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Feasibility Study for

Pointe91 at Chu Lai Open Economic Zone (CLOEZ) Disclaimers: Study conducted by the Quang Nam Province September 2007 Updated by PHILAND Corporation based on CBRE-Vietnam Research June 2008 NOTE: Complete due diligence archives available at http://www.philandcorp.com/investorsonly/site/login.php Password upon request The purpose of this feasibility study is to provide information and current statistics on the demographics, infrastructure and plans for the development of the Quang Nam Province, the Chu Lai area to attract more high-profile projects into the region such as Pointe91 by PHILAND Corporation.

CONFIDENTIAL


Table of Contents Description

Page

Table of Figures

3

Introduction

4

PART I I. II. III.

IV.

V.

PART II I. II. III. IV. V.

RATIONALE FOR RESEARCH AND INVESTMENT 5 FOUNDATIONS FOR THE ESTABLISHMENT OF THE PROJECT 5 1. Legal Foundation 5 2. Tourism Development Strategy 5 RATIONALE FOR INVESTMENT 6 NATURAL, SOCIO-ECONOIC CONDITIONS OF CHU LAI OPEN ECONOMIC ZONE (CLOEZ) IN DEVELOPING TOURISM AND SERVICE INDUSTRY 7 1. Natural Conditions 7 2. Area Demographics 11 MARKET STATISTICS 15 1. Market of Visitors 15 2. Tourism Income and Tourism Turnover 18 3. Tourism Facilities 20 4. Labor in Tourism Industry 22 5. Tourism Investment 23 6. Tourism Marketing and Promotion 24 SECOND HOME MARKET STUDY IN VIETNM AND CENTRAL COAST BY CBRE 26 1. Resort Villa Projects in Central Coast Province 26 2. Current and Near Future Projects 30 3. Comparables 32 PROJECT OVERVIEW by PHILAND Corporation COMPANY INFORMATION REPRESENTATIVE OFFICES INVESTMENT LICENSES INVESTMENT OBJECTIVES MILESTONES

33 33 33 33 34 34

PART III CONSTRUCTION REQUIREMENTS BY CLOEZ I. GENERAL ARCHITECTURE II. INFRASTRUCTURE REQUIREMENTS 1. Electricity Supply 2. Water Supply 3. Drainage 4. Natural Ventilation and Lighting Solutions 5. Communications III. ENVIRONMENT PROTECTION AND LABOR SAFETY METHODOLOGY 1. Environment Protection 2. Labor Safety 3. Fire Prevention Plan IV. REQUIREMENTS ON EQUIPMENT AND COMFORTS V. REQUIREMENTS ON SERVICES IN TOURIST AND SERVICE AREA VI. GENERAL CONSTRUCTION PLAN

35 35 36 36 36 36 36 36 37 37 37 37 37 38 38

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VII.

ENGINEERING SOLUTION

38

Table of Figures Table

Description

1.

Area, Population classified by Communes & Wards

11

2.

Labor and Population Demographics

12

3.

Visitors into the QN Province & Central Focal Economic Zone, 1997 – 2006

15

4.

Comparison between the QN Province and others Provinces in the Central Focal Economic Zone, 2005 - 2005

16

5.

Forecasted Arrivals into the QN Province

17

6.

Foreign Visitors into the QN Province, 2005

17

7.

Actual vs. Forecasted Comparison of Foreign Visitors into the QN Province, 1999 2006

18

8.

Domestic Visitors into the QN Province and others provinces as part of the Central Focal Economic Zone, 2000 – 2005

18

9.

Actual vs. Forecasted Comparison of Domestic Visitors into the QN Province, 2000 – 2006

18

10.

QN Province Tourism Revenue Summary, 2000 – 2006

19

11.

QN Province Tourism Structure, 2001 – 2005

19

12.

QN Province Daily Average Visitor Expenditure, 2006 – 2010

20

13.

Structure of Accommodation Establishments in the QN Province, 2006

21

14.

QN Province Tourism Labor Force Statistics, 2001 - 2006

22

15.

QN Province Labor Force Statistics, 2001 – 2005

23

16.

QN Province Investment into Tourism Infrastructure, 2001 – 2006

23

17.

QN Province Tourism Investment Projects, 2006

24

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INTRODUCTION A once war ravaged country, Vietnam has emerged as Asia’s second fastest growing economy, behind China with an outstanding annual GDP growth rate of 8.2% as an average since 2000. Under the new direction of the ‘Doi Moi’ Policy adopted in 1986, the Vietnamese government has taken steps to open up the economy toward a more capitalistic society. Vietnam continues to closely monitor the growth and expansion of China and taken careful steps in planning and implementing new programs to help the country move forward toward an open capitalist economy. With the ASEAN bilateral agreement in December 2001 and ascension into the WTO in January 2007, Vietnam is positioned to be at the forefront of new global market opportunities for decades to come. The developing country of Vietnam is filled with many opportunities, but the mystique of this small country of over 86 million people attracted over 4.4 million international visitors in 2007, a 14% y/y increase compared to 2006. Consequently, over 40% (1.8 million) visited the central region of Vietnam, mainly to witness historic places chosen by UNESECO as World Heritage sites such as Hoi An City, the ancient town and My Son Temple. They are both evident of Vietnam’s culture and tradition that dates back to the late 15th Century. Other tourist attractions in the central area include the Island of Cham, Marble Mountain and the old capital city of Hue. Chu Lai is located in the southern most part of the Quang Nam Province. Investments into the area are managed by the Chu Lai Open Economic Zone (CLOEZ), notably recognized as the home to 20 domestic and foreign manufacturing companies in two large industrial parks located in North Chu Lai and Tam Hiep, occupying over 150 hectares (370 acres). Chu Lai continues to successfully offer favorable tax and duty incentives for the first 15 years of operations to attract new clientele into the region. With the success of these industrial parks, it has created thousands of jobs for the local population, helping to build new skill sets and raising the socio-economic status and modernization of the region and country. The CLOEZ continues to show a high-level of support, cooperation and accommodation to large, high profile projects, especially tourism. Tourism has emerged as one of Vietnam’s key industries, creating thousands of jobs, new market opportunities for local shop owners and attracting an unprecedented number of foreign developers to invest throughout the entire country. In comparison to Ha Noi in the North and Ho Chi Minh City in the south, the land, beaches and natural resources of the central region remains in tact. With the growth of tourism in Vietnam, the Central government has taken the necessary steps to pass new rules and laws to transform the area to become a premiere destination resort. To meet this mandate, the CLOEZ fully supports long-term, sustainable projects into the region to be the catalyst for its tourism development. Currently, the CLOEZ has awarded 9 licenses occupying over 80 hectares (197.6 acres) of land to tourism operators for hotel resorts, various forms of entertainment, restaurants and etc.

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PART 1 RATIONALE FOR RESEARCH AND INVESTMENT I.

FOUNDATIONS FOR THE ESTABLISHMENT OF THE PROJECT 1.

Legal Foundation The Pointe91 project establishment is:

2.

·

Pursuant to Law on Investment and Law on Enterprises in 2005;

·

Pursuant to Decision No.148/2004/QD-TTg approved by the Prime Minister dated 13 August 2004 on major orientation for socio-economic development of Central Focal Economic Zone up to 2010 and vision for 2020;

·

Pursuant to Decision No.253/2006/QD-TTg dated November 6, 2006, approved by the Prime Minister on promulgation of Regulation of Operations of Chu Lai Open Economic Zone, Quang Nam Province.

·

Pursuant to socio-economic, weather, hydrographic features and conditions of the project site.

Tourism Development Strategy 2.1

Development Strategy of the Government The government has adopted an aggressive plan to transform the central region to become a premiere tourist destination by 2010, taking advantage of the natural and ecological conditions, as well as cultural and historic traditions. The government has aligned its budget and domestic resources for international cooperation and support to help realize the industrialization and modernization process for the region and country with particular objectives, but not limited to: ·

In 2006, foreign visitors coming to Vietnam reached the level of 4.5 to 5.5 million and domestic visitors reached the range of 21 to 25 million and tourism turnover amounts reached more than USD 4.1 billion.

·

In 2010, it is expected that foreign visitors coming to Vietnam will reach the level of 6.1 to 8 million and domestic visitors reach the range of 31 to 36 million and tourism turnover amounts to more than USD 7.5 billion.

Today, Vietnam focuses on the development and expansion of its domestic market, bringing into play advantages of tourism development of each province, meeting integration requirement while adhering to national prerequisites. Consequently, the desire for tourist investments into the area is of the utmost priority under the socio-economic development strategy of the provinces, local regions and country as a whole. Feasibility Study Report for Pointe91 at Chu Lai

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2.2

2.3.

Tourism Development Strategy of Quang Nam Province ·

Resolution No.08/NQ-TU dated April 30, 2003 of Provincial Standing Committee of Communist Party has determined the development objective of Quang Nam to become a industrialized province during the period of 20152020 with requirements of economic and labor structural change from agriculture toward industry and services

·

Resolution No.9/NQ-TU dated July 15, 2003 of Provincial Standing Committee of Communist Party on orientation of tourism development strategy of Quang Nam province was executed and maintained to 2015.

Orientation of Tourism Construction and Development in the Chu Lai Open Economic Zone It is determined that the tourism and service sectors will play a supporting role in the development of Chu Lai Open Economic Zone, a unique competitive advantage compared to other economic and industrial zones in Vietnam. Furthermore, priority shall be given to the investment and development of ecological tourism projects with the desire to achieve a five star rating with an upscale and luxurious amenities and other type of services.

II.

RATIONALE FOR INVESTMENT Chu Lai Open Economic Zone, Quang Nam province is located in the middle of Central and Highland Focal Economic Zone (Hue – Da Nang – Dung Quat) with a territorial surface, adjacent to several economic activities not only within national boundary but also over the world. The Government of Vietnam has shown support for investments into the area by granting the Quang Nam Province the authority to pioneer a trial of various extreme incentive programs and policies with the aim of multiplying this development model nationwide. The care and maintenance of local resources, environment and beautiful coastal areas is highly attractive to strategic investors. Moreover, the accession to the World Trade Organization (WTO) and full integration to ASEAN Free Trade Agreement (AFTA) of Vietnam has boosted tourism and service potential for the province. The Quang Nam Province is home to two UNESCO-recognized world heritage sites, Hoi An, the Old Ancient Town and My Son, The Holy Land alongside other historic communities and architectural vestiges and sites such as the Cham Islands which includes the Cham Relics and Cham Museum. In addition, Phu Ninh Lake, Thanh Beach, Ky Anh Tunnel, rich reed plains at the Dam River, Bien Rang and Ky Ha Harbor. Moreover, more than 125 km-length of fresh and clean seashores have been designated to be preserved as beautiful beaches without deep-water bay such as in Dien Ban, Tam Ky, Nui Thanh, and others. The Quang Nam Province has includes about 40 islands (with a total of around 6,000 ha of water surface, 11,000 ha of forest around the lake area), traditional trade villages, colorful and attractive cultural types of 10 different minority ethnic groups, unpolluted and fresh natural environments.

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With a deeply enriched culture and diverse array of natural resources, historic and cultural attractions, the Quang Nam Province posses strong and viable conditions to attract more tourism into the area. Investment and development of a premium grade, ecological tourist attractions and entertainment into the region are of strong interest to the Chu Lai Open Economic Zone Authorities.

III.

NATURAL, SOCIO-ECONOMIC CONDITIONS OF CHU LAI OPEN ECONOMIC ZONE IN DEVELOPING TOURISM AND SERVICE INDUSTRY 1.

Natural Conditions 1.1

Geographical location Chu Lai Open Economic Zone includes the town of Nui Thanh and its Communes of Tam Nghia, Tam Quang, Tam Giang, Tam Xuan I and II, North Tam Anh, South Tam Anh, Tam Hoa, Tam Tien of Nui Thanh Suburban District; Tam Thanh, Tam Phu, Tam Thang Communes and Ward An Phu of Tam Ky City, Quang Nam Province. Chu Lai Open Economic Zone is bordered by: ·

East Sea in the East

·

Tam My and Tam Thanh Communes of Nui Thanh Town, Quang Nam Province in the West

·

Binh Son Suburban District, Quang Ngai Province in the South

·

Thang Binh Suburban District, Quang Nam Province in the North

Main traffic routes through the Economic Zone include National Highway 1A and the national railway that runs from the north to the south. 1.2

Topography The Chu Lai Open Economic Zone has a diversified topography across the region. It consists of sand dunes, plain and low hills transitioning from the western high mountainous area. Generally, the topography slopes from the West to the East, gradually downward sloping toward the Ky Ha port, an estuary area with a wide water surface and other rivers. The topography of the different areas found is as following: Seaside sand-dune area This area has a gentle slope with prevailing heights as following: ·

Average heights from 3.5 to 4.5m

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·

Lowest heights from 2 to 2.5m (accounting for a small area adjacent to the sea)

·

Highest heights of 32m found on in the island of Tam Hai

In general, the topography slopes toward the direction of the sea and Truong Giang river. Tam Phu area Between the Truong Giang and Tam Ky branch rivers, the area has plain and riverside sand dunes with the prevailing topographic heights as follows: ·

Average heights from 3.5 to 4.5m (accounting for 70% of whole total area)

·

Highest heights from 12 to 22m are top of sand dunes adjacent to Truong Giang river

·

Lowest heights from 0.6 to 1.5m are low field adjacent to the lake and swamp area, and Cam Tu and Tam Ky rivers

Generally, the topography slopes toward the direction of the Cam Tu, Tam Ky and Truong Giang Rivers, with average slope ranging from 0.2% to 5%. Chu Lai- Ky Ha area This area has a plain and low hill topography, transitioning from the western high hill area. The prevailing height is as follows: ·

Average height ranging from 3 to 8m

·

Highest height averaging from 12 to 40m (height of hilltop)

·

Lowest height reaching the level of 0.1 to 1.5m belongs to the low riverside field and the valley of Tan An river. Topography slopes toward rivers with average slope ranging from 0.2 to 10%.

In general, the Chu Lai Open Economic Zone area has a topography convenient for construction and natural water drainage, except areas adjacent to river and sea with topographic height of lower than 3.0 m, thus needing a ground leveling if construction is to implemented. 1.3

Weather conditions Chu Lai is located in the Southern Central weather region that has a non-cold winter, the daily and yearly temperature amplitude is low. It experiences 2 seasons every year, dry and humid, and the rainfall level is rather high. According to the records over the last 20 years from the Tam Ky weather station, the region’s weather is as follow:

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1.3.1 Temperature

Celsius

Fahrenheit

·

Average/year

25.6

78.1

·

Maximum average

29.7

85.5

·

Minimum average

22.7

72.9

·

Average temperature amplitude/month

7.0

44.6

1.3.2 Humidity The average humidity level per month is about 82%. From September to October, the relative humidity is about 82 - 88%. From April to September, the humidity level is 75 -81%. 1.3.3 Rainfall Generally, the area experiences rainfall during the months of September to December. Millimeters

Inches

·

Average rainfall/year

2,491

98

·

Yearly maximum rainfall

3,307

130

·

Yearly minimum rainfall

1,111

44

·

Daily maximum rainfall

332

13

1.3.4 Wind The region has 2 main wind flows; East and North East ·

The East wind flow is from March to August

·

The North East wind flow is from October to November meters/second

·

The wind speed Yearly average

2.9

Maximum (in storm)

40

Average high:

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1.3.5 Special weather

1.4

·

Storms are usually from May to July. On average, this region has 0.5 direct storm, and is influenced by 2 to 3 other storms and tropical low pressure

·

Hot dry West wind: the South West wind appears from May to August. The areas experiences 10 - 15 hot dry days during these months.

Hydrography Generally, high tides occur in October with a duration period of up to two weeks. The remaining time experiences half the daily tide line. Average water level amounts to 1.2m with large tide intensity ranging from 1.2 to 2m and small tide intensity averaging 0.5m. Average flow speed ranges from 0.2 to 0.3m/s, with maximum speed of 2.5 m/s. Under large storm conditions, the water levels have been recorded at 1.5 to 3m.

1.5

·

During 1964-1975 there were four great floods, notably the historic flood of 1964 that flooded the city of Tam Ky with flood levels of 3m (118 inches) in one week.

·

The research area is affected directly by hydrographical regime of the Tam Ky river. The river is a confluence of ten small rivers and streams originating from the western mountains, flowing from west to east into to the main river at Xuan Dinh - Phu Tho, Tam Tra commune in Nui Thanh suburban district, then following Northwest – Southeast direction to reach An Hoa seaport of Nui Thanh. The basin area averages 800 km2. Due to its location, the heavy rain area, is controlled by heavy forestry with relatively, stable upstream flow. The flood crest flow intensity of the main stream ranges from 4,000 to 5,000m3/s.

·

River at the basin is affected by tidal regime, with rather strong flow, short river length, and river slope of more than 2%.

·

Tan An tributary river originates from Nui Thanh and is slightly affected when large flood inundated the field at western area of Nui Thanh town.

·

Truong Giang tributary river is a saline one, flowing near the sea and linking An Hoa estuary with the Dai Seaport in Hoi An. In the event of a large flood, only the adjacent areas of the river are adversely effected.

Hydrogeology, Project Geology, Earthquake 1.5.1 Hydrogeology Underground water level exists at the depth level of 2 to 10m. Thus, it is required to be considered carefully when implementing the construction work. 1.5.2 Project geology

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This region is similar to Da Nang-Hoi An region, a part of caledmi tectonic structure. Quang Nam-Da Nang region has experienced geological development period from aleczoi – kainozoi. Average land bearing intensity reaches the level of 1.5-2.5 kg/cm2. 1.5.3. Earthquake According to Institute of Geological Physics, the project site lies in a region that may be affected by earthquake with intensity of 6 Richter scale.

2.

AREA DEMOGRAPHICS 2.1.1.

Population and Labor

The population in Chu Lai Area is predominantly Vietnamese. The estimated population is 150,000 people, with an average growth rate of 1.76%. The population distribution is unequal with a low-density rate with a wide range amongst comparable areas based on size and distribution of the agricultural land area. Total population is estimated to be 150,000 people, amongst the: ·

Urban population: about 16,900 (11.2% of total population)

·

Rural population: about 123,100 (82% of total population)

Population density found in the towns of Tam Quang and Tam Xuan I is approximately 1,000 people/km2. Lower density towns of Tam Nghia (122 people/km2) and Tam Anh were recorded with less then 200 people/km2 . The major livelihood found amongst the population is agriculture (including forestry) with 118,300 workers, approximately 84.5%. A majority of the remaining work in the fishing industry, a small portion of the population found near Ky Ha works in the manufacturing industry and handicraft sector. Living standards and education level are not high. They are strongly dependent on the natural living conditions. Table 1: Area, Population classified by Communes and Wards No.

Communes, Wards

A 1 2 3 4 5 6 7 8 9 10 B

Nui Thanh Nui Thanh Tam Hiep Tam Quang Tam Hai Tam Anh Tam Hoa Tam Giang Tam Tien Tam Nghia Tam Xuan I, II Tam Ky Town

Natural area (ha)

No. of houses

23,601 457.48 3,758.35 1,137.96 1,560.71 4,290.59 2,260.81 1,150.74 2,091.42 5,165.74 1,727.11 5,738

24,380 2,446 2,587 2,889 1,851 3,435 1,995 1,494 2,631 2,638 2,415 6,547

Feasibility Study Report for Pointe91 at Chu Lai

Total 111,200 9,800 9,971 13,000 7,745 14,865 8,430 11,872 11,070 12,750 11,700 28,580

Population Female 56,730 5,100 5,064 5,900 3,926 7,590 4,301 6,050 5,620 7,100 6,084 14,850 Page 11


10 11 12 13 A+B

Phuong An Phu Tam Phu Tam Thanh Tam Thang The whole EZ

1,457 1,603 630 2,048 29,340.0

1,600 1,800 1,434 1,713 30,928

7,205 8,113 6,391 6,868 140,000

3,675 4,140 3,320 3,570 71,580

2.1.2. Labor ·

Population of the working age in the area is 66,500, approximately 47.5% of the total population

·

Labor force in all industries is 40,300, about 70% of working age population

·

The majority of local laborers are in the Agriculture and Forestry sector with 8.7%, while a small portion is in the Service & Administrative and Industry & Laborer Sectors with 8.7% and 12.1%, respectively. ·

Labor in Sector I (Agriculture, Forestry & Fishery) is 31,930 people, 55.5% of total labor force.

·

Labor in Sector II (Industry & Laborer) is 3,500 people, 6% of total labor force.

·

Labor in Sector III (Services & Administration) is 4,870 people, 8.4% of total labor force.

·

Population in working age of other sectors (students, disabled, housewives, etc.) is 17,225 people, 29.9% of total population of working age.

Table 2. Labor and Population Demographics No.

Item

Unit

Total

Percentage (%) -

1 2 3 4

Total population Total household Working-age population Labor in economic sectors

person house person person

150,000 30,928 66,500 57,525

100.0

a b c d

Sector I (Agriculture, Forestry & Fishery) Sector II (Industry & Construction) Sector III (Services & Administration) Other sectors

person person person person

31,930 3,500 4,870 17,225

55.5 6.0 8.4 29.9

2.2.

Economic - Technical Basis, Architecture of Buildings 2.2.1. Industry, Small Scale Industry Currently, there are 2 centralized industrial parks (North Chu Lai and Tam Hiep) with many different kinds of businesses. A majority of these high-profile investors are from European and Asia Pacific countries with substantially large investment budgets. Other industrial parks are in the process of promoting infrastructure investment.

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2.2.2. Tourism, Service and Trade Currently, there are 3 tourism projects in operation with small scale, low quality and incapable of meeting the international standard of tourism services.

2.2.3. Public works Aside from the Office of the People’s Committee at district level in the town of Nui Thanh, public works at the ward/commune level include: ·

A medical station

·

Several education infrastructures for kindergartens, preliminary and high school, etc.

·

Commercial infrastructure such as markets, stores, restaurants, mini hotels, etc.

2.2.4. Supporting infrastructure a.

By Airway The Chu Lai Airport was formerly a Class I airport per American Standards with a main runway of 3,050m x 45m (length x width) and an auxiliary runway. The runway surface quality is in operating condition. The airport upgrade has been finished and has been under operation since March 3rd 2005 with 3 flights a week from Ho Chi Minh City operated by Vietnam Airlines, Vietnam’s largest Carrier. With the growth and demand of travelers into the region, Vietnam Airlines is planning for a new route from Chu Lai to Ha Noi in the near future.

b.

By Railway The independent national railway connecting the north and the south, extends more than 40 km long through the Chu Lai Open Economic Zone. The train flow through the area is 15 couples/day, including 1 couple/day for public missions.

c.

By Road The National Highway 1A runs parallel with the national railway, extending 40 km in length and 12km in width covered in bitumen concrete through the Chu Lai Open Economic Zone. The section from Da Nang to Quang Ngai of the National Highway 1A experiences the highest amount of traffic with shops, marketplaces, and people residing on both sides of the highway.

d.

By Waterway Due to its geography, Vietnam is accessible by the ocean and inlet waterways comprised of its streams and rivers. i.

By way of Sea

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The Ky Ha Seaport is 12km away from National Highway 1A. It was originally established and occupied by the US military. With plans to improve the entire region, the province has allocated a sizable budget to rehabilitate and upgrade the newly constructed Ky Ha Sea Harbor with improved inlet roads for freighters and accessible docking stations for large ship liners. Before 1996, the Ky Ha Harbor had a 300m-long Quay No.1 allowing ship passage of 150m-wide and 8m-deep, able to receive 10,000 DWT ship. In 1997, the Quang Nam Province started construction of Quay No.2 that is 300m-long and 100m-wide with reinforced concrete structure. It has been in operation since May 2002 and has the capacity to receive 5,000 DWT ships. Since May 2002, Ky Ha Port has been receiving 50 shipments with 45,000 metric tons of goods, together with 271 TEU of containers. A number of buildings have been constructed on site to be used as warehouses as part of the port operations. ii.

By way of Inland Water The river system within the Open Economic Zone includes: ·

Tam Ky River is 28km in length, 16km exploitable, classified as a IV river with average water level of 1m

·

Tan An River is 16km in length, classified as a VI river with an average water level of 1m

·

Truong Giang River originated from the Thu Bon River and flows from along the coast at meeting the ocean at the Ky Ha Bay

Generally, the river and arroyo systems in the Open Economic Zone is natural with a prevailing technical standard of class VI. Traffic occurs mostly in the rainy season and moderately used during the dry season. e.

Drainage There is almost no drainage system in the area. Rainwater and wastewater are mainly disposed naturally to local rivers Tam Ky and Truong Giang, and then flowed to the sea at An Hoa seaport. In order to reduce flood intensity for the Tam Ky river basin, some large reservoirs have been constructed:

f.

·

Phu Ninh Lake with total area of 18.9¸36km2, volume of 344 million m3

·

Thai Xuan with total surface area of 6.8km2

·

other small lakes such as Lake May, Lake Doc Co, and a few others serve as water reservoirs to help reduced flooding in the basin areas.

Water supply

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In the Chu Lai Open Economic Zone, a water treatment plant has been built with the capacity of 5,000 m3/day. This plant pumps the water from Thai Xuan Lake and supplies it to the North Chu Lai Industrial Park. Tam Ky City, which is adjacent to Chu Lai Open Economic Zone, has built a water supply system with the designated capacity of 15,000 m3/day. The water treatment plant is located at the west wing of this town. Water from Phu Ninh Lake flows itself to the water treatment plant through reinforced concrete pipe system of F 600 and 7,000m in length.

Water treatment technology process is as the following: Water ® Pump station ® Mixing pool ® First water filtration pool ® Second water filtration pool ® Sterilization ® Clean water pool ® Water supply pipe system g.

Electricity supply Currently, the Quang Nam Province and the Chu Lai Open Economic Zone is supplied by two electricity supply sources: ·

Tam Ky station supplies: 110/35/10 KV – Capacity 1x16MVA 110/35/22 KV – Capacity 1x25MVA

This station is the main supplier for Tam Ky City and surrounding southern suburban districts in the Province. ·

Cau Do stations supplies: 110/35/15 KV - Capacity 1x25MVA

This station is the main supplier for the town of Hoi An and other suburban districts within the Province. h.

Power Grid Several high voltage lines are found extend through the Quang Nam Province. They include: ·

220 KV Da Nang-Doc Soi line is approximately 135km in length.

·

110 KV Cau Do-Quang Ngai single-line is approximately 130 km in length, mainly supplied to the Quang Nam Province.

·

35 KV line is approximately 205.9 km in length, mainly supplied to the suburban districts of Quang Nam Province.

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IV.

MARKET STATISTICS 1.

Market of Visitors Quang Nam’s tourism plays an important role in the overall development of tourism as part of the Central Focal Economic Zone. In recent years, the growth rate of Quang Nam tourism and the country as a whole has demonstrated a strong growth, with the number of visitors into to Quang Nam Province, relatively higher than that of the Central Focal Economic Zone (the average growth rate about 25.1% p.a. compared with 17.15% p.a. in the period of 1997 -2000, respectively). In 2005, the number of visitors into Quang Nam accounted for about 49.85% of total visitors to Central Focal Economic Zone. There were over 1,650,000 visitors into Quang Nam in 2006 (Source: CBRE Vietnam).

Table 3. Visitors into the QN Province & Central Focal Economic Zone, 1997 – 2005 Place Quang Nam Central Focal Economic Zone Ratio

1997

2000

2003

2004

2005

227.016

402.973

826.000

1.024.412

1.362.126

1.450.866

1.702.775

1.649.394

2.144.290

2.732.274

15,64%

23,66%

50,01%

47,76%

49,85%

Unit: Person Average growth/year (1997 - 2005) 25,1% 17,15%

Source: Quang Nam Tourism Service and Tourism R&D Institute

1.1

Foreign visitors The Quang Nam Province is an attractive destination for foreign visitors. Year after year, the number of foreign visitors into Quang Nam continues to exceed the number of domestic visitors. The average growth rate of foreign visitors in the 1997 - 2005 period was 22% p.a, much higher than that of other provinces in the region, such as Da Nang (8.77%), Quang Ngai (15.53%), Thua Thien Hue (12.24%) and Binh Dinh (12%)

Table 4. Comparison between the QN Province and other provinces as part of the Central Focal Economic Zone, 2000 – 2005 Unit: Thousand people Avg. Province, 1997 2000 2002 2003 2004 2005 growth/year City (1997 - 2005) Quang Nam 144.820 226.838 400.441 402.229 493.217 712.529 22,0% Da Nang 185233 194.670 121.437 174.453 236.459 272.491 8,77% Quang Ngai 4620 6.400 8.600 6.800 10.000 11.400 15,53% TT - Hue 204.028 223.200 272.000 210.000 260.000 369.000 12,24% Binh Dinh 18588 20.336 23.412 18.174 25.000 32.000 12,00% Source: Quang Nam Tourism Service and Tourism R&D Institute

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Foreign visitor records according to CBRE – Vietnam in 2005, reflect a large number of visitors from France (largest percentage), Australia, England, German and American. Records reflect a steady increase from Australian and Americans, while the Japanese and other markets have slowly declined. Visitors from nearby represent a small percentage, but that number in 2005 was higher than in 2004.

Table 5. Forecasted Arrivals into the QN Province, 2006 – 2010 FORECAST ARRIVALS TO QUANG NAM PROVINCE 2006-2010 No.

Items

1

a

b

Units

Total visitor arrivals Foreign visitor arrivals Domestic visitor arrivals Total overnight visitor arrivals Foreign visitor arrivals Domestic visitor arrivals Number of visitors Foreign visitor arrivals Domestic visitor arrivals

2

arrivals

2006

2007

2008

2009

1,500,000

1,700,000

1,950,000

2,250,000

700,000

800,000

900,000

1,030,000

800,000

900,000

1,050,000

1,220,000

470,000

526,000

620,000

730,000

320,000

360,000

420,000

500,000

150,000

166,000

200,000

230,000

1,030,000

1,174,000

1,330,000

1,520,000

380,000

440,000

480,000

530,000

650,000

734,000

850,000

990,000

85

90

96

106

3,400

4,300

5,000

6,000

arrivals arrivals arrivals arrivals arrivals arrivals arrivals arrivals

Number of hotels

hotels

Number of rooms

rooms

2010

Average growth rate (%)

2,600,000

14.74

1,200,000

14.42

1,400,000

15.02

860,000

16.31

580,000

16.03

280,000

16.89

1,740,000

14.01

620,000

13.02

1,120,000

14.57

120

9.00

7,500

21.87

Table 6. Foreign Visitors into the QN Province, 2005 No.

Nationality

Persons

1 2 3 4 5 6 7 8

France Australia England Germany America Japan Spain Canada

51,350 45,338 25,947 25,201 24,893 13,338 12,168 8,936

Feasibility Study Report for Pointe91 at Chu Lai

Percentage (%) 17.93 15.83 9.06 8.80 8.69 4.66 4.25 3.12 Page 17


9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

Holland Switzerland New Zealand Denmark Thailand Swiss Belgium Italia Israel Ireland Norway Austria China Korea Singapore Finland Others Total

8,065 5,832 5,819 5,772 5,772 5,645 5,339 4,845 2,922 2,913 2,652 2,230 1,901 1,712 1,522 1,013 14,824 286,342

2.82 2.04 2.03 2.02 2.02 1. 97 1.86 1.69 1.02 1.017 0.93 0.92 0.66 0.60 0.53 0.35 5.18 100.00

Table 7. Actual vs. Forecasted Comparison of Foreign Visitors into the QN Province, 1999 - 2006 Foreign Visitors Actual Forecasted Variance

1.2

1999 167.400 74.000

2000 226.838 88.000

2001 314.219 100.000

2002 400.441 110.000

2003 402.229 122.000

2004 493.217 134.000

2005 712.529 145.000

93.400

138.838

214.219

290.441

280.229

359.217

567.529

Unit: Person 2006* 797.899 NA:

Domestic visitors: The market share of domestic visitors to Quang Nam compared with other provinces in the Central Focal Economic Zone is significant.

Table 8. Domestic Visitors into the QN Province and other provinces as part of the Central Focal Economic Zone, 2000 – 2005 City. Province

2000

2001

2002

2003

2004

2005

Quang Nam Da Nang Quang Ngai TT - Hue Binh Dinh

176,135 208,485 79,406 278,363 102,302

229,260 291,462 86,600 328,000 126,060

259,137 351,059 93,400 391,000 139,167

423,771 339,381 83,200 400,000 165,166

531.195 412,647 130,000 500,000 250,000

649,597 486,383 152,000 681,000 348,000

Avg. growth rate/year (2001 - 2005) 29.5% 13.66% 15.10% 20.04% 28.90%

Source: Quang Nam Tourism Service and Tourism R&D Institute

During the 2000 - 2005 period, the forecasted annual average growth rate of domestic visitors into Quang Nam was 12%. The actual recorded number was 29.5% p.a, higher Feasibility Study Report for Pointe91 at Chu Lai

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than the entire region’s average growth rate of 19.98% as well as other provinces in the immediate region. Table 9. Actual vs. Forecasted Comparison of Domestic Visitors into the QN Province, 2000 - 2006 Unit: Person Domestic Visitors 2000 2001 2002 2003 2004 2005 2006 Actual 176,135 229,260 259,137 423,711 531,195 649,597 881,158 Forecast 30,000 36,000 43,000 50,000 57,000 65,000 NA Variance 146,135 193,260 216,137 371,711 474,159 584,597 -

In general, the number of foreign and domestic visitors into the Quang Nam Province has gradually increased year over year. The number of foreign visitors is substantially larger then that of domestic visitors. On average, foreign and domestic visitors are reported to stay, 2.19 and 1.54 days, respectively. 2.

Tourism Turnover & Tourism Income Tourism revenue is calculated under two main facets in Vietnam: A. Tourism turnover is revenue directly generated from tourism companies whereby visitors purchase products and services through travel agencies and other accommodating establishments. B. Tourism income is revenue indirectly generated from visitors purchasing accommodations such as food, beverage, transportation and other services provided by local and foreign parties.

Table 10. QN Province Tourism Revenue Summary, 2000 - 2005. Unit: Billion VND Province. City

2000

2001

2005

2006*

Quang Nam Central Focal Economic zone QN/Region

43,515

78,782 121,108 123,209 180,000

290,000

414,000

570,799 694,167 866,933 851,599 996,674 1,097,800

-

7.62%

11.35%

2002

13.97%

2003

14.47%

2004

18.06%

25.50%

-

Average growth rate (2000-2005) 39.6 % 12.14% -

Source: Quang Nam Tourism Service and Tourism R&D Institute

The tourism turnover of Quang Nam has increased continuously in term of absolute value and maintained at high growth rate. In 2000, Quang Nam’s tourism turnover was 43.515 billion VND, accounting for 7.62% of total turnover of the Central Focal Economic Zone. That number was 290 billion VDN in 2005 and 414 billion VND in 2006. The annual average growth rate was 39.70% during 2000-2006 period.

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In tourism turnover structure of Quang Nam Province, the main proportion comes from accommodations, accounting for 61.27% of the total turnover; turnover from food and drink, transportation accounts for 29.42%; travel turnover holds the share of 1.57%; turnover from other services makes up the rest of 7.74%. From those figures, we can see that the region is lacking supporting and value-added services for better serving demands of visitors, thus increasing the average staying days of visitors and spending of visitors as well. In order to be higher satisfied by customers, we need to improve tourism supplement services.

Table 11. QN Province Tourism Structure, 2001 - 2005. No. 1 2 3 4 5 6 7

Item

2001 1.485 47.053 15.265 0.204 1.383 9.530 3.862

Travel Accommodation Food & Drink Goods Transportation Entertainment Others

Unit: Billion VND 2002 2003 2004 2005 2.330 2.160 3.061 4.500 75.960 80.619 114.360 170.000 24.830 22.973 33.281 41.366 0.692 0.782 2.947 1.711 1.469 3.060 13.199 12.055 15.191 22.000 2.386 3.151 5.625 83.500 Source: Department of Tourism of Quang Nam Province

Table 12. QN Province, Daily Average Visitor Expenditure, 2006 - 2010 (per $USD) Total

AVERAGE

119.1

MEANS OF TRANSPORT

8.9

By air

14.2

By car

8.6

By train

16.7

By ship

17.7

PURPOSE OF VISIT

14.1

Leisure

18.1

Visit relatives

24.7

Press

19.1

Business, Trade Affairs

18.3

Accommodation 24.8 7.0 8.2 7.2 7.5 10.0 8.2 12.9 16.9 7.9 12.3

Food 18.2 6.8 4.2 3.4 24.9 4.4 4.2 7.6 9.5 7.0 11.3

Transport

Sight-seeing

Shopping

Entertainment

11.5

7.1

42.4

4.2

40.2

4.3

0.8

1.2

21.7

4.6

0.4

49.9

6.5

62.3

PROFESSION Businessmen

17.7 18.7 150.8

11.8 11.2 31.6

6.7 7.6 21.2

Feasibility Study Report for Pointe91 at Chu Lai

Others

0.9

10.1

4.9

0.7

14.0

1.8

4.8

1.0

8.4

3.1

-

25.0

0.7

13.2

42.8

3.7

1.4

10.1

3.3

25.9

4.6

0.7

4.7

45.6

4.5

0.9

10.1

0.9

7.7

57.4

3.0

1.4

19.9

2.8

8.3

43.7

3.6

0.7

8.4

-

32.4

52.7

8.2

0.8

9.6

-

73.2

-

61.1

0.4

15.4

1.1

20.0

Conference Others

Healthcare

37.7

3.6

0.8

11.1

47.7

4.9

0.9

9.0

15.7

8.6

48.6

3.9

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Journalists Teacher, Lecturers Architects, Engineers, Doctors, Pharmacists

31.3

145.5

21.4

115.6

28.1

162.9

Retired

87.6

Students

77.3

Gov't employees

107.1

Others

114.8

15-24

81.0

25-34

123.8

35-44

166.5

45-54

111.9

14.5 20.9

8.0

10.4

62.2

1.9

-

17.3

10.4

6.5

44.3

5.8

1.3

5.0

58.1

2.9

0.3

13.3

20.2

26.7

18.5 19.2 24.9 24.8

AGE

55-64

18.7 24.1 33.7 21.5

37.9

150.9

GENDER Male Female

3.

25.1

114.5 124.4

24.4

Tourism Facilities Tourism facilities are factors creating uniqueness and differentiation for tourism products, giving a distinct image and experience. They are one of the most important selection criteria for visitors seeking a new place or location to visit. 3.1.

System of Accommodation Establishments With the increase of visitors, Quang Nam has steadily increased the number of accommodation establishments and services at a scalable rate to meet the basic growing demands of visitors in terms of quantity as well as quality. A majority of the existing hotels are located in town of Hoi An and Tam Ky. In 2006, the Quang Nam Province recorded 87 hotels with 3,159 rooms and 4,716 beds.

Table 13. Structure of Accomodation Establishments in the QN Province, 2006 Items 1. Total 2. Hotel Rating 1-star 2-star 3-star 4-star Feasibility Study Report for Pointe91 at Chu Lai

No. of Hotels

No. of Rooms

No. of Beds

87

3,159

4,716

14 12 5 7

366 423 336 671

611 1.236 407 1,030 Page 21


5-star Qualified Un-rated 3. Type of Company State-owned Limited Private Household Business Other

1 20 28

163 299 901

204 508 711

8 26 40 16 7

506 645 497 165 258

957 1,349 1,282 203 377

Source: Quang Nam Tourism Department and Tourism R&D Institute

3.2

System of Food and Drinks Trading Establishments Good food and refine beverages are a national pastime of Vietnamese culture. The number of specialtly food and beverage establishments are abundant. They include a wide range of coffee shops, bars, fast-food eateries, bakeries and family restaurants, mostly specializing in Vietnamese and French cuisine. More popular and larger venues can be found in the sleepy town of Hoi An and the city of Tam Ky. In general, the Quang Nam tourism industry has been developing strongly, and other types of international cuisines can also be found, such as Italian, Greek, American as well as Chinese food.

3.3.

Travel & Transportation for Visitors There are 17 travel and tourism transportation agencies in the Quang Nam Province. ·

·

·

3 International Travel Agencies ·

Hoi An International Travel Center

·

An Phu Limited Company

·

Le Nguyen Private Company

2 Domestic Travel Agencies ·

Quang Nam Tourism and Investment Company

·

Quang Nam Labor Union Tourism Company

12 transportation travel companies with 3 of located in other provinces.

The number of transportation companies in this service industry is relatively small but very competitive. Tourist transportation includes tour bus, taxi and shuttle services have grown rapidly to accommodate the number of visitors into the area. Based on unofficial statistic figures, there were 1,200 new vehicles registered into the region in 2006 designated for tourism transportation.

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4.

Labor in Tourism Industry The tourism industry creates thousands of jobs for Central Vietnam, both direct and indirect labors. Direct labors are categorized as those whom directly work for the travel companies, such as hotels, restaurants and other service establishments. Indirect labors are categorized as those whom work for business related to tourism activities. As a whole, the province is limited in delivering international service and quality because they lack the knowledge and formal training.

Table 14. QN Province Tourism Labor Force Statistics, 2001 – 2006 Labor Direct Indirect Total

2001 885 1,500 2,385

2002 1,232 2,800 4,032

2003 1,600 5,100 6,700

2004 2,072 6,200 8,272

2005 3,280 15,600 18,880

Unit: Person 2006 4,321 20,550 24,871

Source: Quang Nam Tourism Department

The labor force found in the Quang Nam Province has not developed proportionately to meet its tourism potential. The number of skilled labors is still low. With the number of tour guides steadily increasing, they come from universities whom teach theory and language but are inefficient in terms of practicality and implementation. There is still a great demand of tour guides who can speak Japanese, Korean, and Germany. However, in 2006, the number of certified tour guides was recorded at 197, with: ·

81 tour guides who spoke English fluently

·

11 tour guides who spoke French fluently

·

2 tour guides who spoke Chinese fluently

·

2 tour guides who spoke German fluently and

·

1 tour guide who spoke Japanese fluently.

Furthermore, figures in the table shown below illustrate the quality of labor found in tourism. In 2005, the percentage of labor having undergraduate and college degree in all majors is 21.83%, compared to that of the unskilled labor force, which accounts to nearly 60%. The ability to effectively communicate using a foreign language has also been detrimental to the expansion of the tourism industry in Quang Nam.

Table 15. QN Province Labor Force Statistics, 2001 – 2005 Criteria Feasibility Study Report for Pointe91 at Chu Lai

2001

2002

2003

2004

2005 Page 23


Total labor Undergraduate/College Intermediate/Primary Others

5.

885 19.21% 12.09% 68.70%

1,232 17.37% 11.36% 71.27%

1,600 16.69% 13.75% 69.56%

2,072 22.25% 15.49% 62.26%

3,280 21.83% 18.29% 59.88%

Tourism Investment 5.1

Infrastructure for tourism Investment in tourism infrastructure accounts for 5.1% of total infrastructure investment for Vietnam. Additionally, the central government has consistently invested into the Quang Nam Province during the 2001- 2006 time period in the amount of VND 589,711 million. A summary of the infrastructure investment projects to develop Quang Nam’s tourism are as follows:

Table 16. QN Province Investment into Tourism Infrastructure, 2001 – 2006 No

Investment Project

1 2 3 4 5 6 7

Nam Phuoc – Tra Kieu – My Son Road Cam An – Dien Duong – Dien Ngoc Road Duy Xuyen Tourism Routes Youth Road along the Beach Dong Vong – Phu Ninh Tourism Road Infrastructure of Bai Chong. Cu Lao Cham Resort Infrastructure of My Son – Thach Ban Tourism Centre Total

Total Investment (VND million ) 169,883 275,000 34,000 71,583 3,474 1,271 34,500 589,711

Source: Quang Nam Tourism Department

5.2.

Investment of Infrastructure for Tourism At the end of 2006, over 178 tourism projects invested VND 5,755.71 billion, approximately $USD 1,520.9 million. Project status is as follows: ·

92 in operation

·

14 in the construction stages

·

65 are being submitted for construction permits

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At the end of 2006, there are 16 additional projects registered to invest into the Quang Nam Province with a total investment of VND 114.1 billion and $USD 87 million. The central government continues to increase investment into tourism infrastructure in order to attract and motivate the number of investors into the region.

Table 17. QN Province Tourism Investment Project, 2006

No. A 1 2 3 4

Project Progress of the project In Operation In Construction Stage Submitting for Permission Registered

No. of projects 187 92 14 65 16

Investment Capital (billion VND) 5,755.71 642.42 1,044.80 3,954.39 114.10

Investment Capital (million USD) 1,520.9 12.3 82.8 1,338.8 87.0

B 1 2

Sources of Capital Domestic Investment Foreign Investment/Joint Venture

187 166 21

5,755.71 5,755.71 -

1,520.9 1,520.9

C 1 2 3 4 5 6 7

Investment Region Hoi An Dien Ban Dai Loc Duy Xuyen Tam Ky Chu Lai Open Economic Zone Other Regions

187 95 24 5 6 9 43 5

5,755.71 2,046.5 1,168.1 9.05 52.6 22.97 2,448.29 8.235

1,520.9 80.0 1,115.0 325.9 -

Total

187

5,755.71

1,520.9

Source: Quang Nam Tourism Department

6.

Tourism Marketing and Promotion With the support of the provincial committee, tourism marketing and promotional activities have vastly improved the awareness of Quang Nam’s culture, social community of life and its people as well as identify hidden cultural charms found in the region. The program has largely in part, propelled the number of domestic and foreign investors into the region for work and play on a day-to-day basis. Quang Nam Tourism Promotion Center and Hoi An Trade – Tourism Department has created two tourist information rooms in Hoi An to supply and properly guide tourist with

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updated information for visitors and companies studying investment opportunities in Quang Nam. Brochures and destination profiles are published in large quantities, with promotional billboards, posters and others used for advertising. Additionally, the Quang Nam tourism website is updated on regular basis in 3 languages: English, Vietnamese and Japanese. In cooperation of the central and local tourism offices, the Province hosts a number of calendar events such as “Hoi An – Summer Feeling” to celebrate the diversity and richness of Quang Nam’s people and its way of life. Other festivals include the Heritage Itinerary Festival, Ba Thu Bon Festival and cultural and art exchange program between Vietnam and Japan. Other marketing and promotion activities outside the Province are as follows:

VI.

·

Road shows, Exhibitions, Forums in foreign countries.

·

Conference for tourism marketing and promotion at Ho Chi Minh City and Ha Noi

·

Tourism stands of Quang Nam at Exhibitions and Fairs held in Quang Binh, Hai Phong, Hue and Da Nang

·

Participating in the tourism cultural exchange between Vietnam – Japan at Ho Chi Minh City and in Hoi An Town

SECOND HOME MARKET STUDY IN VIETNAM AND CENTRAL COAST PROVINCES by CBRE – Vietnam 1. Resort-Villas projects in central coast provinces. Vietnam a. Nam Hai Resort, Hoi An/Da Nang The Nam Hai is one of Vietnam's most exclusive luxury oceanfront resorts and features 60 one-bedroom villas and 40 pool villas, ranging from one to five bedrooms, each with its own infinity pool located on 35 hectares of landscaped gardens along Vietnam's famous China Beach. The pool villas feature expansive stone decks and oversized private infinity pools. The average occupancy rate of The Nam Hai was approximately 28.50% as of end 2007. The average daily rate ranges $USD 750 to $USD 3,400 and is subjected to 5% service. Room Categories *

Avg Daily Room Rate

Size (sqm)

($USD) One-bedroom Villa

750

80

One-bedroom Beach Front Villa

850

80

One-bedroom Pool Villa

1.200

250

Two-bedroom Pool Villa

1.700

400

Three-bedroom Villa

2.300

520

Three-bedroom Beach Front Villa

2.960

520

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Four-bedroom Pool Villa

2.600

590

Five-bedroom Pool Villa

3.400

660

* Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

b.

The Golden Sand Resort in Hoi An The five start Golden Sand Resort in Hoi An is managed by the Swissbel Hotel Group opened in March 2005 located on Cam An Beach is less then 5 km from the ancient town of Hoi An. The resort has 195 rooms with an occupancy rate of 56% on average in 2007. It occupies 4 hectares of land, offering a private beach that extends up to 400m with the shore width of 100m. Currently this resort has 195 rooms with approximately 56% as of end 2007. Room Categories *

Room Rate

Size (sqm)

Superior

160

34

Deluxe Garden View

210

45

Deluxe Partial Ocean View

222

45

Deluxe Ocean View

230

45

Ocean View Suite

450

90

* Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

Feasibility Study Report for Pointe91 at Chu Lai

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c.

Victoria Hoi An Resort The four star Victoria Hoi An Resort & Spa in Hoi An was open in April 2001 along a private white sand beach, situated 30 km (18 miles) from Da Nang International Airport and 5 km (3 miles) from the ancient town of Hoi An. The resort revolves around a traditional fishing village theme, with small streets, water ponds and village homes with clay-tiled roofs, providing a warm and restful environment. This resort features 105 rooms and its average occupancy rate here is approximately 75.50% as of end 2007. Room Categories *

Room Rate

Size (sqm)

Superior Garden View

190

34

Deluxe River View

190

34

Deluxe Seaside

220

36

Deluxe Beach Front

245

36

Family Beach Front Suite

325

67

Honeymoon Beach Front Suite

325

63

* Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

Feasibility Study Report for Pointe91 at Chu Lai

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d. Evason Hideway, Ninh Van Bay in Nha Trang The Evason Hideaway Resort features 39 hotel villas, managed by the Six Senses management team whom manage the Evason Hideaway & Spa at Ana Mandara. This luxurious retreat is only accessible by boat from Nha Trang, nestled away in Ninh Van bay with a deserted white sand beach at miles of beautiful coral reefs with an impressive mountain backdrop. The resort adopts an architectural style reflective of Vietnam’s culture and traditions. Room Categories *

$USD Room Rate

Size (sqm)

Beach Villa

660

176

Hilltop Villa

770

158

Spa Villa

880

164

Water Villa

1050

154

Rock Villa

1050

187

· Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

2. Current and Near Future Projects a. VinaCapital Square, Da Nang VinaCapital Square is located on North Tran Hung Dao Street is developed by VinaLand. The developer has been given 9ha of land to develop a 5 star hotel, offices for lease, villas, condominiums trade and entertainment centers and an international school. The project’s investment capital is estimated at US$320 million and the developer is looking for a foreign partner to form a joint venture to implement this project. Expected completion of the first phase will be in 2012.

Feasibility Study Report for Pointe91 at Chu Lai

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b. Kreves Development Kreves Development is located north of Tuyen Son Bridge with capital investment of US$200 million. This company has been given 9 ha of land to develop a luxury Condominiums (28 & 30 floors) of 1600 units of 120 to 125 sqm each. The 42-floor building is for office and serviced apartments. In addition, this complex also has 3-story shopping mall including duty-free shop, 5-start hotel with 600 rooms, a trade & entertainment centers. The project is currently the design phase and expects to be completed by the year of 2012.

Feasibility Study Report for Pointe91 at Chu Lai

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c. Da Phuoc City and Golf Course The Daewon Development company plans to develop a 210 ha resort near Thuan Phuoc Bridge with capital investment of $USD 250 million for the first phase, including commercial and high rise buildings, an18-hole golf course, resort hotel and 635 townhouses, a shopping mall, and an international school. The project is under construction and is scheduled to be complete by the end of 2017.

d. e. f. g. h. i. d. Recent Developments Over the last several years, Retirement, Vacation and Second Home locations in Southeast Asia have continued to become very attractive due to lower cost of living standards and warmer climate conditions. Emerging countries such as Singapore, Malaysia and Vietnam are rapidly increasing their inventories to compete with the market leader, Thailand. Government support with new laws for Free Ownership and Long Term Leasehold requirements under Decree 84 allow more favorable conditions for domestic and foreign ownerships. Development plans into the central region continue to soar with large development groups such as Sama Dubai and VinaCapital. In 2007, Sama Dubai, the real estate division of Dubai Holdings has made a commitment to construct a $150 million bridge that will span Cua Dai (Great River mouth) of Thu Bon river and connect Hoi An to the southward beachfront strip that extends to Chu Lai in the central region of Vietnam, slated to begin as early as September 2008. Sama Dubai is currently working with their team of international designers and developers to prepare their masterplan for their allotted piece of land, south of Hoi An. It is scheduled to be revealed in early 2009. Their total estimated investments of $17 billion into the region will include residential homes, extravagant hotels, golf courses and other recreational and entertainment venues. VinaCapital, a Vietnam focused investment company with their own real estate division Feasibility Study Report for Pointe91 at Chu Lai

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has secured over 5,000 acres of land in the central region with their own development plans. No date has been confirmed in regards to their plans for submittal. The culmination of investors with billions of dollars into the Quang Nam Province will propel the central region to achieve the mandate set by the government. The construction of the new Highway 1A, which will run directly from Hoi An to Chu Lai stretches over 80 km. Accordingly to the CLOEZ officials, this road is scheduled to begin construction in the fourth quarter of 2008. 3.

Comparables The following comparables are based on CBRE-Vietnam findings as of June 2007 A. Land Comparables Subject Property Da Nang Coast Bai But

Description

Location

Price

$/sq ft.

Comment

One side sea, one side street Bai But Bay Resort

Son Tra-Dien Ngoc Central Coast

$8.25 M

$34.84

$4.54 M

$30.10

Vung Tau

Complete Land Infrastructure

$1 M

$61.93

Phu Quoc Island

Beachfront Resort Development site

Vung Tau, Ho Chi Minh City South

$600 K

$27.87

60 villas scheduled to be built 50-70 Villa; 20-25 Apartment Suite Beachfront, On Tran Phu Street, in the city Ocean waterfront, stunning sunset view, 10 mins from airport

B. Residential Unit Comparables Subject Property *Montgomerie Links Golf Course Villas **Nam Hai Villas Avalon D1, HCMC Garden Plaza D7, HCMC The Manor - Binh Thanh

Developer Indochina

Description 3 Bedrooms

Avg sqft/Unit 2,970

Selling Price $825

Price/sqft $278

Indochina

3 Bedrooms 3 Bedrooms 1 Bedroom 3 Bedrooms 2 Bedrooms

3,605 4,250 3,185 6,564 1,100

$1,000 $1,625 $1,000 $2,500 $288 K

$277 $382 $314 $381 $260

Penthouse 14 Retail Shops 96 Condos 2 Bedrooms

2,225 1,500

$580 K $195 K

$260 $130

2,400 1,180

$312 K $254 K

$130 $215

3 Bedrooms

1,500

$320 K

$215

Phuong Nam Co. Phu My Hung Corp. Bitexco

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Pasteur Court

Van Thinh Phat Co Ltd & An Thai Co.

D3, HCMC *Data collected in May 2008 ** Data collected September 2007

4 Bedrooms 2 Bedrooms

2,400 900

$516 K $180K

$215 $200

3 Bedrooms

1,450

$290K

$200

PART II PROJECT OVERVIEW (as approved by the CLOEZ to be amended to cover a total of 224 – 388 acres) I.

COMPANY INFORMATION PHILAND Vietnam (PHILAND VN) is Limited Company (“the Company”), a majority-owned subsidiary of PHILAND Corporation, a US-based company.

II.

REPRESENTATIVE OFFICES PHILAND Corporation has a representative office that is physically located at 246 Trung Nu Vuong Street, Tam Ky City, Quang Nam Province of Vietnam. In addition, the PHILAND Corporation has a marketing branch located at 6 Thai Van Lung Street 11 th Floor, District 1, Ho Chi Minh City in Vietnam, conducting business in accordance to Vietnamese current regulations. The US Corporate Office is located at 17011 Beach Blvd., Suite 1230, Huntington Beach, CA 92647.

III.

OPERATING LICENSES No. 01 02

Code 5511-551100 5521

Industry Hotel service business Food and drink full services

The operation has been granted a 50-year license, beginning the investment license dated granted*. *See JSM Mayer Brown Legal Opinion related to Decree 84 for 75-year renewable land lease @ www.philandcorp.com/investorsonly IV.

INVESTMENT OBJECTIVE The Company‘s objective for Pointe 91 is to develop a masterplan community that includes the successful elements of living. To use the natural topography of the land to maximize the value,

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the natural resources and views of the hilltop, ocean and beachfront while providing a aesthetically pleasing and safe community. The plan includes the construction of a hotel/resort community including 227 residential living units, accompanied by a 70-suite, 32 detached villa beach hotel resort and spa. The community will also feature an outdoor amphitheatre, local marketplace, international commercial and shopping centre, a management-executive training facility, and various forms of media and entertainment venues on the property. Local and international cuisine will be celebrated and enjoyed at one of the many Pointe91 cafes and fine eating establishments. The masterplan community of Pointe91 is designed to serve as a catalyst for the tourism development region of Chu Lai. Pointe91 will feature a marina living community with a dive center, recreational water activities and a boardwalk, as well as a fishing pier where local artisans and talents can gather to display their unique creativity in products, services and entertainment. Pointe91 will facilitate and manage a year around calendar of social and entertaining events to attract the local and foreign visitors. Recreational amenities at Pointe91 will also include extensive pathways for walking, running, hiking and biking along the property, beach and hilltops. Other facilities include community fitness centre, swimming and dive pools, clubhouses and recreational parks with soccer fields, volleyball courts, and open fields to enjoy the natural environment at any given time of the day. The development of Pointe91 will introduce new construction methods that will be easily transferable and the use of the most innovative and high-quality materials and products found in the region. Pointe91 will create a new demand of skills and labor force for the immediate area to help sustain the local population over the long-term with future PHILAND and other developments in the near future. V.

MILESTONES The Company plans to use its equity and bank loans to invest into the infrastructure, construction, equipment and working capital expenditures. The project is scheduled to be complete within 60 month time period. On project implementation progress: · December 2007 – to sign investment contract and survey project site · March 2008 - compensation for site clearance, submittal of primary architecture and identify land leasing procedures. · July 2008 - attain Construction Permit with the submittal of Development Plans · August 2008 – Construction Breakground · January 2009 – Begin Phase 2 of Construction plans · August 2013 – Completion of entire Project

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PART III CONSTRUCTION REQUIREMENTS set by CLOEZ (Development Scope as approved by CLOEZ) I.

GENERAL ARCHITECTURE includes: 1.

Lobby, Reception

2.

Central building of resort area

3.

Swimming pool

4.

Tennis court

5.

Swimming pool and underwater activities

6.

Lazy river

7.

Wave creation lake (artificial sea)

8.

Landscape lake

9.

Stream

10.

Hill, bonsai

11.

Spa, massage, karaoke, discotheque

12.

Resort

13.

Recreation, Restaurant, Cafeteria

14.

Pub 1

15.

Pub 2

16.

Bridge

17.

Area of underwater activities for children

18.

Hotel, office for lease spaces, office of the Authorities

19.

Villas

20.

Presidential Suites

21.

Rescue watchtower

22.

Parking

23.

Duplex bungalows

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II.

INFRASTRUCTURE REQUIREMENTS All construction items are constructed according to international standards, using modern equipment, serviceable as required by different types of customers and characteristics of visitors. The hotel will include a international club rooms, banquet hall, specialty rooms for conferences and seminars fully equipped with innovative, digital, technology for both audio and video appliances with wireless technology accompanied by LCD projectors, laptops and etc. The central operating building will include a operation and management office, reception lounge, functional and technical rooms to support the daily activities, a security office and other rooms as needed. The hotel resort area will be equipped with firefighting equipment, elevator, technical and functional rooms and other facilities as determined. The design and customization of the villa and bungalow units will be designed and constructed to meet 5-start standards. 1.

Electricity Supply Electricity supply for the whole commercial and tourist area is provided by 180 KVA transformer station from available power grid. It will be supplied to provide electricity for the resort, bungalow, office for lease buildings, management office, entertainment venues and etc. The energy will provide a low voltage transformer. The lighting system for the area will be installed underground via a technical trench, automatically monitored and controlled based on time of day and season.

2.

Water supply Water supply is from underground water and water supply pipe system is designed coaxially.

3.

Drainage Drainage system is designed as a closed-loop. Waste water from separate living units, offices, and hotel resort is treated by water filtration pool.

4.

Natural Ventilation and Lighting Solutions Lighting is designed under standards of “natural lighting: TCXD 29 - 68�. All areas are designed and guaranteed with sensible and with good, natural ventilation and lightning. All areas of the hotel and resort, separate living units, offices, and entertainment sites are all equipped with air conditioning and automated heat reducing systems. Other working spaces will be equipped with other air conditioning systems or ceiling fan/wall fan system subject to its usage.

5.

Communications The project site is accessible to four mobile phone networks to include: Vinaphone, Mobiphone, Viettel and EVN. It is also accessible to premium high-grade cable phone network. All separate living units, hotel rooms and other building will be equipped with an internal phone connected via switchboard. They will all be equipped with a separate direct hardline, as part of the phone network.

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Television system and other video satellite systems will be equipped with internal cable system and parabolic antenna of 40-60 channels. All public places will be installed with public telephone booths accessible by phone cards. III.

ENVIRONMENT PROTECTION AND LABOR SAFETY METHODOLOGY 1.

Environment Protection The following solutions are selected:

2.

·

Waste water will be collected within closed pipe system installed underground., directed to water filtration pools, treated by a biological method to sterilize and reused for watering the landscape which includes trees, plants and grass.

·

Solid waste will be collected from capped wastebaskets installed at designated locations on the property. Solid waste are collected daily and moved to local general waste treatment area for disposal as per schedule.

Labor Safety The staff will be equipped with the proper labor equipment and safety gear as per assigned tasks that may include: masks, gloves, floats, walkie-talkie and other necessary devices. With the use of machinery and equipment, training and guidance will be conducted on a per assignment basis. Warnings and Caution signs will be noted throughout public sites at visible locations to help prevents accidents.

3.

Fire Prevention Planning As per standard TCVN 2622 – 95, all areas will be equipped with a fire extinguisher and automated fire alarms with a strategically located fire department with 2 fire truck engines readily available.

4.

Medical Center The Quang Nam Provincial General Hospital is 7.5 km from the project site. However, a medical center will be constructed within the designated area with an emergency team of 3 - 5 medical staff members and necessary equipment for medical examination and treatment.

IV.

REQUIREMENTS ON EQUIPMENT AND COMFORTS ·

Air conditioning systems will be installed in all public areas.

·

Separate Elevators will be installed for visitors and staff for all buildings with more then one story.

·

All items in general architecture including hotel rooms, the lobby, reception area, central buildings for the spa, massage parlor, karaoke bars, discotheques, game rooms, restaurant & cafeterias, lease spaces and hotel will be installed with separate and central air conditioning system and heating system as well as other automated devices for fire and explosion prevention, evacuation, antitheft and etc.

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V.

REQUIREMENTS ON SERVICES IN TOURIST AND SERVICE AREA ·

Safety room for the safe-keeping of monetary and valuable goods

·

Public services to include a courier/postal services, public telephones, film developments, faxes, xeroxing, typing, stationary for rent and athletic apparatus.

·

Disability access for wheelchair and other handicapped visitors

·

On-staff emergency team for rescue and medical emergencies

·

Entertainment services, Tourist Concierge Services, Car Keeprs, Rental cars and bicycles

Moreover, a minimum of at least 30 - 50 cars, 2-3 tourist boats, 7 canoes and other means of water transport available to meet the needs of visitors.

VI.

GENERAL CONSTRUCTION PLAN With an initial project area of 42 hectares, the land area is apportioned as follows:

VII.

·

Total construction area: 22% (approximately 5ha)

·

Construction area for public utilities: 18%

·

Area for traffic: 2 %

·

Area for green trees and water surface: 59%

·

(Note: Amended construction plan will account for additional land allocation of 40 – 115 additional hectares in the near future).

ENGINEERING SOLUTION ·

Magnum Sheething Boards reinforced by Cold Steel Construction

·

International Standard Elevators with evacuation stairs and fire preventing and fighting system in accordance with the law.

·

Innovative and Stable WiFi Network

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Feasibility Study for Pointe 91  

The purpose of this feasibility study is to provide information and current statistics on the demographics, infrastructure and plans for the...

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