1. Investment projects in city-resort Jurmala, Latvia Development of elite residential apartment houses in Jurmala. Projects acquisition proposal August 2008
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4. Description of the projects Sea&Sun-1 Sea&Sun-2 Location 79 Melluzu prospect 400 m from the sea, 5-7 minutes drive from Jurmala city center 25 minutes drive from Riga Bus stop: 2 min walk Train stop: 10 min walk 3 Olgerta street 200 m from the sea, 7-10 minutes drive from Jurmala city center 25 minutes drive from Riga Bus stop: 5 min walk Train stop: 10 min walk Status of the project Technical design approved, building permit and tender is necessary to start construction and sales. This stage can be completed in 1-2 months. Detailed planning is ready, PA U received, technical and sketch designs to be started and approved. This stage can be completed in 6- 8 months. Planned project duration 24 months / 2 years 3 2 months / 2 years and 8 months Infrastructure in the neighbourhood Restaurants & cafes, school, equipped sand beach, grocery shops, aqua parks recreation centres, hotels, a supermarket construction is planned in the neighbourhood, the neighbourhood is located 3 km from Kauguri (Jurmala most populated district with market, hypermarkets, department stores, and other urban infrastructure). Design decisions Technical design for 40- apartment two - section dwelling house with underground parking is accomplished and approved Design of detailed planning , which allows designing and construction of 3 one - section dwelling houses for several families in 300 m protected dune zone is accomplished and approved Area to build Built area: 5,956 m 2 Saleable: 5,346 m 2 (apartments+other premises) + 44 underground parking units Built area: 6,622 m 2 Saleable: 6,010 m 2 (apartments+other premises) + 50 underground parking units Project acquisition price EUR 2,200,000 EUR 2,400,000
5. Description of the projects: areas Sea&Sun-1 Sea&Sun-2 Land plot area 3’740 m 2 4’879 m 2 Number of floors 3.5 floors + basement 2.5 floors + basement Number of apartments 40 apartments 50 apartments Total built area, incl.: 5’956 m 2 6’622 m 2 - Above ground built area 4’151 m 2 4’732 m 2 - Basement area 1’805 m 2 1’890 m 2 Total saleable apartment area , incl.: 3’811 m 2 4’370 m 2 - Balconies’ area 128 m 2 250 m 2 Ground floor terraces area 445 m 2 500 m 2 Roof terraces area , incl.: 950 m 2 940 m 2 - Covered roof terraces 184 m 2 - - Open roof terraces 766 m 2 940 m 2 Number of underground parking units 44 units 50 units Basement storage rooms 141 m 2 (31 units) 200 m 2 (50 units)
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8. Financials Sea&Sun-1 The above project financial data and calculations are based on usual business assumptions and cannot be guaranteed to a potential investor by the project Seller. The above financial data is derived by applying a project financial model, which can be presented to the prospective investor upon request. The financial model assumes inflation 6% p.a. assumed for both costs and revenues Sources Uses 56% Bank loan @ 40% (land), 80% (construction) € 5.21 m 24% Project acquisition € 2.25 m 38% Equity € 3.53 m 68% Construction hard costs € 6.27 m 6% Other equity (pre-sales and sales) € 0.51 m 8% Project soft costs € 0.73 m 100% Total sources € 9.25 m 100% Total project costs € 9.25 m Sales (incl. VAT) Apartments @ 2’900 EUR/m 2 (starting price) 3’810 m 2 € 11.44 m Covered roof terraces @ 1’800 EUR/m 2 (starting price) 184 m 2 € 0.34 m Open terraces @ 800 EUR/m 2 (starting price) 1’211 m 2 € 1.00 m Basement storages @ 1’600 EUR/m 2 (starting price) 141 m 2 € 0.23 m Underground parking @ 14’ 000 EUR/unit (starting price) 44 units € 0.64 m Total sales € 13.65 m Total project duration: 24 months Main project results & ratios Equity to invest € 3’535’000 Dividends (after profit tax 15%) € 3’131’000 Net mark-up before tax 45% Net mark-up after tax 38% ROE (dividends / equity invested) 89% xEquity 1.9x Unleveraged IRR 47.9% Leveraged IRR 69.4%
9. Financials Sea&Sun-2 The above project financial data and calculations are based on usual business assumptions and cannot be guaranteed to a potential investor by the project Seller. The above financial data is derived by applying a project financial model, which can be presented to the prospective investor upon request. The financial model assumes inflation 6% p.a. assumed for both costs and revenues . Areas and other technical data are assumed based on approved detailed planning and PAU. Sources Uses 43% Bank loan @ 40% (land), 80% (construction) € 4.36 m 24% Project acquisition € 2.45 m 44% Equity € 4.53 m 65% Construction hard costs € 6.68 m 13% Other equity (pre-sales and sales) € 1.35 m 11% Project soft costs € 1.11 m 100% Total sources € 10.24 m 100% Total project costs € 10.24 m Sales (incl. VAT) Apartments @ 3’100 EUR/m 2 (starting price) 4’370 m 2 € 14.49 m Open terraces @ 1’000 EUR/m 2 (starting price) 1’440 m 2 € 1.54 m Basement storages @ 1’600 EUR/m 2 (starting price) 200 m 2 € 0.34 m Underground parking @ 14’ 000 EUR/unit (starting price) 50 units € 0.75 m Total sales € 17.12 m Total project duration: min 32 months Main project results & ratios Equity to invest € 4’531’000 Dividends (after profit tax 15%) € 4’916’000 Net mark-up before tax 64% Net mark-up after tax 54% ROE (dividends / equity invested) 109% xEquity 2.1x Unleveraged IRR 48.4% Leveraged IRR 60.7%
16. Sea&Sun-2 3 Olgerta street General plan and concept visualisation
17. Prices of selected new residential projects in Jurmala For more information and market data see www.jaunieprojekti.lv Sea&Sun № Project Web page Selling prices 1 Edem www.edem4you.com from 3’400 EUR/m 2 2 365 www.365.lv from 3’400 EUR/m 2 3 Summertime www.summertime.lv from 2’100 EUR/m 2 4 SunDays www.sundays.lv from 3’500 EUR/m 2 1 2 3 4
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