INVESTMENT PROPOSAL LUXURY VILLA, APARTMENT AND HOTEL DEVELOPMENT

INVESTMENT PROPOSAL

LUXURY VILLA, APARTMENT AND HOTEL DEVELOPMENT, KAZIKLI,

MILAS April 2008

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LUXURY VILLA, APARTMENT AND HOTEL DEVELOPMENT, KAZIKLI, MILAS

This is an opportunity to acquire the Fund’s interest in a luxury residential villa, apartment and hotel development project situated in the pristine coastal setting of Kazikli, in the Milas district of Turkey.

Tourist development in the Bodrum Peninsula, with its enviable climate and stunning coastal scenery, has expanded in recent years as result of rising demand from both Turkish and international visitors.

The area surrounding Kazikli, which is located only 34 km from Bodrum‐Milas International airport, has become increasingly popular, with demand for real estate growing significantly.

The Kazikli site benefits from coast line to the Aegean Sea on both sides and the adjacent properties are undeveloped making it a compelling development opportunity for a unique luxury villa and hotel resort with private mooring facilities in a natural bay setting of outstanding beauty.

The Kazikli project has been developed as a 50:50 joint venture with the Ado Group, a leading and well respected supplier of building materials in the region.

INVESTMENT SUMMARY

Project Overview:

• Total Gross Area: 274,522 sqm

• Total Net Land Area: 197,960 sqm

• Construction Area: 76,000 sqm

• Gross Sellable residential area: 70,390 sqm

• Net Sellable residential area: 56,053 sqm

• Hotel Area: 14,703 sqm

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Site Usage:

• Total of 530‐550 units.

• 330 Luxury Villas (some with private boat moorings) sizes 75 to 350 sqm.

• 100‐120 hotel rooms with access to shared pool facilities.

• World class spa facility.

• Supporting restaurants, leisure and social facilities.

Project Status:

• 50% share of the site, comprising 8 contiguous parcels of land, acquired from the Ado Group by the Fund’s wholly owned Turkish subsidiary OSMANLI YAPI 2 in March 2007.

• Clear unencumbered freehold legal title acquired for the entire site.

• Required zoning plans obtained from the local authorities – increase obtained in permitted building density from 49,000 sqm to 74,000 sqm (51% increase in buildable area).

• Tourism Investment Certificate received.

• Submission of project information to Mugla Environmental Agency complete. Certificate received confirming no further environmental permissions required.

• Master plan and concept design process completed by Atelier Xavier Bohl, who has an excellent reputation from his work on Port Alacati, Marina Limassol and Larnaca.

• Detailed architectural design and application drawings being undertaken by Xavier Bohl and local architect Cengiz Eren.

• Engineer Application Drawings to be completed in May 2008.

MASTER PLAN

FINANCIAL OVERVIEW

Key Financial Assumptions:

• Assumes no leverage

• Domestic sales: 50%

• International Sales Payment Structure: 30% down payment; 70% at the completion

• Targeted investment period: 36 months

• Construction period: 22 months

• Sales period: 36 months

• VAT: 18%

• Corporate Tax: 20%

• Sales Costs: 7%

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Hotel Operation Assumptions:

• Assets: Spa, Restaurant, Meeting Room, Front of House and Back of House

• Occupancy: 50%

• ADR: $300

• Total Room Nights Available: 360

• Number of Hotel Units: 120

• Exit: Hotel will be sold at the end of year 6 at 7x EBITDA i.e. $35m (operating profit of $5m)

Financial Results:

IRR Sensitivity Analysis:

Sales Price per sqm41.2% $2,500 $3,000 $3,500

Built $1,100 34.7% 50.1% 67.3%Costs $1,200 29.7% 44.0% 60.3%

per sqm $1,300 25.4% 38.9% 53.7%

ROI Sensitivity Analysis:

Sales Price per sqm184.2% $2,500 $3,000 $3,500

Built $1,100 151.5% 264.6% 391.9%Costs $1,200 119.9% 203.6% 353.4%

per sqm $1,300 96.4% 163.1% 269.6%

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Cumulative Cash Position:

($30,000)

($20,000)

($10,000)

$0

$10,000

$20,000

$30,000

$40,000

Jun-08

Nov-08

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May-11Oct-

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Mar-12

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KEY SELLING POINTS

Advanced Project Status

• Master plan and concept design work is completed.

• Zoning applications are fully completed.

• Environmental clearance obtained.

Strong Sales Proposition

• Positioned in a spectacular pristine coastal location with superb views of the Aegean Sea and surrounding mountains and benefiting from stunning sunsets.

• Excellent Mediterranean climate with low humidity.

• Availability of private boat moorings key attraction to high end purchasers.

• Close proximity to Bodrum‐Milas International airport and proposed world class golf course, Vita Park.

• 2 km from Kazikli village restaurants offering bayside dining.

Support, Market Know‐How

• Key local officials and contacts supporting the project.

• Ado Group’s strong influence and reputation in the region and network of key contacts beneficial in securing required approvals promptly.

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MARKET COMPARABLES

Comparable Land Sale Prices

LOCATION AREA (m²) SALES PRICE

USD* COMMENTS PRICE (USD/m²)

KIYIKISLACIK 113,000 17,691,729 50% hotel, 35% villa zoning. peninsula 157

KIYIKISLACIK 2,200,000 154,000,000 Sea front location. zoning plans are

ready 70 KIYIKISLACIK 2,274,000 113,700,000 15% density, max floor: 2 50

KAZIKLI 25,000 1,250,000 15% density, max floor: 2 50

KIYIKISLACIK 114,000 13,500,000 Residential zoning, 30% density, unique

location, peninsula. 118 KIYIKISLACIK 890,525 62,336,750 Situated on Mandalya bay 70

Comparable Villa and Apartment Prices

PROJECT NAME TYPE REGION

AREA (m²)

SALES PRICE* USD COMMENTS

PRICE (USD/m²)

Port Alaçatı I Attached house Alaçatı 70 339,990

Sea view, without indoor finishing, social area, 100% of units sold 4,857

Port Alaçatı I Attached house Alaçatı 140 560,000


Port Alaçatı II Villa/Channel

House Alaçatı 293 732,500


Port Alaçatı II Attached house Alaçatı 141 324,300


Port Alaçatı II Apartment Alaçatı 75 165,000


Port Göcek Villa/Channel

House Göcek 116 719,200

Sea view, without indoor finishing, social area, 305 of units sold 6,200

* VAT inclusive.

SAMPLE DESIGN PERSPECTIVES FOR KAZIKLI PROJECT

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Kazikli Mugla

Project Name Kazikli Mugla

Ownership 50%

Start of Construction October 08

Construction Period (months) 22.0

Delay in Construction (months) 0.0

Sales Start November 08

Sales Period (months) 36.0

Delay in Sales (months) 0.0

Construction Area 75,871.2

Sellable Area 70,390.2

Costs / sqm 1,200.0

Total Construction Costs $91,045.4

Sales / sqm $2,900.0

Sales $204,131.6

Domestic Sales 50%

Land Investment $22,348.2

End of Construction August 10

End of Sales Period November 11

Kazikli Mugla 2008 2008

USD '000 Total

Local Sales $102,066

International Sales Deposits 30% $30,620

International Final Payment 70% $71,446

Hotel Revenue $59,179

Total Construction Costs ($91,045)

Net Proceeds Before Taxes $172,265

VAT Paid 18.0% $16,388

VAT Received 18.0% ($36,744)

Accumulated VAT

Net VAT Payable ($20,356)

Real Estate Registration Tax 1.5% ($1,531)

Stamp Tax 0.75% ($1,531)

Sales Costs 7.0% ($7,145)

Net Revenue before Land Costs $141,703

Land Cost Allocation ($22,348)

Profit Before Tax $119,354

Accrued Corporate Tax 20.0% ($23,887)

Net Profit $95,467

Cash Flow to Investor

Investment ($11,174)

Net Revenue before Land Costs $70,851

Corporate Tax ($11,943)

Debt (Paydown) / Draw $0

Net Cash Flow Before Carry $47,734

Carry ($8,807)

Net Cash Flow $38,927

Cumulative Cash Flow

Net Cash to Investor $38,927

Maximum Cash Requirement $21,132

IRR 41.2%

INVESTMENT PROPOSAL LUXURY VILLA, APARTMENT AND HOTEL DEVELOPMENT

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