TEASER
R E S O RT P R O J E C T JOY COMPLEX BARÚ Barú
Island | Colombia
This document is confidential and private, it should not be circulated with third parties, this document was prepared for purely commercial purposes.
C ON T E N T 1 |
Executive Summary
2 |
Project Description
3 |
Timeline
4 |
Financials
5 |
Impact
1| Executive Summary
BACKGROUND
OVERVIEW
◤ All-Inclusive Tourism is thriving in the Caribbean, portraying steady growth for decades, while being currently underserved in Colombia, leaving plenty of room to grow.
◤ Baru is one of the main tourist attractions of Colombia due to its spectacular beaches, nearby attractions and proximity to world-class destination Cartagena, with a hurricanefree tropical weather 365 days a year exceptional offer.
◤ Tourism is one of the strategic sectors for the Colombian government, and it´s delivering strong growth numbers all along; tourism in Colombia is the place to be and Cartagena is the shining star.
◤ Only a few resorts have been developed in Baru.. ◤ Cartagena has the highest air connectivity in the Colombian Caribbean ◤ The site is ideally located, directly of the main road, and overlooking a bay with over 350 meters of beachfront and calm waters
CORPORATE FINANCE | M&A | FUNDRAISING
SCOPE
◤ Joy Complex - Baru is a “experienced-focused” resort unique in the Latin American hospitality landscape. ◤ With the support of the Time Warner brands, Cartoon Network and HTV, will be the stars in the hotel (455 Keys), providing a unique resort experience for children, families and adults in one of the most desirable tourism destinations in Colombia and Latin America.
◤ A water park set to be the cherry-on-top of this unique concept, a game-changer in the Colombian and Latin American industry.
GOALS ◤ The Complex has a total investment of approximately US$ 82,7 million, equivalent to US$ 181,653 per key. ◤ The Promoters and main Shareholders are Armilla Group & Tandem Proyectos. * Each partner with different investment vehicle(s). ◤ The Capital Requirement for this project is US$75 millions ⌟ Equity US$25 millions ⌟ Debt US$50 millions ◤ We are looking for someone to finance the US$ 50 million in debt or subscribe more Equity.
2| Project Description IN COLOMBIA … the tourism sector has significant tax incentives for investors.
PROMOTERS & SHAREHOLDERS
LOCATION & AREA
DESIGN & ARCHITECTURE
LEISURE EXPERIENCE
SUPPORT & KNOWLEDGE
2| Project Description
PROMOTERS & SHAREHOLDERS
ARMILLA & TANDEM are the promoters and main shareholders of this project. TANDEM brings the experience of more than 30 years in construction and ARMILLA a wide knowledge of the real estate sector and a team with vast experience in hospitality.
Equity USD 25.02 millions
54%
46%
Other Investors USD 13.52 millions July 2018 - June 2019: US$ 0,62 July 2019 - June 2020: US$ 0,62 Nov 2019: Terrain contribution US$ 10,05 July 2020 - June 2021: US$ 0,24 July 2022 - June 2023: US$ 1,00 July 2023 - June 2024: US$ 1,00
USD 11.50 millions Capital contribution based on annual requirements: ⌟ July 2020 - June 2021: US$ 0,05 ⌟ July 2021 - June 2022: US$ 0,12 ⌟ July 2022 - June 2023: US$ 5,59 ⌟ July 2023 - June 2024: US$ 5,74
2| Project Description ◤ ARMILLA GROUP combines the knowledge of a Real Estate Developer, the technical strength of a Developer, the financial strength of a Real Estate Fund and the long-term vision of a Real Estate Administrator. ◤ Its founder and CEO is Mr. José Ignacio Robledo, who is also the Founder of Terranvm Hotels, main hospitality group in Colombia. He led the purchase of Decameron Hotels for USD $500 million, where he consolidated a portfolio of 10 thousand rooms in Latin America. ◤ Mr. Robledo is a Pioneer in Real Estate Funds in Colombia, in 2007 he structured and launched “Patrimonio Estrategias Inmobiliarias (PEI)”, first REIT in Colombia and leading Real Estate investment vehicle in the country. He structured and led the negotiation and acquisition of Real Estate Assets for COP $2.5 billion. ◤ Main player in this sector in Colombia, with Assets Under Management close to 3,650,000 m2.
PROMOTERS & SHAREHOLDERS
2| Project Description
PROMOTERS & SHAREHOLDERS
◤
TANDEM PROYECTOS and its partners (Family Herrera) have experience of over 30 years promoting, constructing and managing real estate projects in Colombia.
◤
The Company is specialized in structuring and management of high value projects, and has a strong group of partners and allies which allows it to create unique and successful projects.
◤
Tandem’s Business Model is based on two principles: Specialization and Collaborative Work. Based on these principles, Tandem is constantly searching for strong allies in architecture, engineering and commercialization, in order to create extraordinary teams for outstanding projects.
2| Project Description
LOCATION & AREA
◤ The Isla de Barú is a former peninsula south of Cartagena, Colombia. It was cut off from the mainland by the Canal del Dique, but is still connected by bridge. The extension is approximately 25 km long and in places is less than 1 km wide. Approximately 20,000 people live on the island. ◤ Most of the economy of the island is devoted to tourism and summer homes, particularly for visitors to its white sand beach. ◤ Located just 45 minutes by car from Cartagena, one of the main cities of the Caribbean declared a World Heritage Site in 1984. Cartagena has the highest air connectivity in the Colombian Caribbean
◤ Due to development restrictions, only a few resorts have been developed in Barú. ◤ Barú is not in the hurricane and sargassum (algae) paths that have impacted heavily the Caribbean and Mexico.
2| Project Description
LOCATION & AREA JOY COMPLEX Ideally located site with direct access from the main road and 350 m of beachfront overlooking a calm bay.
Area: 70.000 m2
Beach Front: 350 m
Building permit: Approved June 2020
Maritime Concession: Approved March 2021 Construction: 39.000 m2 – (6 floors) Nature: 60% of the site for native tropical forest Topography: Descending to the sea offering spectacular views for the entire hotel
2| Project Description LOCATION & AREA
LOCATION & AREA
2| Project Description
DESIGN & ARCHITECTURE
Joy Complex is comprised of three hotels that operate independently from a guest experience standpoint. ◤ Joy Complex - Baru is a Resort that seeks to offer a unique product for families not only in the Caribbean but worldwide. For kids the hotel will offer restaurants, rooms, shops, games and shows alluding to the most emblematic characters and television shows in the Cartoon world. For adults and teenagers, the Resort will offer the best of the Latin music experience, live shows, recreation, realities and guest artists from HTV’s world. ◤ The Complex seeks to offer its guests experience and fun for the whole family for all ages.
BUNGALOWS
2| Project Description
DESIGN & ARCHITECTURE
Inline with industry trends, Joy Complex is able to offer a wide array of amenities and experiences in side by side hotels to better target its customers. BUNGALOWS ◤ For Adults, the Resort will offer floating Bungalows in a calm sea. ◤ An exclusive experience in a quiet and romantic environment.
◤ Suitable for couples looking for a moment of relaxation, away from the hustle and bustle.
BUNGALOWS
2| Project Description
DESIGN & ARCHITECTURE
The resorts seeks to blend with its surroundings through local materials and landscaping
2| Project Description
LEISURE EXPERIENCE
Unique resort in the region for adults and children with lots of fun thanks to the Cartoon Network style and experience
AMENITIES ◤ ◤
◤
197 keys: 174 Standard room (88.3%), 6 Jr Suites (3.0%), 15 Suites (7.6%) and 2 Iconics (1,0%) Cartoon Network Baru Resort will offer 4 Restaurants (1 Buffet, 2 specialties, 1 beach restaurant) / Infinity Pool / Kids Pool / Pool Bar / Kids Zone / Entertainment Rooms / Rooftop Juice Bar / Snack Bar / Coffee Shop / Themed Bar / Beach Soccer / Amphitheater Water park: Water slides, ocean inflatable park, kids zone and play structure
TARGET ◤ ◤
Families with kids (from 0 to 17 years old) Focus on entertainment and activities for families & kids
EXPERIENCE
2| Project Description
LEISURE EXPERIENCE
A key amenity of the Cartoon Resort will be the world class waterslides, kids zone and play structures for all ages
2| Project Description
LEISURE EXPERIENCE
Unique resort in the region for family and adults with the best Latin music scene promoted by HTV.
EXPERIENCE AMENITIES ◤
202 keys: 180 Standard room (89.1%), 6 Jr Suites (3.0%), 14 Suites (6.9%), 1 Presidential (0.5%) and 1 Iconica (0.5%)
◤
HTV Baru Resort will offer 4 Restaurants (1 Buffet, 2 specialties, 1 beach restaurant) / Infinity Pool / Swim up Pool Bar / Sports Bar / 2 Rooftop bars / Convention Center / Business Center / Fitness Center / Tennis Court / Beach Volleyball / Night Club / Hairdresser
TARGET ◤ ◤ ◤
Middle and upper middle class Families with kids (from 10 to 15 years old) Teenagers and young adults (from 16 to 40 years old)
2| Project Description
LEISURE EXPERIENCE
B U N G A L O W S : Exclusive hotel with floating bungalows in the Colombian Caribbean sea
EXPERIENCE AMENITIES ◤ ◤ ◤
56 keys: 54 Bungalows Suites and 2 Presidential Bungalows Suites Bungalows Baru Resort will offer Flooting bungalows / Snack Bar / Dock Restaurant / SPA / Fitness Center Private beach
TARGET ◤ ◤ ◤
Upper Middle and high class Adults (from 28 to 70 years old) SPA/ Wellness center / Fitness Center / Restaurants
2| Project Description
SUPPORT & KNOWLEDGE
Vertical integration is key for a successful all-inclusive platform to better reach its customers. ◤ Armilla Group has an integrated business model that comprises: a) Extensive all-inclusive experience b) Robust local and international distribution network c) Vacation Club
d) Destination Management Company (DMC) ◤ With the support of the Turner brands and their platforms, it is expected to reach their audience through television channels, websites, social media, among others. 70%
40%
60% 30% Hostel Industry
20%
30%
70% 80%
Direct Sale Others
2| Project Description
SUPPORT & KNOWLEDGE
Operations, distribution, vacation club and DMC are the key components for a robust performance in the industry… HOTEL MANAGEMENT : Experienced management team with extensive experience, industry knowledge and strong track record in generating healthy returns and an outstanding guest-experience. DISTRIBUTION NETWORK: COLOAEREO: Colombia’s n°1 Consolidator Agency, with 300 freelance and 100 travel agencies, which offers a high quality service and competitive prices in airplane and packages fares. From 100,000 to 120,000 tickets sold each year. COLVAC: Wholesaler which produces and consolidates travel services in the Caribbean and Latin America. Thanks to its strong relationships with hotel chains, tour operator and airlines, Colvac is highly effective in developing new markets and positioning vacation destinations.
Endless Joy
A VACATION CLUB with great benefits for its members such as discount offers, special services, privileged locations and lots of entertainment. Vacation club members are granted all access to the amenities of JOY Resorts Hotels and its allied hotels
DISTRIBUTION NETWORK: Receptive agency with 30 years of experience and presence in more than 11 countries in Latin America and commercial representation in 9 other countries worldwide. Reception of 20,000 to 25,000 passengers per year in all destinations, from more than 40 countries.
3| TIMELINE Construction is expected to begin at July 2022… The first stage consists in 399 rooms and increases with the bungalows to reach 455 in total. Resort is expected to open in 2024
CONSTRUCTION START > JULY 2022
THE BEGINNING FIRST STEPS > 2019
PHASE 1
FINISH > JULY 2024 399 Keys 197 Cartoon Network 202 HTV
PHASE 2 FINISH >JULY 2026 +56 Bungalows
4| Financials Joy Complex … will have a significant impact on the economy and development of the communities.
TOTAL INVESTMENT
CAPITAL REQUIREMENT
PROFIT-EARNING CAPACITY
4| Financials TOTAL INVESTMENT
INVESTMENT
$ 82.7 m PER YEAR
To date, the Promoters have already made capital contributions like: land, fees for design & architecture, permits, etc.
4| Financials
CAPITAL REQUIREMENT
The Capital requirement amounts to US$75.02 millions. A 66.6% loan-to-cost capital structure is proposed, with equity of USD 25.02 millions. US $ 7.68 million of the investment is generated by the cash flows themselves. It is intended to supply the US$50 with debt.
Ideal credit conditions are: ◢ Interest Rate: 7,00% ◢ Installments: 10 years ◢ Grace period: Amortization 2 years July-2022 / June-2024. ◢ Amortization: gradient
7% 16%
Finish
Start 2%
AVERAGE INTERES RATE
The credits will be disbursed according to the requirements to assume the pre-operational costs .
4| Financials
CAPITAL REQUIREMENT
The proposed capital structure is conservative and has extensive coverage
The project presents comfortable levels of coverage throughout the life of the debt.
* Operational Period
4| Financials
PROFIT-EARNING CAPACITY
The Project stabilizes at EBITDA margins of 36% and generates significant cash surpluses Margins
Cash Cumulative
Percentage
US$ millions
* Operational Period
* Operational Period
4| Financials
PROFIT-EARNING CAPACITY
The Project stabilizes at an EBITDA of USD 50,000 per key, in line with comparable hotels in the region
$27.15k
$32.54k
$39.00k
$44.50k
$45.71k
$46.79k
$48.39k
5| Impact JOY COMPLEX … is the only approved PINES in the tourism sector in Colombia
GOVERNMENT
ECONOMY
ENVIRONMENT
SOCIETY
PHILOSOPHY
5| IMPACT
GOVERNMENT
PINES CERTIFIED
Projects of National and Strategic Interest “The colombian goverment by decree 155 of 2015, created the intersectoral commission for strategic projects for Trade, Industry and Tourism sectors (PINES). The main objetive is to coordinate and guide the functions of public entities that participate in this type of projects. This commission is guided by the Presidency of the Republic of Colombia and is in charge of supporting and monitoring the PINES, as well as providing solutions to any obstacles encountered by the projects.”
Joy Complex Barú is the only approved PINES in the tourism sector in Colombia: ◤
The Colombian government handpicks private projects that have a significant impact on the economy and the development of the communities and lends its support to streamline administrative processes and promote them via official channels.
◤ PINES are flagship projects that the Government directly endorses and supports due to their great contribution the the social, environmental and economic wellbeing and development of the region.
5| IMPACT
ECONOMY
CREATION OF FORMAL EMPLOYMENT: ◤ The development of the project will create between 1.3 and 1.5 direct jobs per key - between 520 and 600 new jobs. Additionally, it is estimated that for each direct job, between 1 and 3 indirect jobs are generated, thus a creation of 1,800 indirect jobs is expected as well. Additionally, during the construction stage, the project will create formal jobs. ◤ The project will boost consumption in the region thanks to the number of guests which are estimated to exceed 500,000 in the first 3 years Benefits: ◤ Increase the contribution to social security in the area… greater number of affiliates. ◤ Improvement in the quality of life of the population ◤ Increase in consumption and consequently in the income of the population
◤ Incentives to formalize work and improve working conditions
5| IMPACT
ENVIRONMENT
CORAL REEF RECOVERY: ◤ The resort will have policies and activities aimed to protect the environment and to promote the recovery of the coral reef and maritime life, through the development of a restoration laboratory with technological tools for monitoring the ecosystem. Benefits: ◤ Increase in tourism
◤ Coral reef recovery ◤ Increase in fishing, improving activity and income for fishermen in the area ◤ Recovery of the fauna and flora
◤ Improvements in health of the communities of the area
5| IMPACT
ENVIRONMENT
The project considers investments that have a big environmental impact...
5| IMPACT
SOCIETY
AQUEDUCT ACCESS: : ◤ The project promotes the development of the aqueduct in the afro-descendant municipalities of Santa Ana and Barú for populations that today have no access to water. ◤ For this, the private sector will finance the Section 2 (4.3 kms that will transport 14,000 m3) with an investment of USD 1.3 million, and the mayoral office of Cartagena and Aguas de Cartagena will build section 3 in the municipality of Barú (that will transport 32,000 m3) with an investment of USD 4.8 million. Aguas de Cartagena will then be able to further expand the aqueduct to bring water to Cholón and other municipalities in the area.
Benefits: ◤ Improvement in the quality of life of the population ◤ Decrease in diseases caused by poor water quality ◤ Improvements infrastructure
in
the
hospital,
educational,
and
housing
5| IMPACT
PHYSOLOSOPHY
Promote integration with the local community to strengthen tourism and reduce social inequalities. Actions:
◤ Create opportunities for one of the most vulnerable communities in the country. ◤ Participation in economic and environmental activities with the aim of improving their quality of life. ◤ Train communities in the development of skills that improve tourist service. ◤ Incorporate natural and cultural attractions, as well as local traditions to the tourist offer.
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