A collection of small luxury estates in the South of France, each comprising up to 6 apartments offered as fractionals and up to 20 hotel rooms, with boutique-style 4-star & concierge services. An attractive IRR, thanks to the combination of developer profit, hospitality cash flows and the proceeds of the salesthe hotel business after 10 years.

1. f²h Paris-Provence
French fractional
& hospitality fund
May 25, 2009

2. f²h May 25, 2009
A collection of small luxury estates in the
South of France, each comprising up to 6
apartments offered as fractionals and up to
20 hotel rooms, with boutique-style 4-star &
concierge services.
An attractive IRR, thanks to the combination
of developer profit, hospitality cash flows
and the proceeds of the salesthe hotel
business after 10 years.
© Domaine & Demeure

3. f²h May 25, 2009 1
The concept
Paris
A 6-unit mixed-used luxury properties chain
Each property:
• Historical estate or house
• 6 for-sale fractional flats and 20 hotel rooms
• Mutualised concierge service, outsourced restaurant
Provence
Marketing edge:
• Building on the fractional/lifestyle trend
Paris • Unique offering for francophile US babyboomers
+
Provence 3-level leveraged value creation over 10 years:
• Promoter’s return on fractional flats (62%)
• Hotel cash flows (8%)
• Proceeds of the sale of hotel business (30%)
© Domaine & Demeure

4. f²h May 25, 2009 1
In a nutshell
• For investors with real estate experience
and an interest for small luxury hotels but
Fractional
real estate
no taste for hands-on management
• Leveraging two growth markets: fractional
ownership & made-to-measure travel
+
Boutique
hospitality
• Paris & Provence: the best locations in the
world’s most visited country
• 4m€ invested grows into 37m€ after 10
years (52% IRR)
• 400 investors @ 10,000€ each, or
20 investors @ 250,000€ each
© Domaine & Demeure

5. f²h May 25, 2009 2
What’s in it for investors
• 6 historical properties with 6 fractional apartments and 20 hotel
rooms* in each – and 4-star services and amenities: a small hotel
chain in its own right (33 flats, 106 rooms under management)
• Mixed use: small luxury hotel and for-sale fractional: safer option for
investors, which enables above average return
• Fractional: long term trend, alternative to second home ownership,
lifestyle concept
• Comparables:
▫ RitzCarlton, Fairmont, Wyndham: all develop mixed use with fractional
▫ Garrigae in Languedoc (incl. hotels)
▫ Les Maisons de Baumanière (Avenio)
* 3 fractional apartments and 6
rooms in the Paris townhouse
© Domaine & Demeure

6. f²h May 25, 2009 2
What’s in it for co-owners & guests
• A new way to travel, to go on vacation, to own a second home
• For co-owners:
▫ More than just money – why pay 100% of a vacation home to use it only
15% of the time?
▫ Hotel rooms for their guests – like an « extendable » holiday home
▫ Paris & Provence: so co-owners can stop over in the City of Lights
• For hotels guests:
▫ True boutique hotels: historic properties, modern amenities, just 20
rooms, the same 4-star service that co-owners enjoy
▫ A boutique hotel for less: the quality,
the style, the service – without the
stupid prices
© Domaine & Demeure

7. f²h May 25, 2009 3
Clientele
• North American (USA/Canada) baby
boomers looking to organise their later years:
travel, vacation/second home
• France/Provence lovers, typical profile:
Alliance Française members
• A few figures:
▫ 100,000: US citizens reside in France
▫ 400,000: US citizens visit Provence (PACA/LR)
each year
▫ 2,500: US fractional owner in Provence
potential in 2013

8. f²h May 25, 2009 4
Paris
• 1.3m North American tourists
visited Paris in 2008
• Targeting those who want to go
beyond St Germain des Prés and
the Eiffel Tower
• Solid demand for luxury
accomodation, boutique hotel type
– at the right price
• Natural stop over on the way to
Provence

9. f²h May 25, 2009 5
Provence (« where the Mistral rules »)
• The most visited French region outside of
Paris: 12 millions foreign tourists per year
• Every American knows Provence
• Mediterranean climat: olive trees,
vineyards, palm trees, garrigue,
scrublands, fig trees, apricot and cherry
trees
• 280 days of sun a year, summers from
May to October, average temperature
25°C (77°F)
• Easy reach from anywhere

10. f²h May 25, 2009 6
Partnerships
• Branding: to build on the « Provence » name
within the USA, for ex: L’Occitane or Souleiado
• Architect & design: to capitalize on the credibility LAFOURCADE
of an experienced professional, for ex: Lafourcade,
Thoulouze
• Food & beverage, concierge: to offer the top-
quality service needed (and organize cooking
seminars), a regional Michelin chef, for ex: Jérôme
Nutile, Hostellerie Le Castellas (Collias)
• Affiliation services: to commercialize the rooms
and manage the fractional flats seamlessly, for ex:
The Registry Collection
• Commercial: to sell the fractional shares to a
North American clientele, for ex: Global Quarters

11. f²h May 25, 2009 7
Legal structure
• The investors’ owned hotel business can be set up
offshore, with a French subsidiary running the properties
in Paris & Provence
• Each property is structured as a French condominium
(copropriété horizontale), including 6 fractional flats
(separately owned) and the hotel premises (owned by the
hotel business)
• Each fractional flat is the property of a French SCI (société
civile immobilière), owned by a US LLC controlled by its co-
owners

12. f²h May 25, 2009 8
Typical city site
• Art Deco house, built in 1924 for writer
Frank Townshend, design by André Lurçat, a
Cubist architect friend of Le Corbusier
(unlisted by owner choice)
• In the private « Villa Seurat » (20 houses)
where former tenants include Salvador Dali
and Henry Miller
• 420 m² (4520 sq.ft) on 5 floors, with 2
separate stairs and entrances, a roof terrace
(60 m²) and a patio (30 m²)
• Potential for 3 fractional flats, 6 hotel
rooms
• Parc Montsouris quartier, quiet, recently
renovated one-way street (Tombe-issoire)
• Current price tag: 3m€

13. f²h May 25, 2009 9
Typical rural site (1)
• Heritage 18th century property, with
own name (« Mas Dalgaz ») on the
map
• 5 acres, 64 more available
• Nice open plain location, gentle hills
in sight
• Mature trees, easily landscapable
surroundings
• 14,000 sq.ft inside 6 buildings
• Current price tag: 790,000€

14. f²h May 25, 2009 10
Typical rural site (2)
• 14 miles from Uzès, 16 miles
from Nîmes
• Airport: 23 miles; high-speed
train (TGV): 16 miles
• On the outskirt of the village, less
than 400 yards from village
center
• Only one property nearby (line of
sight with some trees)

15. f²h
€
May 25, 2009 11
Investment metrics (per rural unit*)
Property purchase cost/m² 590€
Renovation cost/m² 1,400€
Furnishing cost/m² 840€
Architect’s fee 12%
# of fractional flats 6
# of guest/hotel rooms 20
Average flat size 110 m²
Average room size 25 m²
Common areas 160 m²
* City unit metrics & financials available on demand

16. f²h
€
May 25, 2009 12
Investment (per rural unit)
Purchase 869,000€
Renovation 1,928,000€
Interior design & furnishing 1,104,400€
Landscaping & outdoor 564,000€
Coordination 260,572€
Financing 160,352€
Other costs 659,439€
Per unit 5,488,727€
Total cost per m² 4,096€

17. f²h
€
May 25, 2009 13
Fractional sales (per rural unit)
Fractional flats per domaine 6
Shares (co-owners) per flat 36
Price per share 210,000€
Gross sales 7,560,000€
Sales & marketing costs 1,512,000€
Net sales 6,048,000€
Costs 5,020,190€
Financing (30%, 3 years, 6%) 296,391€
P/L per rural unit 1,909,500€
ROI p.a., 3 years 17%

18. f²h
€
May 25, 2009 14
Hotel revenues metrics (per rural unit)
Co-owners’ annual 4%
maintenance fee of purchase price
Hotel room price (incl. Tax) 190€
Average room service charge 46€
Hotel occupancy rate (all year) 50%
Margin on outside services 20%
Seminars (cooking etc.)/year 7

19. f²h
€
May 25, 2009 15
Hotel revenues (per rural unit)
Room sales 451,894€
Co-owners fees 302,400€
Food & beverages 163,800€
Seminars (net) 28,840€
Other revenues (net) 87,750€
Per unit 1,034,684€

20. f²h
€
May 25, 2009 16
Expenses metrics (per rural unit)
Number of staff 12
Staff-to-guest ratio 1:4
Salaries/total cost 53%
Social security costs/base salary 80%
Management & affiliation
fee/total revenue 6.7%
Yearly remplacement provision:
Fractional flat 11,000€
Guest room 2,500€

21. f²h
€
May 25, 2009 17
Expenses (per rural unit)
Salaries 455,760€
Furniture replacement provision 116,000€
Materials 56,400€
Management & affiliation fees 68,969€
Office, running & other costs 63,900€
Marketing & sales 117,600€
Per unit 878,629€
Operating profit 156,055€
15%

22. f²h
€
May 25, 2009 18
10-year P/L
Fractional sales 34.8m€
Hospitality cash flow (net) 4.6m€
Sale of hotel business 16.4m€
55.9m€
Investment 22.9m€
Cost of financing 1.6m€
24.5m€
Profit 31.4m€
Cash invested 4m€
IRR 52%

23. f²h
€
May 25, 2009 20
10-year summary

24. f²h
€
May 25, 2009 21
Model variations
• Add another townhouse – either in Paris or in
Montpellier, Aix or Avignon
• Replicate the concept in other countries, with a
historical heritage and a vacation/sun identity
• Develop rural units outside of Provence, for ex:
Bordeaux region (wine estate) or Brittany

25. Thank you
for your interest
Contact: Pierre Guillery
 +33 (0)6 8434 8992
f²h pguillery@francefractionalinvest.com
www.francefractionalinvest.com