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Frontline 5 star resort
• Only 45km from Marsa Alam International Airport • Prices from €29,500 • Average 10% bank backed rental guarantee • Extensive green areas with only 18% of the site being built on • All apartments with private outdoor space and climate control • Elevator access for all apartments
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Preface The decision to purchase an apartment abroad, whether as an investment or for your own use, should not be taken lightly. The following Investment Guide contains all the information required to invest in the Marsa Alam Beach Resort of the IPI Group and will help you to make the right decision. We guarantee a transparent working method by providing all the information you require regarding the products and services we offer. The IPI Group has, at the request of investors, organized a recommended solicitor to handle transactions for clients and provide pre-purchase reporting and Due Diligence. Anthony Seddon & Co Solicitors is a London based law firm, regulated by the Solicitors Regulation Authority. Anthony Seddon & Co has carried out a Due Diligence report on both the IPI companies and their affiliated projects. The result of this research was positive and the report is available upon request. Anthony Seddon & Co are a 100% independent body, working solely for the protection of their clients. IPI are not obligated to undergo such research into their developments nor is it the norm with overseas developments of such kind to do so. However, as stated above we want to be as transparent as possible. We are proud of our projects, our ethical business practices and code of conduct. We are convinced that our service will offer peace of mind and inspire trust. For example, we have made our Due Diligence report easily accessible in the download section of our website. We are unique in that the IPI Group will continue to remain the owners of the resort once the site is developed. IPI will be completely responsible for the management and maintenance. This gives investors peace of mind as IPI’s goals are aligned with investors, which helps to ensure the long-term success of the resort. IPI have a long term commitment to the development and consequently we remain of service to you throughout the entire investment process. IPI supports you throughout the purchase and, if required, we will manage and rent your apartment after completion and handover. We hope you enjoy reading this Guide and look forward to welcoming you to the growing group of satisfied investors. With kind regards, The IPI Group - Board of Directors Jßrgen Oddens and Henri Dral
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Contents Title page Preface Table of Contents Marsa Alam Beach Resort Facilities Location Google Earth Government Planning Economy and Tourism Sustainable Investing The Resort Site Map Phase I Site Map Hotel Suites Phase I Junior Suite (Type B) Junior Suite - Furniture Packs Site Map 2 Bed Apartments phase I 2 Bed Apartments (Type D) 2 Bed End Apartments (Type E) 2 Bed Apartments and 2 Bed End Apartments- furniture packs Rental returns Suites Rental returns 2 Bed Apartments Financial Projections Method of payments Breakdown of payments Purchasing procedure Stichting Derdengelden IPI Legalities Purchase Transparency Company structure IPI IPI Track record IPI Philosophy Construction management Frequently Asked Questions Disclaimer
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Marsa Alam Beach Resort The Marsa Alam Beach Resort is an exclusive, 5 star, 1,434 unit development. Located frontline on the sun-drenched Red Sea Riviera; it has its own private 500m beach and house reef. Marsa Alam is widely regarded as the world’s premier diving destination and the resort takes full advantage of its enviable location with two private jetties, an on-site diving school, a water sports shop as well as a full range of facilities (see ”Facilities” for full details). Not only does the resort offer the perfect holiday destination, it also provides an unrivaled investment opportunity. Located in one of the Red Sea hot spots, the resort encompasses low entry levels, high bank backed rental guarantee’s averaging 10% per year for five years, stage payment plans, developer funded mortgage and use of an escrow account for client funds; all of this from a developer with a strong track record in high quality developments throughout the world. The Marsa Alam Beach Resort offers various investment options to cater to all budgets including: - Junior Suites from €29,500 - Two bedroom apartments (with rental guarantee) from €43,945 - Two bedroom end apartments (with rental guarantee) from €45,945
An additional information pack containing information on the area, diving, excursions, commercial floor plans etc is available on request from your agent.
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Facilities The Marsa Alam Beach Resort will encompass a full range of on-site facilities designed to cater to everyone’s needs. For the more active the resort will include swimming pools, scuba diving school, multiple sports courts and organized beach sports activities. For those that prefer to pamper themselves whilst on holiday, a fully equipped wellness, Thalasso and beauty centre will cater to your every need. An extensive range of on-site restaurants will allow you to sample culinary delights from around the world and why not finish the evening off with a drink at one of the beach bars situated right on the magnificent Red Sea. With tour and excursion services as well as shuttle, limo and car rental, exploring the world outside the resort couldn’t be easier. To make your children’s stay all the more enjoyable, the resort also comprises two designated children’s areas. Internet connections in all apartments will ensure that you’re never too far from family and friends should you wish to be contactable. But with all of this on your doorstep you’d be forgiven for not wanting to be. • • • • • • • • • • • • • • • • • • • • • •
Spa, wellness, Thalasso and beauty centers Restaurants, bars and a nightclub 24 hr concierge, reception and room services 24 hour in house security services with manned gate Medical and dental services Limo service and car rental Shuttle service to and from the airport In-house serviced laundry Travel and excursion services Shopping mall Supermarket Internet connection in all apartments Climate control as standard Elevator access for all apartments Amphitheater Cinema Children’s playground Four tennis courts and two basketball courts 10 swimming pools; both salt and freshwater 500m private beach with house coral reef and two private jetties Dive centre and water sports shop Botanical landscaped gardens with streams and fountains
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The Health Club with tennis courts in the foreground and the manicured gardens present throughout this extensive resort.
One of the basketball courts with the Suites in the background. Version 4 - Page 7
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Location Until recently, Marsa Alam was a small fishing village located in Egypt, on the Red Sea west coast. However, it has rapidly increased in popularity and since the opening of its International Airport, it has started to become yet another favorite holiday destination on the Red Sea Riviera. In fact, most informed observers believe that it is destined to become more popular than Sharm El Sheikh and Hurghada within the next few years. Marsa Alam is situated near the Tropic of Cancer where the Arabian Desert meets the Red Sea and it has the appearance of a tropical paradise with its palm trees, mangroves and sea coasts fringed with barrier coral reefs. It has already gained a strong reputation amongst scuba divers due to its numerous and unspoilt diving sites both along the coast and offshore. Marsa Alam also has some inland attractions such as the Emerald mines and the Temple of Seti 1 at Khanais near the Marsa Alam
The geographical location of Marsa Alam provides a perfect climate all year round. The mountains behind the resort provide not only a spectacular backdrop, but also ideal wind conditions for a perfect temperature. This consequently provides great opportunities for many types of water sports, including, sailing, windsurfing and kite surfing. Month
Jan
Feb
Mar
Apr
May
Min
6
7
11
16
20
23
24
Max
23
25
29
35
39
41
41
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Jun Jul Aug
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Sep
Oct
Nov
Dec
24
21
18
12
8
41
38
35
30
25
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Google Earth In both images the Marsa Alam Beach Resort site is marked by the shaded red area. The larger area on the right hand between the sea and the road is the resort. The smaller parcel on the left hand side of the road is to be the business services and living quarters. The Beach Dima Resort is the completed resort immediately to the North.
This photo shows a wide angle direct overview of the resort.
This photo shows an aerial view of the resort looking along the coast. The resort on the bay to the south is the Brayka Bay Resort.
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Government Planning The Egyptian government has earmarked several areas of the Red Sea Coast for tourism development. These areas stretch from the coast between Ain Soukhna and Zafarana in the north to Marsa Alam in the south. Most of the land in Egypt, particularly along the coast, is owned by the government and therefore the Egyptian Tourism Board has a much higher level of control on the master planning of expansion areas than would be witnessed in most countries. The map opposite shows the division of blocks in the area around the Marsa A l a m B e a c h Re s o r t , w i t h resorts on the sea-side of the road and business services and staff accommodation on the other.
Marsa Alam Beach Resort
The ability to exert influence over what is built on each parcel, when it is to be built and how it should be built allows this area the benefit of forward planning rather than a resort area which is built according to what available land can be found and maximizing the number of properties on the available space.
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Economy and Tourism Quick facts
Source:CIA world factbook
Area: 1,001,450 sq. km Coastline: 2,450 km Natural resources: petroleum,
natural gas, iron ore, phosphates, manganese, limestone, gypsum, talc, asbestos, lead, zinc
Population: 81,713,520 (July 2008 est.)
Population growth: 1.682% (2008 est.)
Median age: 24.1(m) 24.9(f) (2008 est.)
Life expectancy: 71.85 years
Egypt has witnessed strong tourism growth in recent years as the country has embarked on a targeted marketing campaign. As a result Egypt, is now the number one medium haul destination from Europe. Tourists are drawn by the increase in high quality resort accommodation, direct flights from Europe, the world’s best diving sites, not to mention the 365 days of sunshine and the abundance of culturally significant attractions. Egypt has once again succeeded in expanding the tourism industry, bringing in more tourists who stay longer and come back more frequently. 2007 saw more than a 22% increase in visitors to Egypt. This means that Egypt had 11 million tourists in 2007. The expectation is that Egypt will have 16 million tourists in 2015. Europe has remained the largest tourist markets for Egypt, with regulars such as Italians, Germans, French and British. All four countries made it on to the top ten most visiting countries for the second year running. Germany managed to keep its top spot as the highest visiting European country as well as taking the number one stop for the most tourist nights in Egypt. Throughout Northern Europe, Egypt has also remained a favorite destination for Finnish (+18.9%), Norwegians (+35.2%), Swedish (+14.1%) and Danish tourists (+42.3%). In Asia, Indian and Chinese markets show good results with respectively 34.6% and 56.6% increase over 2006.
(2008 est.)
Government type: Republic Capital: Cairo Independence: 28th Feb 1922 GDP growth: 7.1% (2007 est) Labour force: 22.1m (‘07 est) Labour by occupation:
32% agriculture, 17% industry, 51% services
Unemployment: 9 .1% (’07 est) Industries: textiles, foodprocessing, tourism, chemicals, pharmaceuticals, hydrocarbons, construction, cement, metals, light manufactures.
Top Ten Markets 2007 (No. of visitors) 1. Russia 2. Germany 3. United Kingdom 4. Italy 5. France 6. Libya 7. Saudi-Arabia 8. Ukraine 9. Poland 10. United States European Arrivals 1. Lithuania 2. Ukraine 3. Poland 4. Slovenia 5. Slovakia 6. Russia Other Regions 1. Brazil 2. Argentina 3. China 4. Singapore 5. Malaysia 6. Hong Kong
1,516,561 1,085,930 1,055,012 983,293 464,239 439,469 412,466 358,969 335,016 272,523
+ 51.9% + 12.4% + 2.1% + 25.1% + 24.6% - 0.8% + 6.2% + 74.7% + 69.7% + 19.4% + + + + + +
77.8% 74.7% 69.7% 61.1% 59.1% 51.9%
+ + + + + +
95.0% 66.1% 56.6% 56.6% 56.5% 51.2%
The above figures clearly show Egypt’s popularity worldwide. All continents are seeing increases in visitors.
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Sustainable Investing Conservation The Marsa Alam Beach Resort is constructed in an environmentally sympathetic manner. This can be witnessed through the low building stamp, whereby only 18% of the site is constructed on. This not only allows for investors and guests to enjoy vast quantities of green, open space but also minimizes the environmental impact of the resort. Power The electricity for the resort will be partly supplied from solar panels located on the roof of buildings within the resort. This will further be enhanced by generators in the commercial area thus providing complete peace of mind for guests and investors. This not only protects the environment but provides the added bonus to investors of reducing maintenance charges for the provision of utilities. The Egyptian government has also adopted a strong green power initiative with various wind farms supplying power to the national grid. Water Water is an extremely precious resource in Egypt and in order to provide the lush green environment that investors and guests expect without negatively impacting the water supply, the Marsa Alam Beach Resort will provide its own water for irrigation, laundry, swimming pools etc through the use of a desalinisation plant and waste-water treatment facility located at the rear of the business services and staff accommodation sector opposite the resort. Employment for the local community As a rapidly developing country, Tourism is Egypt’s third largest industry behind the Suez Canal and natural gas. Tourism creates the highest level of employment for Egyptian citizens. This project has been developed with careful consideration of the positive impact that a resort such as this can have for the local population. The resort will provide employment for a vast number of the local population during construction, as well as creating over 1,200 excellent job opportunities for the community upon completion. Once the resort is completed the local community will benefit from facilities provided in the business service area. This includes the provision of living quarters for staff, business services, medical centre, pharmacy and staff dining. Version 4 - Page 12
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The Resort The Marsa Alam Beach Resort is set over 252,000m2 with 500m of private beach frontage. The resort comprises 1,434 units in total and an extremely low build density of just 18% means that the resort encompasses 206,640m2 of manicured gardens, lawns, pools and communal areas ensuring that investors and guests alike can take full advantage of the tranquil gardens and surroundings within the resort.
The above site map details the layout of the apartment blocks with the suites at the sea end and the two bedrooms located in the raised rear section, 10 swimming pools, shopping malls, tennis and basketball courts, two jetties, the health club, diving center, two beach bars and several reception and service areas. Version 4 - Page 13
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Site Map Phase 1
Suites
Two bedroom apartments
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Suites
The suite section of the resort is broken up into four separate buildings and 14 different blocks. The unique design of the building maximizes the views of the sea from as many of the apartments as possible. Please see “Marsa Alam Beach Resort Apartment Locations,� for individual apartment locations. Version 4 - Page 15
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Junior Suite (Type B)
There are 402 Junior Suites in Phase I of the Marsa Alam Beach Resort. These apartments are situated in the section of the resort closest to the sea, allowing the majority of apartments to have fantastic sea views. The Junior Suites are comprised of one large bedroom complete with ensuite bathroom, a spacious open plan living area with a kitchenette, and a private terrace. The kitchenette will be for owners use only so can neatly be partitioned off in a lockable section of the room, thus providing owners with all of the comforts in their home away from home. Internal Space: Terrace/balcony: Total Net Area:
42.0 m2 7.0 m2 49.0 m2
From only â‚Ź29,500.00
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Furniture Pack - Type A and B Junior Suite
Nightstand Bedside lamp Double bed Headboard Wardrobe Desk Stool Mirror Pillows Bedspread Curtains Safe Hairdryer Enlarged mirror Bathroom accessories Ceiling lamp Outdoor wall lamp Cooking equip Electric Kettle Fridge Kitchen accessories Entertainment Unit 27 inch LCD TV Lounge chair 2 seater sofa Carpet Coffee table Curtain Sidetable Lamp stand Balcony chairs Terrace table Sunlounges Umbrella & stand
2 2 1 1 1 1 1 1 2 1 1 1 1 1 3 1 1 1 1 2 packs 1 1 1 1 1 1 1 1 2 1 2* 1*
*Only in Ground floor apts
Junior Suite â‚Ź 4,450.00 garden â‚Ź 3,950.00 first and second floor Furniture packs are available for all apartments within the Marsa Alam Beach Resort. Whilst the acquisition of the furniture pack is not compulsory, should you wish your apartment to be included in either the rental guarantee or the rental pool, then this pack must be taken at the time of purchase. All items are guaranteed during the time they are in the rental pool or when the apartments will be rented by IPI.
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Two Bedroom Apartments
The two bedroom apartments are broken into three separate buildings and seven different blocks. This section of the resort sits on a raised section of land affording some of the apartments views over the rest of the resort to the sea. Please see “Marsa Alam Beach Resort Apartment Locations,� for individual apartment locations.
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Two Bedroom Apartments (Type D)
These two bedroom apartments are located in the raised rear section of the resort closest to the main swimming pool and the shopping malls. These apartments take advantage of the fabulous rental guarantee averaging 10% over five years. There are three types of apartments which share this floor-plan; the garden apartment which contains an additional garden, the middle apartment, and the penthouse which benefits from a larger terrace and the obvious views gained from being on the top floor. Inside the two bedroom apartment you will find two bedrooms, a spacious open plan living area with a fully fitted kitchen, a family bathroom and a private terrace. Ground: Internal Space: Terrace: Garden: Total Net Area:
79.0 m2 16.0 m2 60.0 m2 155.0 m2
Price: €54,945.00
Middle: Internal Space: Terrace: Total Net Area:
79.0 m2 20.0 m2 99.0 m2
Price: €43,945.00
Penthouse: Internal Space: Terrace: Total Net Area:
79.0 m2 24.0 m2 103.0 m2
Price: €65,945.00
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Two Bed End Apartments (Type E)
These two bedroom apartments are located in the raised rear section of the resort closest to the main swimming pool and the shopping malls. These apartments take advantage of the fabulous rental guarantee averaging 10% over five years and, the fact that as they are on the end of the blocks, they are semi-detached with larger terraces. There are three types of apartments which share this floor-plan, the garden apartment which contains an additional garden, the middle apartment, and the penthouse which benefits from a larger terrace and the obvious views gained from being on the top floor. Inside the two bedroom apartment you will find two bedrooms, a spacious open plan living area with a fully fitted kitchen, a family bathroom and a private terrace. Ground: Internal Space: Terrace: Garden: Total Net Area:
78.5 m2 21.0 m2 60.0 m2 159.5 m2
Price: €58,945.00
Middle: Internal Space: Terrace: Total Net Area:
78.5 m2 25.5 m2 104.0 m2
Price: €45,945.00
Penthouse: Internal Space: Terrace: Total Net Area:
78.5 m2 30.0 m2 108.5 m2
Price: €67,945.00
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Furniture Pack - Type D and E Two bedroom apartment Nightstand Bedside lamp Double bed Single bed Headboard Wardrobe Desk Stool Mirror Pillows Bedspread Curtains Safe Hairdryer Enlarged mirror Bathroom accessories Ceiling lamp Outdoor wall lamp Microwave Cooking equipment Electric Kettle Coffee Machine Toaster Fridge Extractor fan Kitchen accessories Stereo Entertainment Unit 27 inch LCD TV Lounge chair 3 seater sofa Carpet Coffee table Dining table Dining chairs Sidetable Lamp stand Balcony chairs Terrace table BBQ Sunloungers Umbrella & stand
3 3 1 2 3 2 2 2 2 4 3
1 1 1 1 5 1 1 1 1 1 1 1 1 4 packs 1 1 1 1 1 1 1 4 1 1 4 1 1* 2* 1*
Two bedroom end apartment
Nightstand Bedside lamp Double bed Single bed Headboard Wardrobe Desk Stool Mirror Pillows Bedspread Curtains Safe Hairdryer Enlarged mirror Bathroom accessories Ceiling lamp Outdoor wall lamp Microwave Cooking equipment Electric Kettle Coffee Machine Toaster Fridge Extractor fan Kitchen accessories Stereo Entertainment Unit 27 inch LCD TV Lounge chair 3 seater sofa Carpet Coffee table Dining table Dining chairs Sidetable Lamp stand Balcony chairs Terrace table BBQ Sunloungers Umbrella & stand Outside Dining Table Outside Dining Chairs
3 3 1 2 3 2 2 2 2 4 3
1 1 1 1 5 1 1 1 1 1 1 1 1 4 packs 1 1 1 1 1 1 1 4 1 1 4 1 1* 2* 1* 1* 4*
* Only in Ground floor apts
Two bed apartment
Two bed end apartment
€ 7,950.00 garden € 8,450.00 garden € 7,450.00 first and second floor € 7,950.00 first and second floor
Furniture packs are available for all apartments within the Marsa Alam Beach Resort. Whilst the acquisition of the furniture pack is not compulsory, should you wish your apartment to be included in either the rental guarantee or the rental pool, then this pack must be taken at the time of purchase. All items are guaranteed during the time they are in the rental pool or when the apartments will be rented by IPI. Version 4 - Page 21
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Two bedroom apartments
Suites and manicured botanical gardens Version 4 - Page 22
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Rental Return - Suites The Marsa Alam Beach Resort offers investors fantastic flexible options for the rental of their property. You can opt to have your apartment managed and rented on-site through the rental pool, rent the property through your own devices or keep the apartment for your own use all year round. The rental on the suites will be derived through the use of four separate rental pools (A – B – C – F). The first group consists of the 24 Presidential Suites (type A), the second of the 402 Junior Suites (type B), the third of the 24 Executive Suites Silver (type C) and the fourth of the 33 Executive Suites Gold (type F). The net income will be paid to the owner on a pro rata basis according to the availability and location of the residential apartment. This income will be paid to the owner in Euros (€) quarterly in arrears beginning from the completion of the residential apartment. This ensures that all apartments receive a share of the rental income of the suites as a whole, not just when their individual apartments are being utilized. The conservative predicted rental income for suites is 10% per annum and this will vary directly with occupancy levels. Therefore the higher the occupancy level of the resort, the higher the rental return. You have unlimited access to your apartment under the rental pool conditions. However, you will not receive rental income whilst yourself, friends and family are using the apartment. The following monthly fixed maintenance cost will be charged if you decide not to participate in the rental pool: Type A: € 60.00, Type B: € 45.00, Type C: € 60.00, Type F: € 70.00 Variable costs such as water and electricity will also be charged monthly. Both costs are subjected to yearly inflation and indexation by governmental increments. The service costs cover all charges concerning the suite, such as local taxes, maintenance of the buildings, security, costs of the membership to the Association of Owners, insurance and rental through the management organization, as well as replacement of the furniture if any damage is caused by guests.
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Rental Return - 2 bed apartments The two bedroom apartments include a five year rental guarantee. This guarantee can be covered by IPI or with the optional bank backed guarantee, supplied by ABN AMRO. The guaranteed rental return is: Year Year Year Year Year
1: 2: 3: 4: 5:
6% 8% 10% 12% 14%.
Should you wish to have the added protection of a bank backed rental guarantee, ABN AMRO will charge the following for the entire five year period: Middle Apartment End Middle Apartment Garden Apartment End Garden Apartment Penthouse End Penthouse
€885.00 €910.00 €1,022.00 €1,071.00 €1,158.00 €1,183.00
You are entitled to six weeks access to the apartment per year when using the rental guarantee option, this can be taken at any time. You should provide three months prior notice to ensure use of your own apartment. The maintenance fee and variable costs are covered via the rental guarantee. However should you wish to not take the rental guarantee then you would be required to pay the monthly maintenance fee of € 70 and variable costs, such as water and electricity. Both costs are subjected to yearly inflation and indexation by governmental increments.
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Financial Projections Case Study:
IAF7B Junior Suite €38,500.00
Price Furniture pack Escrow agent, Deed and Translation Total Cost
€ 38,500.00 € 3,950.00 €
€
1,050.00 43,500.00
Example profit: Three years after completion Description New Property Value* Cost Rental return** Net Profit
€ 77,000.00 € 42,750.00 €
Value/Cost € 11,550.00 45,800.00
*Calculated on a conservative predictive growth rate of 15% per annum for the next five years **Calculated on a conservative rental return of 10%
Case Study: model D two bed garden apartment €54,945.00 Price Furniture pack Escrow agent, Deed and Translation Total Cost
€ 54,945.00 € 7,950.00
€ 1,050.00 € 63,945.00
Example profit: Three years after completion Description New Property Value* Cost Rental return** Net Profit
€ 110,000.00 € 63,195.00
Value/Cost € 13,187.00 € 59,992.00
*Calculated on a conservative predictive growth rate of 15% per annum for the next five years. **Rental guarantee for the first three years after construction 6%, 8% and 10% respectively.
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Methods of Payment Stage payments Stage payments are available on all apartments within the Marsa Alam Beach Resort. The charge for using the stage payment option is 10% of the purchase price excluding furniture and escrow costs. This is the equivalent of a discount for those clients who opt to pay all funds upfront. The payment will be broken down as follows: 10% 10% 10% 20% 15% 10% 15% 10% 10%
surcharge - On signing - Site development - Start of foundations - Start of concrete structure - Start of brickwork - Start of electrics/plumbing work - Start of plasterwork - Start of finishing work - On completion
Developer funded mortgage Developer funded mortgages are available on 81 of the apartments in the Marsa Alam Beach Resort. These are non-status mortgages and therefore no financial information is required. Please contract your representative or agent for availability. The mortgages are over a six-year term with an interest rate of 10% p.a. The mortgage is secured against the rental income and the apartment and therefore the client will need to make up any shortfall between the amount payable and the rental income received. The yearly outgoings for mortgage will be: Garden apartment: Middle apartment: Penthouse:
Loan: €30,000 P&I repayment €6,888 p.a Loan: €24,000 P&I repayment €5,510 p.a Loan: €36,000 P&I repayment €8,266 p.a
As a result all apartments with mortgages will become cash-flow positive in year five of the rental guarantee. The first payment will be due 12 months after the balance payment (total amount minus deposit minus loaned amount) hits escrow and will be payable yearly on this date. Rental income will be offset against the payments. Therefore, the payments will be due in month 12, then month 24. The rental income from month 18-30 will be credited against the payment in month 24 i.e. six months retrospectively and six months in advance.
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Breakdown of Payments 1)
A reservation fee of €1,500 is paid to allocate the property and take it off the market.
2)
The property price minus the reservation fee, together with the furniture pack price, escrow fee and title deed fee is to be paid into escrow within 28 days. The escrow agent will then release funds in stage payments per block as follows: a) 10% following the start of the infrastructure (excavation works, water and electricity station, water piping, electricity cabling, sewerage and construction of the resort fence) b) 10% following the start of foundations c) 20% following the start of concrete structure d) 15% following the start of brickwork e) 10 following the start of electrics/plumbing work f) 15% following the start of plasterwork g) 10% following the start of finishing work h) 10% on completion
3)
An escrow and title deed fee of €1,050 is payable which consists of : • • • • • • • •
Due diligence approval of the developer Due diligence approval of the Egyptian Land Ownership/Government planning approvals Due diligence of all plans and construction methods as per industry standards Due diligence of the management company Setting up of escrow accounts Raising of Contracts Monitoring escrow accounts in Holland as per the photographic evidence and structural reports Official property certificate in Egyptian and English
4)
The buyer receives an official property certificate in Egyptian and English
5)
Final inspection and delivery inclusive of all facilities
6)
Ten year construction warranty starts
The payment and purchasing procedure for the Marsa Alam Beach Resort has been designed to be as cost effective and straightforward for clients as possible. The breakdown of payments shows the various stages of the purchase that take place from several parties. For detailed information on the purchasing procedure, and what will be expected from purchasers and when please see the following page.
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Purchasing Procedure Day 0. Place a reservation Your agent reserves an apartment for you with IPI. You will be required to provide your name, address, phone number, email address and apartment number to place this reservation. You will then be sent a reservation form. At this time you are required to make payment of the â‚Ź1,500 reservation fee to the escrow account by way of bank transfer. Please note this amount cannot be paid by credit card or cheque. Day 5. Return reservation documentation The signed reservation must be returned within five days of reservation along with a copy of a recent utility bill, a copy of your passport and your â‚Ź1,500 reservation fee having been received into the escrow account. If this has not shown you will be required to provide proof of transfer to keep your apartment. Your deposit is now only 50% refundable as the cooling off period has expired. Day 7. Contract Sent Once the aforementioned documentation has been received three copies of the contract will be drawn up and posted to you. Day 28. Return contract and balance payment You should return all three contracts signed and initialed on each page to IPI by day 28. After this date, should you not complete the purchase for any reason, no part of your deposit is refundable. Day 35. Ratified contracts Once your balance payment shows in the Escrow Account, you will receive a copy of your contract signed by an authorized representative of IPI. The invoice for payment will also be included. Failure to pay by the due date may lead to the apartment being placed back on the market and your reservation deposit being forfeited. After full payment of funds into the escrow account, you will receive a receipt of payment. The stage payment purchasers will receive receipt of payment after each stage payment shows in the escrow account. They will receive a copy of their signed contract after their surcharge payment has shown in the escrow account. Provision of Information Once the purchase process is completed you will be able to view the current state of construction and receive any news relating to the development on www.ipibv.eu.
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Stichting Derdengelden IPI Advantages of Stichting Derdengelden IPI The use of an escrow account is commonplace in the purchase of real estate throughout the world, however each country’s structuring of the system varies slightly. Unlike some other countries such as the UK, lawyers in The Netherlands are not permitted to operate escrow accounts as it is seen as safer to utilize a third party specializing in the function. All funds from investors are transferred into an escrow account to protect your money. Funds are released from escrow to IPI upon the completion of various stages and verification of this by a third party. When the buyer and IPI come to an agreement relating to the rental guarantee, Stichting Derdengelden IPI can arrange a bank guaranteed rental income. The foundation takes care of the payment of these funds, manages the agreements and undertakes the payments and charging of the costs. The foundation is responsible for all funds from investors and will not undertake any risk-bearing actions, but will only supervise and work on the safe keeping of the capital which has been transferred by the investors.All actions of the Stichting Derdengelden IPI are subject to Dutch law. Safety and protection Marsa Alam Beach Resort employs the use of an escrow system to work twofold. Firstly it protects the client’s money throughout the construction period as money is only released once stages are satisfactorily met. It also allows IPI to deliver lower cost investments as admin charges are reduced by reducing payment numbers. The following diagram shows the steps taken to operate an escrow account and how the flow of processes and money works throughout the agreement term.
1. Seller (IPI), Escrow agent (Stichting Derdengelden IPI) and the buyer sign an escrow agreement 2. Buyer deposits funds into escrow 3. Stichting Derdengelden IPI manages the escrow account 4. Stichting Derdengelden IPI confirms to IPI that the escrow amount has been received in the escrow account 5. IPI meets stages of construction as per the escrow agreement 6. Stichting Derdengelden IPI receives proof of completion of stage as per the escrow agreement 7. Stichting Derdengelden IPI releases money to the contractor as per the escrow agreement.
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Legalities Due Diligence A comprehensive Due Diligence report conducted by Anthony Seddon & Co will be made available to you should you wish to look at title deeds, planning permission etc before you will be asked to make non-refundable payments or sign contracts. These documents will contain not just the official deeds, permissions and other pertinent documentation but translations in English as well to ensure the maximum protection of your investment. Registration Property registration differs greatly in Egypt from much of Europe. The property registration system is still in its infancy and currently only about 10% of property in Egypt is registered. The registration fee stands at 3% with a maximum of LE£2,000 (approx £200). The alternative is to not register the property and under this method the property can only be transferred through the production of the original title deed. Therefore, this document is vital and must be stored in a place reflecting its importance. Property can be registered at any time after completion. The charge is based on the purchase price which is listed on the title deed so will not increase in cost should you decide to undertake this process at a later date. IPI will advise investors closer to completion of companies whose services they can utilize should they wish to register the property. Taxes Egypt has very few taxes which is one of the strong driving forces behind the high level of foreign investment in the country. Egypt works on a self declaration taxation system where rental income derived from furnished property is classed in the same bracket as general income tax. The taxable income is 70% of the gross rent, the other 30% being allowable deductions as income-generating expenses. Property which is valued at under LE 500,000 (approximately £50,000), as well as property with an annual rental income of less than LE6,000 (approximately £600) is exempt. Those properties that do not fall under this exemption are subject to a flat 10% tax on 70% of the yearly rental income. Source: http://www.bi-me.com/main.php? id=22059&t=1&c=33&cg=4&mset= Egypt does not have capital gains tax, inheritance tax or stamp duty. The only other relevant tax is a 2.5% sales tax on the total sale price which would be payable if the property is re-sold after completion.
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Purchase Transparency Equality The IPI Group believes strongly in a system of equality and fairness in its business dealings. As a Dutch based company they are actively involved with sales in Holland, Belgium and Germany. Throughout the world, the IPI Group are represented by several authorised agents who are there to assist clients in the sales process and to answer any questions that potential investors may have regarding the resort. The IPI Group does not engage in direct sales outside of the aforementioned markets. Availability All agencies work from the same availability and the same prices, to provide the fairest market place possible. Therefore, any agent will be able to provide you with access to exactly the same properties at the same price as the next. Prices All prices, furniture packs, escrow fees, rental amounts etc are to be paid in Euros, and whilst some agencies may advertise in different currencies, the amount received into escrow must be in Euros. This ensures that movements in exchange rates do not affect the final price paid and that the rental guarantee on the two bedroom apartments is the same percentage for all investors.
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Throughout the botanical gardens within the resort, you will find plenty of places to sit and soak up the atmosphere.
The Thalasso, Health and Wellness Centre, with the suites on either side. Version 4 - Page 32
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IPI Company Structure IPI Internationale Makelaardij B.V.; IPI International Property Investors B.V.; IPI International Property Investors MABR B.V. and IPI Management & Operations B.V. are all Dutch companies, which are responsible for the various duties in the development and the management of the IPI resorts. The aforementioned companies are managed by Holdings Notwerk B.V. and Hedra Beheer B.V. IPI Internationale Makelaardij B.V. is responsible for marketing, agent management and sales in the Netherlands and Belgium. IPI International Property Investors B.V. are responsible for the development and construction, international marketing, agent management and agent support for the Best Western Zafarana Beach Resort. IPI International Property Investors MABR B.V. – development and construction, international marketing, agent management and agent support for the the Marsa Alam Beach Resort. This company also owns the resort. IPI Management & Operations B.V. is responsible for the management and maintenance of the commercial buildings, the apartments, facilities and services in the resorts. Stichting Derdengelden IPI is responsible for the protection of your money. All payments regarding your purchase will be processed into the escrow account.
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IPI Track Record Managing Director Jürgen Oddens has many years experience in real estate development, marketing and sales. IPI Internationale Makelaardij B.V. was formed in 2004. This company was first responsible for the restoration and sales of the so-called Fachwerk houses in Quedlinburg, former East Germany. A lack of demand for this type of product lead to full market research being carried out and an alternative focus was initiated, showing commitment to providing a product that met the needs and enthusiasm of a broad target group. IPI Internationale Makelaardij B.V. started that same year with the beginnings of the development and sales of the apartments on the north coast of Egypt. A hundred apartments were sought and found in 2004 and 2005 for a Dutch owner. The offer of a sales product in Egypt turned out to be a good change of tact, largely due to the low entry levels. The region was also somewhat unknown with the north coast of Egypt not a first thought for those looking to invest. However, it was acknowledged as an area that had potential due to the pull of Red Sea as a holiday destination. Next, IPI Internationale Makelaardij B.V. was approached by a developer in Turkey to support them with development of apartments and villas that, at that time, were in high demand and were consequently involved with the development and sales of various projects in Alanya and Bodrum. IPI realized that the development system in Turkey was virtually the same as that in Spain. As a result, the company also foresore short term saturation of the market. The investment potential of Egypt had begun to receive increased interest and this did not escape IPI’s notice. Investment’s here meet varying important criteria for investors and tourists alike. IPI chose to develop in the Red Sea area largely because of its commitment to a long term plan. The experience in Spain, Turkey and the north coast of Egypt has formed the current IPI Group. Partnerships were founded in 2006 as a result of establishing good working relations and agreements were reached. This resulted in the development of the Best Western Zafarana Beach Resort. Organizations were employed and sister companies established to keep the various departments for this resort separate and manageable. Best Western Zafarana Beach Resort will be fully operational in 2009. IPI plan to develop a minimum of a further 2,000 apartments and hotels in Egypt as well as in other countries encompassing all of the tourist facilities which the Marsa Alam Beach Resort contains. This started by researching various areas around the Red Sea coast for a new plot in Egypt to meet with their long-term objectives. This research started in the second half of 2007 and concluded at the very beginning of 2008. They found the perfect plot near Marsa Alam, commonly considered as the Saint Tropez of Egypt. From the first quarter of 2008, IPI has also been working on the development of the Marsa Alam Beach Resort on the Red Sea in Egypt. In reading this Investment Guide you will discover everything about the facilities and the service level of this five star resort, together with the guarantees and securities, which will both strengthen your investment and the return on your investment.
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IPI Philosophy IPI are of the opinion that you can only be successful if you employ your own values. In particular we are very disciplined in the management of our construction staff in obtaining the building quality we require. IPI remain the owners of the resort, keeping everything in house including management and maintenance of the commercial buildings and facilities once the development has been completed. IPI follow a tried and tested business model. IPI purchase a piece of land with its own capital, and then acquire licenses and building permissions. With input from the local authorities we agree the site layout in preparation for the construction. The construction activities are being checked by our own construction management who gives orders to local constructors. Only apartments and villas can be purchased in IPI resorts and any sales through either IPI direct or its network of agents adhere to strict guidelines. These guidelines mean that all details are identical, such as the purchase price, payment plans etc. Before the completion of the development IPI will commence with acquiring a world-wide hotelier group. Through the use of the booking system of a world-wide hotelier group and worldwide tour operators, tourists are informed of the resort and can then make arrangements to utilize the services. The IPI working ethos generates income in two ways; the first is short-term profits through the renting of apartments and commercial properties; and the second is long term profits generated by the capital increase of the buildings and apartments. Through the IPI working philosophy, IPI and the investors have the same goal and can work in unison in generating long term profits for all. To summarize, IPI build for the tourists, sell to the investors and then manage and operate the resorts. If your situation changes IPI also operate as a real estate broker for you to resell your apartment, and by adopting this formula IPI provide the complete package for all of our clients. Research has shown that most tourists choose a summer holiday at least once every year. These so called sun – sea – sand holidays have a very wide appeal. You can simply lounge in the sun or you can take advantage of the excursions and facilities the resort has to offer. IPI also offer a great selection when it comes to the resorts culinary facilities and with the Red Sea on your door-step and a very pleasant climate, this will further add to the enjoyment of your vacation. This amazing climate with 365 days of sunshine can be reached in approximately five hours from the UK. Combine this with a country that is steeped in some of the oldest culture known to man, with beautiful flora and fauna and the result is one of the fastest growing tourist destinations throughout the world. This increase in tourist numbers further leads to an increase in demand for holiday apartments and accommodation. The country is developing fast and consequently the investment possibilities are fantastic, especially if you compare it to more mature markets such as Spain, France, Italy and Turkey. Remember that the aforementioned countries were once themselves unfamiliar as an investment opportunity, and before investment started they offered the same potential. If you already have a number of investments, it is often a good idea to diversify your investments through a number of markets, thereby spreading your risk. The legitimate purchase of foreign property can be facilitated by the implementation of a sound developer who helps to eliminate potential pitfalls.
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The motivation behind purchasing an apartment in Egypt can often be very different to purchasing an apartment or villa in other countries. For example many people buy in Spain and France to either live in the apartment on a permanent or semi permanent basis, not just a few weeks a year. Many people purchase within Egypt in order to provide a place for them to enjoy low cost holidays all year round. As both a tourist and an investor you get to enjoy the full IPI experience when visiting on holiday. The IPI philosophy requires that each resort provides all the facilities on site for a guest to have no reason to leave. However, there are of course excursions and day trips suitable for all, which can be arranged by IPI. The resort provides a full range of activities including restaurants, bars, shops, an array of water based activities, medical care and security. In short everything you require to enjoy a trouble free stay. An important aspect of our philosophy is the location, including the accessibility, surrounding area and of course the sea and beautiful house coral reef. The points that you have read throughout this Investment Guide are an important part of the total investment. Our transparency and open communication are also a very important factor. We do our very best to take on board all the comments and points that are made from everyone including the comments made on the worldwide forums. We are conscious that the world has become a lot smaller due to the internet, and that skepticism and uncertainty can spread very fast throughout the World Wide Web. Whilst we are not against this we ask that you communicate about and offer solutions to any problems which may arise. Although the requirements of the buyers and the visitors can often be different, IPI feels their ethos that has developed over a long period of time offers a solid basis to satisfy both.
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Construction Management The development of a world class resort cannot be done without suitable partners. IPI International Property Investors B.V. has partnered up with DARS Consultants & Engineers. Prof. Dr. Moustafa Korashy, owner of DARS, is one of only 17 Egyptian government certified consultants. DARS has employed specialized engineers for every building phase and DARS also maintains close contact with the authorities and suppliers at every stage of the process. DARS employs European building methods and standards to satisfy the expectations of all the IPI investors. The collaboration with DARS is the perfect way for a European developer to build in a qualitative, efficient and controlled way. DARS Consultants & Engineers were founded by Prof. Dr. Moustafa Korashy in 1979. He is a highly respected man in both the business and educational sector due to his knowledge and experience throughout the Middle East. DARS employs 45 staff, all who have their own expertise within the corporation. The organisation deals with preparatory studies, planning, architecture, building oversight and financial management. The company is located in Cairo and will be working mostly from the site of Marsa Alam Beach Resort. Besides the extensive knowledge that DARS has of the construction, they also have good contacts with the producers of commodities and materials. This enables them to purchase high quality materials, which are delivered on time. In addition DARS has exceptional experience in architectural design and has been involved in industrial and project based construction. To date they have been involved in the construction of airports, hospitals, office buildings, parks, shopping malls, schools etc. DARS has had extensive experience in the construction of holiday resorts and to date, have contributed to 15 separate projects located in Marsa Alam, Sharm el Sheikh, Ras Sedr, Raas el Hikma, Haram, Alexandria, Marsa Matrouh, Luxor and Aswan. The Marsa Alam Beach Resort will be the sixteenth resort to join this already impressive list. IPI and DARS will build the 1,434 apartments resort along with the swimming pools, restaurants, shopping malls, medical center and employee accommodations required for 1,200 staff.
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Frequently Asked Questions How many of the apartments will have sea views? Due to the unique design of the suites, the majority will have sea views. Due to the two bedroom apartments being constructed on elevated land, some of the apartments that face this direction will have views of the sea over the top of the suite buildings in front. Who is the owner of the land? The land is owned by the Egyptian company EL SERY for Tourism Development. IPI Management & Operations B.V. is 100% owner of the company EL SERY for Tourism Development. This means that IPI is 100% owner of the land. What purchasing restrictions are there for those foreign investors in Egypt? There are no longer any restrictions on direct foreign investment into Egypt, since the government adopted their policies to encourage foreign investment into the country. Therefore an individual or company may hold title to as many separate properties as they wish. As with all property within Egypt they would be subject to a 2.5% sales tax upon resale. There is no capital gain, stamp duty or inheritance tax etc in Egypt. Can you recommend a nearby hotel in the area? The hotel we would recommend in Marsa Alam is the Lamaya Resort (part of the Iberotel group) (please note this is an all inclusive hotel). What are the visa requirements for those purchasing? You are not required to hold a visa in order to purchase property in Egypt. Should you wish to visit Egypt, you can get a visitor’s visa for a three month period when you land in Egypt at a cost of US $20. Should you wish to stay longer than this you can extend your stay with the local authorities for up to one year. Owning a property in Egypt does not automatically grant residency, however this is a formality if you own a property. Useful websites are: www.mfa.gov.eg. www.egyptianconsulate.co.uk Will those who purchase receive discounts at restaurants and facilities on the resort? Owners of properties within the resort will each receive a 10% discount card which will cover restaurants, bars and activities within the resort. Can we visit the site now? At present we do not have a site office at Marsa Alam; we will do in the near future. You are more than welcome to visit the site, however you will need to make these arrangement yourself. The plot is 44.4 km south of the roundabout at Marsa Alam Airport. (from airport into direction Marsa Alam) The plot is between a finished resort to the North and one under construction to the South, just slightly North of Brayka Bay Resort. We expect to have a fully operational site office with facilities to conduct site inspections in the last quarter of 2008.
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Frequently Asked Questions What transportation will be available for guests from Marsa Alam airport? Free shuttle services will operate for guests and investors from Marsa Alam airport once the resort is operational. What is the beneficiary address? Stichting Derdengelden IPI Langewei 8 4033 CE Lienden The Netherlands What are the additional service costs? All costs, such as maintenance, service, insurance, joint facilities, local taxes, utilities and the like, shall be borne by the operational company whilst the apartment is in the rental guarantee or available for the rental pool. At other times the costs shall be borne by the buyer. These costs are from ₏ 45,00 up to ₏ 70,00 per month. Beside these fixed monthly costs the costs for the consumption for electricity and water will be invoiced to the owner. These costs will be invoiced yearly. Both the fixed and variable costs are due to yearly inflation and indexation by governmental increases. Who is responsible for the contents and building’s insurance? Contents are covered under the furniture pack guarantees and insurance is covered under a resort wide policy and included in the maintenance fee. Whilst the apartment is part of the rental system, the furniture is guaranteed new for old replacement for a five year period. Is the rental paid yearly and in arrears? No, unlike Zafarana the rental will be paid quarterly in arrears to your nominated account. What personal usage do we get per annum? What restrictions are there on this? A two bedroom apartment with the rental guarantee allows for six weeks per year personal usage. The suites have unlimited personal usage. You need to allow at least three months notice to ensure that your apartment is available. There are no restrictions on when you can take this time. You are also able to utilize a similar, or smaller apartment type in another IPI resort as part of your allocation. This will be deducted from your six weeks personal usage or in the case of the rental pool, against pro-rata payment of rental income for the duration of your stay. Are we able to lend weeks out to friends or family should we personally be unable to use them? Yes, you are also able to sub-let these weeks should you wish to do so. The use of other IPI resorts is strictly for owners and cannot be sublet to other parties.
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Frequently Asked Questions Completion dates? The construction period shall be a maximum of 18 months from the date of receipt of the full payment for the apartment and supplementary costs in accordance with this purchase agreement. If the construction period is exceeded, the developer can allow themselves a postponement of two months. If completion is delayed, the developer undertakes to pay the buyer compensation of 0.15% of the price of the apartment per week, for the period of the delay. If the bank guaranteed letting agreement applies, there is no claim for this compensation as the rental income will begin accruing 18 months from the time the balance hits escrow. The entire resort (phase I and II) has an expected completion date of end of 2010. Are there lifts? Yes, there is elevator access for all apartments within the Marsa Alam Beach Resort. . What are the Google earth co- ordinates? 25°13’33.80” N 34°47’56.61” E Can I opt out of the rental pool or rental guarantee? Yes, you are under no obligation to use the rental pool or the rental guarantee. However, the rental guarantee is for a period of five years and therefore you must opt out of this when you purchase as you cannot do so after this time. Is the rental guarantee amount net of service charges? Yes, the rental guarantee is net of service charges. The only deduction would be for the bank guarantee should you wish to purchase this. Are the apartments freehold? The apartments are 100% freehold. This is the same for apartments as it would operate in the UK whereby you own the physical apartment plus a stamp of the land beneath it. Who is the Escrow Agent? The escrow agent is Stichting Derdengelden IPI. Full details can be found on the “Escrow Account,” page of the Investment Guide.
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Frequently Asked Questions Who is the rental guarantee backed by? On the two bedroom apartments, the rental is guaranteed by IPI. There is also an optional ABN AMRO backed rental guarantee available for a five year period at a cost of: Middle Apartment €885 End Middle Apartment €910 Garden Apartment €1,022 End Garden Apartment €1,071 Penthouse Apartment €1,158 End Penthouse Apartment €1,183 If clients wish to make use of this facility then they must inform IPI of this upon reservation so that the contracts can reflect the use of this facility. Who will manage the resort? The resort will be managed by IPI. It will be branded under a reputable international hotel or resort group. These agreements allow the branding of the resort under a hotel group which supplies branding privileges and their booking system. Whilst different groups have different operating procedures and standards to adhere to, they are not involved in the day to day operation of the resort. The group will be announced at a later date as these negotiations cannot be finalized until the resort is closer to completion. The appointment of the Best Western group for the management of the Zafarana Beach Resort does not automatically extend to the Marsa Alam Beach Resort, therefore allowing IPI to maximize the investor’s returns by appointing the most appropriate group at the time. How does the pooled rental system work? The operational company works with four separated pool systems (A – B – C – F). The first group consists of the 24 Presidential Suites (type A), the second of the 402 Junior Suites (type B), the third of the 24 Executive Suites Silver (type C) and the fourth of the 33 Executive Suites Gold (type F). The net income will be paid to the owner on a pro rata basis according to availability during the year and the location of the hotel suite. For owners, this means your individual apartment does not need to be in use in order for income to be generated from it. Do any of the suites come with a rental guarantee? All of the suites are under the rental pool system and are not available with the rental guarantee. The rental guarantee is only available with two bedroom apartments in the rear section of the resort. Can the owner renew the rental agreement after the initial five year period? After the completion of the initial five year agreement, owners will be able to negotiate a new rental agreement of a year by year basis. Alternatively they are able to take their apartment out from management to allow greater use for themselves or resell the property. This is where IPI derives the majority of their income and therefore it is imperative that they optimize their income stream for as long as the owners will allow them to manage their apartments.
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Sales Agent
The IPI Group contains of the following companies: IPI Internationale Makelaardij B.V.; IPI International Property Investors B.V.; IPI International Property Investors MABR B.V.; IPI Management & Operations B.V.; El Sery for Tourism Development. This document contains confidential information for exclusive use of the intended recipient. If you are not an intended recipient, please contact Sue Lovett immediately at s.lovett@ipibv.eu Pricing and dates within this document relate to Phase I and may not be applicable to the resort as a whole. This document may contain forward-looking statements. These forward-looking statements can generally be identified as such because the context of the statement will include words such as plans, expects, should, believes, anticipates or words of similar import. Members, potential investors and other readers are cautioned that these forward-looking statements are predictions based only on current information and expectations that are inherently subject to risks and uncertainties that could cause future events or results to differ materially from those set forth or implied by the forward-looking statements. These forward-looking statements are only made as of the date of this executive summary and IPI does not undertake any obligation to publicly update such forward-looking statements to reflect subsequent events or circumstances. Whilst all care has been taken to ensure the information contained within this document is true and accurate, this document holds no contractual value. This document and information contained herein may not be duplicated or disseminated without the express written consent of IPI International Property Investors MABR B.V. Any unauthorized use is strictly prohibited. All rights reserved. Version 4 - Page 42
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