Helios Apartments; Bahamas, Nassau

Property Development Summary: 2013

Main Objectives:

• To acquire 3,36 acre, 209 liner beach front, clear and freehold title land parcel in Cable Beach, Bahamas, Nassau New Providence area;

• Develop Nr:44,LEED platinum certified, contemporary style, high energy efficient serviced apartments targeted to holiday, business visits and permanent residence markets to attract wider audience than current market rivals.

• Position Helios Apartments, as Land Mark building of the area, symbol of sustainable luxury attracting world wide attention;

• Provide long term on site asset and business management services to ensure high living standards and asset income levels are maintained.

Geographic Position:

International Direct Flights from Nassau:

Direct Flights from Miami

Traffic gateway for local islands

Development Site:

3.36 acres –Freehold;209 liner beach front;Lush site tropical vegetation;Electricity,water,phone line on site;

Development Site Pictures;

Development Site Details:

PROPERTY IDENTIFICATION:                           Lot numbers 5 and 6 of Cable Beach Subdivision; ADDRESS:                                        On the north side of West Bay Street in the Cable Beach area;SITE AREA:                                                        146,256.21 sq. ft. or 3.36 acresGROSS FLOOR AREA:                                             9,806 sq. ft.ZONING:                                                          Single/multi-family residential;HIGHEST AND BEST USE:                                    Multi-family residence;TYPE OF PROPERTY:          Single family residence; ZONING:         Single family/multi-family residential and resort development; HIGHEST AND BEST USE:             Multi-family residential /resort development is the best use for land;SERVICES:           City water, electricity, telephone lines and cable.  Drainage by septic tank;NEIGHBOURHOOD:           Cable Beach is a high income residential area, about ninety percent developed in single family houses, condominiums, timeshare developments and hotels with most buildings being over twenty years old.  Values therein range from $150,000 to multi-million dollar hotels.  Distances to grade school:  1 mile, high school:  6 miles, shopping:  immediate, and downtown Nassau:  6 miles. OFF-SITE IMPROVEMENTS:                 West Bay Street is asphalt paved and has street lights;REMARKS:             The property is located in a very convenient location in Cable Beach and is on the waterfront with a good quality beach.  It is within short walking distance to the new Baha Mar resort.    

Investment Highlights :Geographical:1. Easy access by air from America

and Europe cities ( Miami, NY, London)

2. Idyllic climatic conditions. September to May, with temperatures averaging 21-24 Celsius, remainder of the year 26-30.

3. High visibility destination, ideal for luxury brand positioning; Political:

1. The Commonwealth of The Bahamas is one of the most politically stable countries in the world, with the constitution based on the Westminster Model.

2. Peaceful and stable democracy since 1729

Physical:1. Land parcel is correct rectangular form;2. 22 ft above sea level;3. Zoned for residential/hotel/resort

development;4. Max build high up to 7 stories; 5. Essential services already on site;

Economical:1. Bahamas imposes no taxes on capital gains

inheritance, corporate and personal income dividends and interest. 

2. Sound economy guided by prudent fiscal policy. 

3. Proactive incentives for investment. 4. Safe investment environment .5. Essential public services and modern

infrastructure.

Market Opportunity:

Declining Mortgages Rates: Construction Confidence:

2010 2011 2012 2013

5.2 5.6 5.7 6

0.4 0.1 0.3

Tourism Numbers in mln:

Tourism Increase

Tourism Activity:

Gross Domestic Product ( GDP);The Bahamas enjoyed GDP growth of 3% p.a. from 1997 to 2007.  Growth halted in 2008 (-2.3% GDP) and 2009 (-4.9% GDP), due to the global financial crisis.  Growth was since recovered, with 0.9% growth in 2010, 0.9% and 2011, 2.5% (estimated) in 2012, and expansion of 2.7% expected in 2013.

Rental Market:Nassau tends to have the highest average gross rental yields around 8%, while waterfront condominiums yield an average of around 7%.Monthly rents for waterfront condos in Nassau range from US$2,000 to US$ 5,000 per month.

Building Green – increases asset value

Business Structure:

Helios Group (Bahamas)

Site Operations

Lead Generators

Promotions and marketing

Asset Managers

Business Operators

Contractor

Developer Helios Group

Nominated Earthworks

Nominated Substructur

e

Nominated Superstruct

ure

Asset Delivery Stage:

Asset Management Stage:

Strategic Alliances:

Real Estate Sales and Marketing

For Client Mortgages and development finance

Legal associates

Financial Modelling: Helios Apartments:

Land Parcel and Proposed Unit Number for Development:

Size in Acres Size in Ha Size in sq/m TOT Nr: Size sq/feet:Price: TOT Size in

sq/feet:Unit:

Land Parcel 3,36 1,359 13,590 5,900,000.00 $ 146,361.60

Beach Front 209 linear feet

Penthouse: 4 4600 18,400.00

3 bedrrom 20 2500 50,000.00

2 bedroom 20 1900 38,000.00

TOTAL area: 44 134,090.91 $ 106,400.00

Construction Costs Assumptions per unit:

Hard costs per sq/fee

Soft Costs per sq/feet

Land Acqusition cost per unit

TOT costs per sq/fee TOT per sq/foot

incl land

TOT costs: TOT Construction Costs:

Penthouse 170.00 $ 60.00 $ 134,090.91 $ 230.00 $

Size sq/foot TOT Number: TOT cost p/apt 4,600.00 4.00 1,058,000.00 $

Land costs: 134,090.91 $

TOT costs: 1,192,090.91 $ 259.15 $ 4,768,363.64 $

3 bedroom apart

Size sq/foot: TOT Number: TOT cost p/apt:

2,500.00 20.00 575,000.00 $ Land costs: 134,090.91 $

TOT costs: 709,090.91 $ 283.64 $ 14,181,818.18 $

2 bedroom apart

Size sq/foot: TOT Number: TOT cost p/apt:

1,900.00 20.00 437,000.00 $ Land costs: 134,090.91 $ TOT costs: 571,090.91 $ 300.57 $ 11,421,818.18 $ 30,372,000.00 $

Profesional fees: 1,000,000.00 $

Architecture/Desing/Landscaping: 2,000,000.00 $ Site Set up/clearance: 2,000,000.00 $

Contingency @ 5%: 0.05 30,372,000.00 $ 1,518,600.00 $ 36,890,600.00 $

Penthouse Nr: 4

3bedroom Nr: 20

2bedroom Nr: 20

$ 0 $ 2,000,000 $ 4,000,000 $ 6,000,000 $ 8,000,000 $ 10,000,000 $ 12,000,000 $ 14,000,000 $ 16,000,000

4,768,363.64 $

- $

14,181,818.18

$

- $

11,421,818.18

$

TOT Construction Costs per Apt type

Penthouse Nr: 43bedroom Nr: 202bedroom Nr: 20

Additional Project Costs:

Land Acquisitions: 0.025

Due diligence 2,5% 50:50 5,900,000.00 $ 73,750.00 $ 0.1

Stamp Duty @ 10% 590,000.00 $

Development Costs: 0.03 36,890,600.00 $

Sales and Marketing @ 3% 1,106,718.00 $ 0.01

Extras @ 1% 368,906.00 $

TOT additional costs: 2,139,374.00 $

TOT Development Costs, excluding Depth Service: 39,029,974.00 $

Depth and Equity Assumptions:

Loan to Value (LTV 70%-30%) TOT development Costs excluding depth service Annual Interest; TOTALS:

Loan amount: Equity Amount:

70% 0.7 30% 0.3

27,320,981.80 $ 11,708,992.20 $ 39,029,974.00 $

0.02

Interest @ 2% Y1 26,774,562.16 $ 546,419.64 $

Interest @ 2% Y2 26,239,070.92 $ 535,491.24 $

Interest @ 2% Y3 25,703,579.68 $ 524,781.42 $

TOT interest: 1,606,692.30 $ 1,606,692.30 $

TOT Capital to repay: 28,927,674.10 $ 28,927,674.10 $

TOT Development Costs incl depth service: 40,636,666.30 $

Building Costs:

Additional Building Costs:

Additional Costs:

Senior Depth:

Senior 3Y Interest:

Stakeholder 1Equity:

Stake 1 3point interest:

$ - $ 5,000,000 $ 10,000,000 $ 15,000,000 $ 20,000,000 $ 25,000,000 $ 30,000,000 $ 35,000,000

30,372,000.00 $

6,518,600.00 $

2,139,374.00 $

27,320,981.80 $

1,606,692.30 $

11,708,992.20 $

11,225,400.13 $

Development Costs by Group

Sales Forecasts/Equity Accumulation:

Current Market Valuation Purchase Price: Planning approved @ 15

increase Equity Accumulated

0.15Land Price: 5,900,000.00 $ 885,000.00 $ 885,000.00 $

Penthouse: TOT build cost incl land sq/feet Low price sales sq/feet Medium price sales

sq/feet High price sales sq/feet

Penthouse size: 259.15 $ 500.00 $ 650.00 $ 850.00 $ Price per unit: 4,600.00 4,600.00 4,600.00 4,600.00Cost to Build 1,192,090.91 2,300,000.00 2,990,000.00 3,910,000.00TOT Number 4.00 4.00 4.00 4.00Tree point average: 4,768,363.64 $ 9,200,000.00 $ 11,960,000.00 $ 15,640,000.00 $ 12,266,666.67 $

3 bedroom apt; 36,800,000.00 $

3 bedroom size: 283.64 $ 500.00 $ 650.00 $ 850.00 $ Price per unit: 2,500.00 2,500.00 2,500.00 2,500.00Cost to Build 709,090.91 1,250,000.00 1,625,000.00 2,125,000.00TOT Number: 20.00 20.00 20.00 20.00

Tree point average: 14,181,818.18 $ 25,000,000.00 $ 32,500,000.00 $ 42,500,000.00 $ 33,333,333.33 $

2 bedroom apt; 100,000,000.00 $

2 bedroom size: 300.57 $ 500.00 $ 650.00 $ 850.00 $ Price per unit 1,900.00 1,900.00 1,900.00 1,900.00

Cost to Build: 571,090.91 950,000.00 1,235,000.00 1,615,000.00TOT Number 20.00 20.00 20.00 20.00 76,000,000.00 $ 25,333,333.33 $

Tree point average: 11,421,818.18 $ 19,000,000.00 $ 24,700,000.00 $ 32,300,000.00 $ 53,200,000.00 $ 69,160,000.00 $ 90,440,000.00 $

TOT Sales + Equity: 71,818,333.33 $

Cash Flow Projections: Cashflows for a period of 36months: From 1/05/2013 - 1/05/2016;Period Ending: May-13 Jun-13 Jul-13 Aug-13 Sep-13 Oct-13Month: 1.0 2.0 3.0 4.0 5.0 6.0Sales Proceeds 3point avg: 2,244,322.92 $ 2,244,322.9 $ TOT Development Costs, exc, Depth Service:

Land parcel Purchase: -2,950,000.0 $ -2,950,000.0 $ Due Dilligence: -10,000.0 $ -41,875.0 $ -31,875.0 $ Stamp Duty: -295,000.0 $ -295,000.0 $ Profesional Fees: -10,000.00 $ -10,000.0 $ -30,000.0 $ -30,000.0 $ -30,000.0 $ -30,000.0 $ Architec/Design/Landscap -1,000.00 $ -5,000.0 $ -15,000.0 $ -15,000.0 $ -30,000.0 $ -66,645.2 $ Site set up/work/clearance - $ - $ -58,823.5 $ -58,823.5 $ -58,823.5 $ -58,823.5 $ Contingency Fund: -1,000.00 $ -1,000.0 $ -1,000.0 $ -2,000.0 $ -47,612.5 $ -47,612.5 $ Building Costs: -949,125.0 $ -949,125.0 $ Other Project Costs: -1,000.00 $ -2,000.0 $ -3,000.0 $ -33,718.7 $ -33,718.7 $ -33,718.7 $ Sales and Marketing: -10,000.0 $ -10,000.0 $ -31,297.7 $ -31,297.7 $ -31,297.7 $ -31,297.7 $ Extras: -1,000.0 $ -1,000.0 $ -1,000.0 $ -1,000.0 $ -11,653.3 $ -11,653.3 $ TOT project costs: -34,000.0 $ -3,315,875.0 $ -3,416,996.3 $ -171,840.0 $ -1,192,230.8 $ -1,228,876.0 $ Depth Repayments: Senior Loan Interest: - $ - $ - $ - $ 50,209.1 $ 50,209.1 $ Senior Loan : - $ - $ - $ - $ 853,780.7 $ 853,780.7 $ Balance Left: - $ - $ - $ - $ 26,416,992.0 $ 25,513,002.2 $ Stakeholder 1 Equity: - $ - $ - $ - $ 365,906.0 $ 365,906.0 $ Stake Interest 3point aver - $ - $ - $ - $ - $ - $ Balance Left: - $ - $ - $ - $ 11,343,086.2 $ 10,977,180.2 $

Cash Balance left: -34,000.00 $ -3,315,875.00 $ -3,416,996.25 $ -171,839.98 $ 974,427.09 $ 974,427.09 $

Cash Flow Projections: Period Ending: Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14Month: 7.0 8.0 9.0 10.0 11.0 12.0 Sales Proceeds 3point avg: 2,244,322.9 $ 2,244,322.92 $ 2,244,322.92 $ 2,244,322.92 $ 2,244,322.92 $ 2,244,322.92 $ TOT Development Costs, exc, Depth Service:

Land parcel Purchase: - $ - $ - $ - $ - $ - $ Due Dilligence: - $ - $ - $ - $ - $ - $ Stamp Duty: - $ - $ - $ - $ - $ - $ Profesional Fees: -30,000.0 $ -30,000.0 $ -30,000.0 $ -30,000.0 $ -30,000.0 $ -30,000.0 $ Architec/Design/Landscap -66,645.16 $ -66,645.2 $ -66,645.2 $ -66,645.2 $ -66,645.2 $ -66,645.2 $ Site set up/work/clearance -58,823.53 $ -58,823.5 $ -58,823.5 $ -58,823.5 $ -58,823.5 $ -58,823.5 $ Contingency Fund: -47,612.50 $ -47,612.5 $ -47,612.5 $ -47,612.5 $ -47,612.5 $ -47,612.5 $ Building Costs: -949,125.0 $ -949,125.0 $ -949,125.0 $ -949,125.0 $ -949,125.0 $ -949,125.0 $ Other Project Costs: -33,718.73 $ -33,718.7 $ -33,718.7 $ -33,718.7 $ -33,718.7 $ -33,718.7 $ Sales and Marketing: -31,297.72 $ -31,297.72 $ -31,297.72 $ -31,297.72 $ -31,297.72 $ -31,297.72 $ Extras: -11,653.31 $ -11,653.31 $ -11,653.31 $ -11,653.31 $ -11,653.31 $ -11,653.31 $ TOT project costs: -1,228,876.0 $ -1,228,876.0 $ -1,228,876.0 $ -1,228,876.0 $ -1,228,876.0 $ -1,228,876.0 $ Development Funding: Senior Loan Interest: 50,209.1 $ 50,209.13 $ 50,209.13 $ 50,209.13 $ 50,209.13 $ 50,209.13 $ Senior Loan: 853,780.7 $ 853,780.68 $ 853,780.68 $ 853,780.68 $ 853,780.68 $ 853,780.68 $ Balance Left: 10,073,190.4 $ 9,169,200.56 $ 8,265,210.74 $ 7,361,220.93 $ 6,457,231.11 $ 5,553,241.29 $ Stakeholder 1 Equity: 365,906.01 $ 365,906.0 $ 365,906.0 $ 365,906.0 $ 365,906.0 $ 365,906.0 $ Stake Interest 3point aver - $ - $ - $ - $ - $ - $ Balance Left: 10,611,274.18 $ 10,245,368.2 $ 9,879,462.2 $ 9,513,556.2 $ 9,147,650.2 $ 8,781,744.2 $ Cash Balance left: 974,427.1 $ 974,427.1 $ 974,427.1 $ 974,427.1 $ 974,427.1 $ 974,427.1 $

Profit/Loss Low price sales Medium price sales High price sales Sales 3point average

TOT project sales: 54,085,000.00 $ 70,045,000.00 $ 91,325,000.00 $ 71,818,333.33 $ Profit Before Taxation: 13,448,333.70 $ 29,408,333.70 $ 50,688,333.70 $ 31,181,667.04 $ Profit Before Costs: 33.09% 72.37% 124.74% 76.73%

Profit on Costs ex depth 34.46% 75.35% 129.87% 79.89% Taxation on profits : (Subject to company structure) - $ - $ - $ - $

NET profit: 13,448,333.70 $ 29,408,333.70 $ 50,688,333.70 $ 31,181,667.04 $

Variable Costs: 75% of TOT develop cost incl depth

0.75 0.75 0.75 0.75

30,477,499.72 $ 30,477,499.72 $ 30,477,499.72 $ 30,477,499.72 $

Conribution per apartment 536,534.10 $ 899,261.37 $ 1,382,897.73 $ 939,564.40 $

Fixed Costs: 25% of TOT develop cost incl depth

0.25 0.25 0.25 0.25

10,159,166.57 $ 10,159,166.57 $ 10,159,166.57 $ 10,159,166.57 $

Breakeven in Unit Number: 18.93 11.30 7.35 10.81

Apt, everage sales price: 1,229,204.55 $ 1,591,931.82 $ 2,075,568.18 $ 1,632,234.85 $

Breakeven in USD: 23,274,743.95 $ 17,984,427.06 $ 15,247,723.95 $ 17,648,759.05 $ Investment Performace:

Y0 Y1, 2013, 4months Y2,2014, 12months Y3,2015,12months Y4, 2016,4months

Cash Flow Summary: -11,708,992.20 $ 8,977,291.67 $ 26,931,875.00 $ 26,931,875.00 $ 8,977,291.67 $

PV factor (@20%) 1 0.833 0.694 0.579 0.482

Present Value of Cashflow: -11,708,992.20 $ 7,478,083.96 $ 18,690,721.25 $ 15,593,555.63 $ 4,327,054.58 $

Extraction of 30% equity: 0.3 2,693,187.50 $ 8,079,562.50 $ 8,079,562.50 $ $ 2,693,187.50

Present Value of Cashflow: -11,708,992.20 $ 2,243,425.19 $ 5,607,216.38 $ 4,678,066.69 $ 1,298,116.38 $

Net Present Value (NPV): $ 2,117,832.43

Internal Rate of Return (IRR); -11,708,992.20 $ 2,693,187.50 $ 8,079,562.50 $ 8,079,562.50 $ $ 2,693,187.50 28.86%

Low Sales

Medium Sales

High Sales

3 Point Average Sales

TOT Development Costs

$ - $ 20,000,000 $ 40,000,000 $ 60,000,000 $ 80,000,000 $ 100,000,000 $ 120,000,000 $ 140,000,000

54,085,000.00 $

70,045,000.00 $

91,325,000.00 $

71,818,333.33 $

40,636,666.30 $

12,103,500.33 $

26,467,500.33 $

45,619,500.33 $

28,063,500.33 $

TOT Development Costs vs. Sales and NET profits

NET profit Distribution: Equity lended:

Profit + Risk Margin @ 20% of NET sales

TOT Repaid:

ROI per annum ROI per annum % TOT ROI %

0.2 3

Stakeholder Nr 1: $ 11,708,992.20

Low Sale profits: $ 11,708,992.20 $ 2,689,666.74 $ 14,398,658.94 $ 896,555.58 7.66% 22.97%

Medium sale profits: $ 11,708,992.20 $ 5,881,666.74 $ 17,590,658.94 $ 1,960,555.58 16.74% 50.23%

High Sale profits: $ 11,708,992.20 $ 10,137,666.74 $ 21,846,658.94 $ 3,379,222.25 28.86% 86.58%

Three Point Average: $ 11,708,992.20 $ 6,236,333.41 $ 17,945,325.61 $ 2,078,777.80 17.75% 53.26%

Alternative Strategy: Alternative Option:

Actual Price: Purchase Costs:Project preparation:

Planning fees: TOT Costs: Potential increase @15%

Land Purchase: $ 5,900,000.00 $ 663,750.00 $ 300,000.00 $ 30,000.00 $ 6,893,750.00 $ 885,000.00 Resale Option: $ 7,778,750.00

Invetsment Duartion: 6months

Return: 12.84%

Investment Comparison: Real Estate Development: Alternative Investment Options:Low Sales: Medium Sales: High Sales: Irish Bonds: Germany Bonds: Persion Sheme:

Duration in years: 3 3 3 3 3 3

Capital Invested: $ 11,708,992.20 $ 11,708,992.20 $ 11,708,992.20 $ 11,708,992.20 $ 11,708,992.20 $ 11,708,992.20

Security Level: Medium/High Medium/High Medium/High Low/Medium Low/Medium Low/Medium

20% NET Profit Share: 20 20 20 0 0 0

Projected Returns in 3 year time:

$ 2,689,666.74 $ 5,881,666.74 $ 10,137,666.74 $ 1,462,031.60 $ 716,683.99 $ 1,652,913.06

Return per annum: 7.66% 16.74% 28.86% 4.00% 2.00% 4.50%

TOT 3Y Return: 22.97% 50.23% 86.58% 12.00% 8.00% 13.50%

Capital Repaid: $ 14,398,658.94 $ 17,590,658.94 $ 21,846,658.94 $ 13,171,023.80 $ 12,425,676.19 $ 13,361,905.26

Proposed Building Shape and Sustainability Concept

Proposed Building Shape and Sustainability Concept

Apartment Features:

•Beach and Ocean views;•100% independent, renewable energy for cooling, lighting;•Full back up power generator;•Floor to ceiling windows;•Porcelain floor tiling;•Granite kitchen surface with solid wood cabinetry;•Smart energy management system;•Electric hurricane shutters; •Marble bathroom vanity surface;•Contemporary furniture and designer service to serve clients needs;•Interned and digital TV wiring;

Proposed Interior Design :

Proposed Exterior Design:

Development Features:

Action Plans:

Bahamas – Notable Residents:

•Nicolas Cage - owns estate residence on Paradise Island and a private island in the Exuma chains;•Johnny Depp - owns private island;•Tiger Woods - owns the Albany Estate;•Joe Lewis - British billionaire (347th richest person on Forbes list of billionaires), owns a property in Lyford Cay;•Mariah Carey - owns a house on Windermere, a private island connected to Eleuthera;

Bahamas Video : http://www.youtube.com/watch?v=rbY4AjafLdYhttp://www.youtube.com/watch?v=m_Ln73W2RyU

Capital

Security;

Required capital amount will be secured against land parcel, which is located in Bahamas, Nassau New Providence; Capital release will be monitored by escrow

account fiduciary which will be nominated by Helios and Stakeholder 1 agreement; Escrow facility will be used as security feature for international investor capital

withdrawals when project evolves into construction stage;

Income

Security:

Due to high energy efficiency, strategic geographic location, contemporary design, attractive economic fiscal policies, bank willingness to lend for local and

international buyers and scarcity of high end serviced apartments on the island, the project will attract upper class clients from USA, China, Russia, Germany,

Canada as lucrative investment opportunity, therefore sales of the units will start right after all necessary local authority approvals are issued;

Inflation:

Inflation in 2012/July was recorded at 2.1%. The proposed development profit share is well secured against inflation and stands @ fixed 20% NET profit share. Risk

against inflating labour, materials and service prices will be limited through contractual obligations.

Capital

Growth:

This investment is not a subject to capital growth for the stakeholder 1. Capital appreciation will be felt after completion for the product end user and tend to

increase @ 3% after project is accomplished. Income generating from business-vacation rentals is subject to increase commensurate to yearly inflation levels.

Risk profile:

Structural Risk – will be monitored through contracts, and well established building contractors;

Legislative Risk – project will imply LEED platinum energy ranking methods, design and management procedures; this will guarantee that increasing

environmental standards will be met well in advance;

Taxation – Bahamas imply no taxation on income received from capital gains, interest, inheritance, corporate or personal income. It is attractive investment

location.

Default by the contractor – retention from nominated contractor will be required before to work commencement.

Stagnant Sales – having in mind that development will contain only 44 high class units, sales distribution network will be developed well in advance, where

off plan sales will be offered at certain discount with 70% financial assistance from local banking partners. The attractive incentive is that properties

purchased above $500k, allows owners to become a resident of Bahamas and enjoy residency privileges stay in the country all year around. This option is

attractive to Russian speaking economies.

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