Presentation about hotel development project in Kaunas, Lithuania

1. Hotel development
Kaunas,Lithuania

2. Content:
1. Project
2. Location
3. Development ideas
4. Market outlook
5. Investment opportunity

3. 1. Project
Please find ideas for the development and
completion of an unfinished hotel in Kaunas,
Lithuania.
Project consist from two phases: I’st – hotel,
II’nd - offices
For the I’st phase is planned to install:
• A wing (left) 144 room hotel
• B wing (right) up to 7 000m2 for hostel or
office, with a possibility to equip spa,
amusements, etc.
• 365 (147 on ground, 218 underground)
parking places on site; 2 400 parking places
within 200m of the building;
The building is comprised of two 10 floor wings
(26 000 m2 gross area), joined by a mid-
section.
The mid-section is planned to be demolished.
The two remaining buildings will share ground
level and underground parking.

4. 1. Project – areal view
Offices
(II’nd phase)
Offices
(II’nd phase)
Hotel
(I’st phase)
Hostel & Offices
(I’st phase)

5. 1. Project
• The primary purpose of this building (as a hotel) is 40% completed.
• It is situated on an 8 497 m2 land plot, leased from the state for long term
period.
• An architectural study by G.Natkevičius and Partners has been prepared.
Pre-design solutions and 3d drawings are also available.
• Kauno arka, UAB (KA) is a special purpose vehicle, which owns the
unfinished hotel building.
• The building has been bought from equity and the company has no
liabilities to the banks or other financiers.
• Kauno Verslo Rumai (KVR) is the owner of 100% KA shares. KVR was
established as a development company in 2004.
• KVR also owns two plots of land (4 398 m2 and 2 992 m2) adjacent to the
hotel. The company plans to develop in II’nd phase offices and
commercial premises.
• KVR is owned by two corporate shareholders from Lithuania and the
Netherlands with 5 other private shareholders also involved.

6. 2. Location – Kaunas, Lithuania
Distances from Kaunas:
• Vilnius 100 km
• Klaipėda (sea port) 220 km
• Riga (Latvia) 265 km
• Warsawa (Poland) 405 km
Information about Kaunas city:
• Wikipedia http://en.wikipedia.org/wiki/Kaunas
• Kaunas city http://bit.ly/gbXH3W
• Invest in Kaunas http://www.invest-in-kaunas.lt/

7. 2.Location – Kaunas center
Kaunas central district – closer view Kaunas central district – satellite view
An interactive map can be found at the following link: http://bit.ly/eccZuZ (Google maps) or
http://binged.it/omNFWQ (Bing maps)
Location summary:
• central district of Kaunas.
• borders to 6 lane central city street.
• Waterfront.
• distances:
o 200 meters - Main pedestrian street.
o 300 meters - Sports arena and park on the island of the river Nemunas.
o 1.0 km - City council.
o 6.5 km - Access to national motorways Vilnius - Klaipeda and Via Baltica (Warsaw - Tallin).
o 15 km - Kaunas airport → http://www.kaunasair.lt/index.php?lang=en.

8. 2. Location - Surroundings
VDU - University Medical academy
www.vdu.lt www.kmu.lt
Pedestrian street Shopping center
http://goo.gl/XxGM3 www.akropolis.lt
K.Mindaugo str. Parking
6 lane road for 2 400 cars
Island park “Zalgiris” arena
www.zalgiris.lt

9. 3. Development - Ideas
Main functions of the building:
• Left wing – hotel and reception.
• Right wing – student house, hotel, hostel,
office, spa, restaurants, conference hall,
reception.
• Underground and ground level parking
will serve both buildings.
• Hotel rooms and reception will be
equipped according to operator
requirements.
• Building construction is predefined for
~23 m2 rooms, which can be joined
together for bigger suites.

10. 3. Development – Space utilization
Left wing Right wing Total
Number Size, Net area, Gross Number Size, Net area, Gross Number Net area, Gross
Floor Function of rooms m2 m2 area, m2 Function of rooms m2 m2 area, m2 of rooms m2 area, m2
10 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
9 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
8 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
7 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
6 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
5 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630
4 tc tc -
3 re, off, ofc, tc 735 865 off 650 765 1 386 1 630
2 re, off, ofc, tc 735 865 off 650 765 1 386 1 630
1 rc, off, tc 735 865 off, cf, re 2 350 2 765 3 086 3 630
0 tc - sp, tc - -
Total 144 5 374 7 785 132 6 555 8 885 276 11 929 16 670
Function list:
ho Hotel cf Conference hall, ballroom
hs Hostel re Restourant, bar, amusement
sh Student house rc Reception
ofc Office - cabinet layout sp Spa
off Office - free layout tc Technical, other purpose

11. 3. Development – Layouts
Double room solution (5-10th floors)
Single - double room solution (current situation, 5-10th floors)

12. 3. Development – Parking
• Parking entrances will be from
two adjacent streets for easy
access from any direction.
• 365 (147 ground level and 218
underground) parking places on
site.
• 2 400 parking places in 200m
reach;

13. 4. Market outlook - Lithuania
• Territory: 65,300 km2
• Common borders with:
Latvia
Belarus
Poland
Russia (Kaliningrad Region)
• Population: 3.4 million
84% of Lithuanians
7% Polish
6.5% Russians
• Capital and biggest cities:
Vilnius (capital): 550,000
Kaunas: 320,000
• State language: Lithuanian
• State Government:
Democratic Republic
• Religion:
80% of Roman Catholics,
5% Orthodox
More information about country could be found at http://www.investlithuania.com/

14. 4. Market outlook
Macroeconomic outlook and forecasts
In the first quarter of 2012 Lithuania’s real GDP increased by 3.9 per cent on an annual basis. Taking into mind unfavorable
economic climate in Europe, economic growth in Lithuania remained rather robust. Good export diversification and increasing
efficiency at company level were important growth factors. Meanwhile domestic demand was strong and contributed
significantly to economic development.
On the one hand, GDP growth was slower than in 2011. On the other hand, it was higher than expected, and the situation in
main economic sectors remained stable what gives ground to more optimistic expectations about the nearest future. Sectors
oriented to domestic demand demonstrated the fastest growth in the first quarter of 2012, i.e. value added in construction
increased by 10.8 per cent year-on-year, IT and communications by 6.5 per cent, real estate operations by 5.6 per cent,
manufacturing industry by 5.0 per cent, retail and wholesale trade, transport and logistics, accommodation and catering by 4.9
per cent. Other sectors grew slower than the whole economy on the average.
Despite the ongoing euro zone crisis, Lithuanian exports grew fast both to Western and Eastern markets. At the beginning of
2012, exports to European Union countries increased even faster than exports to CIS countries. Regardless lower demand in
most of euro zone countries (except Germany), Lithuanian-origin exports remain competitive in terms of prices.
Source: SEB, 2012

15. 4. Market outlook
Hotel market in
Lithuania vs Europe
Number of places to
stay in hotels and
campsites per 1 000
inhabitants.
Lithuania
Lithuania <=10
Source: Eurostat

16. 4. Market outlook - Hotels
Nights in hotels - Country Nights in hotels - Kaunas
400 000 30 000
350 000
25 000
300 000 +63%
20 000
+46%
250 000
15 000
200 000
10 000
150 000
-22%
100 000 5 000
2005M04
2005M10
2006M04
2006M10
2007M04
2007M10
2008M04
2008M10
2009M04
2009M10
2010M04
2010M10
2011M04
2006M01
2006M07
2007M01
2007M07
2008M01
2008M07
2009M01
2009M07
2010M01
2010M07
2011M01
2011M07
2012M1
Nights in hotels - Country 12m moving average Nights in hotels - Kaunas 12m moving average
Source: Lithuanian statistic department

17. 4. Market outlook - Hotels
Nights spent in Kaunas - Room occupation in hotels - 4q
country share moving average
11.00% 60.00%
Park In Kaunas opening
232 rooms
10.00% 55.00%
+25% of Kaunas market
9.00% 50.00%
8.00% 45.00%
7.00% 40.00%
6.00% 35.00%
5.00% 30.00%
2005M04
2005M07
2005M10
2006M01
2006M04
2006M07
2006M10
2007M01
2007M04
2007M07
2007M10
2008M01
2008M04
2008M07
2008M10
2009M01
2009M04
2009M07
2009M10
2010M01
2010M04
2010M07
2010M10
2011M01
2011M04
2011M07
2011M10
2012M1
2012M4
2006Q3
2003Q1
2003Q3
2004Q1
2004Q3
2005Q1
2005Q3
2006Q1
2007Q1
2007Q3
2008Q1
2008Q3
2009Q1
2009Q3
2010Q1
2010Q3
2011Q1
2011Q3
2012Q1
Nights spend - country share 12m moving average
Occupancy rate of rooms - country
Occupancy rate of rooms - Kaunas
Source: Lithuanian statistic department

18. 4. Market outlook
Key facts
• Kaunas city has 355 th. inhabitants, placed in
centrum of Lithuania.
• Near Kaunas crosses two main motorways: Via
Baltica (Warsaw – Helsinki) and A1 (Vilnius –
Klaipeda)
• Total amount of keys in Kaunas hotels – 1152
• Total number of hotels - 24
• Recent developments in Kaunas:
– Kaunas City ** (44 rooms) started in August 2011
– Ibis ** class hotel (125 rooms, 3 143 m2) in March 2012

19. 5. Investment opportunity
We would like to discuss your investment goals, therefore no firm scenario
has been defined.
Possible development scenarios:
• Development of 168 room hotel (left corpus) only
• Development of 168 room hotel and 138 room student house/hostel
• Development of 300 room hotel
– Additionally some space could be installed for conference hall, office, amusement, spa
• Complex development of hotel and adjacent land plots (~0,7 ha) for hotel,
office and/or housing
Financially could be considered:
• Joint venture by share acquisition and/or equity raising
• Sale of shares or assets
• Convertible bond debt

20. Contacts:
Vaidas Repečka
Development adviser
+370 686 46800
vaidas.repecka@vajare.lt
http://lt.linkedin.com/in/vaidasjrepecka
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