furniture m2 188 Audio Equipment Nbr 1 Beach Kiosks with Seating - Kiosks with seating Nbr 22 - Chairs Nrr 80 - Tables Nbr 20

12 ESTIMATES OF CAPITAL EXPENDITURE US$/000 EXPENDITURE - YEAR 1 Coral Village Months TOTAL A. Land B m2 170 Raw Land ,00% CONSTRUCTION INFRASTRUCTURE Rs m2 1 Clear Site Nbr Earthworks- Allowance Water 1 Nbr Tank m 21 - Distrubution Nbr Wells Drainage 1 nbr Tratment/Septic Tank m 98 - Collection Paved Roads 900 m Hardcore m Stone Paving m 27 - Kerbing Car Parking & Paths etc m Hardcore m2 7 - Chippings m 27 - Kerbing m 35 Service Conduit - Security,Hi Fi etc m2 6 Landscape BUILDINGS Rs m Guard House m2 500 Electrical Sub Station m Restaurante - Phase 1 inc bar,self service,etc Restaurante - Phase 2 80 m Toilet Block Kitchen & Storage - Phase Kitchen & Storage - Phase m Staff Block m Bar & Kiosk

13 188 m Shops & Offices Rooms - including veranda 462 m Phase Phase 2 - Phase 3 EXTERNAL WORKS Rs m Adult Pool m Childrens Pool m2 200 Deck Nbr Beach Volley & Football Courts Nbr Multi Purpose Court C $60 FURNISHINGS & EQUIPMENT Rs Nbr Boat Nbr Car - Goods Purchase Nbr Kitchen Equipment Sq Ft Storage Nbr 200 Restaurant - Tables Nbr 50 Restaurant - Chairs Nbr Rs Bar - Internal B2 1 Nbr Bar - External Nbr Computer Equipement m2 110 Office Furniture C. 1 Nbr Audio Equipment Nbr Beach Kiosks with Seating D 80 Nbr 25 - Chairs Nbr Tables Nbr Rooms - Phase C Professonal Fees - Design & Project Management E Pre Opening Expenses F Working Capital H Contingencie s 5% TOTAL - Quarterly TOTAL - Accumulated

14 CN Coral Village PROJECTED INCOME & EXPENSE RESTAURANT OPERATIONS Covers Days Visitors Total Peak Season High Medium Low Total Number of Covers Market Capture 50% 75% 85% 85% 85% 85% 85% 85% 85% 85% Food Comumption 20,00 21,00 22,05 23,15 24,31 25,53 26,80 28,14 29,55 31,03 Beverage Consumption 6,00 6,30 6,62 6,95 7,29 7,66 8,04 8,44 8,86 9,31 Boat Trips Cover 50,00 52,50 55,13 57,88 60,78 63,81 67,00 70,36 73,87 77,57 Boat Trip Participation 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% Annual Inflation 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Operating Costs Cost of Food 30% 30% 30% 30% 30% 30% 30% 30% 30% 30% Cost of Beverage 25% 25% 25% 25% 25% 25% 25% 25% 25% 25% Cost of Boat Trip - Fuel etc 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% Payroll Nbr Persons Cost Payroll Revenue Food sales Beverage Sales Boat Sales Total Revenues Cost of Sales Food sales Beverage Sales Boat Sales Total Costs

15 Gross Operating Cash Flow INVESTMENT OPPORTUNITY IN Less Departmental Costs(On sales) 10% 10% 10% 10% 10% 10% 10% 10% 10% 10% (Elec,Insurances,Marketing,Replacements Reserve etc) Sales Agents Commission 15% 15% 15% 15% 15% 15% 15% 15% 15% 15% (Calculated on Food & Boat Trips) Net Operating Cash Flow ROOM OPERATIONS Rooms Available Annual Nights Available room nights Occupancy 55% 60% 65% 65% 65% 65% 65% 65% 65% 65% Occupied Room Nights ADR $202 Inflation Rate 5% 5% 5% 5% 5% 5% 5% 5% 5% 5% Total Room sales $ GOP 75% 75% 75% 75% 75% 75% 75% 75% 75% 75% Gross Operating Profit $ Reserve/Capex %age sales 1% 2% 3% 4% 4% 4% 4% 4% 4% 4% US$ $ Net Operating Cash Flow Total Net Operating Cash Flow Net Operating Profit//Cash to Owner

16 CN Coral Village APPRAISAL OF VALUE Dis Cash Flow Resid Value TOTAL Net Present Value 10% $ $ $ Net Present Value 12% $ $ $ Net Present Value 15% $ $ $ CN Coral Village NO MORTGAGE CALCULATION OF INTERNAL RATE OF RETURN CRITERIA 1 Capital Expenditure Income Residual Value = Income Yr 10 cap 10% TOTALS INTERNAL RATE OF RETURN 43,8%

17

18 10 ANNEXE A ARCHITECTURAL CONCEPT.

19

20

21

22

23

24

25

26

27

28

29

30 ANNEXE B MAPS AND PHOTOGRAPHS 11

31

32

33

34

35

36

37

38

39

40

41

42

43

44

45

46

47

48

49

50

51

52

53

54 ANNEXE C CALCULATION OF TOURIST DAY VISITORS Maceio Hotels Category Name Nbr - Rooms 1 4 Ritz - Lagoa de Anta Radisson Maceio Atlantico Suites Jatiuca Resort Salinas Beach Resort Brisa Towers Prategy Ritz - Coralli Pousada Casa Calada San Marino Suites Ponta Verde Maceio Mar Reymar Express Pajacara Ibis Porto Maceio Matsubara Sete Coqueiros Ritz Plazamar Poro da Praia Enseada Marinas Maceio Praia Bonita Saint Patrick Praia Coqeueiros Express Ritz Praia Costamar Pousada Cais da Praia Pousada Perolas do Mar Ciribal Pousada Morada do Sul Verde Mar Paraiso das Aguas 50 Non Class 10 Pousados 200 approx Visitors Hotel Rooms 3156 Av Occupancy 70% Persons per room 1,8 Tourist 75% Say 3.000