Purchase the land and existing structure for R60m from the current owner, conditional on the seller settling any claims from timeshare owners (25% shareholding). Construct apartments and hotel for R286m, and realise R303m by selling sectional title apartments. Surplus of R16.4m (excl land) realized, plus a hotel asset (with no construction debt). Income stream associated with the hotel is reflected in the hotel feasibility. Upon completion of the hotel it is estimated that it would have a value of approximately R100m, representing a 40% increase!

1. In association with
Laurusco Developments (Pty) Ltd
Development Opportunity
Erf 885,888,889,896,897 - Scottburgh
Development Facilitators, Property Brokerage,
Project and Construction Management to the Property Industry
Jason Wilkes and Eric Quevauvilliers

2. Locality and Aerial
Jason Wilkes Eric Quevauvilliers
084 245 2158 083 293 3133
Laurusco Developments (Pty) Ltd

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Jason Wilkes Eric Quevauvilliers
084 245 2158 083 293 3133
Laurusco Developments (Pty) Ltd

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18. Feasibility and Building Estimate
Jason Wilkes Eric Quevauvilliers
084 245 2158 083 293 3133
Laurusco Developments (Pty) Ltd

19. Blue Marlin - Investment Proposal
HOTEL APARTMENTS TOTAL
Revenue from Sales - Dec 2011 302,731,000 302,731,000
Cost - Land 0
Cost - Building 70,103,000 216,234,000 286,337,000
Development Cost 70,103,000 216,234,000 286,337,000
Surplus -70,103,000 86,497,000 16,394,000
Land Acquisition 60,000,000
Construction Cost 286,337,000
Proceeds Dec 2011 302,731,000
Surplus on construction (excl land) 16,394,000
Net Present Value - Projected Hotel Income Stream Forecast Discounted Discount % 30%
Terminal Growth 15%
Year 1 Per Hotel Feasibility Year 4 (2012) -1,544,421 -540,745
Year 2 Per Hotel Feasibility Year 5 (2013) -383,119 -103,185
Year 3 Per Hotel Feasibility Year 6 (2014) 2,657,441 550,558
Year 4 Per Hotel Feasibility Year 7 (2015) 6,354,296 1,012,661
Year 5 Per Hotel Feasibility Year 8 (2016) 9,829,573 1,205,002
Year 6 Per Hotel Feasibility Year 9 (2017) 11,723,195 1,105,493 Yield 12%
Year 7 Per Hotel Feasibility Year 10 (2018) 13,456,339 976,098 Value 112,136,158
Infinity Value 101,508,873
105,714,755
Internal Rate of Return
2009 2010 2011 2012
YEAR 1 YEAR 2 YEAR 3 YEAR 4
-60,000,000 -143,168,500 265,277,255
Internal Rate of Return 22.5%
Investment Proposal
Purchase the land and existing structure for R60m from the current owner, conditional on the seller settling any
claims from timeshare owners (25% shareholding).
Construct apartments and hotel for R286m, and realise R303m by selling sectional title apartments
Surplus of R16.4m (excl land) realized late 2011, plus a hotel asset (with no construction debt).
Income stream associated with the hotel is reflected in the hotel feasibility.
Upon completion of the hotel it is estimated that it would have a value of approximately R100m, representing a 40% increase
over estimated construction costs (per MLC feasibility).
Assumptions
Infinity value of hotel income takes terminal growth rate (growth in Year 7 per the hotel feasibility workings) and factors in a present value of 30%
No tax considerations are taken into account
It is assumed that construction will take two years and will occur in 2010 and 2011.
Income from the Operating Management Agreement is ignored in the calculations valuing the hotel. It is treated as a cost and assumed
to be paid to an external third party.

20. Draft Hotel Feasibility
Cost Escalation
10%
Hotel Rooms (No) 70
Room Nights ( room days) 25,550
Rate ( R) 750 850 1,000 1,200 1,350 1,500 1,650
Occupancy ( %) 55% 56% 58% 60% 62% 62% 62%
Rental Pool Rooms (Apartments) 328
Rental Pool Nights 119,720
Rate ( R) 750 850 1,000 1,200 1,350 1,500 1,650
Occupancy (%) 30% 30% 35% 35% 40% 40% 40%
Net % Share of Rental Income 10%
2012 2013 2014 2015 2016 2017 2018
YEAR 1 YEAR 2 YEAR 3 YEAR 4 YEAR 5 YEAR 6 YEAR 7
Hotel Room Rentals 10,539,375 12,161,800 14,819,000 18,396,000 21,385,350 23,761,500 26,137,650
Food & Beverages 60% 6,323,625 7,297,080 8,891,400 11,037,600 12,831,210 14,256,900 15,682,590
Gross Income 16,863,000 19,458,880 23,710,400 29,433,600 34,216,560 38,018,400 41,820,240
Rental Pool Income (Apartments) 10% 2,693,700 3,052,860 4,190,200 5,028,240 6,464,880 7,183,200 7,901,520
Cost of Sales (Room) 25% 2,634,844 3,040,450 3,704,750 4,599,000 5,346,338 5,940,375 6,534,413
Cost of Sales (F&B) 30% 1,897,088 2,189,124 2,667,420 3,311,280 3,849,363 4,277,070 4,704,777
Gross Profit 15,024,769 17,282,166 21,528,430 26,551,560 31,485,740 34,984,155 38,482,571
Overheads 50% 8,431,500 9,274,650 10,202,115 11,222,327 12,344,559 13,579,015 14,936,917
Property costs 6% 1,011,780 1,112,958 1,224,254 1,346,679 1,481,347 1,629,482 1,792,430
Management fees 9% 1,517,670 1,669,437 1,836,381 2,020,019 2,222,021 2,444,223 2,688,645
EBITDA 4,063,819 5,225,121 8,265,681 11,962,536 15,437,813 17,331,435 19,064,579
Depreciation 8% 5,608,240 5,608,240 5,608,240 5,608,240 5,608,240 5,608,240 5,608,240
Profit before Tax -1,544,421 -383,119 2,657,441 6,354,296 9,829,573 11,723,195 13,456,339
Growth 75.2% 793.6% 139.1% 54.7% 19.3% 14.8%
Yield 12%
Value of Asset 112,136,158

50. Umdoni Municipality Zoning and VALUATION
Jason Wilkes Eric Quevauvilliers
084 245 2158 083 293 3133
Laurusco Developments (Pty) Ltd

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Valuation
Far Coverage FAR coverage
ERF Use
232 104,4 R 271,000.00 ComRes1 45Yo
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889 vacant 348
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public park
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Ptn 1 886 vacant
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13982 19797 5939.1
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derivedfrom UmdoniMunicipalValuatjon and Planning
Roll SchemeDocuments)
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