Vlyho Marina

Lefkas Greece

Market Background

The Mediterranean as a whole has approximately 330,000 marina berths. Greece, although recognized as one of the finest cruising areas in the Mediterranean, presently has only some 10,000 of these berths, or about 3% of the total.

Within Greece, western Greece comprising the Ionian and the Gulf of Corinth has 4,000 of these berths. The Ionian has a benign climate, and does not suffer from the strong Meltemi winds, which affect much of the Aegean starting in May and going through to October. Its 7 major islands and dozens of islets offer a variety of cruising within short distances. Its proximity to Italy (less than 100nm Brindisi to Corfu) makes it a favourite for Italian yacht owners.

Within the Ionian major marinas are at; Gouvia in Corfu with 1000 berths, Lefkas with 600 and Preveza with 225. Patras marina has some 470. Both Corfu and Lefkas are close to international airports well served by charter flights, including from the UK, Germany, Austria, Switzerland, and Holland.

Lefkas is approximately 4 1/2 hours by road from Athens, and this time will be shortened as the highway link to Athens is fully completed, the €630m Rion Antirion bridge segment of which was opened in 2004.

Lefkas and Nidri

Lefkas as well as being a port of entry has in its vicinity all the associated support facilities including boatyards with lifting facilities, areas of hard standing for yacht storage ashore, service agents, and chandleries, necessary for yachts to remain year round, not just seasonally. As a result the area hosts the largest concentration of yachts in the Ionian.

Nidri

The bay of Nidri some 1.7 nm long with depths to over 6 metres, is very well sheltered, but presently lacks permanent moorings, nonetheless many yachts overwinter at anchor, and it is also a favoured provisioning place for yachts during the season, due to the many shops in Nidri itself.

Berthing rates summary

Present annual rates for a 15 metre yacht are approximately €5,200 at Lefkas and Gouvia. Daily rates are about €60. Rates have been flat for the last 4 years.

For comparison a berth in In Zea Marina in Athens would be €8,600 annual and €60 daily. In Split in Croatia €8,000 and €108. In the Italian Adriatic the average for 37 marinas is €5,000 (with a high of €7,800) and €67 per day.

Supply and demand in the Lefkas area is approximately in balance with an excess of yachts during the summer months and ready availability of in water berths in the winter months when many yachts are ashore, and visitor numbers are minimal. Nonetheless there is a market for annual berths.

Future capacity increases will come from a projected new marina in Lefkas itself, a projected marina in Meganisi, and a marina now under construction at Argostoli. The timing and capacities of these marina developments requires further analysis.

Vlyho Marina – the opportunity

The opportunity exists to acquire a fully permitted development marina, with adjacent development land comprising:

� Marina Concession - to run to 2039 extendable to max 99 years total with an annual rental €7.8k indexed to CPI

o 16,470 m2 water area + 402 m2 landfill, to accommodate:

60 berths up to 15.5 m length (as presently permitted / pre-studied)

90 berths up to 50 m length (with improved utilization of water area)

� Freehold Land with development rights:

o 2,199 m2 of waterfront land

o 3,562 m2 of additional adjacent land

o 470 m2 + 200 m2 permitted building zone coverage

� Total All-in Acquisition and development cost (excluding cost of developing non marina land areas):

o ~ €3.0 million. 60 berth marina

o ~ €5.2 million. 90 berth marina

� Asking priceo Marina Concession owning Company:

Waterfront: 2,199 m m2 (1.901 m2 + 298 m2)

Adjacent Land 3,562 m2 (1.140 m2 + 2.512 m2 above road)

o Most recent asking price for Marina Concession plus Freehold Land €900,000 (original asking price €1,200,000)

Vlyho Marina – Marina Layout

The permitted marina layout 60 berths of average size 13 meters length, for a total lettable area of 3,800 sq. m. This represents a water area utilization of 23% much below the normal range of 40-65%.

The configuration of this site suggests that a utilization at the upper end of the range should be possible. A revised berth mix has been prepared using a standard Mediterranean mix, which results in 90 berths with average size ca. 18 meters length for a lettable area of 10,000 sq. m- over 2.5 times more than the 60 berth marina.

The layout has not yet been produced and needs to be verified.

Vlyho Marina Financials

� the Marina Concession and Freehold Land will be purchased for a combined total price of €900,000.

� 50% finance, over 10 years with a 2 year capital moratorium interest at 7% ,will be available and working capital needs will also be financed.

� No costs are allocated to developing the land except buildings and reclamation directly connected with the Marina, and no revenue has been attributed to sales or rental of the land (except rental of the fuel installation).

� Tariff rates are based on current rates for Lefkas for yachts to 40 meters and for Gouvia for larger sizes

� Real (over inflation) tariff increases of 5% over base are assumed in 2016 and 10% over base in 2017, thereafter rates are assumed as flat with inflation only rises

� The build period is assumed to be 18 months starting from January 2014

Summary

Vlyho is a well located marina project in an area with an established yacht fleet and stable and reasonably high tariffs. It does not require breakwaters or dredging, often significant costs for a marina.

An unquantified part of the acquisition price of €900,000 is attributable to development land, and not the marina. The development costs and potential revenues of the development land are not included in the present.

The 60 berth marina which suffers from poor water area utilization, results a stabilized berthing revenue of ca. €250k per annum, based on an investment of €1.5 million.

The 90 berth marina with much improved water utilization achieves stabilized berthing revenue of ca. €660k per annum, based on an investment of €2.6 million.

The project is entitled to 50% EC grants on construction cost.