Nexus Plot 1

8/8/2019 Nexus Plot 1

1/24

NEXUS PLOT 1 DEVELOPMENT SITE

CONTENTS

Page No.STATUS OF VALUER AND INSPECTIONS 1COMPLIANCE 1LOCATION 2SITUATION 3DESCRIPTION 3LEGAL STATUS 4TOWN PLANNING 5BUILDING PERMISSION 5ENVIRONMENTAL MATTERS 6PROPOSED SCHEME 6

MARKET OVERVIEW 7BLACK SEA HOLIDAY HOME COMMENTARY 8DEMAND 13SALES PRICES 15FORECAST 16VALUATION METHODOLOGY 16MARKET VALUE 18LIABILITY AND PUBLICATION 19

APPENDICESAppendix I General Assumptions and Definitions


2/24

Your Ref

Our Ref G:\INTERNATIONAL\CFT\Projects\MPGDate 27 March 2008 9 Marylebone Lane

LondonW1U 1HLTel: 020 7935 4499

Fax: 020 7487 1800

www.collierscre.com

Direct Line+44 20 7344 6609Direct Fax +44 20 7344 6539Mobile +44 7768 [email protected]

The Directors

MPG100 Pall MallLondonSW1Y 5HP

For the attention of Michael Gallucci

Dear Sirs

NEXUS PLOT 1 DEVELOPMENT SITE

In accordance with your instructions, we have inspected the above development site in order toprovide you with our opinion of Market Value, as at 31 January 2008, for secured lending purposes.

STATUS OF VALUER AND INSPECTIONS

The property has been inspected and valued by suitably qualified valuers who fall within therequirements as to competence as set out in PS 1.4 and 1.5 of the Valuation Standards (the RedBook) issued by the Royal Institution of Chartered Surveyors (the RICS). We confirm that ColliersCRE complies with the requirements of independence and objectivity under PS 1.6 and that we haveno conflict of interest in acting on your behalf on this matter.

The property was inspected on 9 January 2007 by Kristian Engley BSc MRICS and supervised andvalued by Christopher Fowler-Tutt BSc MRICS.

The extent of our investigations and the sources of information on which we have relied upon aredescribed under PS 5 of the Red Book.

The General Assumptions and Definitions form Appendix I to this report.

COMPLIANCE

This appraisal has been prepared in accordance with the International Valuation Standards 2005 and

the RICS Valuation Standards (the Red Book). In the context of the valuation Colliers CRE act as anIndependent Valuer. The valuers do not have any direct or indirect personal or corporaterelationships with the property or Company that is the subject of this assignment and that might leadto a potential conflict of interest.

This engagement has been performed independently and without bias toward the client or others.We have complied with the code of conduct and adhered to the ethical standards set out in the RICSValuation Standards.


3/24

NEXUS PLOT 1, AHELOY, BURGAS, BULGARIA

LOCATION

The subject property is located on the eastern Black Sea coast of Bulgaria, in the locality of Aheloy,a small rural village. Aheloy is located within the Pomorie Municipality and the wider Burgas region.The village is located approximately 6km west of the Black Sea coastline and the Sunny Beachtourist resort. Aheloy also lies approximately 5km west of town of Nessebar, 40km north of Burgasand is 100km south of Varna.

The wider Burgas region is one of the most developed areas in Bulgaria. With the second largestland area, it is the fourth most densely populated region of the country. The Burgas region operatesas an important gateway to the country, with 74% of Bulgarias imports and exports being handledthrough the port of Burgas. The region provides 5.22% of the countrys GDP and houses BurgasInternational Airport, the Burgas Port complex, and the Triple Way extended railway stationsbetween Burgas and Kamobat.

A large, highly skilled, labour pool in the region also serves the growing manufacturing andconstruction industries, primarily concentrated around the city of Burgas. Bulgarias largest touristcostal resort is the costal area of Sunny Beach situated approximately 5km north of Burgas. Theresort has upwards of 500 hotels stretching along and directly behind the beachfront, arranged overmedium to high-rise hotel blocks. The resort also houses a large number of apartment blocksranging in design and quality. Contributing further to the regions tourist industry are the numerousthermal mineral spa springs that populate the Burgas coastal areas.

A map extract showing the wider location of Aheloy is detailed below:

Source: (Google 2008)

MPG Associates Ltd 2


4/24


SITUATION

The subject property sits 2km north of Aheloy and 1.5km south of Tankovo, both villages in apredominantly rural location, and is situated approximately 5km from the Black Sea coastline withineasy access of the popular tourist destinations of Sunny Beach, Nessebar, and Pomorie. Theproperty lies to the west of the tertiary Tankovo Aheloy link road, and is accessed via an un-surfaced access road leading westwards from the link road. The property can be found on thesouthern side of the access road, approximately 100m from the link road junction.

The village of Aheloy has good transport links and is bisected by the E79 Highway. The E79 is themain arterial route into the Sunny Beach resort from both northerly and southerly directions,providing a direct link to the cities of Varna and Burgas. The nearest international airport is located inBurgas (40km), with Varna (100km) also having an international airport.

Aheloy is predominantly residential in nature, with local amenities limited to local convenience storescatering for the small local population. An aerial photo of the site is shown below:

Source: (Google Earth 2008)

DESCRIPTION

The subject property comprises an undeveloped plot of agricultural land. The parcel of land referredto as the Nexus Plot 1 comprises a land plot with a total area of 10,003 m 2 (1.0 hectare) Theproperty is currently used as agricultural grazing land with covering vegetation in the form of shortgrasses together with some vine beds. Topographically, the plot is broadly level with no notablegeographic features. The plot is arranged in a regular rectangular shape with the longest axis of the



5/24


plot running in a north-south orientation, with the northern boundary lying adjacent to the unmadeaccess road.

The plot is bounded by agricultural land to all sides, including the adjacent plot known as Nexus Plot2. During our inspection there was no evidence of any adjacent buildings or features in theimmediate locality, with the closest development occurring in the adjacent villages of Tankovo andAheloy. We have attached photos of the subject property below:

Main view of the property View looking east of the property

View of property looking east View of Tankovo-Aheloy link road

View of property looking west Junction of access and link road

LEGAL STATUS

We understand that the subject property is held freehold by MPG Associates Ltd (MPG) and is freefrom any legal encumbrances that may have a material impact on the value of the property.

However, we would advise interested third parties to make their own enquiries into the legal status of



6/24


the property to establish the current situation. We have been provided with the ownership details forthe property, which we have summarised in the table below:

Address Land parcel ID Size (m2) Ownership document

Aheloy Village,PomorieMunicipality,Burgas Region

001251 7,000Notary Deed 158, volume I, reg. 525, file 143dated 2006; registered with the Real Estate Registerunder Deed 40, volume VI, file 1061 dated 2006

Aheloy Village,PomorieMunicipality,Burgas Region

001252 3,003Notary Deed 158, volume I, reg. 525, file 143dated 2006; registered with the Real Estate Registerunder Deed 40, volume VI, file 1061 dated 2006

Total 10,003

TOWN PLANNING

The property is currently zoned for residential development by the Pomorie Municipality as per OrderNo. P-16-93 dated 1 February 2006 and P-16-32 dated 19 January 2006. We have summarisedthe zoning parameters in the table below:

Land parcelsID

Coefficient ofconstruction

Density Green areasEaves Height

(m)Permitted Use

. 1251 1.2 40% 50% 10 Holiday homes

. 1252 0.8 30% 50% 7 Holiday homes

BUILDING PERMISSION

We have had sight of the building permission permit for the Nexus Development plot dated 7 June2007, authorised by the Pomorie Municipality. The document provides permission for MPGAssociates Ltd to:

(i) Commence building on the site after the coming into force of the permission of use.

(ii) The construction/assembly works provided in the approved Rational Design should start

after opening of the building site and determination of the building line and level.

(iii) During construction, deviations from the approved plans are not permitted.

(iv) To use part of the street and pavement roadway for a building site according to theHealth & Safety plan.

(v) To build temporary buildings in reference to the organization and mechanisation of thebuilding according to the approved Health & Safety plan.



7/24


ENVIRONMENTAL MATTERS

We have not carried out soil, geological or other tests or surveys in order to ascertain the siteconditions or other environmental conditions of the properties. Additionally, we have not received anenvironmental report or any comment on the environmental condition of the property. Subsequently,our valuation assumes that there are no unusual ground conditions, contamination, pollutants or anyother substances that may be environmentally harmful and that may have a material affect on value.

PROPOSED SCHEME

We understand that the proposed scheme comprises 28 villas, car parking, and commercial serviceunits with a total built up area of 11,432 m The residential accommodation is expected to bearranged over three villas types, with villa type A (typically 170 m ), villa type B (typically 128 m )and villa type C (typically 100 m ). The villas will be arranged over ground and first floor. In additionto the individual villas there are two apartment blocks located on the northern end of the site. Theseapartments will be arranged over ground to fourth floors. We understand that both the villa andapartment units will have the following specification:

Foundations Reinforced concrete foundations.

External Walls Concrete block inner leaf, cavity insulation, 100m outer leaf withrendered external finish.

Roof Roof structure to engineers design with metal interlocking, single plyor asphalt roof finishes. P.V.C and metal gutters on proprietarysystem.

Windows Double glazed units with composite aluminium / timber frames.

Internal Stairs Pre-cast concrete, with steel or software timber stairs betweenfloors, where applicable.

Electrical Installation Installation to comply with National, European Rules & Regulations.All homes wired for Sky T.V, IT with security system and telephoneservice integrated to a site wide provider.

Heating / Cooling Fitted with heat-pump centrally located piped & ducted to providefully automated system. Sized by mechanical engineer with a localthermostatic control and timer.

Kitchen Units Fitted kitchen units with facilities for built in fridge/freezer,washer/dryer, electric hob unit.

Patio Area Each villa will have its own patio area with decking and grass as perarchitects drawings.



8/24


We have relied upon the following schedule of areas for the proposed development provided byMPG.

Premises UnitsSize per Unit (m2) Total Size

(m2)Area Terrace Total

Residential

Block 1 73 3,565

Block 2 68 3,434

Villa Type A 4 170.86 23.39 194.25 777

Villa Type A1 4 170.86 23.39 194.25 777

Villa Type B1 10 128.44 23.37 151.81 1,518

Type C 10 99.20 16.72 115.92 1,159

Subtotal 169 11,231

Commercial

Caf 1 56.74 6.41 63.15 63.15

Shop 1 26.60 0 26.60 26.60Fitness 1 63.90 7.10 71.00 71.00

Office 1 37.49 2.70 40.19 40.00

Subtotal 4 201

Total 11,432

MARKET OVERVIEW

Bulgaria joined NATO in 2004 and the EU in January 2007. During the first half of the 1990sBulgarias economy shrunk dramatically owing to the loss of the COMECON markets, and UNsanctions against its major trading partner Yugoslavia. In 1994, GDP began to show signs of growthand inflation fell for the first time since transition commenced in 1990. The collapse of the economyin 1996 was primarily due to an unstable banking system. Since 1997 the economy has graduallyrecovered due to sound macroeconomic policies and a broad structural reform programme.

Since 2000, GDP has grown at 4% to 6% per annum and is forecast to grow by similar levels in 2007and 2008.

Bulgaria macroeconomic data and forecasts

2005 2006e 2007f 2008f 2009f

Nominal GDP (Euro bn) 21.4 24.4 27.5 30.5 33.5Per capita GDP (Euro) 2,780 3,170 3,590 4,010 4,420

Real GDP, yoy (%) 5.5 6.3 6.5 6.3 6.2

Inflation (CPI), yoy, avg (%) 5 7.3 6.2 4.7 3.6Unemployment rate (%) 10.7 9.1 8 7.5 7

Exchange rate/Euro, avg 1.96 1.96 1.96 1.96 1.961M SOFIBOR (1), avg of the year 2.7 3.7 4.2 4.1 3.9

Current account/GDP (%) -11.3 -14.7 -14.2 -11 -9.5FDI/GDP (%) 10.8 15.5 14 10.5 9

General government debt/GDP (%) 31.9 25 24.5 23 22Budget balance/GDP (%) 2.3 3.5 2 1.5 1

Total external debt/GDP (%) 71.4 75 81 83.5 86

(1) Prior to SOFIBOR introduction yield on 3M treasury bonds was used as a benchmark interestrate.

e Estimate f Forecast Source: Bank Austria



9/24


Bulgarias dynamic GDP and per capita income growth rates and increasing economic integrationsince 2000, have been driven by domestic consumption and investment. Bulgarias GDP per head in2005 was circa $3,500. The country remains the poorest of the CEE states (excluding Russia andUkraine). Its estimated GDP per capita in 2006 even at Purchasing Power Parity was just 30% ofthe EU15 average, 35% of the EU25 average and 53% of the EU8 average.

The reform programme launched in the late 1990s led to a steady fall in inflation. However during theperiod between 2003 2006, inflation has varied between 2.3% and 7.3%. Given the rapid GDPgrowth, it will be difficult to bring down inflation much further in the short term which presents a threatto the countrys targeted accession to the Eurozone in 2010.

Bulgarias unemployment level has also been falling since 2000, reaching circa 9% by year end2006. This is the lowest level since the beginning of transition and compared with approximately19% in 2000.

The biggest constraint on growth and risk to underlying economic stability in Bulgaria has been its

trade deficit. Estimated at approximately 15% of GDP in 2006, it is the highest in the CEE regionand is forecast to remain in double figures until the end of 2008. Furthermore, Bulgarias fixedexchange rate has made it difficult for Bulgarian exports to remain competitive.

Surging inflows of capital goods in recent years, however, will continue to stimulate export growth,providing sufficient financing for the current account shortfall and as such mitigating much of theassociated risk.

Growth Drivers

Bulgarias tourism sector generated more than 2 billion of revenue in 2006 from four million visitorsenjoying its sun, sand and sea along its 354km of Black Sea coast, skiing opportunities in the winterand mountain landscapes in the interior. The sector accounted for approximately 14% of Bulgarias

GDP in 2006 and accounts for more than 140,000 jobs.

Bulgarias accession to the EU is contributing to a boom in tourism, raising its profile as a majoremerging travel destination. Post EU accession, the number of the foreign tourists in Bulgaria havejumped by at least 10% in 2007 and a forecast by the World Tourism Organisation indicates that bythe year 2010, the number of tourists in visiting the country will annually exceed 20 million.

Since 2003, Bulgaria has seen booming interest from foreign investors. The driving forces havebeen the EU accession process and membership; the highly-skilled multilingual workforce with theEUs most competitive wage; a stable and predictable business environment; the lowest operationalcosts and tax rate in the EU and tax exemption and investment incentives for qualified investors.

Between January and November 2006, the state exchequer received 3.2 billion of inwardinvestments. This equates to approximately 13% of GDP and more than 100% of current accountdeficit. Bulgaria has the highest level of FDI as a percentage of GDP in the CEE region.

BLACK SEA HOLIDAY HOME COMMENTARY

Overview

The Black Sea holiday homes market experienced significant growth in 2006 and 2007. In excess of19,500 residential apartment units were added to the overall supply in coastal resort areas bringingthe total to in excess of 50,694 units. A number of additional facilities such as golf courses alsoemerged during 2007, providing added levels of amenity for visiting tourists. The completed and

proposed golf courses occupy both coastal and mountain locations. The emergence of theserecreational facilities in the area, is expected to strengthen the demand for holiday properties. The



10/24


quality of holiday home construction has also improved, in line with increasingly demanding buyerrequirements together with the premium pricing levels associated with these exclusivedevelopments.

Sunny Beach continues to be the most popular coastal resort in the Black Sea locality, accountingfor about 35% of all new supply to the market. Demand is predominantly formed by privateindividuals from the United Kingdom and Ireland, and new markets, such as Russia, Romania andthe Baltic states, are becoming increasingly active in the Bulgarian market.

Supply

Overall trends

Most of the supply continues to be concentrated in the popular Sunny Beach resort area, which alsoincludes St. Vlas, Elenite, Nessebar, Ravda, Kosharitza, and Aheloy. The latter region accounts formore than half of the current supply. However, the supply of new schemes has started shifting

towards medium and smaller resorts due to a number of key factors. Firstly, sharp increases in landprices in popular destinations has prompted developers to invest in relatively unexplored areas.

Furthermore acquisition of substantial land plots, in large well developed areas, has becomeincreasingly hard to find. In addition, there has been an element of over-construction and marketsaturation in these established resorts, with supply outstripping demand. In response, majordevelopers are starting to plan and build projects away from the primary resorts, and are focusing onsecondary locations offering exclusivity, privacy, and added services and facilities like marinas andgolf courses.

The supply of vacation homes on Bulgarias Black Sea coast amounted to almost 50,700 units by theend of December 2007, which represents 56% year-on-year growth. We have detailed the growth inholiday home supply from June 2006 to December 2007 below.

Cumulative Coastal Holiday Homes Supply

(Apartment Units)

0

10 000

20 000

30 000

40 000

50 000

60 000

June 2006 December 2006 June 2007 December 2007

Source: Colliers Research

As previously detailed, the pioneer developments were located in the Sunny Beach area, thereforethe market for vacation homes remains unevenly distributed between established, well knownresorts, and smaller and less popular locations. The proportional share of the Sunny Beach resort interms of overall supply remained constant. Bulgarias largest coastal resort currently accounts for34% of the total coastal supply compared to 36% six months earlier. St. Vlas, another resort in the

greater Sunny Beach area, showed a significant 66% increase from December 2006. Ravda and



11/24


Sozopol continued to develop as leading holiday-home locations as cumulative supply in thesecoastal towns increased by 73% and 83% respectively. Currently, their share of the total cumulativesupply is 7% and 6% respectively.

Developments geared towards families and terraced units gained more popularity, and their numbercontinues to grow. At present, properties of this type are mostly concentrated in Kosharitza, Sozopoland Kavarna. However, due to the intensive construction in most of the established locations, somemajor developers have shifted their focus away from these popular areas. The graph below showsthe distribution of holiday apartment supply in the established holiday home locations.

Cumulative Supply of Coastal Holiday Homes in Selected Resorts (Apartment

Units)

0

5 000

10 000

15 000

20 000

25 000

Golden Sands Ravda Sozopol St. Vlas Sunny Beach

June 2005

December 2005

June 2006

December 2006

June 2007

December 2007


Balchik, Byala, Kavarna, Obzor, and Pomorie are among the locations that have become morepopular and attractive for second-home projects over the last year. The increase in supply for Balchikand Kavarna, has been driven primarily by the ongoing development of the golf courses in thelocality. As a consequence these resorts contribute significantly to the overall annual increase inholiday homes built on the Black Sea coast during last year.

The overall share of the coastal holiday home market is shown below, with comparisons betweenDecember 2006 and December 2007.



12/24


Resort Share in Coastal Holiday Homes Supply

(December 2007)

34,0%

8,0%

7,0%6,0%

5,0%

5,0%

4,0%

4,0%

4,0%

3,0%

3,0%

3,0%

2,0%

2,0%

2,0%

2,0%

1,0%

1,0%

3,0%

Sunny Beach

St.Vlas

Ravda

Sozopol

Balchik

Pomorie

Elenite

Golden Sands

Aheloy

Obzor

Primorsko

Byala

Kavarna

Tzarevo

Kosharitza

Nessebar

Lozenetz

Chernomoretz

Others

Res ort Share in Coastal Holiday Home s Supply

(December 2006)

35,3%

6,9%

6,1%5,8%

5,4%

5,0%

4,7%

4,6%

4,3%

4,0%

2,8%

2,6%

2,6%

2,0%

1,9%

1,5%

1,2%

0,9%

2,3% Sunny Beach

St.Vlas

Elenite

Ravda

Kavarna

Tzarevo

Balchik

Sozopol

Pomorie

Golden Sands

Obzor

Aheloy

Kosharitza

Primorsko

Byala

Nessebar

Lozenetz

Sinemoretz

Others


Characteristics of Supply

Coastaldevelopments range from complexes offering fewer than 20 units, to resort villages featuringmore than 1,000 units. Currently the average number of units per complex is approximately 100compared to 115 for the same period in 2006. The growing number of small developments hascontributed to this net size reduction. The charts below shows the size distribution of developmentsin December 2006 and December 2007.



13/24


Size of Coastal Holiday Home s Developments

(December 2007)

37%

54%

10%

up to 50 units

50-199

200 and above

Size of Coastal Holiday Homes Developmen

(Decem ber 2006)

41,9%

49,2%

8,9%

Up to 50 units

50 to 200 units

More than 200 units


As shown by the above charts the net size of developments are reducing in size. The current shareof complexes with less than 50 units has decreased by 5% from 2007. However, this share has beenadded to the next range of small size developments with up to 200 units. The share of large projectsoffering over 200 units has decreased from 10 % to 8.9% for the same period, driven by moremoderate investment scope in general, and by the growing number of small local developers withlimited funding.

By Type of Apartment and Amenities

The supply of second-home apartments on the Black Sea coast is predominantly formed from one-and two-bedroom apartments. However, large-scale developments also offer studios, three-bedroomapartments and penthouses. In addition, there are developments designed as apartment hotelswhich consist mainly of hotel type rooms and small apartments ranging in size between 20 to 35 m2.



14/24


A small number of developments offer apartments in a turn-key condition, featuring fitted bathroomsand kitchens, while other developments offer basic kitchen furniture and air conditioning systems.

Many developments also offer a wide range of services and on-site facilities, such as private pools,parks, shops, restaurants, sports and leisure amenities, parking lots, 24-hour security, maintenanceof common and private areas etc. Some developers even provide buyers with rental assistance,furnishing, and redecoration of the apartments. However, only a small number of second-homedevelopments guarantee rental yields. These are mostly large-scale projects carried out by wellestablished developers.

By Development Status

Almost half of the Black Sea holiday home development schemes are currently under construction orin the planning stage. However, the share of completed projects is growing and stood at 56.6% as atDecember 2007.

0

10000

20000

30000

40000

50000

Total Supply

Decem ber 2007

South Black Sea North Black Sea

Development Status Holiday Homes Supply

(December 2007)

Under construction

Existing


DEMAND

Bulgaria has emerged in recent years as a hot spot for holiday homes. The major factors drivingdemand include Bulgarias EU accession, growth of the tourism industry in Bulgaria, and thefavorable landscape and climate for both coastal and mountain holiday home developments.Furthermore, Bulgarias comparatively low real estate prices in relation to competing Europeanmarkets has also attracted a large number of international investors.

Buyers have become more demanding in terms of quality, added services, and developmentfeatures. They have acknowledged that poor construction and underdeveloped infrastructure do notadd value to the product. Holiday apartments in smaller and relatively unexplored resorts are inhigher demand than units in more popular and developed locations.



15/24


16/24


SALES PRICES

Overall sales prices in the resort apartment market have remained unchanged for the past sixmonths, as supply continues to outstrip demand, with price ranges remaining within last years limits.A number of new high quality developments, offered primarily to overseas investors, have achievedlevels around 1,700 to 2,200 p/m2 and were initiated by international developers. However, thereare also many properties offered well below 1,000 p/m2. In general, prices continue to range mostlybetween 800 and 1,800 p/m2.

The table below presents the sales price range per sq m of coastal vacation homes in differentlocations.

*Prices include VAT Source: Colliers Research

Prices of second homes vary depending on several criteria, the primary factors being location,quality of holiday resort, complex facilities, and stage of completion. Prices were highest in the

popular holiday locations of Sunny Beach and St. Vlas in 2006. In 2007 the resorts achieving thehighest pricing levels have been Elenite and Balchik. However, prices in excess of 2,500 p/m 2

should generally be considered exceptional, as no more than a couple of developments per locationhave achieved such levels. In general, most prices fall between 900 and 1,600 p/m2.

Sales prices also vary according to the development status and level of completion. Usually,apartments are offered for sale at different stages of the project. When offered off-plan, secondhomes cost approximately 15% to 30% less than when finished. When offered at early stages ofconstruction, apartments are sold at prices 10% to 15% lower than completed ones.

With the increase in supply of holiday homes, the diversity of pricing schemes has also increased.Some of the prices include VAT, while some prices are separated in several payments where someof the payments are exclusive of VAT, thus lowering the effective VAT impact. In addition, some

prices correspond to different levels of finishing works, as well as furniture fit-out.


Dec 2006 Dec 2007

Resort Low Price High Price Low Price High Price

Sunny Beach 580 3 000 940 1 115

St.Vlas 590 2 500 1 090 1 400

Elenite 950 1 705 1 205 1 630

Kavarna 550 2 050 830 1 090

Balchik 700 1 520 1 050 1 540

Sozopol 700 1 760 1 100 1 450

Pomorie 650 2 310 870 1 170

Golden Sands 960 1 800 1 100 1 470

Aheloy 585 1 540 955 1 300

Byala 630 1 900 890 1 135

Nessebar 550 1 500 1 015 1 150

Lozenetz 800 1 400 1 050 1 250


17/24


18/24


We set out our inputs in the table below:

Inputs - NEXUS

Revenue Estimations

Total Square Meters (Ex parking) (m2) 11,432

Total sale revenues 8,507,172

Total Development Cost

Construction hard costs 4,572,896

Total area (m2) 11,432

Soft Costs

Professional Fees 298,645

Marketing & Letting costs 60,000

Disposal Fees 334,219

Acquisition Costs

Stamp Duty 2.0% 12,531

Acquisition Agent & Legal Fees 9,399

Other Costs

Finance Debit Rate 7% Credit Rate 7% 158,708

Profit on Cost 2,205,563

Land Value 626,566

Land Value (Rounded) 625,000

Time Scale & Phasing

A pre-construction period of 2 months has been adopted in the appraisal to allow for site preparationprior to construction. We have adopted a construction period of 12 months for each of the phases,and a sales period of 8 months for each phase. This gives a total project length of 27 months.

Construction Costs

Construction costs have been taken at 400/m for the residential and commercial elements of thedevelopment. This rate reflects construction of the car parking and external areas.

Professional Fees & Marketing

Architects fees have been taken at 40,000 with administration and other professional fees at258,645. Marketing fees have been taken at 60,000 with letting agents and sales legal fees at334,219.

Acquisition Costs

Stamp duty has been taken at 2.0% with agents fees at 1.0% and legal fees at 0.5%.



19/24


Developers Profit

We have adopted a developers profit of 35% reflecting our opinion of the inherent risks associatedwith the project.

Estimated Sales Values

Based on our analysis of market transactions together with existing off-plan sales we have adoptedthe following sales values for the proposed development summarised in the table below:

Accommodation Area (m2) Sales rate (/pm2) Total Sales ()

Apartments 7,000 700 4,900,000

Villa Type A & A1 1,554 850 1,320,900

Villa Type B 1,518 800 1,214,480

Villa Type C 1,159 750 869,400

Car Parking 700 200 140,000Total 11,931 8,444,780

Commercial Elements

We have included a commercial revenue input of 62,392, which reflects our estimation of thecapitalised rental income generated from the commercial units. We have adopted a capitalisation rateof 11% when calculating our total estimated revenue.

Gross Development Value

Based on the above we estimate that on completion of the project a Gross Development Value of8,507,172 would be realised.

MARKET VALUE

Having regard to the above we consider the Market Value of the subject property as described in thisreport is625,000 (Six hundred and twenty five thousand euros).



20/24


LIABILITY AND PUBLICATION

This report and valuation has been provided exclusively for the use of the addresses for thepurposes set out herein. We do not accept any responsibility to any third party for the whole or anypart of its contents.

Neither the whole nor any part of this valuation or any reference thereto may be included within anypublished document, circular or statement nor published in any way nor disclosed orally to a thirdparty, without our prior written consent to the form and context of such publication or disclosure.Such approval is required whether or not Colliers CRE are referred to by name and whether or notthe report is combined with others. In breach of this condition, no responsibility can be accepted tothird parties for the comments or advice contained in this report.

Yours faithfully

Christopher J Fowler-Tutt BSc MRICS

DirectorFor and behalf of Colliers CRE



21/24

APPENDIX I

GENERAL ASSUMPTIONS AND DEFINITIONS


22/24

GENERAL ASSUMPTIONS & DEFINITIONS

The valuations have been prepared by a suitably qualified valuer, as defined by PS1.4 and PS1.5 of theValuation Standards, on the basis set out below unless any variations have been specifically referred tounder the heading Special Remarks:

1 Market Value (MV)Where we have been instructed to value the properties on the basis of Market Value, we have doneso in accordance with PS3.3 of the Valuation Standards issued by The Royal Institution ofChartered Surveyors, which is defined as follows:

The estimated amount for which a property should exchange on the date of valuation between awilling buyer and a willing seller in an arms-length transaction after proper marketing wherein theparties had each acted knowledgeably, prudently and without compulsion.

The interpretative commentary on Market Value, as published in International Valuation Standards1, has been applied.

2 Market Rent (MR)Valuations based on Market Rent (MR), as set out in PS3.3 of the Valuation Standards, adopt thedefinition as settled by the International Valuation Standards Committee which is as follows:

The estimated amount for which a property, or space within a property, should lease (let) on thedate of valuation between a willing lessor and a willing lessee on appropriate lease terms in anarms-length transaction after proper marketing wherein the parties had acted knowledgeably,prudently and without compulsion.

MR will vary significantly according to the terms of the assumed lease contract. The appropriatelease terms will normally reflect current practice in the market in which the property is situated,although for certain purposes unusual terms may need to be stipulated. Matters such as theduration of the lease, the frequency of rent reviews, and the responsibilities of the parties for

maintenance and outgoings, will all impact on MR. In certain States, statutory factors may eitherrestrict the terms that may be agreed, or influence the impact of terms in the contract. These needto be taken into account where appropriate. The principal lease terms that are assumed whenproviding MR will be clearly stated in the report.

Rental values are provided for the purpose described in this report and are not to be relied upon byany third party for any other purpose.

3 Rental AssessmentUnless stated otherwise within the report, our valuations have been based upon the assumption thatthe rent is to be assessed upon the premises as existing at the date of our inspection.

4 Reinstatement Valuation

If we have prepared Reinstatement Values we will not have carried out a detailed cost appraisal andthe figures should therefore be considered for guidance purposes only.

5 Purchase and Sale CostsIn arriving at our opinion of value we have allowed for purchasers costs of 3.5%. This reflects 2%for land tax with the remainder being apportioned between agents and legal fees.


23/24

6 MeasurementsIn accordance with your instructions we have relied upon the floor plans and areas provided by theBorrower.

Floor areas are provided for the purpose described in this report and are not to be relied upon byany third party for any other purpose.

7 ConditionUnless otherwise stated within the report, we have not carried out a building survey, nor have weinspected the woodwork or other parts of the structures which are covered, unexposed orinaccessible and we are, therefore, unable to report that such parts of the properties are free fromrot, beetle or other defects.

Where we have noticed items of disrepair during the course of our inspections, they have beenreflected in our valuations, unless otherwise stated.

None of the services, drainage or service installations was tested and we are, therefore, unable toreport upon their condition.

We have not been provided with a Technical Due Diligence Report.

8 Environmental MattersUnless otherwise stated within the report, we have not carried out soil, geological or other tests orsurveys in order to ascertain the site conditions or other environmental conditions of the properties.Unless stated to the contrary within the report, our valuation assumes that there are no unusualground conditions, contamination, pollutants or any other substances that may be environmentallyharmful.

9 Fixtures and FittingsIn arriving at our opinions of value we have disregarded the value of all process related plant,machinery, fixtures and fittings and those items which are in the nature of tenants trade fittings andequipment. We have had regard to landlords fixtures such as lifts, escalators, central heating and

air conditioning forming an integral part of the buildings.

Where the properties are valued as an operational entity and includes the fixtures and fittings, it isassumed that these are not subject to any hire purchase or lease agreements or any other claim ontitle. No equipment or fixtures and fittings have been tested in respect of Electrical EquipmentRegulations and Gas Safety Regulations and we assume that where appropriate all such equipmentmeets the necessary legislation. Unless otherwise specifically mentioned the valuation excludes anyvalue attributable to plant and machinery.

10 Tenure, Lettings and Reports on Title and/or TenanciesUnless otherwise stated, we have not inspected the title deeds, leases and related legal documentsand, unless otherwise disclosed to us, we have assumed that there are no onerous or restrictivecovenants in the titles or leases which would affect the value.

11 TaxationWhilst we have had regard to the general effects of taxation on market value, we have not takeninto account any liability for tax which may arise on a disposal, whether actual or notional, andneither have we made any deduction for Capital Gains Tax, Valued Added Tax or any other tax.

12 MortgagesWe have disregarded the existence of any mortgages, debentures or other charges to which theproperties may be subject.


24/24

Documents

Nexus Plot 1