HaKishor 22 Holon

A real estate project, an office building with a commercial ground floor.

Project brief

A new office building: Purchasing land for the construction

of an office building composed of a commercial ground

floor and 9 office floors. The projects built area is: 6,276

sqm (net) offices, 866 sqm (net) commercial and 155

parking spaces.

Location: East Holon - in the heart of a new and rapidly

developing business center.

Accessibility: land in the new Business center is very sought

after because of its unparalleled accessibility – a few driving

minutes from Road 4, Road 1 and Ayalon freeway. Adjacent

to the new lightweight train Green line, allowing for a

commute of a few minutes straight to Tel-Aviv's business

center.

terms :

1. 8.33% Compound interest on

invested capital.

2. 10% of the projects profit at

completion.

Required Capital: € 1,472,456

Expected yield: 16.03%.

Optional exit after permit

details: After Permits. Financing the

remainder of capital, establishment of a

joint company for the project.

Percentage of revenue: 46%.

Required Capital: €6,105,792.

Expected IRR: 15.1%.

Financing in two rounds:

Round A

Round B

The Israeli office real-estate market - Part 1In light of declining returns in the residential sector, investors who are looking for the

next project are looking for opportunities in the office real-estate space.

The market for office projects enjoys a lesser amount of government intervention and

taxation, in contrast to the residential space which suffers from burdening regulation.

Office projects are attractive and welcomed by cities – They bring in revenue from city

taxes and they do not require a high expenditure on services, in comparison with

residential projects. In addition, new office and commerce centers create new working

hubs, and encourage the arrival of new residents.

The real-estate market for offices is dominated by big construction companies. The

market for shared offices for rent has gone thru major shocks recently.

Congestion in Tel-aviv’s center Creates an ever increasing demand for business centers

closer to peoples place of residence.

The Israeli office real-estate market - Part 2

Most employment centers are located in the center of Tel – aviv, where land prices are

the highest. Because of the high price of land, entrepreneurs focus on erecting

skyscraper office buildings, in an attempt to justify the high prices the are paying for

land.

Marketing of these huge projects have to be fast and efficient as possible, and so project

managers prefer selling entire floors to big companies, to institutional entities and to

REITs.

This reality makes it very hard for Small and medium enterprise (SME), and for

independent professionals, to participate in the project in its early stages, and so SMEs

are forced to pay a premium on prices.

The demands of the working space are constantly changing, new technologies are being

developed fast and many companies are outsourcing functions to third party experts.

Small and medium enterprise in Israel

According to the Israeli office of economy and industry, the number

of SMEs that employ between 1 and 4 workers was 160,000 in 2015,

which makes up 11% of the entire workforce in the country.

The number of Independents professionals in 2015 was 260,000,

which makes up 9% of the entire workforce in the country.

Independents professionals usually prefer to work close to home, in

order to avoid traffic jams, shorten driving times and maximize

working hours.

Marketing strategy

We intend to market small office units with an average size of 60 sqm per unit, with

shared working spaces and meeting rooms, for SMEs and independent

professionals.

The Value of an office unite is expected to be NIS 684,000 (NIS 11,500 per sqm).

Prospective buyers will be given the option to pay a down payment of 20% ( ~ NIS

137,000) and pay the remainder over a period of 7 years, with an option for an

additional 7 years.

In the process of crystalizing our strategy we focused on satellite cities of Tel-aviv

like Kfar-Saba, Raanana, Rehovot and Holon since we came to understand that in

these areas the cost of land allows for relatively small project, which are optimal for

SME and for independent professionals. We have identified that in these areas

there is a need for smaller office unites and a lesser chance of competition with

companies that rent shared working spaces.

The hybrid office buildingBuy what you need, share what you use

We have redesigned the office building to create office unites that are more attractive to prospective

buyers, achieved thru the design of leaner offices with luxurious completing facilities. The office unit itself

is more efficient because it allows the buyer to purchase only what he needs – An entrance room for a

waiting area and an administrative employ, and spacious office rooms for staff. Each story in our building

will have 2 high-end conference rooms and a dining + kitchen area.

Conference rooms and a superb dining area

Office owners will enjoy a high standard dining area, always stocked with snacks and a variety of hot and

cold drinks, and will have all the conference room hours they need to conduct staff and business

meetings. Our conference rooms will be built at the highest standard, equipped with high-tech

equipment, perfect for productive meetings in a clean, impressive environment. This floor configuration

allows owners to save money by not buying conference rooms which are vacant many hours of the day

and an private kitchen that is frequently under supplied.

Key benefits of the hybrid design:

● A smaller more tactical office unit allows the buyer to enjoys the same functionality at a lower price point.

● Maintenance fees are only 10% higher than average.

● A floor plan that allows for a community feeling in the building.

Location of the project in relation to Cities, freeways and the light train (Green)

Location

The business environment of the project

General info and marketing assumptions

Construction Info

Plot size 2,500 sqm

Building rights 9,934 sqm

Gross offices metrage 8,744 sqm

Gross commercial metrage 1,189 sqm

Number of floors Commercial ground

floor + 9 office floors

Building footprint/ plot area 47%

Parking spaces 130

Acquisition of land in an area of 2,500 sqm in a

“Combination” Deal (discount in cash in exchange to

finished units in the building). Construction of 140

office unites in an average size of 60 sqm, 866 sqm of

commercial space and 130 parking spaces.

According to our assumptions and market research

we have came to a selling price forecast of NIS 11,400

per sqm (Gross sqm, “Ma’atefet” finish level).

Revenues and cost for the project

Cost of land €357,182

Cost of construction and development €17,242,269

Cost of architectural and planning consultants €926,635

Cost of taxes, finance and miscellaneous €4,487,082

Cost of management and bonds €873,367.72

Total costs €23,886,537

Total Capital needed (Round A and B) €7,882,557

Total revenue (Adjusted for “Combination” deal) €28,894,698

Total profit for the project €5,008,161

The land is valued at

€7,143,638.

It is being bought with

€357,182 in cash and the

rest in built unites.

Investment overview

Land €357,181

Brokerage €125,013

Various costs €279,112

Planning and management €563,903

Fixed fee for Twex 10% €147,245

Capital needed €1,472,456

Selling position after Permit €1,964,500

Carvil success fee 10% €196,450

Original investment €1,472,456

Profit €295,593

COC 19.91%

Yield - 1.5 year 13.27%

Capital needed €6,105,792

Percentage of revenue 46% 19,629,847 €2,303,754

COC 37.74%

Yield - 2.5 Years 15.10%

Total to be raised €1,472,456

Yearly compound interest from year 2 2.5 year 8.33% €326,059

Project profit €5,008,161

Part in project profit 10% €500,816

Total return €826,875

COC 56.11%

Yield 3.5 16.03%

Phase A Capital Phase B Capital

Phase A returns at project's completionPhase A optional exit at permit

Investment value timeline

Current time At building permit (~ one and a half years)

Construction and project completion (~ 4 years)

Real-estate Value € 7,143,638 € 8,130,481 € 28,894,698

Description

The market value of the land based on location and existing building rights

The value of the land + value of in effect building permit from Holon municipality priming land for construction

As construction progresses the building takes shape. The value raises gradually until full market value of the newly built office building.

Investor’s position Value (Round A)

€ 1,472,456 € 1,964,500(in case of exit this sum includes €196,450 successes fee)

€2,299,332

DescriptionValue of position in a combination deal that was just signed.

Value in a combination deal in a project that has a building permit and is ready to begin construction on site.

Total expected value based on Investment agreement. Investment + profit.

Selected projects

67 Pinsker, Tel-AvivUrban renewal project in the center of Tel Aviv. Carvil, in equal parts with one of our investors, has established an independent company which purchased 25% of the land ownership and owns the rights to execute an urban renewal project in the compound. The Company initiated the financing, planning and licensing of the project, its management and construction, while the investor is responsible for providing the required share-holders' equity.

37 Wingate, HerzliyaAn ecological (Standard 5281) luxury apartments project in Herzliya Pituach with 15 residential units in a built-up area of 2,430 sqm, which was financed by Bank Mizrahi. The company initiated the purchase of the land, obtaining finance, as well as planning, management and construction of the building. The project was populated in 2014.

Green Park, Kiryat GatA logistics park in Kiryat Gat industrial zone, which includes 9 logistics platforms and two showroom buildings, in over 28,000 built-up sqm. The company initiated the project and its execution via a limited partnership that was established with an investor's fund; Carvil acting as General Partner. The project is currently under construction, and been financed by Discount Bank.

The project’s managers

Eric Lederman, An architect and entrepreneur for several decades, A Doctors degree in green construction and solar energy planning, has planned and built dozens of buildings in Israel including residential, hotels, offices, Industry, Logistics and commerce. An expert in planning and promoting city plans with local and regional councils.

Eti Langermann, Over 20 years of experience in financial consulting and construction loans. On her last position has served as the CEO of discount mortgage bank. Currently she is a director in the Israel Aerospace Industries, a member of the an Investment fund comity, a counselor to the treasury and other directorate roles.

Yonatan Palman, The CEO of Carvil, a lawyer in education, manages the business operations of the company, an expert in project management and business development.

Carvil LTD.Carvil engages in investment, planning and development of real - estate projects in Israel.Carvil has a competitive advantage due to its extensive experience in the phase of initial planning and well experienced entrepreneurial capabilities. Carvil has proven management ability which consistently reduces the inherent risks involved in all real-estate project.

Disclaimer

• The information contained in this presentation (the ”Presentation”) is confidential and intended solely for the use of person to whom they have been delivered for the purpose of evaluating a possible acquisition of a commercial property in Israel, as presented above (the “Deal” or the “Transaction”) and is not to be reproduced or distributed to any other persons (other than professional advisers of the prospective investors receiving such documentation and information).

• Prospective investors should note that the documentation and information contained in the Presentation do not purport to be a complete description of all matters which would be material for consideration by a prospective investor. No responsibility or liability is, or shall be, accepted by Carvil Ltd (Carvil) as to the accuracy or completeness of the documentation and information contained in this Presentation.

• Carvil makes no representation and gives no warranty, express or implied, to prospective investors with respect to the legality of investment by such investors under applicable investment or similar laws or to financial, trading, or economic projections, estimates, forecasts, statements of intent, statements of opinions analyses, budgets, business plans or management analyses or to the future profitability, solvency, revenues, results of operations, cash flows, financial, trading or economic performance, conditions or prospects of the foreseen investment and proposed investment structure.

• The documentation and information contained in the Presentation are intended for discussion purposes only. Without limitation, such documentation and information do not constitute an offer, an invitation to offer or a recommendation to enter into any transaction. When making an investment decision, prospective investors should rely solely on the final documentation relating to the transaction and not to the summary contained herein. We recommend that prospective investors seek advice from their own technical, tax and legal advisors in making this assessment.

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