ABSEZ Antigua Free Zone Investment Opportunity in ...

ABSEZ Antigua Free Zone

Investment Opportunity in Hospitality Portfolio in a Diamond DestinationINFORMATION MEMORANDUM – Full Version

June 2020

Yida International Investment Group Antigua & Barbuda Co.

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DisclaimerThis Information Memorandum, issued by Horwath HTL on behalf of Yida International Investment Group (here-after also “the Client” or as well “the Developer”), contains confidential information on the hospitalityportfolio in the ABSEZ - Antigua Special Economic Zone. The aim of the work is described in the body of the report.

This Document is strictly confidential and may not be copied, summarized, disclosed, mentioned, described to, or constitute a reference for any third party. This Document is not intended to make an assessment ofthe investment opportunity described herein (the “Investment Opportunity”) and therefore the Advisor does not take any responsibility whatsoever with regard to the feasibility and suitability of the same. ThisDocument may neither be interpreted as an evaluation, a fairness opinion and/or a declaration of the reasonability of the Investment Opportunity, nor may it be used by anyone, including without limitation, anyadvisor, independent expert and/or accountant, as the basis of any financial analysis and/or feasibility analysis on the same. This Document is based on data and it uses methodologies and criteria which could havebeen different and/or led to different outcomes. The information and data on the Investment Opportunity on which this Document is based have been provided by the Client and have not been independentlyverified by the Advisor. The Advisor therefore does not take any responsibility for having or not having carried out any inquiry, analysis and/or independent due diligence exercises with regard to the informationcontained in this Document.

This Document is not intended to be exhaustive or contain all the information which may be necessary for rendering an assessment of the Investment Opportunity. In addition, the information and data contained inthis Document do not replace the assessments and analysis which have to be carried out autonomously by each receiver. This Document does not constitute a recommendation of any nature whatsoever, or aninvitation to investment or disinvestment and neither it does constitute an offer to the public nor a contractual offer, a solicitation, nor does it contain any undertaking, of any nature whatsoever, by the Client and/orby the Advisor. The information and data contained in this Document neither constitute an expression of contractual will nor originate any kind of responsibility, also as a pre-contractual liability, by the Client, theAdvisor and/or its respective Representatives.

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GeneralThis document concerns the presentation of an investment opportunity in ABSEZ, theSpecial Economic Zone of the State of Antigua and Barbuda, Caribbean Islands.

This information memorandum (also “IM” here-after) is intended for supportinginvestment into the hospitality component portfolio of ABSEZ development, whichincludes nine hotels and resorts, perfectly accessible and ideally located on the virgincoasts of Antigua.

The investment opportunity is promoted by Yida International Corporation, being theowner of the project and the land under consideration and the sole owner of the rightsto build a total covered surface of approximately 235 thousand sqm of hospitality, leisureresidential properties, other buildings, infrastructure and logistics facilities.

Yida International Corporation negotiated with the Government of Antigua and Barbudaand succeeded in obtaining the special status of Free Economic Zone in 2015, for whichinvestments in the area are now significantly facilitated.

DocumentThis IM has been prepared by Horwath HTL and contains information and dataelaborated within a general “Hospitality Master Plan” and consequent several “Businessplans” prepared for each of the nine hospitality opportunities.

Pictures, drawings and renderings were prepared by Erregi Engineering and Architecture.

Further documents and data related to this opportunity are available through access tothe data-room.

To request access to the data-room please contact [email protected]

About this Information Memorandum

mailto:[email protected]

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1. The Opportunity 2. ABSEZ 3. Caribbean Hospitality Market 4. ABSEZ Development Master Plan5. Hospitality Portfolio

5.1. Upscale Family Sea-front Resort

5.2. Upper Upscale Adults-Only Resort

5.3. Upscale Water Park themed Resort

5.4. Upper Upscale Caribbean Experience Resort

5.5. Upscale MICE Hotel

5.6. Upper Upscale Casino Hotel

5.7. Luxury Wellness & Golf Resort & Villas

5.8. Top Luxury Boutique SPA Resort

5.9. Luxury Marina Hotel

6. Financials 7. Limitations8. Data Room9. Glossary10. Key Contacts

Table of Contents

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1. Opportunity

Investment OpportunityThis is a unique opportunity to invest in a top world-known destination within anextremely favorable business environment, having just few parallels on a globalscale.

The asset is a plot of land whose total size is 685 ha, of which 123 ha authorized forexclusive hospitality development for a total buildable surface of 235 thousandsqm, currently segmented into 9 hotels and resorts, including leisure residentials.

This hospitality portfolio, involving 9 properties, has been conceived to providecoherence and consistency to the development plan, based on prospect marketsevidences, but its composition is not mandatory and can be adapted to theinvestor’s preferences and view.

The sale concerns the entire development plot of land.

There are no restrictions to the building authorizations in terms of size of eachproject, scale, precise location on the plot of land.

FlexibilityThis investment opportunity is very flexible since:

It is conceived for a global development investor

Each asset’s plot of land can be further adapted to the view of theinvestor

The relationship started by the Owner/Developer with local Governmentis inspired by reciprocal respect and trust, thus customized conditions forpurchase and development can be further discussed and obtained

Clear advantagesThis investment opportunity provides clear business advantages. The most relevantare:

No taxation and no infrastructural standard requirements for investments

No operating income taxation for hotels and resorts

No taxation on employment (salaries are tax exempted)

More information on these and other advantages can be found on page 12.

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1.1. A spot in an earthly paradise

A spot in an earthly paradiseAntigua is located between the Caribbean Sea and the NorthAtlantic Ocean, east-southeast of Puerto Rico. It is one of theLeeward Islands in the Caribbean region and the main islandof the country of Antigua and Barbuda, part ofCommonwealth.

Tourism is the leading industry in Antigua. The Island hasbeen welcoming international tourists for decades. It is wellequipped and offers direct access form both Europe and theUSA.

V.C Bird International Airport is the international gateway tothe Eastern Caribbean and beyond, in particular Antigua,Barbuda and Montserrat. Located 8 km northeast of St.John's, it is one of the largest Leeward Islands’ airporthandling close to 1 mln passengers per year (2018 data).

The Island is also a frequent and sought-after waypoint forcruises of all major global cruise-lines and is one of the largestmoorings for yachts in the Caribbean.

Cruise ships terminal is located at Heritage Quay, in the StJohn’s Harbour. Cruise ships also dock near FalmouthHarbour.

Antigua & Barbuda

Bahamas

Cayman Islands Puerto Rico

Trinidad Tobago

Grenada

Barbados

Martinique

VirginIslands (US)

Guadeloupe

Dominica

Anguilla

Dominican Republic

Haiti

Turks & Caicos Islands

Jamaica

Cuba

Aruba Bonaire

VirginIslands (GB)

Saint V. & Grenadine

Curacao

St.Kitts& Nevis

St. Lucia

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There are many direct flight options to get to Antigua from the main sourcemarkets.

USA: Atlanta, Georgia (ATL), Charlotte, North Carolina (CLT), Miami, Florida(MIA), New York (JFK), Newark, New Jersey (EWR),;

Canada: Montreal (YUL), Toronto (YYZ);

UK & Europe: Frankfurt, Germany (FRA), London, UK (LGW), Manchester,UK (MAN), Milan, Italy (MXP);

Other Caribbean islands: Anguilla (AXA), Barbados (BGI), DominicanRepublic (SDQ), Dominica (DOM), Guadeloupe (PTP), Nevis (NEV), Puerto Rico(SJU), Saint-Barthélemy (SBH), St. Kitts (SKB), St. Lucia (SLU), St. Maarten(SXM), St. Thomas, U.S. Virgin Islands (STT), St. Vincent (SVD), Tortola, BritishVirgin Islands (EIS), Trinidad (POS), Turks and Caicos (PLS).

FLIGHTSV.C Bird International Airportis served by: Air Canada; American Airlines; British Airways; Caribbean Airline; Delta Airlines; LIAT (1974) Ltd; United Airlines; US Airways; Virgin Atlantic Airways; WestJet.

CRUISESMost international cruise-linesstop at Antigua: Royal Caribbean Cruises; Princess Cruises; Norwegian (NCL) Cruises; Holland America Cruises; Disney Cruises; Regent Seven Seas Cruises; Celebrity Cruises; Seabourn Cruises.

Great Accessibility Direct International Air Routes

1.2. Great Markets Accessibility

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The Status of Free Economic ZoneAntigua and Barbuda Special Economic Zone is approved by the nationalHouse of Representatives and Senate of Antigua and Barbuda and its duty-free policies are permanently protected by the laws of the Commonwealthand Antigua and Barbuda. Antigua and Barbuda Special Economic Zone canenjoy zero-tax policy permanently.

Legislation, acts and consequent measures adopted to guarantee the specialstatus of Investor in ABSEZ are fully available to Investors requiring access todata-room.

Antigua and Barbuda Special Economic Zone covers an area of about 685hectares, nearly 7 square kilometers, and consists of 19 functional zones,including Antigua and Barbuda Tourism Island, Sino-Antiguan InternationalFree Trade Zone, Antigua and Barbuda Off-shore Duty Free Zone, Antigua andBarbuda International Bonded Warehousing Zone, Antigua and BarbudaFinance and Banking Center and other functional, infrastructural, cultural andeducational, leisure areas.

Antigua and Barbuda Special Economic Zone provides the most internationalcomprehensive and competitive incentives and preferential policies, includingoverall zero-tax policies, free financial policies, and unlimited off-shore duty-free shopping policies to attract foreign direct investment.

ABSEZ is set to be a new global off-shore platform of international tourism appeal, competing with Cayman

Islands, Virgin Islands and Bermuda, or even more attractive

St. John’s

Cruise Terminal

Airport

Devil’s Bridge

English Harbor

ABSEZ

2. ABSEZ: Antigua and Barbuda Special Economic Zone

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Yida International Investment GroupYida International Investment Group is the owner of the land having received the status ofABSEZ. The Company belongs to Yida China Holdings Limited.

Yida China Holdings Limited, together with its subsidiaries, founded in 1988, headquartered inDalian, is China’s largest business park developer and leading business park operator.

The main business involves business park operation, residential properties within and outsidebusiness parks and office properties sales, business park entrusted operation and management,construction, decoration and landscaping services and property management service.

On 27 June 2014, the Company was successfully listed on the Main Board of The Stock Exchangeof Hong Kong Limited.

Since 1998, the Group had firmly been seizing the international industrial relocationopportunities of service outsourcing industry and IT outsourcing industry, implementing“Private Investment + Government Support”, Internationalization and “Industry-Universities”integration strategies, creating the business model of City-Industry Integration, and constructingand operating Dalian Software Park at a high standard. The Group had become a pioneer in thefield of China’s service outsourcing business park development and operation and haddetermined its future development direction.

The Group further developed and operated Dalian Ascendas IT Park, Tianjin Seafront ServiceOutsourcing Industrial Park, Suzhou Hightech Software Park, Wuhan Optics Valley SoftwarePark, Dalian Tiandi, Dalian BEST City, Wuhan First City, Yida Information Software Park andmany other software parks and technology parks.

For over 20 years, the Group had provided its services to nearly 70 Fortune Global 500Companies.

In 2019 the Company employed over 1,900 and generated total revenues for over 850 M USD.

2. ABSEZ: Antigua and Barbuda Special Economic Zone

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Investing in ABSEZ - Investment Framework for Antigua and Barbuda

Ideal location: Antigua is easily accessible all the year long and ideally located at the center of the Caribbean region. It is a well-centered waypoint for any cruise line, and it takes short localconnections to major islands such as the Caymans, the Barbados and Bahamas. Its location makes it easily reachable from the USA, a major inbound market for the region andone of the richest in the world.

Brand awareness: The Caribbean is a world-known tourism region which attracts both business (financial districts of the special economic zones and MICE travelers) and leisure travelers.Especially intriguing for being a well-established platform for luxury services and real estate since many decades, Caribbean awareness is continuously growing and within thistrend Antigua is recording growing attention.

Political stability: Antigua and Barbuda is a small, stable country from a political and social standpoint, with a strong democratic framework of government, based on the Westminster (UK)system.

Safety & security: Antigua and Barbuda is one of the most secure and safe countries of the Caribbean and compares very well world-wide for low crime rates and social security. The country hasno clear reason for exposure to international terrorism. The attitude of the population is that of calm and peaceful people with a natural propension for hospitality and forwelcoming foreigners.

Investor protection: The Country’s law system originates in the UK. The legal code guarantees investor protection. Within the region, the Country is highly ranked for enforcing contracts andprotecting investors. The Country offers a well-regulated, transparent and supportive environment for business.

Trade environment: The Country is member of the OECS (Organization of the Eastern Caribbean States) within a common Central Bank and currency area. Confirmed regional free tradeagreements include WTO, CARICOM, COTONOU and EPA.

2.1. Investing in ABSEZ: general

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Within the several opportunities of investment offered by ABSEZ, hospitality development is clearly the mostadvantaged, thanks to the set of tangible incentives on operating profits and thanks to the favourable locationthat the Area enjoys within the island of Antigua. Tourism is the most credible and real business for the future ofthe Island and will offer solid returns at reduced volatility.

Investing in ABSEZ - Investing in ABSEZ: Clear AdvantagesFree Economic Zone Status: It allows investing with no taxation at all on operating profits, no infrastructure obligations, no taxation on salaries, ease of obtaining citizenship, the ease of

negotiating favorable conditions in a win-win approach with the local Government, who has invested in promoting social welfare and wellbeing for the Country.

Spectacular natural conditions: Beauty of landscape, pristine nature, perfect accessibility.

Incentives and concessions: Within this Area, multi-national companies can minimize their global tax burden by using a zone-based entity to conduct business overseas.

2.1. Investing in ABSEZ: general

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A Special Economic Zone (SEZ) is an area in which the business and trade laws are different from the rest of the

country. SEZs are located within a country's national borders and their

aims is to increase trade balance, employment, investments, job

creation and effective administration.

List of major fiscal advantages:

No capital gain taxes;

No restrictions on the repatriation of profits and imported capital;

No estate, death or inheritance taxes;

No personal income tax on worldwide income if citizen (see below);

Dual citizenship (under the Citizenship Investment Program, more data here);

Fast processing of investment applications (as far as Government procedures:3-4 months).

Hotel development and operations specific advantages:

No tax on hospitality investments;

No profit tax on hospitality operations;

No import tax on goods and merchandise (including raw materials, food, etc.);

No tax on salaries for hospitality employees (reduced cost of labour);

Citizenship for leisure real estate purchase (for sales > 300k $).

”

“

2.2. Investing in ABSEZ: fiscal advantages

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2.3. ABSEZ: Key Advantages in Hotel Development and Operations

HOTEL CONSTRUCTION & LAND PURCHASEABSEZ allows for no tax applicable on hotel development, thus building & constructionoperations are free from tax and free from infrastructure dues. Land purchasing andownership is free from state tax. This advantage is the base to build efficiently and reducethe payback period, as well as reduce risk associated to hotel development.

COST OF FOODS and other imported materialsCost of food and beverage accounts for approximately 23-25% of sales of the F&Bdepartment. Imports of such goods is tax-free in ABSEZ. A clear cost advantage which canbenefit F&B operations for at least a 20% of such cost. Depending on the importance of F&Bsales, such saving can positively impact GOP, by a positive +2-3%.

COST OF LABORCommonly, cost of labor is reported as the most relevant cost item in hotel operations(25%-30% on total revenues). In ABSEZ, salaries are not charged with local or state taxesand therefore a clear cost advantage can be obtained. Departmental income and GOP canbenefit of a significant cost reduction, improving by over +5%.

HOTEL PROFITSOperating profits are exempted from taxes. This has a positive impact on operating cashflows which can be estimated in a net increase of even +30%.This is, per se, a clear motivation to consider operating in ABSEZ.

FACILITATED HOTEL DEVELOPMENT AND HIGHER PROFITABILITYABSEZ offers a variety of incentives which can make hotel operations over 8% moreprofitable than average. Hotels can generate over 30% more liquidity thanks to thespecial status of free-tax profit. Projects will then generate higher ROI also thanks tono dues and tax on land ownership and construction.

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Demand Trends In 2018 Antigua and Barbuda, representing only 1% of international tourist arrivals in the

Caribbean, overperformed the trend of the area and registered an 8.7% increase comparedto 2017;

In the first 7 months of 2019 Antigua and Barbuda’s tourism industry increased by 9.7%compared to the same period of 2018, further exceeding the good performance of 2018 withrespect to 2017.

At end of 2019, according to official press releases, Tourism Officials of Antigua and Barbudacelebrated the arrival by air of the 300,000th visitor. This indicates an 11.5% yearly growthfor the destination, which is double than the the Caribbean average (+5%) and five times theAmerican one (+2%);

Origin: Demand is led by Anglo-Saxon countries and Caribbean islands: USA (38.7% ofarrivals; 104 thousand), U.K. (26.3% of arrivals; 71 thousand), Canada (14.2% of arrivals; 38thousand), Italy (2.5% of arrivals; 7 thousand);

Purpose: Leisure represent the main purpose of visit for visitors going to Antigua andBarbuda (80.7% of tourist arrivals), but Business and professional purposes registered thehighest annual increase in the last 5-year period (+4,7%) even if they still represent a limitedquota (3.9%);

Average Length of Stay: The majority (53%) of the visitors spent in average 4-7 days. Visitorswho stayed 8-14 days accounted for 28% of all arrivals. In 2018, only 9% of all visitors spent15 days or more;

Preferred Accommodation type: Overnight visitors mostly prefer Hotels and similarestablishments (81.4% on total flow) over other types of accommodation for their holidays;

Occupancy levels: Hotels in Antigua, after 2010, have experienced a rapid recovery inoccupancy rates, arriving at 60.9 in 2017. Luxury hotels recorded the highest occupancy rate(62%), followed by Midscale hotels (61%) and Budget hotels (56%).

Source: Data processing by Horwath HTL on the basis of World Tourism Organization, Ministry of Tourism Antigua and Barbuda and Antigua Hotel and Tourist Association; *provisional data

10.4%10.3%

11.0%

8.7%

7.5% 7.2%

8.6%

6.6%

4.3%

6.1%

8.4%

10.8%

Jan Feb Mar Apr May Jun July Aug Sep Oct Nov Dec

Seasonality of arrivals by air in 2018

Arrivals of non-resident tourists at national borders

234,

410

229,

943

241,

331

246,

926

243,

219

249,

316

250,

450

265,

187

247,

320

268,

949

300,

000

159,

764

171,

147

187,

701

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019* Jan-Jul2017

Jan-Jul2018

Jan-Jul2019

+11.5%

+9.7%

+28%

3. Caribbean Hospitality Market

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Supply Trends According to Booking.com and TripAdvisors, in Antigua and Barbuda, there are 58

accommodation properties for a total of 3,675 keys;

The mix of hotel accommodations is mainly oriented towards the Midscale and Upscaleproperties expressing together the 70.1% of keys (38% 4 stars and 32.1% 3 stars) but with asignificant role also of the 5 stars (25.6% of total keys). On the other hand, Economy hotelshave a minor role, under the 3%;

The average size is higher (104.6 keys) in 5-star hotels, followed by 4-star hotels (87.3 keys)and 3-star hotels (56.1 keys). Economy hotels recorded the lowest average size (10-15 keys);

Hotels belonging to the Antigua Hotel and Tourist Association were 34 in 2017 and 32 in2018. The analysis by category shows the Midscale hotels were 22 during 2017, followed byLuxury hotels (7 units) and Budget hotels (5 units);

The hotel seasonality is mostly concentrated between the months of November and April,with the majority of Budget and Midscale hotels operating also during the months of OctoberMay-July.

Source: Data processing by Horwath HTL on the basis of Booking.com, TripAdvisor and Antigua Hotel and Tourist Association

Hotels and similar accommodation facilities

5 stars 4 stars 3 stars 2 stars Not statedHotels 9 16 21 7 5Keys 941 1,397 1,178 107 52

% of operating hotels by category and by month, 2017

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov DecBudget 80% 100% 100% 100% 80% 100% 80% 80% 60% 100% 100% 100%Midscale 95% 95% 100% 95% 91% 86% 91% 73% 55% 82% 82% 82%Luxury 100% 100% 100% 100% 86% 86% 86% 71% 29% 57% 86% 100%

Budget Midscale Luxury

3. Caribbean Hospitality Market

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ABSEZ Components

Hotels

Financial Center

University Town

Technology R&D Zone

Shopping Center

Hospital & Medical Center

International HQ

Industrial Zone

Maritime Station

Deep Sea Port

Pier & Marina

Casino District

CIP Housing

Golf Course & Villas

Hospitality plays a key role within the whole real estate and infrastructure development plan of ABSEZ. The Master Plan allocates over 90% of the pristine coasts of the special economic zone tohotels and resorts, tourism and sports infrastructures. More in general, ABSEZ is set for developing a business district, a logistic platform, a residential area, as well as educational and medicalfacilities.

The hospitality development area stands on the eastern coasts of ABSEZ and includes two small Islands, which represent the ideal location for private and secured developments in the luxury tier.The rest of hotel and resorts development areas are buffered from the rest of other uses and all always facing the ocean with sandy beaches or mangroves just few steps away from the buildingplot.

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5

7 8 27 28

1 2 3 4 6

10

11

13

14

12 18

16

17

19 20

21

9 22 23 24

25 26

4. ABSEZ development Master Plan

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Caribbean Islands offer a tremendous amount of alternative development options.

The close vicinity to the biggest travel market of the world (USA) and the specific top-of-mind positioning in the luxury tier are clear advantages to potentially succeed in any hotel product andsegment.

The portfolio is composed of 9 development opportunities, which are not binding though. They have been conceived based on a consistent market segmentation in the light of current and futuremarket trends. The investor can opt for any change in the proposed size, market scale and even type of hotel product.

The proposed mix is the ideal composition for a well-balanced destination development: a hospitality portfolio creating a new address in the map of world-wide leisure and business exoticdestinations.

5. Hospitality Portfolio: Product Mix

Frenetic and metropolitan lifestyle in the USAand Europe increased the request for detoxingand rejuvenating venues in the Caribbean.Wellness resorts are very credible and suitablein this region of the world.

Luxury & Total Wellbeing

Casino and Caribbean LeisureCaribbean islands are historically well-known fortheir leisure and sport facilities, among whichgolf is a must. There is a great potential forexploiting the attractiveness of a golf, casinos,water parks and themed resorts where theCaribbean appeal plays a key role in the styleand experience of stay.

Caribbean islands are a perfect location to hostincentive programs, corporate conventions andeven great exhibition events. Nevertheless,hotels offering a distinctive supply of adequatefacilities for the MICE segment are yet few.

Business & Incentives

Families and Adults Only (couples)Caribbean islands are highly sought after byfamilies, both for short-breaks and summervacations, but also by couples for specialevents, wellness retreats, honeymoons, meeting/ reunions with friends. The magnets applying tosuch segments are the pristine water/nature,rich amusement programs, romance.

UpscaleFamily ResortABSEZ

Hospitality portfolio

segmentation

2 dedicatedresorts, overall 550 rooms

3 dedicatedhotels & resorts,

overall 910 rooms

2 dedicatedResorts,

overall 410 rooms

2 dedicatedHotels, overall 500 rooms

UpperUpscale

Adults Only

UpscaleWater Park

Resort

Upp. UpscaleCaribbean

Experience Resort

MidscaleMICE

BrandedHotel

LuxuryMarina Hotel

Casino Hotel

Luxury Wellness &

Golf Resort & Villas

Top LuxuryBoutique SPA

Resort

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For the coming years, ABSEZ is set to be one of the biggest hoteldevelopment spots in the Americas and one of the most prestigiousamong those competing in the world.

The proposed portfolio, which composition it not mandatory, wasdrawn based on current and future market trends, among which:

Increasing demand for the region and the Island, a metric of safefundamentals for investing in long-term return assets;

Vicinity the US market, for which the portfolio has included productsegments such as golf resort, casinos, adults only and themedlodging;

Opportunity to excel in the wellness segment, with 2 specializedresorts which might be branded by leading operators in the sphereof holistic wellness;

The aging of population, for which both wellness and Caribbean-inspired resorts are also dedicated to seniors, retired and socialtourism, competing in the Upscale and Upper Upscale segments;

The integration of hospitality service and real estate owning, forwhich the portfolio also includes serviced and branded topresidential units.

This segments mix is ideally conceived to minimize supply excess andseize real diversified opportunities in the potential market for theregion. Allowing for over 2,400 rooms on a total built area of 241,000sqm of hotels and resorts, ABSEZ will make an impact in theCaribbean and parallel destinations such as Atlantis Bay (Nassau),Baha Mar (Bahamas) or Perfect Day at Coco Cay (by Royal Caribbean),shaping the future of tourism in the region.

Golf Resort & Branded Villas

Marina Hotel

Family Resort

Adult-only Resort

Casino Hotel

Boutique SPA ResortWater park

Resort

MICE Hotel

Caribbean Experience Resort

5. Hospitality Portfolio

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DESCRIPTIONCaribbean islands are historically chosen by families for the safe environment, the pristinewater they offer and the several alternatives they can provide to kids, especially those agedenough for adventurous fun (from 8-9 to 14).

These resorts offer:

Family-dedicated product: family-friendly F&B offer; family and connecting rooms; kids’facilities & entertainment; varied range of pools and activities for both parents and kids;easy access to sandy beaches; special resort theme (such as zoos, adventure parks, waterparks, water-sports village, etc.);

Dedicated offer for parents: wellness facilities; large array of F&B offer;

The Upscale segment is the most adequate for such product. Families are willing to spendfor a well-targeted experience where the sense of “luxury” is provided by the wellbeingof their children rather than the privilege of a prestigious brand.

MARKET GUDELINESFamily resorts are generally planned similarly and there are some must-consider guidelines:

General: The plot of land must be easy to control or to fence, usually flat; 1 or 2 storey-buildings;

Rooms: > 150-180 rooms; significant share of three-to-four-bed rooms and suites; manyinterconnecting rooms; large rooms (above average of other Upscale resort types);

F&B: Restaurants are varied and include kids dedicated dining halls;

Other: Varied range of pool with adequate depth; Kids dedicated facilities (kids area /garden, waterparks, sports stations, etc.); Large outdoor park allows for themed facilities.

POSITIONING WITHIN THE ABSEZ It will complement the Upscale and Upper Upscale supply of the other sea-front Adults

Only resort, catering for demand of families and groups of young friends;

it will offer water-based attractions but as one of the several facilities, thus not conflictingwith the water themed Resort;

it will not conflict with the Casino hotel which will provide a different type of leisureexperience, more intended for couples, businessmen, retired seniors and empty nests.

5.1. Upscale Beachfront Family Resort

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Functions' Areas Based on 300 Keys

UnitsIndoor Net

areasIndoor Gross

built areasRoom Ratio

Outdoor areas

Room Inventory 300 9.900 13.500 45 - F&B Outlets + BOH 12 3.000 3.600 12 1.000 Wellness & Sports & Pools 2.500 3.000 10 7.000 Children Facilities 2.000 2.600 9 2.000 Other common areas + BOH 2.300 2.700 9 1.000

TOTAL AREAS sqm 19.700 25.400 85 11.000

RECCOMENDED CONCEPT FEATURES Positioning: Upscale

Rooms: 300 rooms and suites (10%)

F&B: 6 restaurants and 6 bars

Spa & wellness: Spa, gym and indoor sports facilities, some of which dedicated tochildren + outdoor sports facilities + 4 main pools (1 children)

Other: children amenities (kids-club, game-room, nursery and internal playground), anindoor theater (convertible to a conference hall).

Overall built area: c. 24,500 sqm.

Preliminary Revenues ProjectionsBased on the observed market trends of family resorts in the Caribbean, and the recommended project ADR and OR levels of USD 187 and 66%, the expected Total Revenues (GOR) of theresort starts at approx. USD 18.5 mln in year one and reaches USD 25.4 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 232. At the stabilized year, Roomsdept. will account for 53% of GOR, while the F&B dept. for 45%.

5.1. Upscale Beachfront Family Resort

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DESCRIPTIONCaribbean islands are highly sought after by couples for special events, wellness retreats,honeymoons, meeting / reunions with friends. The magnets applying to such segment arethe pristine water, amusement alternative programs, romance provided by certain exoticspots, dedicated programs and the presence of specialized brands and resorts providingquietness and privacy to their adults only guests.


Wide variety of F&B offer (themed restaurants, boutique & gourmet) with limitednumber of covers, reservation required;

A high number of pools with private spots and dedicated design intended to avoid thesense of crowded;

Direct access to beach and individual sports facilities;

The opportunity to choose among a varied room inventory, including suites, executivesuites and villas/bungalows.

MARKET GUDELINESAdults-only are simply classic S&B resorts with a focus on abundance of F&B, pools, sportsactivities and relax/wellness. These resorts include:

General:

A plot of land to guaranteeing wide spaces for walking, relaxing, avoiding themass/crowd effect, and including buffer zones from close-by developments;

Buildings can be tall or flat. The close-future trend is flat and dispersed buildings(intriguing and preserved spot Vs artificial and cold building);

Rooms: >200 rooms; significant share of suites; Rooms are large in general; Villas andbungalows often feature large surfaces and small private whirlpool;

F&B: Restaurants are very varied and include small gourmet outlets;

Wellness & Other: Three-to-four pools limited in size; Spa; wellbeing-approach to resortdesign; The outdoor areas to guarantee quietness.

POSITIONING WITHIN THE ABSEZ It will complement the Upper Upscale supply of the other sea-front resorts dedicated to

groups, families and friends, catering for demand of seniors and special events, attractingrefined connoisseurs / experienced guests of the Caribbean regions;

it will offer some water-based attractions, although limited not to cannibalize the offer ofthe water-themed Resort”;

it will not conflict with the Casino hotel nor the water-themed resort which will provide adifferent type of fun-intensive experience, more intended for young groups andindividuals with frenetic/adrenaline expectations.

5.2. Upper Upscale Adults-only Resort

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UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Rooms & Villas Inventory 250 12,400 16,100 64 - F&B Outlets + BOH 11 2,570 3,000 12 2,200 of which Restaurant 6 1,920 of which Bars 5 650 Pools (main, whirpool) 4SPA & Pools areas 3,500 4,200 17 1,000 Event, weddings, other + BOH 1,000 1,200 5 6,000

TOTAL AREAS sqm 22,040 24,500 98 9,200

Preliminary Revenues ProjectionsBased on the observed market trends of adults-only all-inclusive hotels in the Caribbean, and the recommended project ADR and OR levels of USD 300 and 62%, the expected Total Revenues(GOR) of the resort starts at approx. USD 19.6 mln in year one and reaches USD 27.1 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 297. At thestabilized year, Rooms dept. will account for 63% of GOR, while the F&B dept. for 34%.

RECCOMENDED CONCEPT FEATURES Positioning: Upper Upscale

Rooms: 210 rooms and suites, 40 villas

F&B: 6 restaurants and 5 bars

Spa & wellness: wellness center with SPA, gym and indoor sports facilities + 4 pools;


5.2. Upper Upscale Adults-only Resort

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5.3. Upscale Water Park ResortDESCRIPTIONCaribbean islands are historically chosen by young, families and couples for the safeenvironment, the pristine water they offer and the several alternatives they can provide foradventurous fun, entertainment, leisure activities in general. Most resorts offer leisureactivities linked to the beach and sea sports, but only a limited share of them can beconsidered themed around water activities and water-based fun for young or children users.Water-fun thematization is then a favorable way to differentiate offer.These resorts offer:

Appropriate space for both outdoor and indoor amenities dedicated to water-based funand wellness;

Unique/special/distinctive water-based experience, supported by 1 or more absolutemagnets (a special beach, an intriguing lazy river, a special pool, special slides, etc.);

Supportive amenities intended to cater for young or babies, such as playground, e-sportslounges, etc..

MARKET GUDELINESWater-fun themed resorts are generally planned similarly and there are some must-considerguidelines:

General: The plot of land must be easy to control or to fence, usually flat; Buildings arenot very tall, preferably 3-4 levels only;

Rooms: > 300 rooms; The inventory has a significant share of 3-bed and 4-bed rooms andsuites, with many interconnecting rooms; Rooms are large in general;

F&B: Restaurants are very varied;

Other: Pools are very varied. Other attractions are the lazy river, spray parks, adventureparks, water slides, water fitness facilities, and SPA; E-sports dedicated facilities are aplus; The external park (plot of land) allows for additional themed facilities intended toprovide a distinctive visibility to the resort; Beach sports are a must. Multiple beach-volley fields should be planned.

POSITIONING WITHIN THE ABSEZ

It will complement the Upscale and Upper Upscale supply of the planned sea-front familyresort, catering for demand of families with aged children and groups of young friends,seeking adrenaline, water-fun, a pure “activity-based entertainment”;

It will offer water-based attractions as an alternative to a classic beach-front resort,supporting demand segmentation;

It will not conflict with the Casino hotel which will provide a different type of leisureexperience, more intended for couples, businessmen, retired seniors and empty nests.

24


UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Room Inventory 360 13,680 17,700 49 - F&B Outlets + BOH 16 3,790 4,500 13 3,200 of which Restaurant 9 2,880 of which Bars 7 910 Pools (main, whirpool, child.) 6Wellness & Sports & Pools areas 5,000 6,000 17 4,500 Event, meeting, other + BOH areas 2,000 2,400 7 5,000

TOTAL AREAS sqm 28,260 30,600 85 12,700


Rooms: 360 rooms and (approx. 10%) suites;

F&B & MICE: 9 restaurants and 7 bars; Events and meeting spaces for 2,000 sqm;

Spa & wellness: SPA, gym and indoor pools and whirlpools, with other indoor water-based amenities;


5.3. Upscale Water Park Resort

Preliminary Revenues ProjectionsBased on the observed market trends of family and water parks resorts in the Caribbean, and the recommended project ADR and OR levels of USD 230 and 60%, the expected Total Revenues(GOR) of the resort starts at approx. USD 24.3 mln in year one and reaches USD 31.3 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 238. At thestabilized year, Rooms dept. will account for 58% of GOR, while the F&B dept. for 41%.

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MARKET GUDELINESCaribbean experience resorts are simply classic S&B resorts with a focus on the exotic appeal of theCaribbean and a peculiar care about the contact with local culture and nature. Their precise location isa key determinant of their success (including the view from the room). The plot must be big enough toguarantee wide spaces for walking, relaxing and avoiding the mass/crowd effect. In addition, theremust be enough buffer zones from close-by developments to make the ”sought-after tropicalambience” credible. The must-consider guidelines are:

General: Buildings should not exceed 2-3 levels; Rooms: < 250-280 rooms, the smaller the better; The room inventory has a significant share of

suites and often villas/bungalows; Rooms are large in general;

F&B: Restaurants are very varied and include small gourmet outlets;

Other: The pools size and location is critical. They do not need to be many but need to be perfectlylocated to provide a credible experience of relax and contact with nature; The wellness componentis crucial, and it is not simply the SPA, but it is rather the wellbeing approach to resort design.

DESCRIPTIONCaribbean islands are highly sought after, in general, for the pristine water, amusement alternativeprograms, romance, themed parties and the wellbeing generated by the sensations generated by thattropic parallel of latitude. The exotic side of the experience in the Caribbean is the most importantfactor in choosing the destination. This resort will interpret such magnet at the best of ABSEZ,positioning itself as the “exotic” and “unconventional choice”.


Units with Caribbean soul and typical “bungalow” style villas, immersed in natural with limitedbuilding impact; Very limited distance between accommodation units and the beach or rocks; Eco-friendly approach to building & construction;

Several alternatives for dining, including themed restaurants and boutique/gourmand (limitednumber of covers) outlets with reservation required;

A high number of pools with private spots and dedicated design intended to avoid the sense ofcrowded;

Significant space dedicated to parties and ongoing events/programs/attractions.

POSITIONING WITHIN THE ABSEZ It will offer one among the best spots for beach and sea-view;

It will not conflict with the Adults-only hotel because the market positioning andvalue proposition will be different;

I will not conflict with other Luxury resorts since its promise will be linked to alower ADR and it will be chosen especially for the Caribbean informalatmosphere rather than for the luxe of its design/spaces/furniture.

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UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Rooms & Villas Inventory 200 11,300 14,600 73 - F&B Outlets + BOH 7 1,480 1,700 9 1,400

of which Restaurant 3 960

of which Bars 4 520

Pools (main, whirpool) 2Event, wellness, other + BOH 3,000 3,600 18 3,000

TOTAL AREAS sqm 19,260 22,300 112 6,400


Rooms: 160 rooms and suites, 40 villas;

F&B & MICE: 3 restaurants and 4 bars; An adequate space dedicated to events andentertainment;

Spa & wellness: A functional wellness area (most of this space is outdoor and conceivedfor yoga, personal trainers, activities, open-air sports, team activities, academies);



Preliminary Revenues ProjectionsBased on the observed market trends of upper upscale resorts in the Caribbean, and the recommended project ADR and OR levels of USD 390 and 62%, the expected Total Revenues (GOR) ofthe resort starts at approx. USD 21.7 mln in year one and reaches USD 28.6 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 392. At the stabilized year,Rooms dept. will account for 62% of GOR, while the F&B dept. for 32%, and Wellness services (5.8%).

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5.5. Upscale MICE ResortDESCRIPTIONCaribbean islands are a perfect location to host incentive programs, corporate conventionsand even great exhibition events. Nevertheless, hotels offering a distinctive supply ofadequate facilities for the MICE segment are few.


Provide space for large groups of participants, for several events in parallel, with a majorconference room to be as big as over 400 seats;

Offer intriguing design which make the property attractive for incentive travel;

Offer attractive amenities for participants’ partners, linked to wellness, nature,adventure, culture, cuisine;

Offer a variety of programs, sports and facilities intended for team building and largegroups of players.

MARKET GUDELINESMICE hotels are generally planned similarly and there are some must-consider guidelines:

General: The plot of land must be easy to control or to fence, usually flat; 1 or 2 storey-buildings;

Rooms: > 300-350 rooms; The inventory is mainly composed on double rooms and alimited number of suites (10%-15%); Rooms are mid-sized in general but bigger thanconventional business hotels;

F&B: Restaurants and bars are varied;

SPA: Spa is a must

Other: Events of relevant size need to have a practical outdoor space of adequate size forconventions, banqueting activities, team building games, special arrangements for hostedcorporations.

POSITIONING WITHIN THE ABSEZ It will complement the Upscale supply of the sea-front family resort project, catering for

demand of couples, individuals and groups linked to any kind of event or simply lookingfor an affordable stay in the island;

It will offer attractive entry-level pricing (positioning itself as the most-affordable solutionfor ABSEZ.

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UnitsIndoor Net

areas

Indoor Gross built

areas

Room Ratio

Outdoor areas

Rooms Inventory 400 14,200 18,400 46 - F&B Outlets + BOH 12 2,890 3,400 9 2,400

of which Restaurant 7 2,240

of which Bars 5 650 Pools (main, whirpool) 2SPA & Pools areas 3,000 3,600 9 2,000 MICE areas 4,000 4,800 12 5,000

TOTAL AREAS sqm 26,980 30,200 76 9,400



F&B & MICE: 7 restaurants and 5 bars; events and meeting spaces for 4,000 sqm indoorand 5,000 sqm available outdoor; outdoor facilities intended to cater for the organizationof big events and exhibitions.

Spa & wellness: SPA, gym and indoor pools and whirlpools, with other indoor water-based amenities, for overall 3,000 sqm;


5.5. Upscale MICE Resort

Preliminary Revenues ProjectionsBased on the observed market trends of business and meeting hotels in the Caribbean, and the recommended project ADR and OR levels of USD 174 and 72%, the expected Total Revenues(GOR) of the resort starts at approx. USD 22.9 mln in year one and reaches USD 31.3 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 214. At thestabilized year, Rooms dept. will account for 58.5% of GOR, while the F&B dept. for 39%.

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5.6. Upper Upscale Casino HotelDESCRIPTIONCaribbean islands, such as the Bahamas and others, are historically well-known for theirleisure and entertainment facilities, among which casinos are the most sought-after,together with sport contests and water themed parks. To such extent, there is a greatpotential for exploiting the attractiveness of gambling, through planning of adequatecasino facilities enriched by ancillary facilities.


Big rooms; A significant size in terms of number of rooms and suites;

A fair diversity of F&B facilities;

An attractive casino;

Very often these resorts offer alternative magnets as well. Thus, wellness and fitnessfacilities are crucial;

Pools are highly differentiated and after-dinner activities are also varied. MICE areascan host musicals and live shows as well as private or corporate events.

MARKET GUDELINESCasino hotels are generally planned similarly and there are some must-considerguidelines:

General: The plot of land must be easy to control or to fence; Buildings are usuallytall to guarantee more view to suites on the top and to fence the casino areaadequately;

Rooms: > 300 rooms; Rooms are large in general, over the average of other Upscaletype of resorts;

F&B: Restaurants and bars are varied, no less then 4 bars is the rule;

SPA: Spa is a must

Other: Pools are varied with many indoor alternatives; The external park (plot ofland) allows for exhibitions.

POSITIONING WITHIN THE ABSEZ It will complement the Upper Upscale supply of the other sea-front Adults Only resort

project, catering for gambling lovers and providing an intriguing alternative for spending anight at ABSEZ;

it will offer gaming attractions which are complementing the rest of entertainmentfacilities, such as the water park;

It will not conflict with the rest of supply in general since it will be targeting especiallyyoung couples, businessmen, retired seniors and empty nests, as well as small groups ofyoung travelers.

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UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Room Inventory 350 15,540 20,200 58 - F&B Outlets + BOH 10 2,250 2,700 8 2,000 of which Restaurant 5 1,600 of which Bars 5 650 Pools (main, whirpool, child.) 4Wellness & Sports & Pools areas 2,500 3,000 9 3,000 Casino (overall areas) 3,000 3,900 11 - Event, meeting, other + BOH areas 2,500 3,000 9 5,000

TOTAL AREAS sqm 28,040 32,800 94 10,000

RECCOMENDED CONCEPT FEATURES Positioning: Upper Upscale


F&B & MICE: 5 restaurants and 5 bars; Conference facilities for 3,000 sqm.

A Casino Areas and Wellness center with SPA, gym and indoor sports facilities, some ofwhich dedicated to children + outdoor sports facilities + 3 Tennis Courts + 4 main pools (1whirlpool);


5.6. Upper Upscale Casino Hotel

Preliminary Revenues ProjectionsBased on the observed competitive market, and the recommended project ADR and OR levels of USD 300 and 75%, the expected Total Revenues (GOR) of the resort starts at approx. USD75.0 mln in year one and reaches USD 110.7 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 866. At the stabilized year, the Casino will contribute forover 50% of GOR, Rooms dept. will account for 26% of GOR, while the F&B dept. for 18%.

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5.7. Luxury Wellness & Golf Resort & villasDESCRIPTIONCaribbean islands, such as the Bahamas and others, are historically well-known for theirleisure and sport facilities, among which golf is a must. To such extent, there is a greatpotential for exploiting the attractiveness of a golf course with 18 holes, since this coursesare yet not very developed in the Region, especially those with updated/modern leisureresidential units and state-of-art SPAs.


Big rooms;

A fair diversity of F&B facilities;

A relevant share of suites and villas;

An attractive SPA for players’ partners;

A differentiated menu of alternative sports (tennis, swimming, windsurf, canoes, squash,etc.).

MARKET GUDELINESGolf & SPA resorts are generally planned similarly and there are some must-considerguidelines:

General: The plot of land must allow for additional sports, not just the hectaresdedicated to the golf-course; Buildings are usually not-tall to guarantee reduced impacton landscape. Usually from 1 to 3-4 levels off the ground;

Rooms: > 150 - 200 rooms; Rooms are large in general, over the average of other Luxurytier players;

F&B: Restaurants and bars are very varied, no less then 3 bars is the rule (pool, club-house, American at the lobby);

Other: Pools are varied with many indoor alternatives at the SPA.

POSITIONING WITHIN THE ABSEZ It is the most “isolated” and “quiet” alternative, due to the location (in the island);

It is the most luxurious product, offering large space for a limited number of guests;

It is the one offering the largest villas and leisure residential (serviced and branded) forsale;

It is meant exclusively for golf lovers and SPA lovers, thus non conflicting with the rest ofsupply of ABSEZ.

32


UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Rooms Inventory 26022,400 29,100 112 -

F&B Outlets + BOH 10 2,060 2,400 9 2,000 of which Restaurant 4 1,280 of which Bars 6 780 Pools (main, whirpool) 5SPA & Pools areas 3,500 4,200 16 4,000 Public events areas (excl. Golf) 1,000 1,200 5 2,000

TOTAL AREAS sqm 31,020 36,900 142 8,000

RECCOMENDED CONCEPT FEATURES Positioning: Luxury

Rooms: 160 rooms, of which 40 suites;

Residences: 100 villas, al meant to work as “buy-to-let” serviced and branded villas;

F&B & MICE: 4 restaurants and 6 bars; Event spaces and facilities for 1,200 sqm.

Other: A wellness center with SPA (4,200 sqm), gym and indoor sports facilities + a widerange of outdoor sports facilities + 5 main pools (1 whirlpool);


5.7. Luxury Wellness & Golf Resort & villas

Preliminary Revenues ProjectionsBased on the observed market trends of luxury hotels in the Caribbean, and the recommended project ADR and OR levels of USD 950 and 40%, the expected Total Revenues (GOR) of theresort starts at approx. USD 69.9 mln in year one and reaches USD 116.9 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 889. At the stabilized year,Rooms dept. will account for 68% of GOR, followed by F&B dept. (21%), Wellness (8%) and Minor Operating Department (3%).

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5.8. Top Luxury Boutique SPA ResortDESCRIPTIONCaribbean islands are, ideally, sought after by any individual from Western markets who isinvolved in a frenetic and/or metropolitan lifestyle, for detoxing and rejuvenating. Wellnessresorts are very credible and suitable in this region of the world.These resorts offer:

Quiet location, far from the crowd, spacious and comfortable as space design;

Thus, not too big, not over 150 keys ideally;

Offer specialized facilities and programs, ideally branded by a credible operator in thissegment;

Offer varied and specialized cuisine, for guests to be able to eventually follow a specialregime.

MARKET GUDELINESWellness resorts in the luxury tier are generally planned similarly and there are some must-consider guidelines:

Rooms: They are smaller than 200 rooms/units; The inventory includes a high share ofsuites and independent units (such as villas or bungalows); Rooms are sized generously;

F&B: Restaurants and bars are very varied;

SPA: The SPA size is relevant and indoor facilities need to include at least two pools(different temperature or chemical composition of water);

Other: The outdoor sports facilities are very relevant and varied.

POSITIONING WITHIN THE ABSEZ Will complement the Luxury supply of the Marina Hotel and the Golf Resort, being

distinguished for its specialized wellness services and its boutique positioning;

Will be become the attractive alternative to other well-established (but, possibly, tired)alternatives in top luxury of the Region, being located in a private island.

34

Functions' Areas Based on 100 Keys + 50 villas

UnitsIndoor Net

areas

Indoor Gross

built areas

Room Ratio

Outdoor areas

Rooms and Villas Inventory 150 10,900 14,100 94 - F&B Outlets + BOH 6 1,350 1,600 11 1,200 of which Restaurant 3 960 of which Bars 3 390 Pools (main, whirpool, child.) 4SPA & Pools areas 3,700 4,400 29 4,500 Event, meeting, other + BOH areas 500 600 4 5,000

TOTAL AREAS sqm 17,800 20,700 138 10,700

RECCOMENDED CONCEPT FEATURES Positioning: Top Luxury

Rooms: 150 keys, of which 20% suites and 33% Villas;

F&B: 3 restaurants and 3 bars;

Spa : a wellness center with SPA, gym and indoor sports facilities, some of whichdedicated to children + outdoor sports facilities + 2 Tennis Courts + 2 main pools (1children);

Other: outdoor facilities intended to cater for the organization of big events and activitiesin the area of sports, wellness, yoga, etc..;


5.8. Top Luxury Boutique SPA Resort

Preliminary Revenues ProjectionsBased on the observed market trends of top luxury wellness retreats in the Caribbean, and the recommended project ADR and OR levels of USD 950 and 58%, the expected Total Revenues(GOR) of the resort starts at approx. USD 34.9 mln in year one and reaches USD 48.3 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 875. At thestabilized year, Rooms dept. will account for 62.5% of GOR, while the F&B dept. for 27%, and Wellness services for 9%.

35

5.9. Luxury Marina HotelDESCRIPTIONCaribbean islands are a perfect location for yachting and for chartering. Especially charteringwith sailboats or fishing are very common practices and require locations which areequipped and appealing for such sports and activities. A marina hotel is perfectly suited tohost both yacht owners and their relatives and friends, as well as couples wishing to live theCaribbean sea through excursions and a special connection to the world of yachting.This kind of experience especially requires:

Direct access to docks where charters are leaving from;

Secure anchoring spots;

A high share of units have view on the berths (one room – one berth);

Access to private dry stacks, yacht chandler and specialized maritime equipment shops;

Direct access to beaches;

Varied gourmand fish restaurants + 24h American and/or cocktail bars.

MARKET GUDELINESMarina hotels do not present strict concept requirements, but in general:

General: They are built all around a marina or a small anchoring spot;

Rooms: < 100 rooms; They present a “boutique” concept and try not to be toostandardized; The inventory include a high share of suites (30-40%);

F&B: Restaurants and bars are very varied; One bar must be into the marina;

Other: The SPA is a must have facility. Other facilities must target the relatives of theyacht owner (partners’ fun).

POSITIONING WITHIN THE ABSEZ It will complement the Luxury supply of the other sea-front resort projects in the ABSEZ,

such as the Golf Resort and the Wellness Resort;

it will offer a clear alternative to other resorts due to the peculiar location (the end of apeninsula) and the unique environment (surrounded by boats but with the alternative ofbeaches).

36


UnitsIndoor Net

areasIndoor Gross

built areasRoom Ratio

Outdoor areas

Rooms Inventory 100 5,200 6,700 67 - F&B Outlets + BOH 6 1,350 1,600 16 1,200 of which Restaurant 3 960 of which Bars 3 390 Pools (main, whirpool, child.) 2SPA & Pools areas 2,000 2,400 24 Event+ Dry dock area + BOH areas 1,000 1,200 12

TOTAL AREAS sqm 10,900 11,900 119 1,200

RECCOMENDED CONCEPT FEATURES Positioning: Luxury

Rooms: 100 rooms and (40%) suites;

F&B: 3 restaurants and 3 bars;

Indoor technical areas dedicated to yachting and sea-sports (in additional to marinacovered areas and hangars).

Other: A wellness center with SPA and gym


5.9. Luxury Marina Hotel

Preliminary Revenues ProjectionsBased on the observed market trends of marina hotels and resorts in the Caribbean, and the recommended project ADR and OR levels of USD 400 and 70%, the expected Total Revenues(GOR) of the resort starts at approx. USD 13.3 mln in year one and reaches USD 19.0 mln at the stabilized year, thus a total revenue per available room (TRevPAR) of USD 520. At thestabilized year, Rooms dept. will account for 53.8% of GOR, while the F&B dept. for 41.5%, and Wellness services for 3.6%.

37

6. FinancialsWe have adopted an income approach methodology in accordance with market practice and used a DCF model to estimate the current value of each Resort, in the “ascompleted” status, based on the cash flows generated during the first 10 years of operations in a Management Contract scenario.

In the light of current market conditions, reflecting an average-low risk for the hospitality business in the Caribbean Islands Region, considering the specific location ofthe Resort and evidence of recently transacted hotels in the same market and similar locations, the Advisor estimates that the current Hospitality Development Valueas of March 2020 is approximated in:

(say) USD 1,125,111,000

(one billion one hundred twenty-five million and one hundred eleven thousand)

Family Resort Adults-onlyResort

Water park Resort

Caribbean Experience

ResortMICE Hotel Casino Hotel Golf Resort &

VillasBoutique SPA

Resort Marina Hotel Total

Units 300 250 360 200 400 350 260 150 100 2,370

Plot (ha) 8 6 8 4 6 6 60 22 3 123

GFA (sqm) 25,400 24,500 30,600 22,300 30,200 32,800 37,000 20,700 11,900 235,400

Hotel Value (USD ,000) 66,672 75,664 86,005 90,434 90,589 217,881 302,659 145,679 49,528 1,125,111

Value/Unit (USD) 223,000 303,000 239,000 453,000 227,000 623,000 1,165,000 972,000 496,000 474,730

ABSEZ Hospitality Development Value

38

7. Limitations

Horwath HTL, their affiliates or any of their respective directors, officers, employees and agents have not independently verified any of the information set forth herein and do not give anyrepresentation or warranty, express or implied, as to the accuracy, completeness or adequacy of this Information Memorandum or any other written or oral information made available to anypotential Investor or its advisors in connection with the Investment Opportunity.

The Information Memorandum does not constitute an offer, invitation or advice for the sale or purchase of any securities or asset and does not constitute any form of commitment orrecommendation by the Advisor.

The Investment Opportunity is not intended to qualify as a public transaction or offer and the Information Memorandum has not been, and will not be, filed with, or approved or recommendedby, any national, regional or federal government agency, securities commission or regulatory authority in Antigua and Barbuda or any other jurisdiction. This Information Memorandum does notconstitute an offer to sell or the solicitation of an offer to buy the Investment Opportunity in any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in suchjurisdiction. All recipients of this Information Memorandum should inform themselves on, and observe all applicable legal requirements in their respective jurisdiction, in respect of the receiptof this Information Memorandum. In accepting this Information Memorandum, the Investor is deemed to represent himself: he is receiving it as final Investor and not as a financial or otherintermediary. The content of this Information Memorandum is not to be construed as financial, legal, business or tax advice and any Investor or any recipient of the Information Memorandumshould take its own independent financial, legal, tax or other advice and conduct its own investigation and analysis of this Investment Opportunity.

The Advisor assumes responsibility for the content of this Information Memorandum and declares that, having taken all reasonable care to ensure that such is the case, the informationcontained in this Information Memorandum is, to its best knowledge, after having made due and careful enquiries, in accordance with the facts and contains no omission which would affect itsimportance. The Advisor does not however undertake to update any information contained herein.

We have provided a projection of performance for properties that does not yet exist and have clarified our assumptions. Being projections linked to a certain specific concept, there potentiallymight be significant differences between our projections and real achievable data, due to the fact that some major or minor changes may occur following the Investor decisions on positioningand concept.

Furthermore, we have provided a preliminary opinion on value, based on certain limited information about both the operating structure of the property, its business model and fees structure,for which we have been forced to generalize, using notional fees and assuming the hotel will be operated under a Management Contract Agreement. An opinion of value will always involve adegree of subjectivity and uncertainty that will affect the probability that the opinion would be the same as the price achieved by an actual sale at the valuation date. As such, we are requiredby the RICS to comment upon our level of confidence in the opinions of value reported herein.

39

The methodology employed in valuing a hotel is dependent upon the accuracy of the historical trading results for the subject Hotel as well as the level and accuracy of information available inthe marketplace in order to determine the current market wide trading conditions, and to estimate the future trading potential of the subject Hotel.

We consider our projections of future income and expense to be appropriate when compared alongside those of similar hotel properties, and therefore we consider the level of uncertaintyattached to our opinion of value to be relatively low. At the same time, as mentioned, the fact that there is still a significant volatility involved in the hotels and resorts concept, impose tohighlight that this must be intended as a preliminary opinion only.

This Information Memorandum is intended to provide information to the potential Investor in the context of and for the sole purpose of evaluating a possible investment in ABSEZ.

All historical or factual information contained in this Information Memorandum and relating to the Advisor is true and accurate in all material respects as at the date of this InformationMemorandum. In so far as this Information Memorandum provides information with respect to third parties, it has been drawn from public sources considered by the Advisor to be trustworthy.This Information Memorandum does, however, not purport to contain all the information that the Investor may desire in deciding whether or not to pursue the Investment Opportunity. ThisInformation Memorandum also contains certain information that is not historical but forward-looking, in respect of which the Advisor took into account reasonable assumptions, but whichinvolves by its very nature inherent risks and uncertainties. Some but probably not all are described herein, and the risk exists that the estimates, projections, forecasts or other forward-lookingstatements are not achieved, and such statements never represent all possible scenarios which may develop.

7. Limitations

40

This Investment Opportunity can be pursued by accessing the data-room.

Access to data-room can be requested by e-mail to be sent to [email protected]

The data-room documents include:

1. ABSEZ Master plan for the overall hospitality component (by Horwath HTL)

2. ABSEZ area Master Plan and architectural plans, including hotels and resorts preliminary rendering (by Erregi Engineering)

3. Preliminary business plan and Opinion on value for each hotel/resort (by Horwath HTL)

4. Guide to the Antigua and Barbuda Special Economic Zone (by KPMG)

More information about the Investment Opportunity and ABSEZ legal infrastructure can be found on https://www.antiguaabsez.com/

8. Data Room

To request more information and access to the data-room


https://www.antiguaabsez.com/

41

ABSEZ: Antigua & Barbuda Special Economic Zone

ADR: Average Daily Rate (room revenues in a period dividedby rooms sold in the same period)

AGOP: Adjusted GOP (operational result after basemanagement fees and before incentive fees and fixedcharges)

AR: Available Rooms (number of available rooms to be soldin the opening period)

Avg: Average

DCF: Discounted Cash Flow (valuation method used toestimate the market value of an asset based on its futurecash flows and exit value)

DOF: Double Occupancy Factor (average number of guestsper room occupied)

EBITDA: Earnings before Interest, Income Tax, Depreciationand Amortization (operational result after deduction ofmanagement fees and fixed charges)

F&B: Food & Beverage

FB: Full Board (food & beverage treatment includingbreakfast, lunch and dinner)

FEZ (SEZ): Free Economic Zone (Special Economic Zone)

FF&E: Furniture, Fixtures & Equipment (movable furniture,fixtures or other equipment which have no permanentconnection to the structure of the building)

GDP: Gross Domestic Product

GM: General Management Services (all centralized servicesprovided to all business units by the Group GeneralManagement

GOI: Gross Operating Income/dept. Income (total revenuesnet of departmental expenses)

GOP: Gross Operating Profit (operational result beforemanagement fees and fixed charges)

GOR: Gross Operating Revenue (total revenues from Hoteloperations)

HB: Half Board (food & beverage treatment includingbreakfast and one main meal, lunch or dinner)

MICE: Meetings, Incentives, Congresses, Events (overallterm to describe the meetings & congress market)

MOD: Minor Operating Departments (includes e.g. parking,guest laundry, shops, pay-TV, business center, …)

NOI: Net Operating Income (operational result afterdeduction of Reserve funds)

OR: Occupancy Rate (ratio between rooms sold andavailable rooms in a certain period, usually a year)

P.a.: per annum(per year)

P&L: Profit & Loss

PAR: Per Available Room (revenue or cost parameter basedon the number of available rooms to be sold in the openingperiod)

Pax: Person, guest

POR: Per Occupied Room (revenue or cost parameter basedon the number of rooms sold in the opening period)

Rev.: Revenues

RevPAR: Revenue per Available Room (room revenues of aperiod divided by the number of total available room in thesame period)

RN: Room Nights (number of rooms sold in the openingperiod)

Tot. Rev.: Total Revenues

TRevPAR: Total Revenues per Available Room (totalrevenues of a period divided by the number of totalavailable room in the same period)

VAT: Value Added Tax

VFR : Visiting Friends & Relatives (demand market segment:tourist travelling to visit friends and relatives)

9. Glossary

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Zoran BacicManaging Director+39 342 89 39 [email protected]

Alessio FranzeseProject Manager+39 334 387 [email protected]

Horwath HTL ItalyVia Flaminia 21 00196 – Rome, ItalyTel. +39 06 68 39 50 91Fax +39 06 45 42 26 24

Horwath HTL is a consulting firm with expertise in the field of management and marketing for the hospitality industry and is a member firm of Horwath HTL International Network. Horwath HTL is a member of Crowe Global, professional association of accounting and management consulting firms founded in New York in 1915. Crowe Global currently ranks among the top ten international professional service groups with offices in about 586 cities in 130 countries.

Horwath HTL (Hotels Tourism and Leisure) is one of the leading groups specialized in consultancy in the field of Hotel, Tourism and Leisure, offering experience and expertise to projects for customers around the world through a combination of local knowledge and international "vision". Horwath HTL is currently the world's largest consultancy organization specializing in the hospitality industry, with 50 offices in 39 countries.

Horwath HTL has gained broad expertise in the different fields of public and private tourism.

We are specialized in:• Hotel Asset Management• Tourism & Leisure• Hotel Valuation• Planning & Development• Strategic Advice• Marinas

Horwath HTL

10. Key Contacts



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