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Jumeirah | Culu Culu Polo Resorts Information Memorandum Spring 2009


| CULU CULU POLO


OLOP ULUC ULUC |


Information Memorandum | 1

Contents Execitive Summary

2

Concept Definition

5

Project Descriptions

Jumeirah Culu Culu Argentina

10

Jumeirah Culu Culu at Hurtwood Park

16

Pro Forma Financial Statements

Consolidated Financial Statements

18

Jumeirah Culu Culu Argentina Financial Statements

20

Jumeriah Culu Culu at Hurtwood Park Financial Statements

22

Investment Opportunity

24

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2 | Information Memorandum

Executive Summary Jumeirah Culu Culu Polo Resorts (“Jumeirah Culu Culu”) is the world’s first branded polo hotel and resort portfolio. Jumeirah Culu Culu will develop properties in compelling international destinations to leverage global appeal for the sport among the most coveted investor, resident and guest demographics.

The resorts will share common elements including

Jumeirah Culu Culu Polo Resort in Argentina will be

The Sponsor Group will aggregate, from a small group

exclusive residential villas, managed by Jumeirah Living,

the first property developed in the global portfolio.

of preferred institutional-grade investors, a total of $150

state-of-the-art polo and equestrian facilities, conference

The second portfolio property will be developed in the

million commitments to fund Jumeirah Culu Culu

centers, spa facilities and a six-star hotel.

United Kingdom. The plan, in due course, is to list

Polo Resort developments in Argentina and the United

the global Jumeirah Culu Culu portfolio on a leading

Kingdom. This raise will occur in two tranches. The first

international exchange.

tranche, structured as a preferred equity investment,

Jumeirah Culu Culu Resort hotels will be operated by Jumeirah Group, the Dubai-based operating company, which

totaling $50 million will close on or before March 31,

counts assets such as the Burj al Arab in Dubai, the Jumeirah

The Novati Group International SPC (“Novati

2009. The second tranche totaling $100 million will close

Essex House in New York and the Jumeirah Carlton Towers

International”), in collaboration with its Gulf-based

on or before December 31, 2009. The pro forma cash

Hotel in London as anchor members of its portfolio.

affiliates, is acting as the General Manager as well as

flow analysis suggests an aggregate IRR of 36.1% subject

anchor investor for this portfolio of projects. In such

to the development timeline and asset performance.

The Dubai Investment Group (“DIG”) will be the asset

capacity, Novati International, et al. have also agreed to

manager of the global resort portfolio. Jumeirah and DIG

facilitate the participation of other investors to fund the

are part of Dubai Holding, a holding company owned by

development program.

the Government of Dubai.

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Information Memorandum | 3

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4 | Information Memorandum

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Information Memorandum | 5

Concept Definition Originally devised as a form of battle training by Persian noblemen, polo has long been known as the Game of Kings. One of the oldest sports in the world, polo dates back at least 2,500 years, with the first recorded match being played between the Persians and Turkomans in 600 BC. The Turkomans won.

From Persia the game migrated to the East, eventually

International Olympic Committee. Whereas once

establishing itself in China, Japan and India by the 16th

the game was primarily played by Royalty and later

Century. It was in India that the British tea-planters and

cavalry, today the sport has become more accessible

Army regulars stationed there first saw and played the

and attracts a broader spectrum of society.

game in the mid 19th century, before enthusiastically taking it back to England in about 1869, from where

The modern sport of polo continues to attract the

it spread to other European countries with a strong

interest and active involvement of royalty and the

equestrian tradition, including Russia, Poland, Austria

world’s super-rich as well as the sponsorship of

and France.

exclusive brands, such as Cartier, Piaget, BVLGARI, Audi, Rolls-Royce, Bombardier Learjet and Azimut

Today, polo is played in more than 77 countries

Yachts. Numerous global executives as well as stars

worldwide. It was an Olympic sport from 1900 to

of music and film are actively involved in the sport,

1936 and has now been recognized again by the

making polo one of the world’s most fashionable leisure pursuits.

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6 | Information Memorandum- Aspirational Brand

Aspirational Brand Polo has evolved into a unique sports entertainment offering, drawing considerable print and television media coverage around the world.

The larger international polo tournaments draw capacity crowds of up to 17,000 for England’s Cartier International and 100,000 for the Argentine Open. To this regard, Jumeirah Culu Culu Polo Resorts is engineered to elicit feelings of quality, service and exclusivity:

Quality Jumeirah Culu Culu Polo Resorts will be developed and maintained to a market-leading professional and operational standard.

Service Jumeirah Culu Culu will strive to create an unparalleled customer experience. Every member to the Jumeirah Culu Culu team will be stewards of this promise. The Jumeirah Culu Culu brand will emanate through them.

Exclusivity A significant portion of the Jumeirah Culu Culu exposure audience will wish to own a resort property but may not ultimately succeed in doing so. Scarcity of the brand will further drive aspirational value.

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Information Memorandum | 7

Culture Each property will celebrate the uniqueness of its

A portfolio of exclusive polo resorts operated by

location. The host city itself is an important factor in

Jumeirah will feature facilities necessary for full-scale

determining site selection. The host city will be a tourist

championship events, hospitality and spa services,

destination poised and equipped to show the best of the

restaurants and other entertainment. However, the

local culture, history and traditions.

properties will not be limited to polo – other equestrian, leisure and entertainment options will be available at the

Polo venues in their functionality and scope vary

resort. These assets will capture a significant portion of a

worldwide. A clear distinction can be made between

patron’s (resident, guest and/or sponsor) spend.

the traditional polo club which relies solely on polo as a form of sport and entertainment, and the more developed concepts that utilize polo and its aspirational qualities as a lifestyle vehicle in a direct product extension to other sports and accommodation. Globally, no one has developed a polo resort property portfolio in combination with a luxury hospitality brand. The combination of aspirant lifestyle programming reinforced by an exclusive hospitality offering will forge a new sustainable brand.

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8 | Information Memorandum

Jumeirah Culu Culu will become a center of learning equine sports. By bringing people into the sport, in what will become world renowned facilities, the Jumeirah Culu Culu brand will become analogous with polo attributes of class and exclusivity, thereby feeding the aspirational brand philosophy. Jumeirah Culu Culu will deliver world class instruction to adults and children alike, led by polo and equestrian experts from across the world. Jumeirah Culu Culu will also cater to families and embrace them, as a whole, as customers. For example, every horse loving child will want to participate in a Culu Culu Summer Camp. These Camps will be uniquely anchored by the quality of the resort facilities; driving occupancy and residential activity. Becoming the custodian of polo development globally, the Jumeirah Culu Culu brand will grow by exploiting this involvement. Jumeirah Culu Culu will host cutting edge polo, equine and other entertainment events. As a result, this event programming will further enhance the Jumeirah Culu Culu brand image in an exclusive yet thoughtful manner.

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Information Memorandum | 9

Operating Partners The project’s founding shareholders are Albert Alletzhauser and Anne Cabot-Alletzhauser. To date, the Alletzhausers have funded all development activities. The Alletzhausers have successfully listed and/or funded three companies previously: Advantage Asset Management, an asset management firm with USD $12 billion under management; Bloomsbury Publishing, the publishing house best known for its discovery and publication of the Harry Potter series; and TIR Securities, a global executiononly brokerage house since sold to E*Trade. Jumeirah Culu Culu’s operating partners include The Jumeirah Group and Dubai Investment Group (DIG). The Jumeirah Group and DIG are related entities, both part of Dubai Holding, a holding company owned by the Dubai Government. Jumeirah is a world class luxury international hotel and hospitality management company known for its iconic hotel properties across the globe including, but not limited to, the Burj Al Arab,

Jumeirah Carlton Tower and Jumeirah Essex House.

focused on various investment and advisory mandates

Jumeirah will serve as the hotel operator across the

in the Gulf Cooperation Council (GCC) region, North

portfolio. Jumeirah Living will manage the exclusive

& Sub-Saharan Africa, CIS, the Americas and the Asian

Jumeirah Living residences.

sub-continent. Michael P. Williams, serves as Chairman of The Novati Group International SPC in collaboration

All Jumeirah hotels owned by the government of Dubai

with David P. Mapplebeck, who serves as the firm’s Vice

are physically held through DIG, the asset manager of

Chairman. Novati International and its affiliates are

the Jumeirah Group. Although Jumeirah Culu Culu is

headquartered in the Emirate of Dubai, United Arab

privately held, DIG will also serve as the asset managers

Emirates and have representative offices in New York,

for the Jumeirah Culu Culu global resort portfolio. DIG

London, Riyadh and the Kingdom of Bahrain.

offers third party asset management services to other luxury brands including Fairmont Hotels and Resorts.

The JCC management team will include Al Alletzhauser, the Founder and Executive Chairman of Jumeirah Culu

The Sponsor Group for the Jumeirah Culu Culu

Culu, and a strong core of senior managers, with decades

global resort portfolio is led by the Novati Group

of hospitality development and management experience.

International, SPC. Novati Group International

Their experience includes designing, building and

SPC (“Novati International”) is an alternative

operating resorts across developing markets for luxury

investment management and advisory firm focused

hotel brands such as Four Seasons, Mandarin Oriental,

on infrastructure, industrial, real estate and natural

One & Only, Raffles, Ritz Carlton and Rosewood.

resources opportunities in emerging and/or newlydeveloped markets. Presently, Novati International is

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10 | Information Memorandum

Jumeirah | Culu Culu Argentina Jumeirah Culu Culu will launch its first project in Argentina. The site is located in the town of Lobos, Argentina, 30 minutes from Ezeiza-Ministro-PistariniInternational Airport and approximately an hour from Buenos Aires. This 1,200 acre property will cost approximately $331 million to develop. Jumeirah Culu Culu will finance this development with invested equity and pre-sales of fractional villas and private residences. This project will generate an IRR of approximately 40.6%

Argentina

subject to timeline and asset performance. This property is the first Jumeirah asset to be launched in Latin America and is the first full resort to be launched within driving distance of Buenos Aires’ 13 million residents. Programming for the property will include a boutique hotel with 54 suites and 16 separate fractional villas, 124 luxury residences, four championship caliber polo fields, Olympic specification eventing facilities, a branded Jumeirah Talise spa and fitness center, a Jumeirah Lifestyle Concierge, fine and casual dining options plus numerous other leisure and entertainment facilities. Specifically, the resort will include an indoor multi-purpose arena, the first in Argentina. The arena will cater to concerts, indoor sports and equestrian events.

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Lobos

Buenos Aires


Information Memorandum| 11

Hotel & Polo Pavilion

The Jumeirah polo pavilion and terrace are attached to

The hotel and polo pavilion will be located in front of Lake

the Jumeirah hotel facility, the first in the world. The

Culu Culu, with views over the overall resort. The hotel

pavilion and terrace will be 200 yards long, comprising

architecture will reflect a contemporary interpretation of

of a restaurant, viewing deck, bar, an equestrian shop, a

an Argentinean Estancia (country estate). The decor will

large conference centre facility and banqueting facility.

be contemporary and related to polo. Natural materials

There are currently few facilities outside Buenos Aires

including native stone, wood and leather will be integral

that cater to the corporate conference market. The

to the construction. Large windows will offer guests views

conference centre (under the pavilion) will be serviced

over the estate.

by the hotel back of house. During large scale polo events, the pavilion will seat 5,000 people. The overall

This Jumeirah hotel will function as an upscale country

championship field will accommodate over 20,000

club house and offer prime accommodation through its

attendees.

suites and fractional villas. The hotel will also function as the social focal point for resort property owners. The hotel will include a restaurant with accommodation for 100 patrons indoors as well as outdoors on a shaded terrace. This restaurant will feature nouveau Argentine cuisine.

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12 | Information Memorandum

Lake View

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Information Memorandum| 13

Jumeirah | Culu Culu Argentina Hotel & Polo Pavilion

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14 | Information Memorandum

Project Summary Fractional Villas Jumeirah Culu Culu will develop and service 16 two to four bedroom villas, on the eastern shore of Lake Culu Culu, in close proximity to the hotel. These villas will be furnished at a Jumeirah-approved hotel standard and fractional interests will be sold. When not occupied, these units will be contributed to the hotel pool under a revenue sharing plan with the villa owners.

Event Facilities Argentine culture has always shown special interest

Weddings

in celebrating a wide range of social events. Jumeirah

High Season:

September, October, November, December and March (due to weather conditions)

Mid Season:

April, May

Culu Culu expects to capture a competitive segment

Low Season:

January, February, June, July and August

Attendance:

200 – 300 indoor and up to 500 outdoor

of this market. There are 500 weddings each week held

Peak Days:

Saturday, Friday night, and Sunday noon

in Buenos Aires. The average wedding consists of 400

Average Cover:

AR$350 per person

Average Spend:

US$30,000

attendees. Almost every hotel in Buenos Aires offers facilities for events, from small boardrooms catering to corporate meetings to large convention centres offering a

Conferences High Season:

October, November and December

Mid Season:

March, April, May, June August and September

Low Season:

January, February and July

Attendance:

200 – 300 indoor and up to 500 outdoor

Peak Days:

Monday – Thursday

Average Stay:

2 nights

Average Spend:

US$50,000 – US$150,000 (depending on services hired)

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wide variety of rooms of different sizes catering any kind of event. There are no significant non-urban venues for events. Jumeirah Culu Culu will have event facilities to compete for revenue in this space.


Information Memorandum| 15

Spa

Private Residences

Jumeirah Culu Culu will have an indoor riding arena,

The spa business has not been highly developed in

The Jumeirah Living Private Residences will be available

one of two in Argentina. This arena will be used for all

Argentina. Most city hotels have urban spas. In some

in three, four and five bedroom configurations. Owners

equestrian activities in times of inclement weather, night

cases, small estancias in the suburbs are beginning to

may choose to furnish themselves or purchase a

training and shows. A number of outdoor sand arenas

develop spa facilities, but none are upscale. The Jumeirah

complete interior design and furniture package. Inside

for horse training will be constructed as well. A dirt/sand

Talise Spa will offer premium facilities and services

and outside, the Private Residences will reflect the polo

exercise track will encircle the entire resort will be a dirt/

unrivalled in the market.

lifestyle with large sliding glass panels integrating the

sand exercise track. Bridle paths will circulate through

landscape with each room. The orientation and design

the interior of the resort. The resort will also feature

The Jumeirah Talise Spa anticipates an increase in

of the house will maximize views and interactivity with

daily cultural exhibitions as traditionally practiced on

day use due to strong forecasted growth of real estate

the pool. Bedrooms have been designed with generous

the Argentine Pampa by gauchos (Argentine cowboys)

developments in the area. The spa will support hotel

decks that encourage outdoor living. Each residence

displays and other indigenous exhibits.

occupants, villa guests and private residents.

will have an optional underground cellar and cigar

 

room with access by the kitchen through a feature

The resort will also be home to the Jumeirah Culu Culu

staircase. Residents may entertain family and friends

Riding Academy catering to all riders – from beginners

year round from a kitchen fully equipped with luxury

to professionals. Families new to horse-back riding will

appliances. Outdoor patios include a summer kitchen

have the benefit of basic instruction on safe horses. The

and substantial leisure facilities.

academy will be managed by a former Argentine national show jumping champion and resident women’s polo

Arena & Equestrian Facilities

professional.

Jumierah Culu Culu will have equestrian facilities unrivalled in the market, including Olympic Standard jumping, dressage and cross country facilities and five polo fields. The main polo field fronting the pavilion will contain 20,000 cubic metres of sand, making it playable in all weather conditions. The resort will have 256 stables comprised of 4 stable blocks, each of 64 stables.

Talise Spa High Season:

September to April

Accommodation for grooms, tack and feed will be

Peak Days:

Friday, Saturday and Sunday

provided on site.

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16 | Information Memorandum

Jumeirah | Culu Culu at Hurtwood Park Jumeirah Culu Culu will start development at the Hurtwood Park Polo and Country Club in the third quarter of 2009. The site is located near the village of Cranleigh in Surrey, 20 minutes from Gatwick Airport and approximately an hour from London. The development of this 250 acre property will be financed by invested equity and pre-sales of fractional villas. This project will generate an IRR totaling 34.2% subject to timeline and asset performance. Hurtwood Park has hosted televised high goal polo events, music concerts, corporate outings, weddings and other private parties. This acquisition facilitates Jumeirah Culu Culu’s access to one of the premiere polo markets in the world in an established location. The preliminary development plan for Hurtwood includes renovation of existing polo facilities, a 60 suite boutique hotel and spa plus 17 fractional villas.

Great Britain

London Cranleigh

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Information Memorandum| 17

Hurtwood Park Polo Club

Sale of fractional residences at Hurtwood will offer access

Jumeirah Culu Culu will renovate the existing Hurtwood

to one of London’s most exclusive enclaves. Surrey’s close

Park Polo Club House. This renovation will include a

proximity to London and the presence of two major

new dining facility, retail outlets and offices. Anticipated

international airports, Heathrow and Gatwick, close

facilities on-site include an indoor polo arena, expanded

by have been the key drivers and shapers of the Surrey

parking, housing for academy students and staff and a

economy. Much of Surrey is located in a greenbelt and it

state of the art stabling facility.

is the most wooded county in the United Kingdom, with 22.4% coverage compared to a national average of 11.8%.

Hotel/Spa & Residences The Jumeirah Culu Culu boutique hotel and spa at Hurtwood Park will offer five star facilities and best in class service to its guests and Club residents. The close proximity of this property to existing Jumeirah hotels in London, such as, the Carlton Towers in Knightsbridge, will drive traffic to the property and its adjacent facilities from the current Jumeirah client base.

This high quality environment makes Surrey a desirable place to live, work and play. Surrey is credited with having the highest proportion of millionaires in the United Kingdom and is home to many professional working in the City of London. Surrey’s proximity to London and strategic location within South East England has resulted in it becoming one of the most affluent and successful counties in the UK.

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18 | Information Memorandum

JUMEIRAH CULU CULU COMBINED PROJECT ANALYSIS

PROJECT DEVELOPMENT COST SUMMARY

SUMMARY OF KEY ASSUMPTIONS SPRING, 2009 FINANCIAL SUMMARY

PRE-DEVELOPMENT COSTS Total Development Costs

$484,831,950

Total Site Analysis and Due Diligence

Total Capital Requirement (Equity + Debt)

$131,889,247

Total Development Profit

$229,000,037

Total Architecture and Engineering - Conceptual Planning

Blended Unleveraged IRR

36.06%

Total Hotel Keys

174

1st Stabilized Year Occupancy

66.67%

1st Stabilized Year ADR

$819.73

Average Month of Sale (or Refinance) of Hotels Total Residence Club Units Average Residence Club Memberships per Unit Total Residence Club Memberships Average Price per Residence Club Membership Average Annual Membership Fee Total Home and Condominium Units Average Sale Price per Home or Condominium Average Sale Price per Sq Foot

Month 120 33 5 164

124 $1,800,000 $450

Total Gross Polo Field Acreage

90

Total Net Polo Field Acreage

90

Total Polo Fields

9

Residence Club Net Area (Square Feet)

118,065 sf

Homes / Condominium Net Area (Square Feet)

496,000 sf

Total Land Cost

$27,451,600

(included in Development Costs) 10.00 Years

Average Hotel Sale (or Refinance) Cap Rate

10.00%

ALL AMOUNTS ARE IN US DOLLARS

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$436,358

Total Marketing and Public Relations

$1,145,431

Total General and Overhead

$895,435 Total Pre-Development Costs

$4,046,817

Hotel Costs Total Construction - Hotel

$68,509,884

Total FF&E - Hotel

$21,363,198

Total Undistributed Costs - Hotel

$20,339,924

Total Land or Building Cost - Hotel

$11,171,500 Total Hotel Development Costs

$121,384,506

Private Residence Club Costs Total Construction - Private Residence Club

$59,266,057

Total FF&E - Private Residence Club

$16,021,672

Total Undistributed Costs - Private Residence Club

$15,429,506

Total Land or Building Cost - Private Residence Club

$10,180,100 Total Private Residence Club Development Costs

$100,897,335

Ancillary Facilities Costs

$45,017,154

Homes and Condominiums Development Cost

$186,000,000

Estate Lots and Acreage Development Cost

$5,817,200

Undistributed Project Costs

Average Holding Period for Profit and IRR Number of Projects Included in Analysis

$1,076,504

Total Pre-Opening and Technical Services

$1,459,372 $7,941

$493,089

2

ALL AMOUNTS ARE IN US DOLLARS

$21,668,938 TOTAL PROJECT COST

$484,831,950

includes LAND COST/VALUE of

$27,451,600


Information Memorandum| 19

JUMEIRAH CULU CULU RESORTS

TOTAL

FY 2009

FY 2010

FY 2011

FY 2012

FY 2013

FY 2014

FY 2015

FY 2016

FY 2017

FY 2018

Buenos Aires

418,470,382

19,039,503

91,915,291

97,319,903

Hurtwood Park

295,361,605

-

19,033,966

71,777,682

80,369,063

24,655,080

8,828,429

9,795,136

10,895,565

12,098,046

63,554,366

74,526,959

17,717,720

7,060,255

7,658,428

8,115,553

8,597,057

80,873,985

$713,831,987

$19,039,503

$110,949,257

$169,097,585

$154,896,022

$42,372,800

$15,888,684

$17,453,565

$19,011,118

$20,695,103

$144,428,350

Buenos Aires

$330,610,396

$44,771,020

$71,371,398

Hurtwood Park

$154,221,554

$9,871,342

$81,810,285

$78,367,058

$69,107,341

$57,993,579

$9,000,000

$0

$0

$0

$0

$39,507,783

$10,981,646

$10,455,541

$1,594,957

$0

$0

$0

$0

TOTAL INVESTMENT

$484,831,950

$54,642,362

$153,181,682

$117,874,841

$80,088,987

$68,449,120

$10,594,957

$-

$-

$-

$-

13%

38%

29%

20%

$229,000,037

$(35,602,859)

$(42,232,425)

$51,222,743

$74,807,035

$(26,076,320)

$5,293,727

$17,453,565

$19,011,118

$20,695,103

$144,428,350

$229,000,037

$(35,602,859)

$(42,232,425)

$51,222,743

$(34,356,745)

$34,356,745

$40,450,290

$8,280,425

$5,293,727

$17,453,565

$19,011,118

$20,695,103

$144,428,350

$13,837,748

$(35,602,859)

$(42,232,425)

$51,222,743

$40,450,290

End of Calendar Year 2018 Schedule - Projected Investment Performance (1) CASH FLOW

NET CASH FLOW TOTAL CAPITAL REQUIREMENT (2)

TOTAL UNLEVERAGED CASH FLOW (3)

36.1%

LESS: CASH RESERVES ADJUSTED UNLEVERAGED CASH FLOW TIER I (4)

9.0%

TIER II Residual Cash Flow

100.0%

$215,162,289

$8,280,425

$5,293,727

$17,453,565

$19,011,118

$20,695,103

$144,428,350

Managing Member

-20.0%

$(43,032,458)

$(1,656,085)

$(1,058,745)

$(3,490,713)

$(3,802,224)

$(4,139,021)

$(28,885,670)

$6,624,340

$4,234,982

$13,962,852

$15,208,894

$16,556,083

$115,542,680

PROJECTED INVESTOR PERFORMANCE

$185,967,579

$(35,602,859)

$(42,232,425)

$51,222,743

$40,450,290

Net Co-Investor IRR

31.27%

Net Co-Investor Return

$185,967,579

(1) - Assumes 10-Year investment horizon concluding FY 2018. (2) - Assumes all development complete 2014. (3) - Assumes no leverage. (4) - Assumes 9.0% investor preferred return.

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20 | Information Memorandum

JUMEIRAH CULU CULU BUENOS AIRES, ARGENTINA

PROJECT DEVELOPMENT COST SUMMARY

SUMMARY OF KEY ASSUMPTIONS SPRING, 2009 FINANCIAL SUMMARY

PRE-DEVELOPMENT COSTS Total Development Costs

$330,610,396

Total Capital Requirement (Equity + Debt)

$59,241,586

Total Development Profit

$87,859,986

Unleveraged Project IRR

40.55%

Total Hotel Keys

63.71%

1st Stabilized Year ADR

$627.77

Month of Sale (or Refinance) of Hotel Total Hotel Villas Residence Club Memberships per Unit Residence Club Memberships Average Price per Residence Club Membership Average Annual Membership Fee Total Home and Condominium Units Average Sale Price per Home or Condominium Average Sale Price per Sq Foot

6 96

$0

$10,000,000

(included in Development Costs) CRITICAL INPUTS Pro Forma Start Date

06-Jan-09

First Month of Hotel Occupancy

April 2011

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10 Years

$3,319,657

Total Construction - Hotel

$43,032,207

Total FF&E - Hotel

$15,065,735

Total Undistributed Costs - Hotel

$12,440,648 $3,900,000 $74,438,590

Total Construction Private Residence Club $4,844 / sq m

$27,547,226

Total FF&E - Private Residence Club

$8,481,981

Total Undistributed Costs Private Residence Club

$6,207,415

Total Land or Building Cost Private Residence Club

5

n/a

$750,000 Total Pre-Development Costs

$0 Total Private Residence Club Development Costs

n/a

Average Development Cost per Polo Field

ALL AMOUNTS ARE IN US DOLLARS ($)

Total General and Overhead

Private Residence Club Costs

$1,800,000 $450

$1,000,000

Total Hotel Development Costs

124

Average Development Cost per Net Acre

Hotel Sale (or Refinance) Cap Rate

$400,000

9,899

50

Period for Profit and IRR

Total Pre-Opening and Technical Services

Total Land or Building Cost - Hotel

659,947

Total Net Polo Acreage

Total Land Cost

$822,000

Hotel Costs

16

50

Average Sale Price per Polo Field

Year Ending Mar-2015

Month 120

Total Gross Polo Acreage Total Polo Fields

$347,657

Total Architecture and Engineering - Conceptual Planning

Total Marketing and Public Relations

54

1st Stabilized Year Occupancy

Total Site Analysis and Due Diligence

$42,236,621

incl in Total Dev Costs Ancillary Facilities Costs

$9,743,485

Homes and Condominiums Development Cost

$186,000,000

Estate Lots and Acreage Development Cost

$0

Undistributed Project Costs

10.00%

ALL AMOUNTS ARE IN US DOLLARS ($)

$14,872,043 TOTAL PROJECT COST

$330,610,396

includes LAND COST/VALUE of

$10,000,000


Information Memorandum| 21

JUMEIRAH CULU CULU BUENOS AIRES, ARGENTINA INCOME STATEMENTS AND CASH FLOWS Period

10 Years

INCOME STATEMENT - ANNUAL

Year 1

ALL AMOUNTS ARE IN US DOLLARS ($) Totals and Percentages HOTEL OPERATIONS (EBIDTA)

$15,323,430

8.41%

TOTAL DEVELOPMENT COSTS

($330,610,396)

100.00%

NET PRIVATE RESIDENCE CLUB REVENUES

$63,044,493

TOTAL ANCILLARY FACILITIES REVENUES

$58,005,105

NET HOMES AND CONDOMINIUMS REVENUES

Year 2

Year 3

Year 4

Year 5

06-Jan-2011

06-Jan-2012

05-Jan-2013

05-Jan-2014

05-Jan-2015

05-Jan-2016

04-Jan-2017

04-Jan-2018

thru 5-Jan-2012

thru 4-Jan-2013

thru 4-Jan-2014

thru 4-Jan-2015

thru 4-Jan-2016

thru 3-Jan-2017

thru 3-Jan-2018

thru 3-Jan-2019

($1,974,057)

($1,635,821)

$586,664

$1,412,181

$1,950,269

$2,565,077

$3,295,602

$4,109,255

$5,014,259

($44,771,020)

($71,371,398)

($78,367,058)

($69,107,341)

($57,993,579)

($9,000,000)

$2,209,503

$27,037,773

$27,037,773

$6,759,443

$2,022,415

$5,119,905

$6,224,910

$6,543,388

$6,878,160

$7,230,060

$7,599,963

$7,988,792

$8,397,513

($171,571)

$9,795,136

$10,895,565

$12,098,046

$13,411,773

$66,798,046

$16,699,511

NET CASH FLOW - OPERATIONS AND PROPERTY SALES

$37,717,393

($25,731,517)

$20,543,893

$18,952,844

$11,261,722

($33,338,499)

IMPUTED SALE OF HOTEL OPERATION

$50,142,593

TOTAL NET CASH FLOW FROM OPERATIONS AND SALES UNLEVERAGED PROJECT IRR

$87,859,986

Year 10

06-Jan-2010

$66,798,046

120

Year 9

thru 5-Jan-2011

$64,829,160

10.00%

Year 8

06-Jan-2009

$16,830,000

Month

Year 7

thru 5-Jan-2010

$231,954,763

Cap Rate

Year 6

$50,142,593 ($25,731,517)

$20,543,893

$18,952,844

$11,261,722

($33,338,499)

($171,571)

$9,795,136

$10,895,565

$12,098,046

$63,554,366

40.55%

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22 | Information Memorandum

PROJECT DEVELOPMENT COST SUMMARY

HURTWOOD PARK - SURREY, UNITED KINGDOM SUMMARY OF KEY ASSUMPTIONS SPRING, 2009

PRE-DEVELOPMENT COSTS

FINANCIAL SUMMARY Total Development Costs Total Capital Requirement (Equity + Debt)

$154,221,554 $72,647,661

Total Development Profit

$141,140,051

Unleveraged Project IRR

34.15%

Total Hotel Keys 1st Stabilized Year Occupancy 1st Stabilized Year ADR Month of Sale (or Refinance) of Hotel Total Private Residences Private Residence Owners per Unit Total Private Residence Memberships Average Price per Private Residence Average Annual Owner Association Fee Total Condominium Units

$906.11 Month 120 17 4 68 $5,176 0 n/a

Average Sale Price per Sq Foot

n/a

Total Gross Polo Acreage

40

Total Net Polo Acreage

40

Average Sale Price per Polo Field Average Development Cost per Polo Field Average Development Cost per Net Acre Total Land Cost

$254,504

4 n/a $1,454,300 $145,430 $17,451,600

(included in Development Costs)

Period for Profit and IRR Hotel Sale (or Refinance) Cap Rate

ALL AMOUNTS ARE IN US DOLLARS ($)

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$145,431

Total General and Overhead

$145,435 Total Pre-Development Costs

Year Ending Mar-2015

$727,160

Hotel Costs Total Construction - Hotel

$25,477,677

Total FF&E - Hotel

$6,297,463

Total Undistributed Costs - Hotel

$7,899,277

Total Land or Building Cost - Hotel

$7,271,500 Total Hotel Development Costs

$46,945,916

Private Residence Club Costs Total Construction - Private Residences

$31,718,832

Total FF&E - Private Residences

$7,539,692

Total Undistributed Costs - Private Residences

$9,222,091

Total Land or Building Cost - Private Residences

$10,180,100 Total Private Residence Club Development Costs

$58,660,714

Ancillary Facilities Costs

$35,273,669

Homes and Condominiums Development Cost

$0

Polo Field Development Cost

$5,817,200

Undistributed Project Costs

$6,796,895

CRITICAL INPUTS First Month of Hotel Occupancy

$36,358

Total Marketing and Public Relations

$2,587,973

Average Sale Price per Condominium

Total Polo Fields

$145,432

Total Architecture and Engineering Conceptual Planning Total Pre-Opening and Technical Services

120 68.00%

Total Site Analysis and Due Diligence

TOTAL PROJECT COST

April 2011 10 Years

includes LAND COST/ VALUE of

10.00%

ALL AMOUNTS ARE IN US DOLLARS ($)

$154,221,554 $17,451,600


Information Memorandum| 23

HURTWOOD PARK - SURREY, UNITED KINGDOM INCOME STATEMENTS AND CASH FLOWS Period

10 Years

INCOME STATEMENT - ANNUAL

Year 1

ALL AMOUNTS ARE IN US DOLLARS ($) Totals and Percentages HOTEL OPERATIONS (EBIDTA)

$41,829,918

19.98%

TOTAL DEVELOPMENT COSTS

($154,221,554)

100.00%

NET PRIVATE RESIDENCE CLUB REVENUES

$169,377,637

TOTAL ANCILLARY FACILITIES REVENUES

$12,384,216

NET CASH FLOW OPERATIONS AND PROPERTY SALES

$69,370,216

IMPUTED SALE OF HOTEL OPERATION

$71,769,835

TOTAL NET CASH FLOW OPERATIONS AND SALES UNLEVERAGED PROJECT IRR

$141,140,051

Month

120 10.00%

Year 3

Year 4

Year 5

Year 6

Year 7

Year 8

Year 9

Year 10

06-Jan-2009

06-Jan-2010

06-Jan-2011

06-Jan-2012

05-Jan-2013

05-Jan-2014

05-Jan-2015

05-Jan-2016

04-Jan-2017

04-Jan-2018

thru 5-Jan-2010

thru 5-Jan-2011

thru 5-Jan-2012

thru 4-Jan-2013

thru 4-Jan-2014

thru 4-Jan-2015

thru 4-Jan-2016

thru 3-Jan-2017

thru 3-Jan-2018

thru 3-Jan-2019

($696,738)

$1,749,638

$4,094,075

$4,761,197

$5,529,927

$6,037,711

$6,398,818

$6,778,305

$7,176,983

($9,871,342)

($81,810,285)

($39,507,783)

($10,981,646)

($10,455,541)

($1,594,957)

$19,730,704

$69,067,815

$69,067,815

$11,511,303

$960,229

$1,365,068

$1,445,220

$1,530,328

$1,620,717

$1,716,735

$1,818,752

$1,927,167

$32,269,899

$63,545,313

$7,262,179

$5,465,298

$7,658,428

$8,115,553

$8,597,057

$9,104,150

($9,871,342)

Cap Rate

Year 2

($62,776,319)

$71,769,835 ($9,871,342)

($62,776,319)

$32,269,899

$63,545,313

$7,262,179

$5,465,298

$7,658,428

$8,115,553

$8,597,057

$80,873,985

34.15%

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24 | Information Memorandum

Investment Opportunity The Sponsor Group will aggregate, from a small group

not constitute any form of binding contract and create no

of preferred institutional-grade investors, a total of $150

obligations or the basis of any claims against any party,

million commitments to fund Jumeirah Culu Culu

but rather are solely for the purpose of outlining the terms

Polo Resort developments in Argentina and the United

pursuant to which a definitive agreement may ultimately

Kingdom. The pro forma cash flow analysis suggests

be entered into. Any subsequent investment in JCCR and/or

an aggregate IRR of 31.3% subject to the development

its subsidiaries will be subject to and contingent upon the

timeline and asset performance.

completion of successful due diligence and the negotiation and execution of formal agreements. This Memorandum

Participating investors will be invited to subscribe

is intended only for the use of the recipient and is not to be

for a pro rata stake in the subsidiaries of JCC Resorts

reproduced or distributed in whole or in part.

SPC (JCCR), a Cayman Islands segregated portfolio company with limited liability. This company will invest, through a series of subsidiary special purpose entities (SPEs), into specified resort development projects in various geographies (presently, Argentina and the United Kingdom), with the goal of maximizing tax and operational efficiency for the targeted investment in that respective country of origin. Note: This Information Memorandum (“Memorandum”) is being submitted on a confidential basis solely for the information of selected qualified investors in connection with the private placement of shares in JCC Argentina Limited and JCC UK Limited, Cayman Islands exempted companies with limited liability (henceforth, the “JCC SPEs”). This Memorandum is neither an offer to sell nor the solicitation of an offer to buy such interests in any jurisdiction where prohibited by law or to any firm or individual to whom it is unlawful to make such offer. The terms of this Memorandum do

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Information Memorandum| 25

Proposed Entity

The JCC SPEs shall be created by the Sponsor Group, in cooperation with JCCR, the holding company for the Jumeirah Culu Culu Resorts global portfolio. These SPEs shall fund, pursuant to the structure outlined in the Investment Opportunity section, supra, the equity capital requirements for the development of the Jumeirah Culu Culu Polo Resorts in Argentina and the United Kingdom. Participating JCC SPE Shareholders shall provide 99.0% of required project equity investment for public infrastructure and private development (“Project Equity Contributions”). JCCR shall provide the remaining 1.0% of required project equity investment (Project Equity Investment”). As a result of these investment and development activities, the JCC SPEs shall receive preferred distributions from the Jumeirah Culu Culu resort development projects in Argentina and the United Kingdom and shall distribute such income, amongst its participating investors, as set forth in the SPE Operating Agreements.

Purpose

Design, capitalize, build, operate and dispose of Jumeirah Culu Culu Resorts inclusive of hotels, for sale luxury residential properties, equestrian facilities and other leisure and entertainment assets in preferred global locations.

Managing Member of JCC SPEs

The Managing Member of the Jumeirah Culu Culu Argentina Project shall be JCCR or a Special Purpose Entity designated by JCCR.

Contribution Tranches

$50 million Preferred Equity Tranche

Removal of Managing Member

The Managing Member may be removed in the event that it commits fraud, gross negligence, willful misconduct, or materially breaches the agreements between the Managing Member and JCC SPE Shareholders and fails to cure such breach within such reasonable timeframe as agreed between the parties, and/or is convicted of a criminal act. After removal, the Managing Member’s SPE interest(s) shall be converted to non-voting limited SPE interest(s).

Financing Fee

None.

Acquisition Fee

None.

Development Fee

The Managing Member shall be paid a development fee, on an amortized basis, equivalent to 4.0 percent of the total Project Cost.

Disposition Fee

None.

Property Management Fees

Third parties or affiliates of the Sponsor Group and/or other JCC Shareholders may provide service to the Project, including due diligence, real estate brokerage, construction management, sales, information technology and management, and risk management. All such services shall be provided on an armslength basis.

Expenses

Upon consummation of the transaction, the JCC SPEs will bear all expenses related to the design, build, operation and disposition, financing (including origination fees, mortgage brokerage cost and investment banking fees), including allocated advisory costs, third party services, attorneys fees, and all other such costs and expenses related to project activities (“Project Costs”). Project Costs shall be paid out of the SPEs funds as they are incurred.

$100 million Common Equity Tranche Project Equity Contributions

1.0% Managing Member -JCCR 99.0% JCC SPE Preferred & Common Shareholders - Participating Investors

Project Distributions

Distributions of Project net cash flow shall be made at such times as the Managing Member deems appropriate in the following priorities: 1. First, to the JCC SPE Preferred Shareholders in accordance with their capital percentages until all JCC Preferred SPE Shareholders have received a 9.0 percent per annum cumulative return, compounded quarterly, on unreturned Equity Contributions;

If the parties do not proceed to negotiate and execute final documentation, each party shall bear its own legal fees and other costs in connection with the transactions contemplated herein. Reports & Meetings

JCC SPE Shareholders shall receive (i) Annual Audited Financial Statements and Annual Report (including an overview of all SPE activities), and (ii) Unaudited quarterly financial reports and project updates. The Managing Member and JCC SPE Shareholders shall meet in person or by teleconference no less than quarterly to review the progress of the SPE activities.

Confidentiality

The terms and conditions of this Information Memorandum shall be deemed Confidential Information and shall not be disclosed to any third party without prior consent, except that the parties hereto may disclose the terms and conditions described in this Information Memorandum including its existence to their respective officers, directors, employees, attorneys, potential lenders, and other advisers (“Representatives”), provided that such persons shall be advised of the confidential nature of the information and the disclosing Party shall be responsible for any disclosure of Confidential Information by a Representative of such Party. If any Party determines that it is required by law to disclose information regarding this Information Memorandum, it shall, promptly upon being advised of such disclosure obligation, advise the other party thereof and consult with the other party regarding such disclosure or filing and seek confidential treatment for such portions of the disclosure or filing as may be reasonably requested by the other party.

Non-Solicitation

For the thirty (30) day period commencing with the date of the execution hereof (“Due Diligence Period”), neither the Receiving Party nor any of its affiliates will directly or indirectly solicit, initiate, or participate in any discussions or negotiations with, or encourage or respond to any inquiries or proposals by any person or group, (other than customary bank financing sources) concerning polo themed resort development.

2. Second, 80 percent to the JCC SPE Preferred Shareholders and 20 percent to the Managing Member, in the ratio of their percentage interest. 3. Upon the earlier of a 10-year duration of the participation by the Preferred and/or Common Tranche Holders or of the sale or listing of a single JCC asset and/or an aggregated portfolio of JCC assets, a conversion will be made for Preferred and Common Tranche Holders from economic participation in the cash flows of the funded JCC asset(s) to a common ownership stake in the identified asset(s) and/or portfolio, based on a pre-stated valuation. Leverage

JCCR intends to evaluate the use of credit and/or credit alternative products to create leverage within the Project. The leverage shall not exceed 70.0 percent, in aggregate, of the total Project Cost at the time that such indebtedness is incurred (“Aggregate Debt Limit”).

Business Plans

As part of the JCC SPE Agreement, the parties will agree on a multiphase Project Business Plan and Budget. Any material variation from the Project Business Plan will require the consent of the JCC SPE Shareholders. Such consent will not to be unreasonably withheld, conditioned or delayed.

Day to Day Operations

The Sponsor Group will execute day to day operations in accordance with the approved Business Plan.

Future Contributions

The Managing Member and all JCC SPE Shareholders shall be required to contribute capital to the JCC SPEs as required by any approved budgets and/or approved Business Plan. In the event any Member and/ or Shareholder fails to make such required capital contribution, such Party shall be considered in default of their obligations under the SPE Agreements and, as such, may be removed from the JCC SPEs and/or such Partner’s SPE interest may be diluted as a result thereof. Contributions necessary to fund project costs including land acquisition, carrying cost, vertical development costs, credit facility and/or operating costs, if approved, will be made in proportion to the initial equity contributions shown above.

Items Requiring Consent

The following items shall require the written consent of the Managing Member and all JCC SPE Shareholders:

At the end of the Due Diligence Period, Receiving Parties will either deliver a further notice to the Sponsor Group setting forth its intention to proceed with the project (in which case the exclusivity provisions shall continue for an additional thirty (30) day period to allow the parties to negotiate definitive transaction documents, or will notify the Sponsor Group of its decision not to proceed, in which case the exclusivity provisions will terminate but the Confidentiality provisions above shall remain in full force and effect. During the Due Diligence Period, the Sponsor Group shall provide to prospective investors reasonable assistance and such information as it has in its possession related to the Project.

1. Dissolution or winding up of the JCC SPEs; 2. Change in the nature of business of the JCC SPEs; 3. Admission and/or removal of a Shareholder and 4. A material amendment to the SPE Agreements or certification of formation.

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26 | Information Memorandum

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Information Memorandum| 27

| CULU CULU POLO

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28 | Information Memorandum

OLOP ULUC ULUC |

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Information Memorandum| 29

| CULU CULU POLO


www.culuculu.com.ar

Jumeirah Culu Culu Polo Resort Argentina Av. Callao 1870, 2nd Floor Buenos Aires, Argentina

Jumeirah Culu Culu Brochure  

Jumeirah | Culu Culu Polo Resorts Information Memorandum Spring 2009 | CULU CULU POLO |CULUCULUPOLO Information Memorandum | 1 | CULU CULU P...

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