Ilha do Farol - Kite Villas. Investor´s Manual 2023 (EN)

An excellent cost/benefit ratio, with very high profitability and a concept of an organic, ecologically sustainable condominium with a Mediterranean aesthetic.

Investment, development, appreciation, and management

The growth of the local market around Ilha do Farol Kite Villas and the context of H&T’s activities in the region.

When the world is short of profitable and reliable investment opportunities, private investors often look to real estate and gold as areas to invest. However, mass movements generated demand bubbles and price increases, which reduces the attractiveness of these options. D espite the recent political turmoil and devaluation of the Brazilian real (BRL), Brazil remains an interesting

market for people seeking opportunities in other regions. Institutions from the United States and other countries are continuing to invest in large areas of land and tourist projects in Brazil. For example, Radisson is investing in Trairí, Hard Rock is investing in Lagoinha and Jericoacoara, and Nomade is investing in Camocim, all located in Ceará. The Brazilian residential real estate market is expected to grow

by more than 6% per year between 2022 and 2027, with Fortaleza leading the market, according to the most recent report by Mordor Intelligence.

The Brazilian North East has been identified as a region with great tourism and investment potential, especially in areas close to Jericoacoara, where there is a growing number of developments, such as Flow by XP, Coconut, Cunduru and Atobá. The uniqueness of the landscape, climate and nature has attracted investments thanks to the opening of the Jijoca Airport, making the region more accessible. Previously, only adventurers and practitioners of wind sports ventured into the Route of the Winds, but now there is a large flow of investors from all over Latin America and Europe. Most of the investments are being directed towards Preá, creating a high standard landscape accessible to few. However, there are investment opportunities in lesser-known areas, such as Itarema, which offers a diverse and impressive natural landscape, including Lagoa do Lagamar and Lagoa da Barra da Ilha do Guajirú, which are 7 km long. Ilha do Farol Kite Villas are located next to these attractions and offer an ideal spot for kitesurfers to enjoy the flat, clean waters. Investing in these less explored areas can be a promising business opportunity, as it will bring recognized differentiation.

H&T is a Spanish company that was founded in 2020 by a professional with worldwide experience, with the aim of creating or assisting companies dedicated to the generation of international projects that focus on the sustainable development of tourism. In 2022, H&T established H&T Brasil, with the aim of carrying out its first project in the country. The choice fell on the coast of Ceará, due to the high value of its ecosystem in deep transformation. H&T Brasil started its journey in Itarema as a developer and, in the near future, will become the manager of Ilha do Farol Kite Villas. The company’s ambition is to create a space where man integrates with nature, thus discovering our obligation to preserve. H&T Brasil seeks to show the compatibility between an exceptional and sustainable lifestyle at all levels.

10 Reasons to Invest in the Brazilian North East This Year

1. The exchange rate is highly favorable, which means you get more for the same amount of money invested.

2. There are waterfront investment opportunities in the North East that are yet to be discovered, making this an excellent option for investors.

3. Capital appreciation is the highest in all of Latin America, offering significant potential return for investors.

4. Itarema offers an untouched natural paradise, with a variety of attractions and natural beauty that make it an excellent investment option for those looking for something out of the ordinary.

5. There is a huge demand for vacation rentals in the region, offering a safe and high-yield investment opportunity.

6. The luxury beach market in Ceará is constantly growing, making it an attractive option for investors looking for high-end projects.

7. With the turmoil in the rest of the world, now is a great time to invest in Brazil and take advantage of the opportunities available in the North East.

8. The region is a very popular tourist destination year after year, which ensures a constant demand for vacation rentals.

9. Rental income in the region is high, offering a lucrative investment opportunity.

10. The region’s wind season is the longest in the world, making it an ideal destination for wind sports and kitesurfing in particular.

Ilha do Farol - Kite Villas: Investment in a peaceful life

The Ilha do Farol Kite Villas real estate development is a unique opportunity to live in a true paradise with distinct characteristics. Located in a beautiful and sparsely populated region, access to Jericoacoara airport is easy, and it is just a few minutes from the headquarters of Itarema, keeping guests close to all services and amenities without losing peace and quiet. Kite Villas are surrounded by some of the best winds in the world and properties are customized for rentals and accommodation, offering connectivity for remote work, premium services, security, good taste in every detail and sustainable solar energy options. These features provide comfort, privacy and space for everyone, including digital nomads. In short, Ilha do Farol Kite Villas is the

perfect choice for those looking for a peaceful life close to nature, with all the necessary comfort and services at their fingertips.

Investing in real estate requires attention to the equity itself. At Ilha do Farol Kite Villas, extreme attention to construction is another important aspect. The project was carried out by experienced architects and engineers, using the best available building materials and a detailed construction process. The villas are built on stilts, allowing air circulation and isolation from humidity and natural elements. Thick walls provide insulation and comfort. The goal is to provide lowmaintenance construction and minimize asset depreciation over time.

Well-managed, purpose-built rental properties are a highly profitable investment.

Real estate investment in properties for short and long term rental in Ceará

Investors looking for a new real estate investment model use terms like ”Built to Rent”, ”BFR” and ”B2R”. These properties are built from scratch and add value through professional management, allowing you to define an ideal short- or long-term rental price, and offer above-average profitability. Well-managed, purpose-built rental properties are a highly profitable investment.

Since the start of the pandemic, there has been an increase in demand for second homes, which has increased property values and demand for short-term rentals. Forecasts indicate that property values could double every 5 to 10 years, making it an attractive option for investors looking for alternatives to volatile stock markets or negative interest rates on savings accounts. The demand for beach properties in Ceará is estimated to increase by 10-15% per year. In addition, the combination of high demand for luxury real estate in the region, the

scarcity of these properties and the growth of the local middle class provide a good basis for efficient resale.

At Ilha do Farol Kite Villas, we expect an excellent annual occupancy due to its 8 months of high season, with sunny and pleasant weather, and constant and direct winds during 8 months of the year. Therefore, investors can expect mid-range income, including full property management and internationally recognized concierge services. Already in the first year, a minimum ROI of 8% is expected just for rents, doubling this rate in the following three years. The highest occupancy growth rate is estimated by analyzing all developments carried out by private investors and by the city of Itarema.

Property features

Land area: from 187m² to 309m²

Properties: from 239m² to 400m²

Investments: from €109,000

Villas available: as a whole or in 25% shares

Number of suites in each Villa: from 2 to 4

Presidential master suite ”apartment”: up to 176m²

Apartments: from 35m² without deck, barbecue and garden

Fully Furnished Villas: Available from day one, allowing for effortless immediate rentals

Private gardens (including decks): from 58m² to 151m²

Property management monthly fee: from €400/month

Property deed: complete

Fully managed property: including rentals

Built to Rent: Ilha do Farol Kite Villas unique layout carefully designed to maximize your rental income potential.

The original prices are in reais. Prices in US Dollars and Euros are given as an example only and may vary depending on the exchange rate on the day.

Benefits of Specialized Local Real Estate Management

Condominium investments are a popular option for investors, but managing properties can be a challenging task. However, with expert local property management, investors can enjoy significant benefits.

By hiring an administrator specializing in local property management, investors can be assured that their investments will be professionally managed. The administrator will supervise and manage everything that is relevant to the continuity and proper functioning of the condominium.

With proper management, investments in condominiums can achieve high occupancy rates and high profitability. The management company will take care of finding suitable tenants, monitoring rent payments and dealing with maintenance and repair issues.

List of Obligations and Services of the Administrator of the Condominium ”Ilha do Farol Kite Villas”:

* Maintenance and conservation of all common areas, equipment, landscaping, gardens and trees

* Maintain internal telephony/internet, CCTV, cold water, sewage and electricity

* security and surveillance 24h/7days

* Responsible for the entire accounting service, issuing collection slips, cash control, files, personnel control, operational movement control, accounts payable, accounts receivable and the entire condominium operating system

* Daytime Reception and/or Concierge organizing complementary services such as horse/bike rides, tours, breakfast at the hotel, events, airport pick-ups, delivery of goods in the city, housekeeping, chefs, laundry, babysitters, etc.

* “Lease Pool” system administration, managing rental booking and marketing platforms to increase occupancy rate.

* Responsible for managing and collecting any and all income from the “Ilha do Farol Kite Villas” development. Each condominium member will be entitled to the results of the leases referring to their respective period of use occupied in the lease.

* Timeshare maintenance and conservation, according to proportional apportionment.

Co-Ownership Regime and Lease Pool

The Ilha do Farol Kite Villas real estate development is a unique opportunity to live in a true paradise with distinct characteristics. Located in a beautiful and sparsely populated region, access to Jericoacoara airport is easy, and it is just a few minutes from the headquarters of Itarema, keeping guests close to all services and amenities without losing peace and quiet. Kite Villas are surrounded by some of the best winds in the world and properties are customized for rentals and accommodation, offering connectivity for remote work, premium services, security, good taste in every detail and sustainable solar energy options. These features provide comfort, privacy and space for everyone, including digital nomads. In short, Ilha do Farol - Kite Villas is the perfect choice for those looking for a peaceful life close to nature, with

all the necessary comfort and services at their fingertips.

Investing in real estate requires attention to the equity itself. At Kite Villas, extreme attention to construction is another important aspect. The project was carried out by experienced architects and engineers, using the best available building materials and a detailed construction process. The villas are built on stilts, allowing air circulation and isolation from humidity and natural elements. Thick walls provide insulation and comfort, and the goal is to provide low-maintenance construction and minimize asset depreciation over time.

Profitability in numbers

4 weeks owners use

Hypothesis and preliminary estimates valid only for BL11

1. Villa cost excludes furniture, fixtures and electrical equipment. This therefore includes the villa complete with cupboards and furniture packages.

2. Villa cost excludes furniture, fixtures and electrical equipment. This therefore includes the complete electrical equipment of the villa.

3. High season rate August/December, 5 months R$2600/night; mid season January, June and July, 3 months, R$2,200/night and low season, Feb/May, 4 months, R$1,800/night.

4. The cost of Annual Rental Management is 15% of the Internet Reservation Platforms, 7% to advertise the property for rent and 10% of profits from the gross rental income.

5. Property management fees are calculated at 11% of gross rental income.

6. Bills to keep the condominium in the best lease conditions.

Real Estate Investment Visa encourages foreign investors in Brazil

The Brazilian government seeks to attract foreign investors through the Real Estate Investment Visa. With this initiative, investors can acquire real estate in the country and obtain a permanent visa. To qualify, investments must meet the following criteria: investment can be made in land or property, real estate must be located in urban areas, and a minimum investment

of R$700,000 (€127,000*) is required for the North and North East region (being R$1 million for the rest of Brazil). The investment amount can be spread over several properties and can be done in built or under construction properties. After 4 years, the visa holder can apply for a passport and Brazilian citizenship.

Ilha do Farol Kite Villas offer a key value proposition for investors seeking asset returns and an easy exit through a wellmanaged property.

High ROI Real Estate in an Exclusive Natural Area

Ilha do Farol Kite Villas offer a key value proposition for investors seeking asset returns and an easy exit through a well-managed property. In addition, the company is committed to leading by example the area’s socially, economically and sustainable development, while driving strong environmental development.

Concern for the environment is a sign of the project’s commitment to preserving and promoting the well-being of the region. With easy financial access to the benefits of the project through the option of quotas, Ilha do Farol Kite Villas opens its doors to new investors looking for a prudent risk.

The opportunity to invest in a luxury property with high real estate ROI in an exclusive natural area with a shortage of high quality accommodation options is what sets Ilha do Farol Kite Villas apart. The company is confident of achieving a 5-year ROI, considering rents and property valuation. Check the profitability in numbers:

• Managed rent return estimated between 10% to 15% per year;

• Annual value of housing estimated between 10% and 12%;

• Achieving a total annual return on investment above 20% per annum of the acquired amount, defining a general return on investment in just 5 years.

Related fees and taxes

Buying a Plot as a Non-resident Individual