Real Estate Development Gated Community – Resort Project Dominican Republic Description and Development Outline
PRESENTED BY:
Masstech Dominicana S.A.
Note: To readers of this .pdf document currently connected to internet. You can click on the web links as highlighted in blue throughout the document and see additional information, images, etc. in your web browser.
Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
Mission: To build a mixed use gated community and resort marketed internationally. Strategy: Partner with top gated community and resort master planners, developers and builders to develop over 1,000+ acres of ocean front property. Through innovative financial planning achieve real estate development goals set forth within.
Assets: The property owned by Masstech Dominicana, S.A. consists of 4.2 million square meters (1,024 acres) of ocean front land valued at US$60 million on which part of the project will be built, with options to incorporate 400 acres of the same parcel. Adjacent land is available to triplicate the project area.
Master Plan – Specific plans – Status: At this stage, Yuma del Mar has a general plan and a plan for ¼ of the territory, a Marina, a few small hotels and and StadiumClub Entertainment Center commitment. A new master plan will eventually be prepared but it is our belief that the final master plan and specific design of all the project components is a task for top leisure, hospitality and resort planners such as Wimberly Allison Tong & Goo (WATG) or other who will be contracted and also take our design guidelines and marketing concepts and adjust them for optimum economic viability of the project. Construction could begin beginning late 2011 early 2012.
History: • Land acquired in 1989 • A preliminary first phase master plan, hotel, marina, ecological urban planning and feasibility studies prepared from 1989 to 1992 • First web site in 1999 • Renewed web site 2003 • Web site updated in 2007 (additional content, drawing, aerial photos, etc.) • June 2009 Agreement to incorporate StadiumClub Entertainment Center into Phase1 • Sept 2009 Retained Services of Leisure Properties Development & Marketing to assist in Residential Marketing • Dec 2009 new web site launched to support retail pre-development investment campaign • June 2010 begun pre-development investment and sales campaign to achieve funding and commitments for Single Owner, Fractional Ownership and Income Properties.
Current efforts: Communicating with International Developers, Builders, Financial partners, seeking interested parties. Launched pre-development telemarketing investment program. Working with Call Centers, beginning telemarketing efforts for sale of Fractional Ownership and Income Properties during this predevelopment stage. Page - 1 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
Promotional material available: • WEB site, English • Executive summary • Description and Development Outline (This document) • Financial Projections (available upon request) Location advantages: Yuma del Mar is located 30 minutes east of La Romana airport and 1 hour west of Punta Cana airport (this later time will reduce to about 30 minutes when the new highway is completed (2011) The linear distance to Punta Cana airport is really only 15 miles. The site is 10 miles from Cap Cana (Donald Trump & Jack Nicklaus investments) and 20 miles from the Famous Casa de Campo gated community (Teeth of the Dog Golf Course). The site is minutes away from Parque Nacional del Este (National Park) and 20 minutes sailing to Isla Saona. The general area of Punta Cana, Bavaro, Bayahibe; a 30 mile radius, has over 30,000 of the 60,000 hotel rooms in the whole country and offers many excellent golf courses. The site is 35 minutes from the Town of Higuey (pop. 90,000) and 35 minutes from the town of La Romana (pop. 210,000).
Site advantages: • Undeveloped property not encroached by urban development. • The property is rectangular shape approx. 4 km ocean front by 1 km deep. These proportions are ideal in maintaining high property sales value throughout the development of the site. • Site is stepped; fist level is 5 meters above sea level, reaching 20 meters above sea level offering ocean views further back. • The north boundary of the property is an escarpment 40 meters above sea level and it’s actually about 10 km long parallel to the ocean. This ridge can be used to build exclusive ridge top villas, lookouts, restaurants, etc.
Specific Product offering: • Minimum 1,400 acre ocean front tourist gated community and resort • 5-7 low rise hotels, total of 1,300 to 2,000 rooms • Access by residential unit owners to hotel facilities. • 6,000 residential units • 4,000 detached home sites of average 500 square meters • International class Marina • Signature 18 hole ocean front golf (membership included to residential unit buyer) • 250 Golf villas • Commercial centers • Recreational, cultural, educational and health services. See StadiumClub Entertainment Center • Eco compliant infrastructures • Zero emissions Public Transportation
Page - 2 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
The Dominican Tourist market: The Dominican Republic is the premier Caribbean destination in terms of hotel and tourist industry growth. Income for the country reached an impressive US$4 billion and provided direct employment to 196,000 people. The room offering in the D.R. has surpassed 67,197 (12/09). This country showed a 0.03% growth for 2009, while most other countries of the region suffered a considerable reduction in tourist arrivals mainly due to the international financial crisis. The 3,992,303 visitors (year 2009) to this country assure a steady supply of potential clients required to stimulate and sustain sales of the tourist real estate. The east coast, where the project is located, has most of the country's best resorts and attracts the most affluent visitors, also average yearly occupancy is around 70%. The airports of Punta Cana and La Romana alone received 2 million visitors in 2009. Of the total foreign visitors in 2009, 29% originated from the USA, 16% from Canada and 31% from Europe all are targeted candidates for property purchases.
The Dominican Tourist Real Estate Market: This is a sector that is experimenting strong growth primarily due to noteworthy tourist real estate developments such as Casa de Campo and Cap Cana. Many other projects are in development in Bavaro, Punta Cana (Roco Ki), (Punta Perla), Puerto Plata, Sosua. In Juan Dolio a smaller version of the Miami Beach condo development (see Marbela, Las Olas, Costa del Sol, etc ) is providing reasonable priced options for 2nd vacation homes for the international and local market. Golf Villa Resorts are very successful throughout the country and the Dominican Republic has already been cited as top Caribbean location for golf, beginning again with Casa de Campo, Cap Cana, (luxury high end) Metro Country Club (middle range) that is adding a Greg Normand golf and many others.
Yuma del Mar marketing strategy: Preamble: Because of the worldwide economic slowdown, the tourist and vacation real estate market is evolving. Second home sales in the United States have dropped significantly in 2008 and 2009, Americans and Europeans have curtailed some of their vacation plans. Most vacations are planned with less ambitious spending budgets. In the US where we have access to statistics, 2 nd home buyers are moving to central or southwest states where vacation homes are much more economical than the traditionally preferred South Florida that has become overpriced. The Caribbean and specifically the Dominican Republic has focused on high-end products with many residential units starting at over one million dollars, most custom built on very large lots (Casa de Campo and Cap Cana) Many projects offer you a lot that you are obliged to build on within 3 years. Lots are bought under speculation, waiting to see that the project is moving along before they actually begin villa construction. This sales strategy greatly slows down development timetable and sustainability.
Page - 3 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
Also the luxury market has numerous offers worldwide. The high end client will also look for low density, special designed villas, want a world class marina and luxury recreational facilities to complement his lifestyle. This series of requirements place a big burden on facility developers as it requires huge upfront investments in long term ROI developments such as a large marina, high end designer golf, expansive groomed green areas, etc. Villa construction is slow and delivery is long. These realities translate in lack of economic viability for the developers. Further the low density development is contradictory to offering full services in leisure, recreational, shopping, dining variety, etc. having no economic sustainability for the first 3-5 years. This low density also impedes the use of the name or resemblance of “gated community” as its low density again does not provide the critical mass (population mass) required to achieve social and economic sustainability. You may note that Casa de Campo that begun in the mid 70’s has only recently (3-5 years) passed the hurdle of its original low density format to higher density, mixed residential offering and can now be considered an “almost full service” gated leisure, vacation and permanent living community, but it took 25 years to get there. Cap Cana now in its 5 rd year of development but has suffered extreme financial pressures to remain functional, open and operational. It has chosen to be a high end resort and we predict at least 10 more years before possibly transforming itself into a full fledged community.
Our Target Market and Positioning: After considering the above preamble: • We consider targeting mainly the middle class “Snow Belt” 2 nd home buyer that has dreamed of owning a property in South Florida, Arizona or other Caribbean Island but cannot afford to. • Because of excellent air routes to the Dominican Republic east coast, buyers and vacationers can get to the DR in 2 hours from Miami, 4 hours from NY, 5 hours from Toronto. The middle class vacationer is already very fond of the Dominican Republic; making the DR a choice for a vacation property. It is then a question of properly priced and financed packages. • Yuma del Mar will offer residential units in various formats such as detached villas, apartments and condominiums. Several acquisition plans such as single ownership, fractional ownership or income properties will be offered. • Up until about two years ago financing a property in the Dominican Republic was almost impossible for a middle class foreign buyer. Today at least two financial institutions; ScotiaBank and Mortgage IT are now offering mortgages to foreigners. This in fact is one of the greatest facilitators of vacation home sales. • The Yuma del Mar Project will be a mixed use vacation, 2 nd home and permanent living facility. The difference with the other projects is that lot sizes will be around 500 square meters for villas and not 2,000 like the luxury market. Villas entry prices could be at $150,000, condos could begin at US$90,000. The objective is to be lower than the average vacation home price in the US that was US$169,000 in 2009 but in the Caribbean this average is well over $275,000. The key to keeping the low cost is to utilize serialized construction methods and prefab systems while offering only 4-5 models in each class of product. • To maintain a faced pace development, no lots will be sold alone. The offers will always be; finished residential units including lots and running infrastructures (serviced lots). The Page - 4 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
• •
Description and Development Outline
mortgage will hence finance all 3 components. This will prevent development gaps and neighbor vacant lots while assure logical construction deployment programs in the order of: Build, clean, pave, landscape and leave a liveable neighborhood behind, free from further noisy and dirty construction activities. The community will always have completed units in inventory and under construction, ahead of sales to assure quick delivery (immediate to within 30-60 days) helping sales and also to maintain the fast development pace. With a target of 300 residential units built in the first year from construction debut and 600 per year in the 4th year, an industrialized mass sales approach must be used.
Generally Yuma del Mar will be offering a very complete and sophisticated complex in its public areas, infrastructures and services, while offering affordable residences with quick financing options. Ecological, green, zero carbon, renewable energy use and healthy lifestyle living are also key differentiators inherent to its base design guidelines. The object is to rapidly increase the number of residents and visitors to reach at least 1,700 residential units and 500 hotel rooms providing about 6,000 residents within 3-4 years and around 21,000 residents in less than 10 years. These numbers will provide sufficient population density to assure viability of commercial, recreation and general service to promote a complete community suitable for permanent living and satisfying vacationing.
Marketing and sales methods: The fact that the middle class target market encompasses several dozen million of people in North America and in Europe, we can now utilize marketing strategies not common for luxury projects. The mass market opens up to direct solicitation using call centers with a campaign centered on a finally affordable and complete vacation home destination including the on-the-spot financing. Such a campaign can be modeled using tactics that are currently used to do debt consolidation and mortgage refinancing. This is not so different also to the time-share sales campaigns. Once a client has been certified, we can offer him a low cost 1 week vacation to the project site, close a sale during the vacation (having him financially pre-approved) and possibly deliver him a unit during his visit. The client would have his trip cost deducted from the unit purchase. We would have on-site financial institution representatives able to close the transactions. A web site has been developed to integrate the project description, display of facilities and an on-line shopping module which would show the units available and their prices. A concept of “Try and Buy” could be arranged with our in-house travel agent to book interested buyers in similar units for a week, and have their vacation cost deducted from the purchase price should they buy. The use of the direct sales approach better assures that the sales objectives are met by modulating the campaign sizes, frequencies and target audience. Traditional real estate agencies would also be used as well as being present on numerous on-line travel and real estate sites. Print media will also be part of the marketing strategy.
Page - 5 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
Participating in international tourist and vacation real estate fairs is also necessary to provide exposure. A good form of marketing is to invite tour operators, travel agents and real estate agencies to free stays in hotels or residential units as this help dissipate “independent reviews” of the project, its concept and the satisfaction of the guest. Associate the project with recognizable names – brands for certain elements or activities, such as for the golfs(s), marina, StadiumClub (could be renamed),the project name itself! Our first Marketing deployment: After deploying a new web site in December 2009. a pre-development investment campaign was launched in June of 2010 to help raise US$25 million, by offering 1,000, US$25,000 investment certificates exchangeable as partial payment for future properties once made available for sale. (Minimum 12 months after beginning of campaign) at the same time we are tackling the Fractional Ownership and Income Property market with a telemarketing campaign again offering pre-development Investment Certificates equivalent to the Fractional Ownership Units (FOU) they commit to ie: 1, 2, 4 6 weeks etc. Using telemarketing campaign we are targeting; 2nd home, vacation home, time share and vacation seekers (in the US and Canada first) and offer them these investment certificates. The revamped web is tailored to assist the telemarketing effort providing the public and potential fractional investor all the necessary information and answers. The advantage of this pre-development strategy is that at reaching 1,000 certificates (within 12 months) we will be assured of a backlog of villa/property owners to commence rapid construction and delivery of these properties. This strategy will reduce dependency on other private investments and provide proof of project feasibility by fact of a “pre-development sales condition” of 1,000 residential units.
Financial dimension - Capital requirements – Income potential Development of 1,400 acres can have a build out value of well over US$1.6 billion dollars Development of a phase 1 (to end around 4 th year) which would encompass approximately 1/3 of the territory could require about US$380 million dollars to develop with $259 million for the residential component and $121 million for commercial development and common infrastructures. The land and linear infrastructure sales in phase 1 could generate over $105 million in profit while the residential builder’s profit could be around $53 million. Since we plan to invite builders who would have their own interim construction financing, it would remain necessary to plan for $121 million financing to cover the common infrastructure and commercial development planned for phase 1. Nowadays hotels are usually financed and built by private investors and operated by flag Hotel operators. A construction budget for the first 500 rooms must be part of the initial development. A first hotel is complementary to the residential component and should develop in parallel.
Page - 6 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com
Yuma del Mar
Description and Development Outline
The project & property owners Masstech Dominicana S.A is a Dominican company founded in 1985 by Canadian and Dominican shareholders. The main office of Masstech is in Santo Domingo, Dominican Republic. Masstech Dominicana, S.A. is the owner of the property and The Yuma del Mar Project. You may browse through our WEB site: Yuma del Mar that provides information about the project and some initial ideas that are proposed for its development. Please do not hesitate to contact us should you require additional information or details. Yours truly, Masstech Dominicana, S.A.
Normand Masse Vice-president
Page - 7 -
Masstech Dominicana S.A. Ave. 27 de Febrero #194, Suite 201, Santo Domingo, Dominican Republic Tel: 809-756-7004, Email: masstech@dr.com, www.yuma-del-mar.com