Crete Investor Report 06

Invest in the idyllic beauty of ancient Greece

Prinos Village Crete

March 2006

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Important

The information contained in this report is confidential and is set out as a general outline of an investment opportunity. All descriptions, references and other details are given in good faith, as is external market information that has been gathered by Urban Exposure or is believed to have derived from reputable and reliable sources. All opinions, judgments, and all financial forecasts and projections contained in this document are necessarily of a subjective nature and subject to uncertainty. The analysis is based on sources believed to be correct and reliable and represent the opinion of Urban Exposure as at the date of this document. Neither Urban Exposure nor any of the sources quoted or relied upon assume any responsibility for any direct or indirect damage or loss suffered due to reliance on the information contained herein. The information contained in this report, including any part thereof, may not be reproduced or quoted to third parties beyond the intended recipient without the prior written permission of Urban Exposure and/or the sources quoted or expressly relied upon herein. Nothing in this document constitutes an offer or solicitation.

© Urban Exposure Ltd, 2006

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Contents 1. Introduction .................................................................................... .....5 2. The region....................................................... ....................................5 3. Prinos Village................................................................ ........................7 4. Getting there........................................................................ ................7 5. Activities on the island.................................................................... .........7 6. The Developer................................................... ..................................10 7. The Resort...................................................................... ....................10 8. Apartment specifications....................................................... .................11 9. Guarantees................................................................. ........................12 10. Furniture packages........................................... ...................................12 11. Mortgage Guarantee ...................................................... ......................12 12. Rental Market and Projected Open Market Income.........................................12 13. Use of Apartments by owners....................................... ...........................12 14. Capital growth............................................................................. .......13 15. Finance.................................................................... ........................13 16. Inspection visits.......................................................... ........................14 17. Payment schedule and purchase procedure............................................. .....14 18. Currency.................................................................................... .......15 19. Tax 15 20. Legal......................................................................... ......................15 .................................................................................... ............16 Appendix 2: EXAMPLES OF FLOOR PLANS................................................. ..17 Appendix 3: RUNNING COSTS AND UTILITY PROVISIONS..................................20

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Summary Information Urban Exposure is pleased to present you with the opportunity to purchase a luxury apartment on the beautiful island of Crete. The exclusive development consists of 78 apartments, due to complete in May 2007. Located in a stunning valley with spectacular sea views and within walking distance of the beach, it is only 10 minutes drive of Rethymno – a popular tourist harbour town. Urban Exposure has compiled an excellent package of discounts and incentives for purchasers as follows;

 15% Discount incorporated into purchase price  Costs paid for 3 years: including mortgage payments, service charge & utilities  Full furniture package included  Solicitor’s and notary fees paid  Purchase tax paid  Financing of up to 85% available (subject to status)  Excellent capital growth potential  Fully managed rental pool with free use for apartment owners

Please make reservation enquiries as soon as possible to avoid disappointment. Please contact Urban Exposure on 020 7763 7186 or email [email protected] with any queries or to make a reservation.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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1. Introduction Urban Exposure has secured an outstanding investment opportunity on the beautiful island of Crete exclusively for its investors. Not only does the development have excellent capital growth potential in the short and long term but the purchase price has been negotiated to include all costs associated with the purchase of the property (such as solicitors and notary fees) in addition to the payment of all ongoing costs including mortgage payments for the first 3 years. Excellent levels of financing are available (subject to status and bank lending criteria) and the price of investing in this Mediterranean paradise is incredibly reasonable compared with other European destinations. 2. The region

Greece

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Greece has long been a popular holiday destination due to its wonderful climate, beautiful scenery, fascinating heritage and delicious cuisine. The Greek mainland and its archipelago of 1400 islands (169 of which are inhabited) boast a 5000 year old history and are home to just over 10 million people. The islands are divided into six groups: the Cyclades, the Ionian, the Dodecanese, the islands of the North-Eastern Aegean, the Sporades, and the Saronic Gulf islands. The two largest islands, Crete and Evia, do not belong to any group. Some facts at a glance: Population: Area: Religion: Currency: Key Industries: Key Trading Partners: President: Prime Minister: Ruling Party:

11 million 131,957 sq km Greek Orthodox 98%, Muslim 1.3%, Other 0.7% Euro Tourism, Shipping, Food and Tobacco, Textiles, Chemicals, Metal Products, Mining and Petroleum. Germany, Italy, France, Great Britain, USA Karolos Papoulias Costas Karamanlis New Democracy Party.

Crete Crete is the largest of the Greek islands and located at the southern most part of Europe. The island is rich in natural beauty and has 1000 km of dramatic coastline as well as high mountains and rugged countryside. Life on Crete is relaxed and informal and the cost of living is affordable. In addition to this the island also has a rich cultural heritage which its people are very proud of, hence the Greek building regulations are every strict to protect the island from over development. Crete alone accounts for ¼ of the entire Greek tourist trade and is the only place on earth that you can visit the reputed birthplace of Zeus the King of the Gods!

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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A well known holiday destination on Crete, Rethymno is a gorgeous harbour town that manages to cater to tourists and holiday makers whilst retaining its charm through its fabulous Venetian architecture. It has a vibrant nightlife and plenty to keep holiday makers with all interests occupied. Visitors to Rethymno can enjoy the hustle and bustle of a pretty Greek town as well as the idyllic solitude of Crete’s beautiful coast or mountains within a short walk or drive. 3. Prinos Village Located on the North West coast and within a 10-minute drive of Rethymno, Prinos is an idyllic location for this exclusive development. The development will be within walking distance of the beach and has great views of both the coast and mountains. The location gives a feeling of seclusion as well as being ideally located for all the bars, shops and historic sites that Rethymno city centre has to offer. 4. Getting there Crete has two international airports: the bigger and principal one is Heraklion and the other is Chania. Frequent charter flights link both to many European cities during high season; flights are currently less frequent during winter. However there are plans to introduce direct flight during the off peak season which will greatly increase the rental potential for property on the island. Both airports have regular flights to/from Athens (about 50 minutes from Heraklion and 40 minutes from Chania) so connections are easily made. 5. Activities on the island Historical Attractions - Crete is crammed with ancient archaeological sites and the island is a paradise for history enthusiasts but some highlights are: •

Knossos - Other local attractions include the infamous Palace of Knossos. Home to King Minos palace dates back to 1900 BC and houses more than 1000 rooms

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

this

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•

Nikos Kanzantzakis – The author of Zorba the Greek is buried just outside Iraklio.

•

Dikteon Cave – Reputedly the birthplace of Zeus, king of the gods.

Golf - Crete’s first 18 hole championship golf course was opened in July 2003. Based to the east of Heraklion the 6430 yard 71 par course. The course also comes with the full range of practice facilities for novice golfers, tourists and golf club members. This includes a double- ended covered driving range with practice bunkers, short game area and practice putting green. There is also a second putting green adjacent to the first tee. There are plans to construct another course on the island. Water Sports - Most organised beaches in the Rethymno and surrounding areas offer water skiing, wind surfing,

sea

parachuting and other water sports. There are also some excellent dive centres around the island.

Mountaineering/Walking - Crete is home to the famous Samaria Gorge, Europe’s longest ravine which has spectacular walks that last between 5 and 7 hours as well as other fabulous nature trails through mountains

and

lush vegetation and historical walks encompassing ancient archaeological and religious sites. Organised tours are available or you can just take a map and explore! Mountain Biking - Organised Mountain bike tours are available as well as the opportunity to explore the Cretan countryside by renting a bike on your own. The countryside is easily accessible from Prinos by car or foot.

Shops, Restaurants and Nightlife - Rethymno has an impressive variety of shops selling designer labels, hand made jewellery, fine antiques and high quality leather goods. You can enjoy

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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drinks, music and dancing in the clubs, and folk dances to live music played on the bouzouki. Whether dining at a local taverna or an elegant restaurant, there are a delightful variety of restaurants serving Greek specialities and international cuisine.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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6. The Developer A House on Crete is a construction and development company based near Rethymno on Crete. The company is run by British born Mark Last, who has over 20 years property development experience and has lived on the island for 9 years. Their portfolio includes exclusive small developments, restoration work and bespoke luxury villas. They have an excellent reputation on Crete for the outstanding quality of their work and the truly personal service they provide to their customers. More information is available at www.a-house-on-crete.com. 7. The Resort Carefully designed to work with the contours and slopes of an existing hillside, the resort will be built to a high standard in a traditional

low-rise

architectural

style.

Apartments will be built in blocks of two, with spectacular sea views from almost all units. The resort will be fully managed by an onsite manager, and facilities will include; 

A communal swimming pool



A shop for food and conveniences



Restaurant with garden terrace and poolside snack bar



All apartments have been designed with well-proportioned spacious living areas, large windows to allow in the light, and outdoor areas to enjoy the sunshine and sea views.

There are three types of apartment available with the following average sizes:

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006



Studios 35 m2



1 Bedroom 50 m2



2 Bedrooms 60 m2

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8. Apartment specifications

2 Bedroom Apartments These apartments consist of 2 double bedrooms of 14 m2 and 13 m2 respectively, one bathroom fully equipped with bathtub, toilet ball with flushing device, washstand, mirror, laundry area. One open plan kitchen and living area of 33 sq m. The kitchens is fully equipped with fitted cupboards and sink with tap for hot – cold water. The kitchen will be fitted with ceramic hob with extractor fan, oven and fridge freezer. 1 Bedroom apartments These apartments consist of one double bedroom with closet of 13.25 sq m and one bathroom of 4.80 sq m fully equipped with bathtub, toilet ball with flushing device, washstand, mirror and laundry area. One open plan kitchen and living area 30 sq m. The kitchen is fully equipped with fitted cupboards and sink with tap for hot – cold water. The kitchen will be fitted with ceramic hob with extractor fan, oven and fridge freezer. 1 Bedroom studio These apartments consist of one bedroom with closet of 12.70 sq m, one bathroom of 4 sq m fully equipped with bathtub, toilet ball with flushing device, washstand, mirror and laundry area. One open plan kitchen and living room of 16.30 sq m. The kitchen is fully equipped with fitted cupboards and sink with tap for hot – cold water. The kitchen will be fitted with ceramic hob with extractor fan, oven and fridge freezer.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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9. Guarantees Copies of all guarantees including the Mortgage Guarantee, Construction Insurance and Construction Guarantees, and Property Management documents are available to view on request. 10. Furniture packages Furniture Packages are included in the purchase price of the apartments. A complete inventory is shown in Appendix 4, and images of internal finishes are in Appendix 5. 11. Mortgage Guarantee For the first 3 years all costs including mortgage payments, utilities and service charges will be paid by the developer. All rental income earned from the property will be kept by the developer, therefore the apartment will be effectively cost and income free. We believe this is a great way to take advantage of the good capital growth prospects without having the inconvenience and day-to-day worry of running costs and rental management. After the initial 3-year period has expired, purchasers will have the option to keep the apartment in a rental pool, or to manage this themselves. If the apartment is sold at any point during the first 3 years these benefits are not transferable to the new purchaser. 12. Rental Market and Projected Open Market Income The holiday season on Crete lasts for 30 weeks from April to October. Based on 75% occupancy for a 30-week season we estimate that the development should achieve the following rents. Apartment Studio 1 bed apartment 2 bed apartment

Weekly Rental Income 300 – 350 euros 400 euros 500 – 550 euros

13. Use of Apartments by owners

During the mortgage paid period all owners will be entitled to 50% discount on the use of the apartment during peak season (June, July and August) OR up to 2 weeks free in April, May, September or October PLUS up to 3 further weeks free during the winter months (November – March inclusive).

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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14. Capital growth Purchasers of apartments at Prinos Village will immediately benefit from the 15% discount that Urban Exposure has secured on the development, providing them with instant equity in their property. We are confident that property prices on the island of Crete are set to rise steadily over the next few years due to the strong tourist trade and potential for development on the island. There are plans to introduce direct flights to the island throughout the winter season which will greatly increase the number of visitors to the island during the off peak season; as well as plans for new golf courses to be built which is always a sign of affluence in any area. Historical data for an 80 sq m property on inland Greece shows an average annual capital growth of 13.35% over the past 5 years. This is based on off plan property sales in the Rethymno area.

Year

Price in Euros

% Increase

2000

75000

2001

85000

13.33%

2002

100,000

17.65%

2003

110,000

10%

2004

120,000

9.09%

2005

140,000

16.67%

Assuming capital growth in the area over the next 2 years of 5% pa, 10% pa and 15% pa then the equity in the following properties would be:

Apt

Purchase

Equity of

Growth Rate

Price in

15% on

5% pa

Euros

Purchase

Growth Rate

Growth Rate

10% pa

15% pa

Value

Equity

Value

Equity

Value

Equity

A1/6

178,483

26,772

196,777

45,066

215,964

64,253

236,043

84,332

A4/4

87,803

13,170

96,803

22,170

106,242

31,609

116,120

41,487

19,335

142,112

32,547

155,969

46,404

A9/1

128,900

170,470

60,905

15. Finance Arranging a mortgage is a simple process and involves completing a 2 page Bank of Greece application, attaching the appropriate ID (a colour copy of your passport) and 3 years tax returns.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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In conjunction with the National Bank of Greece Urban Exposure has secured loans of up to 85% of purchase price on properties at Prinos Village*. Interest rates are from 3.72% during the first year and rise to between 3.92% and 4.42% depending on the size of the loan. Mortgages are available for 15, 20 and 25 year terms. *Please note that all rates are quoted directly from Bank of Greece, are subject to change and market conditions. Urban Exposure makes no representations or warranties about the rates available and or the mortgage products offered now or in the future by any institution.

16. Inspection visits Inspection visits to Crete are available to all potential purchasers who will need to pay for the cost of the flight only. The developer will arrange airport collection and 2 night’s hotel accommodation. The itinerary will include a project briefing at the developer’s office, site visit, lunch/dinner and a visit to an English-speaking lawyer if required. 17. Payment schedule and purchase procedure 1. Reservation •

A reservation form needs to be completed and sent to Urban Exposure

•

A deposit of €1500 is payable directly by bank transfer to the developer

•

If finance is required, a mortgage application needs to be completed and sent back to Urban Exposure with supporting documents:

•

o

Proof of identity (colour copy of passport)

o

Proof of income (3 years tax returns – P60)

Please note that all reservations are considered provisional until the reservation deposit is received in cleared funds to the nominated account

2. Exchange of Contracts •

Urban Exposure has allocated a solicitors firm to work on contracts on your behalf

•

Exchange of contracts will take place 28 days after reservation

•

A 15% deposit is payable at this stage

3. Completion •

Contracts are completed and legal title transferred

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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•

Balance of 85% payable on completion (via mortgage funds if arranging finance)

•

Please note that solicitor’s and notary fees are included in the purchase price of the apartment

18. Currency All transactions will take place in Euros. 19. Tax Purchase Tax is between 9% - 13% (on the first €15,000 tax is 9% and on the remainder tax is 11% - 13%). Please note that purchase tax is included in the purchase price of units at Prinos Village. Capital Gains Tax is currently under review in Greece but expectations are that it will be between 10 – 30% depending on the value of the property and length of ownership. Please take independent professional advice with regards to taxation planning. 20. Legal Please note that all legal cost associated with the purchase of units at Prinos Village are included in the purchase price. There are no restrictions on the purchase of property in Greece by European citizens. The property transaction is executed before the notary and in the presence of lawyers representing the seller and purchaser. Legal procedures in Greece are fairly simple and if all the papers are ready and in order a sale can be completed with relative ease by signing the official contract prepared by the Notary. Purchase Process for Non EU Citizens Whilst EU citizens can freely buy properties in Crete; there are certain restrictions for those people outside of the European Union. However it is possible for non EU citizens to purchase in Crete. It will in general take about 3 months longer. It is necessary for your lawyer and notary public to apply to the Minister for the Interior in Greece and the office there will investigate your position in the community and ensure that you do not have a history of any kind which might be detrimental to the security of the island, this is because Crete is considered to be a border territory. Please bear this in mind if you wish t purchase an apartment.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Appendix 1: CLIMATE STATISTICS

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Appendix 2: EXAMPLES OF FLOOR PLANS Sample Studio Apartment

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Sample One Bedroom Apartment

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Sample Two Bedroom Floor plan

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Appendix 3: RUNNING COSTS AND UTILITY PROVISIONS

All cost detailed below are approximations. The purchase price of the unit includes all service charges and utilities payments for the first 2 years. Heating:

0 – 800 euros Per Annum depending on usage

Water & sewage:

100 euros per annum

Electricity:

300 – 800 euros per annum

Security:

200 euros per annum

Telephone

350 euros per annum depending on usage

Satellite TV

660 euros per annum for package with UK live sports including premier league football and films

Internet

500 euros for ADSL line

Building Insurance

610 euros per annum on a mortgage of 100,000€. Fire and earthquake cover is compulsory.

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Appendix 4: SAMPLE FURNITURE INVENTORY FOR RENTAL HOMES

Kitchen Chairs/Stools Oven Lights Spatulas Kitchen Knives Salad Bowl 21cm Deep Plate Water Glasses Pepper & Salt Toaster Ash Tray Mop

Table Extractor Fan Cooking Pots Cutlery Bread Knife Egg Cups 18cm B'fast Plate Wine Glasses Plate Rack Curtains Dustbin Wringer

Ceramic Hob Fridge Freezer Drainer Cutlery Tray Chopping Board 24cm Dining Plates Tea Cups & Saucer Can Opener Kettle Towel Hangers Bucket Broom

3 Seater Sofa bed Chairs Paintings Artificial Plants

2 Seater Sofa bed TV Curtains

Single Bed Night Stands Clothes Hangers Curtains Iron

Double Bed Aircon Unit Blankets Mosquito Plugs Ironing Board

Toilet Roll Holder Soap Tray Mirror with Light Shower Curtain

Soap Dish Double Hook Toilet Brush

Clothes Horse Chairs

Clothes Pegs Table

Living Room Lights Coffee Table TV Stand Aircon Unit Bedroom Lights Mattresses Built in Wardrobe Pillows Hair Dryer Bathroom Lights Cup & Holder Double towel Rail Bin Outside Balcony Light Umbrella Sun beds

Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006

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Appendix 5: Internal Images Bedroom

Bedroom

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Kitchen and Living Area 1

Living Area 2

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Appendix 6: Computer Generated Images of Houses and Development

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Off plan Investment Opportunity: Prinos Village, Crete Confidential March 2006 © Urban Exposure Ltd 2006