Land & Property Investment Prospectus
Palm Springs Natal North East Brazil
Discover Why These People Like Brazil
“I have invested in Brazil; it has the chance, 30 years from now of being a bigger economic power than China.” Sam Zell, Billionaire – Real Estate & Media Baron Reuters 2010
“Brazil has cleverly positioned itself to become one of the world’s greatest investment opportunities in modern times.” Warren Buffett- Billionaire Investor Fox News Interview 2010
“Brazil is one of the most prosperous economies.” George Soros, Billionaire – Global Financier, Philanthropist HardAssetsInvestor.com 2009
“Brazil is one of the few places in this troubled world I feel confident to make an investment in." Donald Trump – Global Property Magnate Los Angeles Times
“Brazil is a very dynamic market and we haven’t paid enough attention to it in the past.” Richard Branson - Virgin Group International Herald Tribune, 2010
Contents
Contents 1. Executive summary ..............................................................................................1 2. Introduction to Brazil ...........................................................................................3 The economy.......................................................................................................4 Effective economic policies ..................................................................................6 Tourism..............................................................................................................6 Foreign investment ..............................................................................................7 Attractions for investors .......................................................................................8 The expanding middle class & their real estate requirements ....................................9 3. Why real estate in Natal? ....................................................................................10 The North-East region of Brazil...........................................................................10 Natal.................................................................................................................11 Abundant media coverage...................................................................................11 Infrastructure improvements...............................................................................11 New airport .......................................................................................................12 Key factors driving real-estate investment in North-East Brazil ...............................12 4. The opportunity ................................................................................................14 Land and property investment opportunity ...........................................................15 The investment opportunity................................................................................17 Phase 1 - Land plots and villas .............................................................................19 Phase 2 - Palm Springs gated condominium apartments .........................................23 Phase 3 - Apart Hotel & Spa................................................................................26 Entry to exit strategy - Making money from Palm Springs Natal...............................27 The Entry Strategy .............................................................................................27 The Exit Strategy ...............................................................................................28
5. Your investment opportunity ..............................................................................29 Our business model ...........................................................................................29 The Developer ..................................................................................................29 6. Investors Guide .................................................................................................31 Legal Representation .........................................................................................31 Documentation .................................................................................................31 Costs ................................................................................................................32 Tax law advice ...................................................................................................32 Legal Disclaimer................................................................................................34 Contact Us ........................................................................................................36
Executive Summary
Executive Summary A quality investment product offering exceptional value Palm Springs Natal is offering a high-specification investment product, in a gated beach front condominium opportunity in the North East of Brazil. Looking at the nearest equivalent in the area, it is clear that investors can achieve substantial capital appreciation, even on a straight arbitrage basis and even before factoring in anticipated future real estate gains. We are offering a compelling mix of land plots, villas, luxury apartments and a resort apart hotel. This is a multi-pronged play – designed to appeal to wealthy Brazilian nationals and astute foreign investors alike.
Proven exit strategy Crucially the effectiveness of this strategy has already been proven in the marketplace. To test our assumptions and product we made an initial offering of 20% of the Palm Springs Natal project direct to the domestic market. This entire offering was sold out within 21 days of release,
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dramatically underlining the investment potential of our product.
portfolios that may traditionally have been more weighted towards China or India.
Our payment schedule provides annual capital appreciation of up to 100% on a villa, for an expenditure of only 50% of the cost, delivering an immediate return on investment of in excess of 65% when calculated over 24 months.
The aim of this prospectus is to demonstrate how strong returns can be made by investing in one of most exciting residential investment opportunities within the North-East region of Brazil.
We are offering an exceptional opportunity to be an early entrant to the thriving North-East Brazilian real-estate market with all the attendant advantages that brings.
Massive potential for growth Brazil is the fastest growing economy in Latin America. Currently ranked tenth largest by GDP it is forecast to move to seventh position by 2020 and to fifth place by 2035. It is clearly the number one investment player amongst the Latin American nations. Investing in Brazil allows the investor to diversify risk in
Why north-east Brazil? Importantly, the economy in the North East is growing at twice the rate of the rest of Brazil, giving investors in the region a powerful multiplier effect on their investment. Annual returns of 15%-30% are common for Brazilian land opportunities with gains in excess of 100% on property. Generally the economy is forecast to grow between four to six percent in the coming years. Land prices alone are forecast by The Economist to grow up to 30% over the next four to five years
Executive Summary
Major Tourist Expenditure Two of the world’s major sporting events - the 2014 World Cup & the 2016 Olympics - will be hosted by Brazil, ensuring enormous media coverage and massively expanding tourist potential. Worldwide coverage of the North-East region for the World Cup will inevitably provide major positive media attention on the attractions of the area, providing an exceptional stimulus for real estate prices and tourism. The government is already talking of aiming for the “Barcelona effect” where massive infrastructure investment for the Olympic event achieved tremendous and permanent increases in brand recognition and tourist visits.
Substantial Government and Foreign Direct Investment Government expenditure on infrastructure is likewise encouraging – US $281 Billion has been earmarked for infrastructure projects in the period from 2007 to 2011. In the North-east region alone the Government has invested over US $1.1 Billion in projects and infrastructure. Foreign Investment is also growing substantially; in 2010 it is estimated to be US $40 Billion, up from $25 Billion in 2009. Such figures are a tremendous vote of confidence in the region by the international finance community.
Housing Supply Deficit It is estimated that there is a housing supply deficit of over 8,000,000. An increasingly affluent and growing middle class have the funds to invest, and an appetite for quality housing stock. They are expected to purchase between 1,000,000 and 1,200,00 homes per year. It is forecast that in the next three years real estate loans will rise from US $39.5 Billion to US $163 Billion signifying a tremendous influx of cash into the real estate market.
Tourist spending is already substantial in Brazil – 2008 figures show that US$5.8 billion was spent by tourists; substantially increased from previous years. These figures are expected to show exponential growth over the coming years with an influx of over 500,000 visitors for the World Cup alone.
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An introduction to Brazil
An introduction to Brazil Brazil is by far the largest and most populous country in South America, and is now officially the fastest growing major emerging market in the world. Substantial government and external investment in infrastructure is rapidly accelerating the potential for investors. It is the world’s fifth largest landmass with 7,000 km of stunning beaches, some of them the best in the world with enormous tourism potential. It has vast natural resources and a large, inexpensive labour pool. There is a predominantly young demographic within a large domestic population of 190 million people, many of whom have recently gained access to increasing credit and mortgage supply. Brazil along with Russia, India, and China constitute a sector commonly referred to as the BRICs. The term comes from Goldman Sachs, which argued that by 2050 the combined economies of these four countries would overtake the current richest countries of the world. These countries hold 40% of the world's population and make up 25% of the world's land mass. Brazil is the world's fifth most populated country and has the ninth largest GDP in the world. For investors, the BRIC countries hold incredible promise and growth.
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Brazil has recently been in the international spotlight because of the “strength of its economy in spite of the global economic crisis, and its potential for future growth” said Marco Antonio de Simas Castro, Lloyds’ general economist in Brazil. Winning the bid to host two of the world’s largest sporting events - the Olympic Games and the World Cup will also be a major growth accelerant. The Brazilian economy will benefit from huge infrastructure investments in forthcoming years aimed at increasing growth. Brazil is a sleeping giant with a wealth of opportunities in the coming year for the speculative investor. Planned investment is wide ranging, and includes hydroelectric plants, deep-sea oil and gas fields, shipyards, new homes and airport expansions. A further $170bn of investments in infrastructure projects is expected in the next six years (Source: Lloyds of London January 2010) A stable political system, rising employment, low inflation, firm currency and strong economic growth have all been factors in attracting significant foreign investment into the country.
A further $170bn of investments in infrastructure projects is expected in the next six years Source: Lloyds of London January 2010
An introduction to Brazil
The economy Brazil's economy is larger in GDP terms than all of the other South American countries combined, and Brazil is expanding its presence in world markets. It is the ninth largest economy in the world, and is forecast by Deutsche Bank to be the seventh largest in 2020; Goldman Sachs reckons it will be the world’s fifth largest economy by 2035. It is characterised by large and welldeveloped agricultural, mining, manufacturing, and service sectors. The Central Bank of Brasil predicts an annual growth rate in 2010 of 6%, with the main investment banks forecasting between 4.25% and 5%. By contrast the European Union is expected to grow by only 1% and Japan by a mere 1.7%. Despite this rapid expansion, well-conceived fiscal policies have ensured an environment of controlled inflation, stable macroeconomic indicators, job creation and increasingly equitable income distribution. Brazil has created 995,000 new jobs in 2009 and the Finance Ministry is conservatively forecasting an additional 1.6 million jobs in 2010.
The Government has introduced a growth acceleration program known as PAC. The PAC, which calls for the investment of roughly US$250 billion in infrastructure projects has been key to maintaining dynamism in the Brazilian economy amid the global recession. Indeed Brazil has fared remarkably well through the recession and its rapid recovery underscores the robust fundamentals. Under the strong leadership of President Lula, interest rates have fallen from 26% in 2003 down to 8.75% in February 2010 with inflation currently standing at 4.3% in February 2010 In recent years major Brazilian companies such as Petrobras, Unibanco and InBev have recorded increased profitability. Growth in their sectors has been stimulated by a growing middle class with increasingly higher levels of disposable income.
In this new phase sophisticated investors are realising that there is more to investing in Brazil than just commodities. "People talk about the Brazilian stock market and they think commodities," says Maurice Meijers, portfolio manager at New York-based Robeco Investment Management. "But the economy is more diversified than that and some of our favourite stocks are in the consumer, financial and utility sectors and a surge in the primary and second home market".
In this new phase sophisticated investors are realising that there is more to investing in Brazil than just commodities.
Multinational companies such as the mining giant Anglo American are encouraged by the country’s economic potential and are making substantial investment in sectors ranging from manufacturing and tourism to property.
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An introduction to Brazil
A GDP within a GDP
Brazil among the top -10
GDP, 2008
Current prices, USD bn
US
PPP, USD bn Rank
14,441
The numbers indicate that the real estate market has become on of the Brazillian economy’s greatest strengths...
Rank
1 14,441
1
Japan
4,911
2
4,356
3
China
4,327
3
7,926
2
Germany
3,673
4
2,918
5
France
2,867
5
2,130
8
UK
2,680
6
2,228
7
Italy
2,314
7
1,818
10
Russia
1,677
8
2,265
6
Spain
1,602
9
1,395
12
Brazil
1,573
10
1,984
9
...but expenses on residential development in the coutry are still much smaller than in other emerging countries, like Mexico and South Korea (annual investment per capita)...
Seventh place by 2020
30 25 20 15 10 5
US
IN
JP
DE
2000
RU
BR
UK
2020 Sources: IMF, DB Research
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FR
0
...because of this situation, of a houseing deficit totalling 8 million dwellings and the increase in credit, the sector is expected to triple in size over the next two decades
Jobs Generated
(in millions of openings)
6.3%
6.2%
172 165
2.3
2.1
5.9% 1.8
2009
2008
1
2007
20091
2008
2007
Norway
Ireland
United States
Spain
Australia
South Korea
5,400
5,400
2,600
2400
2250
1300
Sums in billions of reals
GDP, current USD tn, PPP basis
Share of GDP 180
2007
Source: IM F
CN
Housing Investment
(per year in billions of reals)
2008
2009 1
Mexico Turkey Brazil
500
400
250
Housing Investment
Construction Value
Sales of Construction Manterial
Real Estate Credit
Average annual growth
Average annual growth
Average annual growth
Average annual growth
4.4%
3.9%
4.8%
11.2%
(1) Estimated (2) Proecjtion Sources: Ernst&Young and Sindurscon
An introduction to Brazil
Effective economic policies
Tourism
The Brazilian government has over the last few years successfully adopted effective economic policies that have resulted in controlled inflation, improved productivity, a positive trade balance, large international currency reserves, a stable domestic currency and impressive exports. It has also implemented programs that have improved fiscal control, significantly encouraged investment and enabled a steady reduction in the prime interest rate over the last few years to a level that supports a sustainable economic growth rate.
Tourism is one of the fastest growing industries in Brazil and there is further enormous upward potential because of the variety of its natural and cultural attractions. Brazil has been ranked seventh in the world by International Congress and Convention Association (ICCA) and the Brazilian Ministry of Tourism has been promoting tourism through investment in infrastructure, roads and airports. They have opened a number of international tourist offices in major cities worldwide. Already Brazil is serviced by over 800 regular international flights every week, and this is widely expected to increase.
In February 2009, the Brazilian government announced an increase in spending on infrastructure projects of 28 percent in response to the global financial crisis; government and private spending on roads, hydroelectric dams and other projects under the for 2007-2011 was increased to US$281 billion. One of the Brazilian sectors to be in the centre of attention in 2010 is civil construction. According to forecasts by the Getúlio Vargas Foundation (FGV), the sector’s GDP should grow by 8.8% this year, whereas the estimate of the Central Bank for growth in GDP is around 5%*. *Source: Goldman Sachs January 2010
Two of the world’s major sporting events - the 2014 World cup & the 2016 Olympics will be hosted by Brazil ensuring enormous media coverage and massively expanding tourist potential.
"Having the Olympic Games following the World Cup in 2014 means a huge infrastructure legacy with direct impact to tourism, but it also creates a tremendous advertisement campaign that will change the image of Brazil for at least 10 years. This is a great promotional opportunity and we will show the world that, aside from beautiful beaches, cultural and natural diversity, we also boast infrastructure in what some may consider one of the greatest destinations for international events in the world." Source: Jeanine Pires, President of EMBRATUR, the Brazilian Tourist Board
The government is already talking of aiming for the “Barcelona effect” where massive infrastructure investment for the Olympic event achieved tremendous and permanent increases in brand recognition and tourist visits. Despite increasing tourism, operations by international hotel chains are remarkably low offering an exceptional opportunity to enter the market early and reap rewards later.
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An introduction to Brazil
Foreign investment Brazil has been among the world's leading recipients of foreign direct investment (FDI) in recent years – a strong predictor of the returns that are possible. The impressive figures reflect the longstanding presence of international companies in prominent areas of the Brazilian economy such as telecommunications, chemicals, pharmaceuticals, automobile manufacturing, and many parts of the service sector. These investments have been sustained, among other factors, by the size of the domestic market, political stability, openness and improved macroeconomic conditions, especially in terms of enhanced fiscal discipline and adjustment, as well as by various economic reforms. Besides their very positive financial impact on the balance of payments, the inflow of FDI has played a major role in enlarging industrial capacity and boosting competitiveness According to ADIT Northeast (Association for Real Estate and Tourism in the North East), Rio Grande do Norte, Bahia and Ceara have the highest volume of new investment in the region.
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The 2010 forecast for foreign investment is US$40 billion, against US$25 billion in 2009. "The building sector should receive a good share of this investment," “The aversion to investment in more advanced countries, like the United States and European nations, the expansion of realestate credit and the housing deficit make Brazil a gigantic attraction to the sector," Source: Luis Afonso Lima, president of the Brazilian Society of Studies on Transnational Corporations and Economic Globalization (SOBEET).
The 2010 forecast for foreign investment is US$40 billion, against US$25 billion in 2009.
An introduction to Brazil
Attractions for investors Opportunities for growth and excellent potential rates of return make investing in Brazil very attractive. It has significant qualities for investors that place it highly compared to other BRIC countries. It is undoubtedly the number one investment play amongst the Latin American nations, allowing investors to diversify risk in portfolios that may traditionally have been more weighted towards China or India. There are excellent transport links from North America and Europe, and the Brazilian Government is investing heavily in supporting tourism projects: by financing major utilities and infrastructure projects, including the renovation of old airports and building of new ones.
“Increasing demand for key luxury developments outstrips supply, therefore giving the investor estimated growth on land prices of up to 20 - 30% over the next 4-5 years.� Source: The Economist 2010
Brazil has provided excellent historic annual growth but new factors such as a growing and increasingly affluent middle class point to even greater returns in the near term. In the real-estate sector, projected demand is such that there is an estimated deficit of 8 million homes. It is forecast that in three years, realestate loans will rise from 2% to 7% of GDP (from $39.5 to $163 US billion).
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An introduction to Brazil
The expanding middle class & their real-estate requirements The property investment market in Brazil shows all the signs of being at the beginning of a lengthy expansionary period; experts are anticipating at least seven to ten years of phenomenal growth. The local Brazilian market boasts a fast-growing middle class; a youthful population and the increasing availability of domestic mortgage-finance products are all contributing to a boom in the real-estate sector. These factors combine to present a compelling exit strategy for the overseas investor when it comes to selling property. Long-term emerging-market investors around the world are looking beyond the high-flying commodities market in Brazil to investment products that are tied to the country's emerging middle class. As a consequence of the strong domestic economy, prosperity levels are rising fast in Brazil. In just two years, 23 million people in Brazil have risen to prosperity level C (middle class). This brings the total of middle class to 85 million people. This middle class has a monthly income between two and five times the official minimum wage and an increasing desire to own their own real estate.
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Areas such as Natal, with its growing and affluent population, are driving the sharp increases in housing demand.
Increasing credit
Credit to private sector, % of GDP
45
There is insufficient first and second home housing stock to satisfy local demand. Currently Brazil has an estimated housing deficit of a minimum of eight million properties. The middle classes are expected to purchase between 1 and 1.2 million units per year. This shortage is unique globally making the exit strategy extremely powerful. The housing market within Brazil’s major cities is a major investment opportunity and no region has seen faster growth than the North East coastline of Rio Grande do Norte. Property in Brazil is comparatively cheap at present (up to half the price of Spain) but completely unlike Spain, the area has a housing shortage, not a surplus. Wage levels are particularly high in areas such as Natal, influencing growth in the condominium property market. Condominium property sales increased by 17% in the first part of 2009 alone. Domestic buyers are looking to buy into beachfronted gated condominiums as primary and secondary homes.
40 35 30 25 20 94
96
98
00
02
04
06
08 Source: CVM
“The last FGV estimate points towards a country with a housing deficit of 8 million houses� Source: Goldman Sachs January 2010
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Why real estate in Natal?
Why real estate in Natal? The North-East region of Brazil Economic and market indicators point towards excellent rewards for investment in Brazilian real estate, showing high capital appreciation and returns for property investors. Furthermore, research has shown that Natal in the North East of Brazil, where our investment opportunity is situated, will shortly be one of the most sought-after locations for second homes and tourism-related property in the world. The area is located only seven hours from Europe, and has no visa requirements for most Europeans for visits of up to six months. Research shows that those that visit the location enjoy their visit – with five percent of the seven million annual visitors expressing a desire to make the region their second home. Tourism has already become one of the country’s biggest employers, generating more than 250,000 new jobs each year. Brazil as a whole is growing rapidly. Importantly, though, the economy in the North East is growing at twice the rate of the rest of Brazil, giving investors in the region a powerful multiplier effect on their investment.
A survey undertaken by the ADIT Nordeste (Association for Real Estate and Tourism in the North-east) has estimated that more than $20 billion will be invested in the North-east over the next five years for the construction of five star hotels, condominiums, resorts, integrated sport complexes, houses and apartments.
MARACAJAU CARAUBAS CABO DE SÃO ROQUE MURIU
PA L M S P R I N G S Natal
Brazil
JACUMA PITANGUI
We are offering a unique opportunity to be an early entrant to the market with the attendant advantages that brings. "The domestic market is producing home-grown wealth with many of the nationals eager to get on the property ladder and purchase second homes in gated condominiums. Around 145,000 will be built in the North East region alone to cater to the existing demand.”
GENIPABU
NATAL
PONTA NEGRA
Source: ADIT Nordeste December 2009
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Why real estate in Natal?
Why real estate in Natal? Natal The Palm Springs development is located in the town of Muriu, one of the most affluent areas in the region of Natal. Natal, the capital city of the State of Rio Grande do Norte, is a major tourist destination in Brazil. It is a vibrant city with multiple beaches, branded retail shops, restaurants and bars to suit all tastes and budgets. Its tropical climate and spectacular beaches have made it one of the fastest growing destinations for tourists from Europe and across the World. Strict conservation programs to protect the natural heritage have made Natal a city of exceptional beauty. Natal is the safest capital city in Brazil and the closest to Europe. It is the country’s most popular holiday destination.
Natal’s ‘rich list’ is one of the fastest growing and the region is regarded by affluent Brazilians as the premium location in the country.
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Abundant media coverage Natal has been chosen as one of the host cities for the 2014 FIFA World Cup. Top sporting events are proven income generators as well as the engines behind much investment property. Worldwide blanket coverage of the region for the World Cup will inevitably provide major positive media attention on the attractions of the area, providing an exceptional stimulus for real-estate prices.
Infrastructure improvements Massive Government investment in transport and general infrastructure is paying dividends for the area. For example, the region has already completed the Forte Redinha Bridge. The bridge is seeing traffic in excess of 25,000 cars a day. The bridge has increased economic growth to the north of Natal: since the bridge opened, in November 2007, land development has increased by 500% in the north.
The Government plans to spend US$21.7 billion of public and private funds to improve transport infrastructure including roads, railways and ports.
Marina The marina will take an area of 50 hectares, including 25 hectares of wet space and 25 hectares of dry space. It will have a capacity of 500 boats. The dry area will also include a park, a museum and a nautical school. According to the Mayor of Natal, the marina should increase the number of visitors to Natal; currently, the nearest marina is located in located in Salvador, Bahia. The marina in Natal will be built around the Iate Clube de Natal (www.iateclubedonatal.com.br), about 500 metres into the Potengi river, and about 500 metres from the Fort of Wise Kings (www.natal-brazil.com/entertainment/fortress-wise-kings). It will be the gateway to visitors from all over Brazil.
Why real estate in Natal?
New airport A new airport, Sao Goncalo do Amarante, is under construction in Natal. When completed it will be the largest in Latin America, and the seventh largest in the world. Additionally, feeder airports such as Brasilia, Rio de Janeiro and Sao Paulo will receive US$2.5 billion for expansion and modernisation by 2010.
According to a Dow Jones News Wire, the airport will have capacity for 40 million passengers, is scheduled for completion in 2011 and has been budgeted to cost $560 million. Construction of the runways has already commenced and there is a possibility that the new airport will be incorporated into a free-trade zone.
Palm Springs is situated just 35 kilometres from the existing modern international airport (Augusto Severo) in Natal. At only 20 kilometres, the new airport will be even closer to Palm Springs Natal affording truly excellent links for international and national travellers.
Once the airport is complete, we expect to see a significant leap in land and property prices in the northern areas of Natal.
Once operational, it is realistic to expect a dramatic rise in tourist numbers to the region, which is likely to continue growing in tandem with increased air-carrier routes and competition.
Key factors driving real-estate investment in North-East Brazil • The State of Rio Grande has a premier position as one of Brazil’s high-end tourist destinations. • The number of tourists to the region will soar with the World Cup in 2014 and the Olympics in 2016. The World Cup alone is expected to attract over 500,000 visitors. • A huge amount of investment on infrastructure will go towards public services, hotels and stadiums in the proposed match location. • Massive new international airport is expected to strongly increase visitor rates to the region. • Cheap labour costs and inexpensive building materials support rapid capital appreciation. • Growth rates are double that of Brazil generally.
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The Opportunity
14
The investment opportunity
Land and Property Investment Opportunity
Phase 1
Buy into Palm Springs now and watch your investment gain momentum, as your land plot increases in value as villas are built.
Phase 2
Watch your investment value increase as we add more value to the project, releasing 220 sea-facing luxury apartments.
Phase 3
We release our four-star apart hotel and spa. Capital appreciation from the early stages of Phase 1 to Phase 3 of the project should be impressive, when you consider the added value of the villas, apartments and hotel.
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Although the location of the project is unique, it is much more than just another beach-front investment opportunity. Palm Springs offers investors a range of investment choices, starting with the entry-level investment in land plots.
The investment opportunity
Phase 1
Phase 2
Phase 3
Land Plots
Condo Apartments
Apart Hotel and Spa
Investors can chose from 347 land plots with plot sizes varying from 354m2 up to 784m2.
The project will have an amazing community feel as we release 220 luxury one bedroom apartments, two bedroom apartments and three bedroom penthouses, with sizes ranging from 55m2 up to 130m2, the apartments are finished with contemporary luxury fittings, air conditioning, fitted kitchens, bedrooms and bathroom, sea views and parking. Investing now in these apartments give the best opportunity for capital growth as the project matures.
Phase 3 of the project is the Apart Hotel and Spa. Rooms will vary in size and all finished to a high standard. The hotel will have the only conference centre in the region and will be a popular location for business conventions. The hotel will also house shops, bars restaurants and the unique spa, making it a repeat-stay destination for holidaymakers.
The plots are cleverly appointed with views varying from sea to the natural protected fauna and flora. The land plots are handed over with all services ready to connect and are maintained by the administration of the project, ensuring that your investment is always maintained.
Luxury Villas We offer a choice of four villas to enhance your land purchase. These were designed by a local architect who designed a perfect villa to achieve high returns with low immediate expenditure. The villas are two and three bedroom, single storey and duplex with a range of options. Choose from layouts between 100m2 and 142m2, all delivered ‘ready to live’.
Our clever three-phase approach to Palm Springs offers investors short, mid and long-term capital appreciation.
We expect Palm Springs’ success to mirror that of Porto Brasil, a well-established condominium development on the southern tip of Cotovelo Beach, Pirangi, a project that sold out in 2007. Palm Springs is currently the only other comparable investment opportunity in the region.
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The investment opportunity
The investment opportunity Why invest in Palm Springs?
Excellent value proposition
One of the most important aspects of investing in any property or land in Brazil is the location; this is where Palm Springs Natal excels. Situated within the town of Muriu, one of the most affluent areas in the entire Natal region, it provides an exceptional opportunity to own real estate in one of the most beautiful and sought after locations in the world.
We are Brazil specialists with a long history of delivering highquality, high-value projects. We understand the market thoroughly and have targeted our project accordingly.
Investing in Brazil offers high returns, which are estimated in excess of 15% per year. Palm Springs Natal offers the prospect of an excellent return on investment due to its location and resort characteristics.
Proven delivery capability
3500 3000 Cost in M2 RA 2500 2000 RS
Palm Springs is an exclusive and secure development that will offer superb capital growth. Combined with the area of Muriu’s outstanding natural beauty and beaches, this location means that property investors can expect a secure and high-growth asset.
Precision planning has enabled us to bring the Palm Springs Natal project on at an excellent price for early-stage investors. Looking at comparable projects in the area it is clear that we are offering the optimum value proposition.
1500 1000 500 0
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Furthermore we are offering a higher specification product since we are providing the only gated beachfront condominium launched in the region. Looking at our nearest equivalent – the beachfront condominiums of Porto Brasil – it is clear that substantial capital appreciation can be achieved even on a straight arbitrage basis and even before factoring in anticipated future real-estate market gains.
Porto Brasil
Alphaville
Bosque Dos Poetas
Palm Springs
The project is managed by an accomplished and respected UK developer with other major interests in property development in Natal. The land is owned outright by the developer with full legal title, and no debts or encumbrances.
The investment opportunity
Some key characteristics of Palm Springs Natal Exceptional Location
Quality Development
• Only 35 minutes from the current international airport and only 20 minutes from the new international airport, Sao Goncalo do Amarante – set to be the largest airport in South America.
• A low-density development within picturesque settings including natural featured stream, beautiful sand dunes and surrounded by luxury developments.
• The main entrance of Palm Springs Natal is situated directly fronting the RN-160 highway to Maxaranguape (north) and Natal (south), which demonstrates it accessibility, and yet it is still only 180 metres from the beach. • A premier destination for affluent Brazilians from Natal who consider Muriu to be the millionaire’s location with one of the best beaches in Brazil.
• Each land plot will have its own title deed and will be fully serviced with water, electricity and telephone. • A Natal-based affiliated construction company has been appointed to install the infrastructure. • Choose from four villas, which have all received the Alvara (planning permission) to four designated land plots, thus demonstrating approved villa designs by the municipality.
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The investment opportunity
Phase 1 Land plots and villas Your opportunity at a glance • Get in on the ground floor with this exciting investment opportunity. • Early entry means maximum growth potential. • Your options: - Buy land only, sell land on as resort is developed and land value increases. - Buy land and add value by building a villa; sell on for profit as resort develops. - Buy land, build a villa; hold investment as buy-tolet investment. • Great investment potential
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We offer villas in a choice of four fantastic styles. These are designed to be functional living spaces, with complementary surroundings, relaxing terraces and lush gardens. The team of architects, interior designers and landscapers work closely with international and local suppliers to ensure that each property blends in sympathetically with the surroundings, providing spacious and luxury accommodation. The four villas have been fully approved; each has a certified alvara, an approval requirement from the local municipality when building in Brazil. The villas range from 100m2 to 142 m2 with two and three bedrooms. The villas are handed over with fully fitted kitchens, bedrooms and bathrooms. We also understand the that some clients will want to introduce their own personality on their home. So we include the option to add extras to add an element of individuality to each home.
We have resisted the temptation to overbuild, committing less than 40 percent of the land to buildings.
The investment opportunity
The beach front location of Palm Springs
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Camelia Rosa
Orchid 21 www.palmspringsnatal.com
The investment opportunity
Hibiscus
Begonia www.palmspringsnatal.com 22
The investment opportunity
Phase 2
Palm Springs gated condominium apartments Your opportunity at a glance • Early entry into this phase will provide an exceptional return. • Buy off-plan our 220 one and two bed apartments or three bedroom luxury penthouses. • Your options: - For the short-term investor – quick turnaround on buying/selling units - For the long-term investor – buy and hold, and gain a rental income from these holdings
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Phase 2 of this prospectus will include 220 one & two bedroom apartments and a limited number of three bedroom luxury penthouses. This style of development is unique in this coastline, as investors have not yet witnessed or had the opportunity to invest in a project on such an ambitious scale – combining, as it does, land and villas sales, apart hotel & and spa and now luxurious apartments and penthouses. The local markets maintain a strong desire for quality and this will be catered for in the opulence and high build standards.
The architecture The apartments/ penthouses will be on six floors, with the seventh floor dedicated to penthouse terraces. Each unit will range from 55 m2 to 130m2, with the exception of the luxury penthouses, which will have an exceptionally large 7th floor panoramic viewing terrace. Most apartment will have the added benefit of a sea-facing terrace. All the apartments & penthouses will be fitted as standard with a comprehensive fully fitted kitchen including appliances, air conditioning throughout, a luxury bathroom with separate shower and a well-appointed bedrooms
Luxury fully fitted contemporary kitchen
Modern light and fresh living area
Sumptuous modern bathroom with walk in shower
Luxury bedroom with warm wooden floors,
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The investment opportunity
Phase 2
Palm Springs gated condominium apartments cont.
Apartment description • 220 luxury apartments & Penthouses • Two Lifts for Staff • Four Panoramic Lifts • Reception • Lobby • Administration • Spa • Restaurant • Leisure Areas
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Ground Floor • Apartments consisting of one & two bedrooms luxury apartments • Two Staff Lifts • Four Panoramic Lifts • Reception • Lobby • Administration • Spa • Swimming Pool (15°C) • Steam Room • Toilets/Female Change Room • Toilets/Male Change Room • Gym • Bar
7
7th Floor (Terrace) • Penthouse terrace
6th Floor
6
5
• Luxury three bedroom penthouses
5th Floor • One and two bedroom luxury apartments
4
4th Floor • One & two bedroom luxury apartments
3 Leisure Area
Restaurant (for sale)
• Adult Swimming Pool – 140m² (02) • Children Swimming Pool – 25m² (02) • Decks (02) • Areas with tables (02) • Support Bar with male and female toilets for people with special needs
• Reception • Restaurant (280m²) 17 tables for four people and five tables for six people (= 98 people capacity) • Kitchen • Dispensary • Male/Female Toilets
3rd Floor • One & two bedroom luxury apartments
2 2nd Floor • One & two bedroom luxury apartments
1 1st Floor
G
• One & two bedroom luxury apartments
The investment opportunity
Phase 3 Apart Hotel & Spa Your opportunity at a glance • This longer-term investment will deliver a significant return on your investment. • Buy into our hotel and spa development. • The hotel development will add massive value to the entire project. • Your option: - Get into this project at an early stage and secure your investment before valuations start to rise.
A major influence on capital appreciation of land plots and villa will be the approval of our exclusive Palms Springs Apart Hotel & Spa. The luxurious accommodation will be set in one of the most beautiful tropical settings beside one of Brazil’s most exquisite beaches. Palm Springs Hotel & Spa will be perfect for holidaymakers looking to experience the very best in elegant luxury. Visitors will be able to relax in one of the world’s most picturesque settings. Dining options will include an unparalleled array of gourmet restaurants and guests will enjoy luxurious accommodation in the exquisitely designed rooms.
Guests can rejuvenate in one of the sublime spas. More energetic visitors can enjoy the air-conditioned gymnasium or indulge in one of the many available activities.
The aparthotel will be the first in the region to host a conference centre. Its proximity to the new airport will make this aparthotel unique in the region for business people and a massive draw for business conventions and conferences.
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The investment opportunity
Entry to exit strategy - Making money from Palm Springs Natal The entry strategy – “make your profit when you buy” This is one of the ‘golden rules’ of property developers. And it’s true in this case. Our payment schedule provides annual capital appreciation of up to 100% on a villa, for an expenditure of only 50% of the cost, delivering an immediate return on investment of in excess of 65% when calculated over 24 months. Your investment at a glance • Choose which phase of the development interests you. - Phase 1 – buy a land plot for either a quick sale or villa development - Phase 2* – buy off-plan one/two bed apartment for quick sale or buy-to-let - Phase 3* – buy into our hotel/spa development for huge long-term rewards. • Our payment structure delivers an immediate 65% return on investment. • Benefit from growth in Brazilian real estate prices of 15-30% a year. • You decide how much profit you want to make: exit the investment when you want. * Subject to release date
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Our research ensures your profit The opportunity in Palm Springs Natal is exciting. The North East of Brazil has tremendous potential for high returns because of the large increase in the middle class and a substantial housing deficit. We have gone further and have undertaken an in-depth study of the local market – your target audience.
tailored condominium-style product that has proven to be exactly what the target market desires.
The local market’s appetite for Palm Springs is voracious To validate this strategy we made an initial offering of 20% of the Palm Springs directly to the domestic market. This entire offering was sold out within 21 days of release, dramatically underlining the investment potential of our product.
In the early days of sourcing land, we quickly realised that an exceptional location was paramount. We also knew we had to provide a product that would be an attractive investment for the domestic Brazilian market. We researched what the domestic market wanted and moulded Palm Springs into that product. We realised that the "loteamento*" concept was simply not what the market desired.
Condominium status gives your investment vital security
We understood that with no regulations on build styles, build times, security aspect or administration, the local market has no desire to purchase a “loteamento”. Instead we offer a
We talked extensively to the local market at an early stage to understand their culture and requirements; the best fit was to be found in registration for condominium status.
The investment opportunity
Condominium rules are regulated by the owners and offer protection once the land is in your possession. These rules, which form part of the purchase of the land plot, have been initiated by the developer to ensure that each owner will benefit from the maximum amount of capital appreciation. Palm Springs consists of one condominium, which differs from general land plot sales where no regulations by the owners are imposed to ensure sympathetic care of each land plot or villa, thus ensuring the sustainability and attractive appearance of the condominium.
Condominium status offers: • Restrictions on height of beach villas • Restrictions on size of build, relevant to the size of the plot • Residents obligations within the condominium • Complete infrastructure • Leisure areas • Clubhouse • Sports facilities • 24-hour security presence, with gated entrance front and back • A fully implemented administration office
Your exit strategy – “getting your money back…with interest” We place great emphasis on your exit strategy. This is where our understanding of the local market is paramount; we understand the needs of the secondary market buyer, the people that are going to buy your land, villa or apartment. We know your target market and can help you
Endorsed by Sothebys Realty – a seal of aproval
Your target audience is not investors in Brazil, but the abundance of new Brazilian middle class with disposable income and a desire to own safe-and-secure luxury primary and secondary homes. Wage levels are particularly high in areas such as Natal, leading to a buoyant condominium property market.
We have an established working relationship with Sotheby’s Realty Brazil, New York and London, who have a wellappointed office in Natal. We have listened to the criteria of local investment experts and developed one of the best projects in Brazil. Palm Springs Natal is the only gated beachfront condominium in the whole of the North-East region. Our patience, diligence and ability to work with the local market have been fully endorsed.
The market for condominiums is booming - Condominium property sales increased by 17% in the first part of 2009 alone.
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The investment opportunity
Your investment opportunity Our business model - Phase 1 Our model is to offer over 75% of the project to investors who can gain capital appreciation over the two-year build period, subsequently selling back to the local market. Sales units are land plots and/ or villas in a unique gated beachfront condominium. This investment prospectus is offering the opportunity to purchase multiple units with a wealth of capital appreciation for the short, mid and long-term investor. This opportunity offers an exit strategy that will be hard to better in the global real estate market. Our objective is to sell multiple units to investment consortiums, property groups, IFAs and lone entrepreneurs. Our office in Natal houses a team of experts to ensure that the construction process is overseen professionally. They demand excellence and ensure that delivery is on time. This allows our focus to be concentrated on structuring investment proposals with global investors.
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We are renowned for finding prime locations and offering a competitive price per square metre. Brazil’s success story will only gain further momentum in the coming year with global media attention on the 2014 World Cup and the Olympics in 2016 - making it the number one hotspot for overseas investment. Land and property acquisition now is fundamental to ensuring our investors capital growth in the coming years. With a housing deficit of over eight million homes in the region, Palm Springs offers investors one of the most logical choices in numeric terms and one of the best executed projects with excellent attention to planning and implementation. With over three years of precision planning for Palm Springs, from location through to infrastructure implementation, with all licenses approved and with the key factor to any investment, a clientele that have already embraced and purchased the project, the prospective investor can be assured that their choice of involvement in this project is an optimal one.
The developer Ritz Property Investimentos Imobiliários LTDA is a company registered in Brazil and is a wholly owned subsidiary of an established UK Group of Companies. The offices in Natal consists of a team of architects, engineers, and surveyors who have continued experience, expertise and proven track record in collaborative working together with the skills to complete a wide range of developments from large hotel complexes sites to single units. RITZ is a property developer and outright owner of Palms Springs Natal, which owns further land in Natal where it plans to build numerous housing developments over a number of complexes. The company’s operations are linked to the UK parent company which is headed by senior managers with an impressive track record of delivery. Ritz has already established itself as one of the region’s most credible and well respected international developers, to enter the region and its strong ties
The investment opportunity
with local government only cements our position for a long term prosperous future. Location is the company’s primary and fundamental objective and having spent two years searching for the right development in the North East of Brazil, Palm Springs Natal evolved. Following a stringent due-diligence process the land was purchased outright with full legal title and no debts or encumbrances. This is different from most of the land projects in the North East, where developers merely own options to buy land plots. The financial security of the company means delivery of the infrastructure is well in progress and due for completion in 2011. With significant investment in Brazil, the mission is to deliver high quality and secure investments for the international client.
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Investors Guide
Investors Guide Palm Springs Natal represents a tremendous investment opportunity for investors. To facilitate your access to the project here are some factors that you should consider. We can offer a full administration facility, obtaining all necessary documentation to complete a real estate investment purchase in Brazil. Our experienced team in the UK and Brazil works together to deliver a fast, efficient service. The following is a guide only and is not intended to take the place of professional advice tailored to your own circumstances.
Legal Representation Lawyers You should obtain legal representation with full competency in Brazilian property law to protect your interests and ensure that all elements of the transaction are conducted effectively. Your lawyer will: • Check that the current owners have the correct title to the property • Check for any charges and liabilities still owed on the property • Check your contract and advise you on the obligations for both parties
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• Help you through the payment/funds transfer • Ensure the property is registered in your name
Costs Legal costs are generally between £500 and £1,000 depending on the value of the land purchased.
Due Diligence Manzanares International law firm were chosen to conduct an independent due diligence report. The firm has offices in a number of countries including Spain, UK and Brazil, and has extensive knowledge of the buying process and local law within the Natal region. At the request of Manzanares Lawyers, they have conducted a stringent, independent due-diligence process on Palm Springs Natal over a three-month period. Through the region’s municipal and government offices, they have carried out a thorough investigation into compliance with statutory requirements for the sale of land plots at Palm Springs Natal. The due diligence report is available on request.
Documentation Property registration The property registry system in Brazil is well developed and safe. Real-estate registration in Brazil is carried out by private notary publics. All land and property is registered at one single registry, which records details of the entire commercial history and the physical identification of each property. It is obviously important to ensure that any land or property you buy has a clear title and your lawyer will ensure this is the case.
Brazilian CPF You will need a Brazilian ID called a CPF. This is the UK equivalent of a national insurance number and can be obtained fairly simply by submitting a copy of your passport with a request for a CPF signature card. Once you receive the signature card you simply sign it and send it back with a small fee, and your CPF number is assigned to you at the Receita Federal. This can then be included in any purchase agreement. A formal copy of the CPF card will be posted out to you at an address in Brazil. For simplicity this is usually your lawyer’s address.
Investors Guide
Our services With our dual offices in the UK and Brazil, for a fixed fee of £650, we will administer the obtaining of a CPF, as we have direct contact with the local notaries, municipality and our experienced well practiced law firm.
Costs Transaction costs, including stamp duty, fees etc. are on average between 3% and 8% of the purchase price. Costs vary according to location, type of property and the State in which you buy. Typical breakdown: 1. A sales contract is prepared by the selling broker. It contains all the required information of the buyer and the seller, location and specifications of the Brazil real estate and the conditions of the payment. 2. The contract is then signed by both parties, or in the case of a notarised copy of the buyer’s passport and a Power Of Attorney being given by the buyer, another person can sign the contract on the behalf of the buyer.
3. A down payment deposit (anything between 10% and 30%) is then normally paid to the seller to prevent the property from being sold to anyone else. 4. The taxes and registration fees (between 4.5% and 10% of the agreed declared purchase value) are also sent by the buyer to either the lawyer or acting agent. 5. From this point, the agent will arrange and pay the registration of the property into the authenticated buyer’s name via cartorio, which can take a few weeks. All taxes are also paid at this time. Here is the breakdown of all fees: • Property transfer fees (ITBI): 2% of the purchase value declared (payable at the City Hall) • The Public Deed and notary fees: usually come between 1% 1.5% of the purchase value declared • The land registry (The Matricula): 2% of the purchase declared value • Legal fees: typically 1% - 2% of the purchase price, which can depend on the value of the property.
• There is an annual property tax (IPTU): approximately 0.6% per year of the assessed value 6. With the registry completed and taxes paid, the full payment will need to be made by the buyer under the conditions of the authenticated contract. It will be held by the receiving bank in Brazil (which is automatically registered with the central bank, as all international movements of over R$10,000). The receiving bank, by law, will then only release the money to the seller’s account when the contract and change of title has been proved.
Our chosen leading tax experts in Brazil When investing in overseas property, an understanding of the tax laws are as important as the investment itself. We believe in local knowledge and searched long and hard to find the best tax lawyers in the region. After months of due diligence on several tax law firms, we have developed a strong relationship and a collaboration with Matida
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Palm Springs - Natal
Our chosen leading tax experts in Brazil cont. Fernandes e Crawshaw Advogados, Lawyers and Consultants tax, legal and fund repatriation. The firm has extensive experience of overseas clients operating in Brazil. Particularly, they provide advice on all aspects of tax, both Brazilian and UK, relating to overseas buyers acquiring property in Brazil. In addition, their services incorporate any angle of tax or legal advice, accountancy, repatriation of funds, and management of properties – including payments of service accounts etc, and the handling of rental agreements. Luiz Matida Fernandes qualified as a lawyer in São Paulo in 2001, as a tax specialist in 2003 and then in England in Business Law at the London School of Economics (LSE). He is fluent in English. Edward Crawshaw qualified as a Chartered Accountant with Cooper Brothers (now PricewaterhouseCoopers). Edward has assisted investors with tax matters for over 40 years, his understanding of the tax system has made him a leading figure in his field. Contact details are available on request.
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Palm Springs - Natal
Legal Disclaimer The is not an offering document of a Real Estate Investment and does not constitute an offer to sell, or a solicitation of offers to buy, securities. This document reflects a real estate investment in the Palm Springs Natal only. The document is intended only to provide an initial summary of the proposed real estate investment transaction, which may be subject to change at any time. This preliminary information document may not be reproduced or distributed by the recipient. The recipient acknowledges a degree of risk of this Real Estate Investment. There are special risk considerations associated with investing, including international investing. No assurance or guarantees are given regarding the performance of this Real Estate Investment. The reader of this document does understand that the developer Ritz Property Investimentos Imobiliรกrios LTDA or its appointed agents are not an Investment Bank or Financial Institutions nor are they a stock brokerage firm but rather an international real estate development firm. Confidentiality Understanding It is understood by the recipient of this document that the below identified discloser of confidential information may provide certain information that is and must be kept confidential. To ensure the protection of such information, and to preserve any confidentiality necessary under patent and/or trade secret laws, it is agreed that: 1. The Confidential Information to be disclosed can be described as and includes: Invention description(s), technical and business information relating to proprietary ideas and inventions, ideas, patentable ideas, trade secrets, drawings and/or illustrations, patent searches, existing and/or contemplated products and services, research and development, production, costs, profit and margin information, finances and financial projections, customers, clients, marketing, and current or future business plans and models, regardless of whether such information is designated as "Confidential Information" at the time of its disclosure. 2. The Recipient agrees not to disclose the confidential information obtained from the discloser to anyone unless required to do so by law. 3. This document discloses some of Ritz Property Investimentos Imobiliรกrios LTDA confidential Information. WHEREFORE, the parties acknowledge that they have read and understand this document and voluntarily accept the duties and obligations set forth herein. Discloser of Confidential Information: Ritz Property Investimentos Imobiliรกrios LTDA. Photographs are for illustration purposes only. Returns on investment may be higher or lower than stated, Figures stated are purely for guide purposes.
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Palm Springs - Natal
Notes
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Palm Springs - Natal
Contact Us
For further information on this investment opportunity at Palm Springs Natal, please contact us on +44 (0) 845 2638861 Fax +44 (0) 2638862 or email our Brazil investment experts at info@dlt-international.com.
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