Sao Paulo City Club

S 達 o Pau l o C i t y C l u b I nve stm e n t P r o p o s a l

R E S I D E NTI A L / H OTE L / M E M B E R S ’ C LU B I N VI L A N OVA CO N C E I ÇÃO

Architectural Image of the building for the proposed City Club at São Paulo to be developed for top quality international hotel and resort operators Six Senses.

An imaginative and innovative design for an imaginative and innovative concept created for the highest quality market in São Paulo.

R E S I D E NTI A L / H OTE L / M E M B E R S ’ C LU B I N VI L A N OVA CO N C E I ÇÃO

This document outlines an exciting investment opportunity; a unique combination of hotel and private apartment building in the most sought after and expensive district of São Paulo which will also be home to a private members club with an array of exclusive facilities for its members as well as apartment owners and hotel guests.

The investment opportunity is presented through an FII by Aria Capital of Rio de Janeiro; highly respected Fund and Investment Managers who will control the money invested in the Fund and who have been responsible for creating the Fund and for the necessary Research and Due Diligence on the Project.

Option Agreements have been secured on all the land making up the plot and the necessary agreement reached to acquire the CEPACS to build 4 times the size of the land which is 3,890m2 which means that the building will have a Total Usable area of 15,560m2.

This area will include 54 apartments varying in size between 85m2 and 410m2 which will be sold but overwhelmingly as Investment Units so that they will also be available to rent through the hotel operators who will be a 6 Star

International Group new both to São Paulo and Brazil. The other facilities will include an outstanding Spa, range of restaurants and other facilities topped by a Rooftop Garden housing facilities which will be detailed later in this report and the Iconic building will be a beacon of greenery and environmental excellence in the heart of São Paulo.

The Financial Model, summarised in this document, demonstrates 5 year profits of over R$440 Million on a R$ 100 Million Investment offering investors a Benchmark Return of 9% p.a. plus cost of living combined with an ultimate profit share of around R$ 224 Million after return of Investment Funds.

Working in collaboration with the internationally renowned hotel operators Six Senses and London’s leading design architects Walker Bushe who are responsible for the concept and design of the building, Elements have also been co-working with São Paulo constructors RFM and São Paulo Project Managers Target in relation to the implementation of this concept in Brazil. The whole project has been created by niche developers Elements Club who have also funded the costs of development including the costs of establishing the Fund.

F I N A N C I A L COM M E NTA RY

Summary

The Hotel

• The total land acquisition including CEPAC’s will cost R$ 90.6 M, allowing for a development over 22 floors, 17 of which are for Residential development.

• The Hotel is anticipated to have a minimum of 48 “pooled back” apartments; the smallest size of an apartment will be 85 m2 up to a maximum size of the Presidential Suite of 412 m2.

• The Gross Internal Floor area totals 10,400 m2 above ground.

• Construction costs are based on R$ 3,000 m2.

• The FII fund is R$ 100 M, of which R$70 M will be drawn down and the balance will remain as a contingency.

• The investors are forecast to receive their initial investment of R$ 70 M plus benchmark return of R$ 63 M and R$ 224.2 M of distributable proceeds over a five year period. The total Project IRR is indicated at 47%.

• The occupancy of the Hotel starts for 75% in year 3 and grows to a occupancy of 80% in year 5.

• The apartments start at a basic daily rate of R$ 2.500 for 85 m2 and increases based on the size and position of the room as you move up the building , with the largest Presidential Suite being charged at R$ 15,000.

• Hotel revenue grows from R$ 74.3M in the first year of operation to R$99.5 in the 5th year of operation.

• Gross Operating Profit (GOP) grows over the first 5 years from R$ 36.2M in the first year of operation to R$52.4 M in 5th year of operation.

Membership Income

Residential

• The Membership of the Club will reach a maximum of 2000 members in Year 5, plus 200 “Premium” select members in the same time frame.

• The total saleable area for Residential development is 9,247 m2, distributed over 17 floors.

• The Membership income makes up 64.5% of Revenues in year one, where the very exclusive and limited Premium level has a joining fee of R$ 50,000 and thereafter an annual fee of R$ 30,000.

• The initial sales price for the Residential Apartments will be R$20,000 per m2 and increases slowly as you move up the building, in terms of both quality and size, to R$ 25,000 per m2; the Presidential Suite is valued at R$ 30,000 per m2.

• Total development cost will be R$71M (including Fittings & Fixtures and professional fees), and will generate a Sales Revenue of R$200.6M.

F I N A N C I A L I NVE STM E NT S UM MA RY

Particulars

Year 0

Capital Acquisition and Funding: Land Acquisition & CEPAC’s Payment

-49,972,00

Cash from Fund Introductory Fee (2.5%) Pre-Launch Costs Cash from Fund Total Cash Outflow - (1)

-1,249,300 -500,000 55,000,000

3,278,700

Cash flow from Operation: Net Sales Revenue

-

EBITDA Less: FF&E Reserve Cash Flow - pre financing

-

Less: Benchmark Return (rolled up)

-

Principal repayment (block) Total Interest and loan repayment

-

Cash Flow - Treasury Operations Sub-total - cash from operation (post financing) Total - Building Cost of Construction

-391,000

Net Terminal value Total Cash Inflow - (2)

-391,000

Net Cash Flow

2,887,700

Cummulative Cashflow

2,887,700

Projected Project Equity IRR

47%

Year 1

Year 2

Year 3

Year 4

Year 5

-

-

31,086,581

38,995,409

43,759,874

-1,633,190

-1,832,652

-1,990,168

38,440,000 -961,000 15,000,000 24,401,000

-

-

63,654,187

66,836,896

70,178,741

63,654,187

66,836,896

99,632,132

37,162,757

41,769,706

-

-

-

-

-63,000,000

-

-

-

-70,000,000

-

-

-

-

-133,000,000

202,139

509,353

2,987,331

10,086,693

13,310,155

63,856,326

67,346,249

102,619,463

47,249,450

-77,920,139

-35,066,560

-31,946,560

-1,200,000

-1,200,000

-1,200,000 337,298,730

28,789,766

35,399,689

101,419,463

46,049,450

258,178,591

4,388,766

35,399,689

101,419,463

46,049,450

258,178,591

7,279,466

42,676,154

144,095,617

190,145,067

448,323,658

F I N A N C I A L COM M E NTA RY

Millions

HOTEL -­‐ Income, Expenses and GOP 120 100 80 60 Total Revenue R$

Total expenses

40

Gross Opera<ng Profit 20 0 Year 3 -­‐20 -­‐40

Year 4

Year 5

Millions

Cash flow Residen1al 60

50

40

R$ 30

Net Sales Revenue EBITDA

20

10

0 Year 0

Year 1

Year 2

Year 3

Year 4

Year 5

T H E B U I L D I N G - i n s p i r at i o n

The inspiration for this building comes partly from its location in South

Americaâ&#x20AC;&#x2122;s leading city and from its extraordinary skyline.

It also comes from various buildings around the world which have been used as architectural references by

project architect Richard Walker; some of them are shown on this page.

THE BUILDING

The main site features are the avenue itself, and the adjacent tower buildings (to the north and east currently).

Given the sun path around the site and these constraints, the building has been sited along the avenue frontage but set back slightly. In addition the main tower has been sited to the south west end to give maximum views and minimum shading/obscuration of view.

This position also allows for an iconic building to be clearly seen from both directions down the main road for some distance.

Two main ‘bodies’ ; one a tower with the residential units in it & the other the main six senses offer. These would be linked by either a two or three storey building which has the more ’public’ elements in it and provides a rooftop garden/restaurant. Part of the reason for this is also to address the street elevation to Helio Pellegrino in an appropriate way, almost to raise a private garden up away from the streets – bringing a bit of Brazilian nature & Six Senses luxury into the city.

(concept drawings, not to scale)

THE BUILDING

F LO O R P L ATE S

Floorplate A 2x flat A @ 70 + 15 or 12 balcony 2x flat B @ 105 + 15 or 12 balcony Core @ 60 No voids Area that counts as GIFA 410msq Saleable area 404msq Propose 6no. of these floors in total

Floorplate B 2x flat A @ 70 + 15 or 12 balcony 2x flat C @ 75 + 8 balcony Core @ 60 Voids (over flat B) 2x 30 Area that counts as GIFA 350msq Saleable area 333msq Propose 5no. of these floors in total (alternated with floorplate A)

Floorplate C 2x flat D @ 180 + 27 balcony Core @ 50 No voids Area that counts as GIFA 410msq Saleable area 414msq Propose 3no. of these floors in total

F LO O R P L ATE S

Floorplates D&E (combined) 2x flat E @ 230 + 27 balcony 1x flat F @ 170 + 32 balcony Core @ 2x 50 Voids (over flat E) 2x 45 Area that counts as GIFA 730msq Saleable area 716msq Propose 1no. of these floors (combined)

F LO O R P L ATE S

Floorplate F 1x flat G @ 360 + 52 balcony (incl pool) Core @ 50 No voids Area that counts as GIFA 410msq Saleable area 412msq Propose 1no. of these floors SUMMARY Total area that counts as GIFA 6,580msq Total saleable area 6,459msq Total no. of residential floors, 17.

Total no. of floors in building above ground, 22.

E L E M E NTS

Elements was founded in 2008 by Edward Baillie a British citizen, who is now a permanent resident of S達o Paulo. After creating some special resort developments in Portugal he has been building a niche development company in Brazil. This company combines the best of European and other international experience with Brazilian flair and imagination.

The team that he has now built up is based partly in London and partly in S達o Paulo and has developed a philosophy based on delivering the highest possible standards, while endeavouring to be at the forefront of environmentally sustainable and ecologically responsible development.

Elements Club have chosen Six Senses as the operator of their first three projects in Brazil; the S達o Paulo City Club plus a fazenda in the South of Bahia and a high end resort development in the North East.

S I X S E N S E S C IT Y C LU B AT SÃO PAU LO

The international hotel operator Six Senses, having recognized that there is an extremely high demand for exclusive, membership led city clubs, in the leading international cities of the world is to launch the first club of this kind in South America’s leading city São Paulo.

The philosophy of the company puts very high emphasis and focus on ensuring that the operation is considered carefully with regard to the effects on the environment and local surroundings. This means that energy production, waste management, and all other environmental impact elements are scrutinized to ensure that the most ecological effective solutions are implemented, as well as being ecofriendly in terms of both design and infrastructure. Furthermore, Six Senses “SLOW LIFE” philosophy is constantly focused on doing the very best for its customers, in terms of environment, service and food; all food served within the Hotel and club will be carefully sourced and will be 100% organic throughout.

Six Senses and its loyal customers share this responsible environmental focus, which is managed hand in hand with an outstanding level of service.

Meeting the demands of upper strata of society is maintained with the utmost care and attention to detail.

The Six Senses City Club, to be located in a newly designed building, will bring a unparalleled level of service to hotel guests and club members to São Paulo.

The building itself will be unlike any other in São Paulo, and will become an iconic representation and beacon of exclusive quality, unparalleled luxury and ecological responsibility going forward.

The Six Senses City Club will have 3 elements • Open Element – Open to select public, hotel guests & members • Hotel Element – Open to hotel guests and members • Hidden Element - This is exclusive open to full Members of the Club

The Six Senses Spa, which is a fundamental part of all Six Senses operations, will form a key element and will create an urban oasis along with the Urban Garden which will spread from the bottom to the top of the building culminating in a sensational rooftop garden.

S I X S E N S E S C IT Y C LU B AT Sﾃグ PAU LO - o p e n e l e m e n t

FOOD & BEVERAGE EXPERIENCES The Gastrodome This section of the Six Senses City Club would be accessible to select members of the public as well as Members and hotel guests. Six Senses will create a multi-restaurant bar concept. The design and cuisine of the different areas will be dramatically different.

The Gastrodome will provide a dining experience never seen before. The wide range of cuisine and the different atmospheres created within this Gastrodome will meet all customers and members demands.

S I X S E N S E S C IT Y C LU B AT Sﾃグ PAU LO - h ot e l e l e m e n t

The accommodation offered at the City Club will be subtle and sophisticated; this will meet the needs of the business, local and international guests.

All suites will be in excess of 85 m2; this large area is to ensure that there is no compromise in terms of the level of comfort offered to members and guests. As well as having all the latest technological entertainment and communication equipment, each suite will have a dedicated butler working day and night to ensure that every need of the guest are fulfilled.

In terms of construction materials and fittings, these again will be found locally, wherever possible, and will come from sustainable source. The overall design of the building is to create a quiet and ecological area, in the heart of the city.

All the suites will be equipped with the latest communication and technological devices. There will be a personalized mobile device, which will give all the guests easy access to their butler/concierge service for every need.

URBAN SPA 窶｢ Six Senses Destination Spa Model Fitness & Sport Center, which will include an Aqua Gym, both indoor and outdoor lap pools. 窶｢ Treatments An extensive range of massage and beauty treatments will be available including a Hair Studio offering a full choice of hair treatments.

S I X S E N S E S C IT Y C LU B AT SÃO PAU LO - h i d d e n e l e m e n t

THE LIBRARY & MEMBERS ENCLOSURE / MEMBER ZONE This section of the Six Senses City Club will be accessible only to the very privileged and limited members of Six Senses City Club. They will be situated in a private Chamber accessible only with full membership, and incorporating all the traditional value of an exclusive members club, accessed through a controlled security area, and will utilize the highest levels of security technology to ensure that access is only limited to the select few.

any previous experience of true values of service and discretion. Due to the very limited number of Six Senses Select members, this area will never be crowded, and each member will be guaranteed to have access to all areas 24 hours a day, 365 days of the year.

Members will first enter into a Library, and from there a host of other specifically designed areas for work and relaxation.

The chamber will then have an open space, with excellent contemporary lighting and chill out music, and in one of the walls there will be an eye or finger print scan that will recognize the member and activate a second door leading to the “Hidden Element”.

There will be meeting areas located between the Select zone and the hotel element, where members will be able to hold meetings with non-members.

This area will not be in the Select Zone, however members will be able to meet their guest through arrangement with the members PA, and will have exclusive access to the meetings rooms from the select side.

Private Working Spaces

Private Wine Cellar

Within the central Select area, there will be an area that we completely redefine members clubs as they known today. It will incorporate the most contemporary elements of design and lighting, providing and meeting all the needs of members, surpassing

With a special stock of fantastic wines, this will be available for private tasting upon request. Our sommelier will contact top vineyards and iconic wines world-wide (both old & new world) and reserve small amounts that are exclusively at our members’ disposal.

EX E C UTI O N

The inspiration for the Six Senses City Club will come partly of course from the imaginative and innovative ideas developed by Six Senses in other parts of the world. This philosophy is also shared by one of the best architects in the world who will add architecture that is truly inspirational in its use of space and materials and its ability to work in harmony with their surroundings of the city, the neighborhood in which the project belongs to.

Richard Walker, Walker Bushe Architects, has emerged as one of London’s brightest and most imaginative architectural talents with work in the UK and other European countries, in urban, seaside and countryside locations. He has produced the ideas and concepts along with the Masterplan which is being developed together with Six Senses as well as Elements Club.

The execution of this project will be very much a Brazilian operation.

All the technical aspects of the project will be managed by Target Desenvolvimento Imobiliário through its team, coordinated by Miguel Giacummo and Ricardo Borges, who are advising the developer, Elements

Club, in the identification, negotiation and development, enabling the implementation of Six Senses City Club in São Paulo. Target will be responsible for liaising with the architects, controlling the project costs, timelines, planning and management of works and also for the selection and supervision of construction work.

The Brazilian architects, Milene Scala and Renata Lamardo, Vivá Architecture, will work together with Richard Walker, to implement his ideas at the Six Senses City Club in São Paulo. In search of new architectural solutions and appropriate technologies to meet the specific demands of the project, seeking to understand how this interferes with their surroundings, offering a contemporary architectural language that responds to customer needs and at the same time, respects the city.

The construction company with preference to perform the work is the RFM Group that since 1979 has been working in the construction of residential, commercial, hospitals and hotels, with more than 800,000 sqm already built. RFM has the Certificate of Quality ISO 9001 (1997) and Environmental Certificate ISO 14001

(2004), PrĂŞmio Master ImobiliĂĄrio (Real Estate Award in Brazil) in 2000, 2001, 2003 and 2004, and in 2001 RFM has gained recognition due to the construction of the first green building in the country.

Elements Club will be the Overall Project Manger to The Fund for the development of project, liaison with Six Senses and the Architect as well as the Fund Managers in relation to the overall success of the project.

contact: edward baillie edward@elementsclub.com +55 (11) 8363 7993 craig fuller craig@elementsclub.com +44 (0) 7767 211 707