Orange Garden-Srilanka

INVESTMENT PROPOSAL ORANGE GARGEN

SEMI LUXUARY HOUSE SCHEME DEVELOPMENT

PASSIKUDAH, VALAICHENNAI, BATTICALOA DISTRICT, ESTERN PROVINCE, SRI LANKA.

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1 . 1 I N T R O D U C T I O N T O P A S I K U D A

There can be a few places in Sri Lanka where the scene that bursts upon you on arrival is more glorious than it is here. Passikudah beach. On the eastern coast of the island, it is about two to three kilometres from Valaichenai. Passikudah and Kalkudah are located few km apart. Located in the Batticaloa district and around 285 kms from the commercial capital Colombo, this idyllic stretch of beach can be also accessed from Trincomalee.

Passikudah Beach itself is known for its long stretch of golden sand shoreline and tranquil turquoise waters that provide a picture postcard like landscape in which to enjoy the glorious coastal sunshine. The waters that surround the beach are relatively shallow and one can safely wade through the sea for quite some distance. This is an ideal place for a family beach picnic and offers a peaceful and laidback seaside setting in which to just sit back, relax and watch the world go lazily by. Also close by is the equally well known Kalkudah beach that is worth visiting. Passikudah beach owes its beauty for its natural setting with a coral reef adjacent to the shore line. The presence of the coral reef places Passikudah in to a biodiversity rich spot among other such places in Sri Lanka. The reef is relatively undisturbed compared to areas such as Hikkaduwa and rich in coral fish. The different species of corals with beautiful colours and patterns could be seen easily.

Given the attraction of the east coast beaches like Passikudah, many foreign tourists seem to give their priority here. Without even visiting down south, some like to visit only the eastern coast. The small hotel operators are also optimistic and speak about the plans to bringing down new tourist parties. During the war, tourist arrivals became almost zero, but the turnaround has opened the doors to a tourist influx in present.

Project profile :ORANGEGARDEN Page 2

The coast line of Passikudah will not be attractive if not for its coral reef. The lagoon remains calm because it acts as a natural break water. If we are to compare Hikkaduwa corals and Passikudah corals, the latter still remain in its natural beauty. Though hard hit by the prolonged northeast war, Passikudah has regained its place as a popular rendezvous for people of different ethnic groups today, thanks to the UNF government and the LTTE signing the Memorandum of Understanding (MOU). Sinhalese, Muslims and Tamils now flock there to take a dip in the placid waters, which was once a hot tourist attraction in Sri Lanka. While taking a dip, the people are also exchanging their views with people of different communities. Passikudah is a bay protected from the ocean. The significance of Passikudah is that its bed is flat and sandy and has a pleasant effect on the feet. This can be experienced up to nearly 150 to 200 meters from the shore. The seabed is minus rocks and sea cucumbers resemble a baby pool. If one has to get his chest or neck wet, he or she might have to walk in the water for more than 100 meters. Passikudah is perfectly in harmony with its stunning natural setting on the island's eastern tip. With its atmosphere of rarefied tranquillity, it is a place for relaxation and renewal.

2 . 2 N A T U R A L S E T T I N G

Passikudah is located in the Eastern part of Srilanka. It is situated between 7°44′0″N Latitude and 81°37′0″E Longitude. Passikudah or Passikudah Green-Algae-Bay) is a coastal resort town located about 35 kilometres northwest of Batticaloa, Batticaloa District, Sri Lanka

2 . 3 R E G I O N A L S E T T I N G Geographically, Passikudah , which is in Batticaloa District is bound by Trincomalee in the North West, and Batticaloa in the South East. The calm sea waters stretch up to the horizon. It is the later hours of evening at Passikudah beach stretch. Many visitors flock to the beach to take a bath and relax in the cool breeze. After the decades of civil war, the roads to the Passikudah beach has been opened without fear of travelling. As a result, local and foreign tourists arrive in massive numbers to see and enjoy the glory of the pure sands and calm waters of Passikudah beach. It is in the east shoreline of Sri Lanka which was an isolated beauty during the civil war. People feared to travel to this area and tour operators didn’t come up with packages for foreigners. Therefore, the beach remained relatively undisturbed. Only users of the beach were fishermen who went to sea for their daily bread. They also went to sea with the fear of attacks by the LTTE. Now all those fears are gone. Human life has indeed come alive full circle in this coastal terrain.


2 . 4 C L I M A T E

The climate is tropical in Passikudah Bay. In winter there is much more rainfall in Passikudah Bay than in summer. The Koppen-Geiger climate classification is As. The average annual temperature in Passikudah Bay is 27.5 °C. The average annual rainfall is 1763 mm. Climate Graph Temperature Graph

The warmest month of the year is June with an average temperature of 29.5 °C. In January, the average temperature is 25.3 °C. It is the lowest average temperature of the whole year.

2 . 4 R E G I O N A L C O N N E C T I V I T Y

Passikudah Beach on the East Coast is located 90 kms south of Trincomalee and 35 kms North of Batticaloa. It is reached either by road from Polonaruwa in the Cultural Triangle, or via a Sri Lanka Air Force Helicopter Flight to the nearby town of Batticaloa or by a short 90 minute drive on a fine stretch of road from Trincomalee, which can be reached by road, air or now the overnight luxury Expo Rail service from Colombo. The transport infrastructure, with modern roads and also pads to land helicopters and jetties to take in sea planes from the Sri Lanka Air Taxi service is being rapidly expanded to be able to bring in a larger number of tourists from the international airport at Katunayake on the west coast.


PrimeLanka Represents an Opportunity to acquire a Semi Luxury Residential Villa, with Supermarket, SwimmingPool, FitnessCentre,

SportsGround facility.

Prime Lanka represents an opportunity to acquire a luxury residential villa, Semi Luxury Housing And Super Centre project situated in Sri Lanka’s premier coastal resort.

Passikudah is one of the most attractive areas within the eastern province in Sri Lanka with an enviable climate, beautiful coastal scenery and sophisticated night life, attracting 2.5 million visitors a year. Villasand apartments in the area of Passikudah - Kalkudah, in the east of the Sri Lanka are particularlysought after by wealthy local and international buyers.

“With stylish secluded resorts and a jet-set crowd to rival Colombo or Gall, the Passikudah Peninsula is in a different league from the rest of SriLanka’s busy Aegean coast..…”

The ‘’Orange Garden’’ site is located amongst low-rise villa developments and commands fine Views. The region benefits from a Mediterranean climate with the Tropical warm weather. Tourism infrastructure and transportation around the site is well developed,

This project aims to provide the context of the housing challenge in Passikudah and confer the enabling strategies and operational instruments that need to be put in place to achieve the “housing for all” vision in general, but specifically this project is analysing the conceptof "Housing Development in Passikudah - Kalkudah, the case of Domestic & International Clients".

Orange Garden Super Centre and Residence, the premium residence and State of the art Fitness Centre operator, have selected the development for their first offering in Sri Lanka and are committed to provide the required residence management and interior design services.


EXECUTIVE SUMMARY: ORANGE GARDEN

P r o j e c t D e t a i l s :

1. Country : Sri Lanka 2. Province : Eastern Province 3. City : Passikudah - Kalkudah 4. Project Name : Orange Garden 5. Project Cost : 140 Million Srilankan Rupees6. Investment Required : 70 Million Srilankan Rupees

I N V E S T M E N T S U M M A R Y

P r o j e c t O v e r v i e w

• Total Gross Area : 10.69 Acres• Total Net Land Area :10.69 Acres• Construction Area : 9.36 Acres• Sellable residential Area : 9 Acres• Sellable Super Mart Centre Area :20 Perches• Social Area :34 Perches

S i t e U s a g e

• Total 36 dwelling Units and 1440 Perches of total build Area.• 4Luxury Houses or Villas with 1400 Sq.ft with their own garden.• 32 Semi Luxury Houses with 1000 Sq.ft with backyard Garden facility• Private pool facility of 1500 Sq.ft in 10 perch land• World class destination fitness centre and spa facility in 10 perches land• Multi Super Centre in 20 perches with private parking facility• Sports ground in 14 perches land includes Tennis court, Basketball Court and Cricket ground.

B l o c k P l a n


P r o j e c t S t a t u s :

• Site acquired by the Fund’s wholly owned by prime Lanka which was purchasedIn April 2013, with a further 2 parcels totalling463, 518.4sq.ft acquired in 2013/2014.

• Clear unencumbered freehold legal title acquired for the entire site which represents thelastcontiguous piece of land suitable for large scale housing development in Passikudah-Kalkudah,Batticaloa, Sri Lanka.

• Master Plan completed by Mr.V.Rajendran, M.S.I (Sri Lanka), Licenced Surveyor & Leveller&Court Commissioner, Licence No: 140118, Registration No.20050967.

• Architectural designs completed by renowned local architects Mr.T.J.Christiraj (SLTS) TechnicalOfficer of Prathesa Shaba, Valaichenai.

• 151 perches out of the total land were donated for Cultural Hall and Children Park to PrathesaShaba, Koralalpattu, and Valaichenai.

• According to the zoning plan notes, for whole buildings the maximum height will be3.65mconsisting of Single floors. Foundationscan be constructed and are not required tobeincluded in calculations of density.

• All architectural design plans, engineering, mechanical and technical plans, and geologicalsurveyshave been submitted. The award of the final construction permit will be handledby the selectedPrime Lanka.

• Sales offices have been constructed in both Passikudah and Mawanella.

• Selection of construction company pending outcome of sales process.

• Management agreement and interior design services agreement executed with Orange Garden, bya leading manager of Prime Lanka.

• The Orange Garden site was chosen by Prime Lanka after an extensive search andSelection process conducted in the region.

• Orange Garden branded residences will be the first semi luxury residence development of its kindin Passikudah, Eastern province in Sri Lanka.

• Prime Lanka will manage the residences and super centre and also provide the interiordesignconcept which will include its signature pool and multi-award winning Fitness centre &spa.

• Primelanka’s involvement and global reputation is expected to significantly enhance thesalesprices that can be achieved for the development.


F I N A N C I A L I N F O R M A T I O N

K e y F i n a n c i a l A s s u m p t i o n s :

• Land Cost: Srilankan Rs.62 million• Investments:• Acquisition Investment: 50% of the initial acquisition cost• Development Investment: 75% of the construction cost on a revolving credit facility• Domestic Sales: 50%• International Sales Payment Structure: 30% down payment; 70% at the completion• Targeted investment period: 60 months• Construction period: 12 months• Sales period: 30 months (straight line sales success assumed)• VAT: 12%• Corporate Tax: 16.5%• Sales Costs: 4%

Super Centre Operation Assumptions:

• Assets: Spa, Restaurant, Swimming Pool, Fitness Centre• Occupancy: 50%

P e r L o t F i n a n c i a l S u m m a r y

• Per Block per Perch Cost (56,825/- per perchX 40) 2,273,000/- (The cost includes Block Separation, Access Roads, and Utilities)

• Cost of Residential Building Structure (For 1000 sq.ft) 3,675,000/- • Cost of Fence, Remote Gate, Garden 1,180,000/-

Total Cost Per Lot 7,128,000/-

C o n s t r u c t i o n C o s t S u m m a r y

A r e a C o s t S a l e v a l u eLot Land 40 Perch 2,273,000/- Housing Building 1000 sq.ft 3,475,000/- Garden & Boundary, Gate

Remaining portion of land

1,180,000/-

parking

7,128,000/- 10.8 – 13.5 mil • Front Portion and parking slot will be Paved and grassed. Anticipated 600 Sq.ft• Balance rear portion of land Plantation of mixed plants such as (Coconut Tree, Mango Tree,

Banana plant)• The Construction of the House in each lot will be Semi Luxury consist of Two Bedrooms withone

attached bathroom in master Bedroom and One Bathroom together two Bathroom, with Hall,Dining room, Kitchen. Anticipated construction period is 6 months.

• The Construction of house can be determined by customer with pre-approved plans of 4 choice orcan be customised, should be more than 1000 Sq.ft and the cost will be increased to SL Rupees6275/- per Sq.Ft.


L o t D e t a i l s :


H o u s e D i a g r a m & D e s i g n

M o d e l # 1

Square Feet 9 8 4 | Bedrooms 2 | Bathrooms 2 | Parking Space 1 | Levels 1

Cosy, comfortable, and perfect for singles, couples, or retirees looking for an affordable home, vacation cottage, or a guest house addition to a family compound, two-bedroom floor plans can be as simple or luxurious as your budget and wish list requires. It includes Fully Tiled.


M o d e l # 2

Feet 1 0 4 4 | Bedrooms 3 | Bathrooms 2 | Parking Space 1 | Levels 1


M o d e l # 3

Square Feet 1 1 0 0 | Bedrooms 2 | Bathrooms 2 | Parking Space 2 | Levels 1


M o d e l # 4



V i l l a D i a g r a m :



S w i m m i n g P o o l

A commercially rated, fully insulated 13m swimming pool and separate spa are concealed within this subtle design. With the covers open, the space in front of the Fitness Centre is transformed into an area of tranquility and repose, a space in which to socialize, entertain and soak up the rural surroundings; admiring the design and craftsmanship of the property as a whole.

The pool features a Calorex air source heat pump, an automatic slatted cover which is hidden in the structure, marine grade stainless steel fittings, a MultiCyclone pre filter and a UV water disinfection system.


F i t n e s s C e n t r e :

• 30 station brand new fitness gym, with equipment suitable for users with mobility problems.


S p o r t s G r o u n d :


S h o p p i n g s u p e r C e n t r e :


The supermarket is to be constructed using concrete foundations and a steel frame. External walls will include structural glazing and composite steel cladding, with some brick cladding. N.B. This assessment does not include demolition or abnormalexcavations, nor does it include external paving and landscaping or the provision of car parking or access roads.


S u p e r C e n t r e & F a c i l i t y C o n s t r u c t i o n C o s t S u m m a r y :

A r e a C o s t V a l u e S a l e V a l u eland 3,068,550 Swimming Pool 3.9 mil Fitness center 2.8 Super center 2.9 Fittings for the shopping complex (A/C)

2.1

parking 1.2

15,968,550 20 mil

Proposed a swimming pool, Fitness Centre with super market to be constructed in Lot 24 which is 40 perches.

Swimming Pool which is to be constructed with paved garden in 10 perches which cost of Rs.3.9 Mil,

Fitness Centre is to be constructed with modern equipment in 10 perch land which cost of Rs 2.8Mil

Parking space for Swimming Pool and FitnessCentre is to be constructed with cost of Rs.1.2 Mil


K E Y S E L L I N G P O I N T S

P r o j e c t S t a t u s

• Master plan and architectural design work is completed.

• Zoning applications are fully completed

• Ready to commence the construction and off plans sales.

• Sales offices constructed both Passikudah (In-Site) and Mawanella.

• Reservation already received for the first phase of 4 Residence Lots.

• Water supply, Electricity, and Telephone lines been individually supplied to each lot.

S t r o n g S a l e s P r o p o s i t i o n

• Positioned in an elite coast allocation, with excellent tourist infrastructure.

• Proximity to the High way and ease of transportation.

• All buildings have a panoramic view.

• Established location for wealthy Sri Lankan purchasers of second homes.

• Prime Lanka branding and proximity to several proposed Residence projects driving

demand from International purchasers ( particularly UK, Australia, Germany, France,

Holland, Italy and India )

• Significant growth in foreign tourist arrivals in Sri Lanka – 19.6% year on Year increase in

January 2013 and annualized increase of 37% in 2014.

S h o r t a g e o f D e v e l o p a b l e p l o t s i n t h e P a s s i k u d a h – K a l k u d a h R e g i o n

• Last contiguous piece of land suitable for large scale Housing development in Passikudah

S u p p o r t , M a r k e t K n o w - H o w

• Key local officials and contacts supporting the project



Purchase Options

Payment Planü$2,500 reservation feeü$250 legal feesü30% due on exchange of contracts in 28 days (minus reservation fee plus VAT)

•10% secured by premierguarantee insurance bond

ü

Legal Fees$250 legal fees paid by client

Other costsDisbursements for searches cost around $250. Stamp duty depends on price

The purchase cost includes all leagal fees and all other documents related.

ü The Preparation cost includes Furnishing and preparing the villa to be rented asap.

Rental GuaranteeThe rental guarantee for The Orange Garden is offered by the developer and clearly defined in both the sales and purchase contract and the guaranteed yield deed for the property.


Property Cost

Purchase Cost

Preparation Cost

Total Purchase Cost

Rental Income

Monthly Gross Income

Rental Management Agency Fee Rate (%)

Monthy cost(Repairs & Maintanence)

Monthly Net Income

Void periods ( Months per year)

Monthly Effective Income

Returns

House price Appreciation (%)

Holding period (years)

Final Property price

Management Agency Fee Rate (%)

Legal Fees

Net Capital Return

Annual Rental Inflation (%)

Total Net Income

Total Return

Internal Rate of Return (%)

$ 92,307.70

$ 1,923.00

$ 9,230.70

$ 103,461.40

$ 2,255.00

2%

$ 384.60

$ 1,825.90

2 Months

$ 1,521.58

10%

5 years

$ 148,662.47

5%

$ 1923.00

$ 139,306.35

1%

$ 93,565.37

$ 129,411.02

24.58% per year

Investment Scenario

For this investment scenario the following has been assumed:

The US $ rate considered at the rate of SL Rupees 130/-

In a Year 4 Months been considered as Season months where thetwo bedroom furnished villa can be rented $120 per night.Out of the rest 8 months in a year the 6 Months considered Off season and Villa can be rented for $ 60 per night.

The Developer recently commissioned an independent feasibility study. The report confirms occupancy rates of 60% - 80 % in the nearby area in Pasikuda – Kalkuda.

The study concluded that the ''Orange Garden'' is uniquely positioned to benefit from the high occupancy rates currently achieved. Investors will be benefit from the following anticipated returns on the two bedrooms Villa.

The property is to be held for at least 5 years after completion to benefit from maximum capital growth and guaranteed rental yields of up to 24% NET per annum.

The guaranteed 169.48% ROI is based is based on a Luxury Two Bedroom Villa (1000 sq ft) priced at $ 92,307 /- and excludes capital growth.

Other unit types have a similar return. If held for 5 years after completion , considering a 10% capital appreciation per year from 2015 to 2019 , and no growth in the off plan stage, the property can be sold with a projected cash profit of $ 148,662/- (including net rental income after costs and mortgage payments), subject to selling costs and tax.

The guarantee works as follows:

Year 1 after completion: 24.6% Net of purchase price Year 2 after completion: 27% Net of purchase price Year 3 after completion: 29% Net of purchase price Year 4 & 5 onwards – projected yield of 32% - 35%*


Our main focus is on investment property in emerging markets, but as each location and development is unique, we have property that is perfect for the second home or holiday home as well as somewhere to retire to.

We believe that research and knowledge is everything. It is why we scrutinise every development we present, ensuring our customers see only the best properties available in the most stunning locations worldwide.

5 Key Principles:• Price• Location• Desirability• Credibility• Ease of purchase

Join the growing number of buyers who recognise that there is no substitute for experience.

Return on Investment

ü80% NET rental guarantee over first 3 years

üYear 4 & 5 onwards – projected yield of 32%-35% based on research

ü169.48% ROI Over 5 Years Before Capital Appreciation

Own a Villa

üInvest from $92,307

ü30% deposit and balance due on completion

ü70% Payment installment

ü

üDelivered Fully Furnished

Hassle Free Purchase

üManagement Company manages and markets the Villa's on your behalf

üNo annual costs for 3 years

üService levels equal to 5 Star Hotels

Water, Electricity, Telephone,

maintenance providedSecurity camera, garden

This impending price increase will provide our clients the opportunity to purchase up to 43% below prevailing market prices.

C u r r e n t I m a g e s o f t h e P r o p o s e d P r o j e c t S i t e :




P R O J E C T T E A M

M.K.M.Mikshad (Senior Advisor- Planning) Prime Lanka Real Estate – Chairman/CEO All Island Justice Of Peace

S.Ajanthan (Project Manager) BSc (Computer engineering) (USA) VAST Holdings (Pvt) Ltd - CEO

Mr.V.Rajendran, (Senior Civil Engineer) M.S.I ( Sri Lanka), Licenced Surveyor & Leveller& Court Commissioner, Licence No: 140118, Registration No.20050967

Mr.T.J.Christiraj (Architect-Urban Planner) (SLTS) Technical Officer of Prathesa Shaba, Valaichenai.

ZakariyaFaleel (Senior Draughtsman) Civil Draughtsman Counsular of MPCS (Multi-Purpose Consultant Society).

Seyad Mohamed Mohamed Makam (Legal Officer) LLB Attorney – At –Lawyer.

A.G.W.Kumara, B.G.P.R.Kumara, W.D.N.Wijeyasinghe, (Socio-Economic Survey M.L.M.Ehiyia, S.D.J.De Silva Team members)

C o n c l u s i o n

The above business plan fully supports Prime Lanka Real Estate (Pvt) Ltd as a company and will produce the projected income stream for the two principals. . The management approach that allows the principals to run the company Mawanella & Passikudah, offices and maintain their current employment while managing Orange Garden Project is viable and maintains a low overhead expense.

The expertise and experience of the principals will lead to the success of the company. Their knowledge and understanding of the market area, as well as identifying and Exploiting purchasing opportunities that keep cost basis low, ability to assess and diversify risk, prepare qualified cash flow Performa’s, and the ability to obtain Investment’s will all lead to achieving the projected return on the portfolio of real estate assets. These returns will achieve the goal of providing supplemental retirement income to the principals of the Prime Lanka Real Estate (Pvt) Ltd.

S i t e A m e n i t i e s

The project will feature ecologically friendly components such as: increase green space on the site, use locally produced materials, use materials with a recycled content (ex: steel, concrete, flooring), low flow toilets and sinks, energy star appliances, high efficiency water heaters and HVAC units, and have garden on site for tenant use.


Documents

Orange Garden-Srilanka