Investment Guide

Marbella Beachfront Apartments

Prices from as little as €186,000 – Up To 70% Finance

Guaranteed & flexible rental management schemes – Minimum 7% Yield

Capital appreciation forecast to provide 19% ROI per annum by 2019

Cosmo Beach

Marbella

Contents

Market Overview

Investment Opportunity

Finance & Projected Returns

Disclaimer: No representation or warranty of accuracy - While Dukesen Sistemas S.L. (the owner of Cosmo Beach Marbella) has made all

reasonable efforts to ensure that all information in this document is correct, accuracy cannot be guaranteed and Dukesen Sistemas S.L. does

not assume any responsibility for the accuracy, completeness or authenticity of any information contained in third party statements and

statistics. This document, and all information, assumptions and materials contained herein, are for initial interest only and accuracy should

be ascertained in following communications.

Market Overview

All key market indicators are starting to display positive signs of improvement in the Spanish

residential property market. Specific micro markets that are predominantly fuelled by international

investment are seeing far more marked levels of improvement.

Data released by the Bank of Spain in the first trimester of 2014 showed that foreign purchases in

2013 exceeded €6bn (£5bn) for the first time since 2004. According to Knight Frank's Global Property

Search, online searches for properties in Spain increased by 29% over the first three months of 2014

compared with the same period in 2013, more than a fifth of all Spanish residential sales – 55,187

transactions – were to foreign buyers.

National Bank Stock.

Sareb (Spain’s bad bank set up in 2012 to absorb the property assets of eight lenders) controls in the

region of 200,000 property assets throughout Spain and are reported to be selling properties at a rate

of approximately 60 a day. The bank is implementing new strategies for marketing and selling the

€50bn in real estate under its control, which has already seen positive results having sold 8,104

properties via its retail sales channel up to June this year and is nearing its forecasted figure of 11,000

units for 2014.

In addition to retail sales, there have been a number of large scale deals with sales of controlling

interests in excess of 100 million euro portfolios being undertaken by numerous international

institutional investors. The most recent being the sale of a loan portfolio, known as Pamela, for a par

value of €200 million. The "Pamela" sale is the biggest wholesale/institutional sale completed by Sareb

to-date in 2014 and one of the highest value portfolios sold since the company was created.

An initial look at these figures looks daunting, however levels of oversupply in the premium demand

tourist regions of the Mediterranean coastline are starting to disseminate.

The demand in these areas for higher quality new property is currently so high that a number of new

construction projects have started and successfully sold out to both domestic and international

second home purchasers alike.

Mediterranean Coastline & Foreign Investment

Coastal destinations in the South of Spain, specifically the Costa del Sol and Malaga Province are

benefitting from far higher levels of sales than the national average and oversupply is fast becoming

absorbed. The demand is fuelled by foreign investment with over 50% of sales on the Costa del Sol

being accounted for by overseas buyers (4.640 of the total of 9.526 properties sold in 2013 were to

non-Spanish nationals).

Marbella – Saw the highest level of increase in property sales anywhere in Spain in 2013.

Statistics provided by the Ministry of Development reported that Marbella enjoyed the highest

increase in property sales of anywhere in Spain in 2013 - with a 23% increase on the previous year.

Marbella reports 4.8% growth in real estate prices!

Marbella has seen the fastest rising holiday home prices on the Spanish coastline running at 4.8% in

the first trimester of the year, view full article.

Investment Opportunity - Only 14 Units Available

The opportunity exists to invest in a recently completed and upgraded beach front residential

development of luxury apartments based in an emerging destination known as the “New Golden Mile”

just West of Marbella, providing fantastic rental yields and opportunity for medium term appreciation.

Forecast returns based on conservative short term rental contracts provide estimated annual gross

yields running at up to 11% of the purchase price, if leveraging finance of up to 70%1, annual gross

yields on investment are forecast to return in the region of 13% after annual mortgage repayments2,

forecast income levels provided by third party letting management companies are detailed below.

For the more cautious investors Cosmo Beach offers a GUARANTEED rental programme offering a

minimum 7% gross yield for the first year of property management. Projected capital appreciation

estimates by 2020 of 40% provide for a realistic average return on investment3 of 19% per annum,

even on a pessimistic estimate of 20% growth over the same period this would provide 10% ROI per

annum.

1 Finance estimates and repayments based on a 70% capital and interest repayment mortgage over a 25 year term with interest set at 4.5% - Terms & conditions apply. 2 Gross annual yield based on projected gross annual income versus total investment with 70% finance, associated buying costs and furniture package as required by rental Management Company. 3 Capital appreciation calculated on projected growth versus total investment with 70% finance, associated buying costs and furniture package as required by rental Management Company.

The Development

Cosmo Beach Marbella is a beautifully positioned collection of 53 beach front apartments idyllically located on the south-west coastline of Marbella in Southern Spain. This boutique style residential development comprises of spacious one, two and three bed apartments and penthouses waking up to uninterrupted views of the Mediterranean coastline and a spectacular backdrop of Marbella’s mountain ranges. Set over 5 floors the low density construction offers a variety of accommodation ranging from penthouses with private access to the rooftop swimming pool to ground floor units with private garden areas. Recently completed to upgraded standards, each apartment is delivered with marble flooring throughout and high quality interior specifications. The contemporary architectural influences and modern design perfectly compliment the semi-circular design of the development, purposely intended to offer unique elevated sea views.

The New Golden Mile

Equidistant between Malaga and Gibraltar International airport’s the New Golden Mile is based in one of the most popular tourist destinations of the Costa del Sol in Southern Spain. The region is fast becoming renowned for its individual style and exclusivity, slightly distanced from the glitz and nightlife of Puerto Banus and the more historic town of Estepona with its stunning beaches and traditional marina. Perfectly combining tradition with innovation, the development is situated just beyond a historically protected area of Roman ruins; however this emerging destination is also lined with exclusive five star hotels, energetic beach clubs & world class golf courses. The renowned Laguna Village beach resort with its shops, boutiques, bars and restaurants is conveniently located within just a three minute drive.

Development Summary

Cosmo Beach - located within easy access of all amenities.

Exclusive features include:

1. Boutique style beach front living

2. Direct access to the beach and neighbouring beach clubs

3. Roof top infinity pool with views across to Africa and Gibraltar

4. Landscaped communal walkways and seating areas

5. Surrounded by world class golf courses, five star hotels and a health spa

6. Brand new apartments – recently completed and upgraded

7. Prices from as little as €186,000

8. Fully managed rental schemes

9. Low density community – only 53 units

Finance & Projected Returns

Designed to appeal to a wide spectrum of property owners and investors alike, this exclusive offer

consists of 14 prime units comprised of a selection of sea view properties, ranging from 1 to 3

bedrooms.

This opportunity provides excellent forecast rental yields, a guaranteed rental yield in the first year

and strong medium term appreciation.

Finance

Varying levels of finance are available for the purchase of these properties depending on status of

residency of the applicant. Our panel of mortgage lenders have been selected to cover applications

from a number of origin countries. As a general rule the following conditions will apply:

Non-resident mortgages

Up to 70% for UK market, France, Scandinavian, German and most usual EU countries

50% for other countries i.e. (Russian, Morocco, etc)

The standard interest rate will be Euribor +3%, with the first year fixed around 4.5%

Maximum term of finance up to 30 years subject to status, with monthly capital & interest

repayments, standard credit checks and terms for approval will apply.

Forecast Capital Appreciation

Our assumptions on forecast growth coming out of the current economic crisis are based on a historic

comparison of recoveries from previous recessions.

Exiting the last recession in 1996 – 1997, the first five consecutive year period saw an average annual

growth of 10.69% appreciation on price per meter for new build properties.

This appreciation obviously was not consistent year on year but saw an average increase from 6.97%

in year 1 to 18.4% by year 5.

Source: Tinsa

We have based our forecasts from 2015 to 2020 on a more conservative basis estimating a maximum

increase of 40% appreciation over this term. These figures predict very healthy estimates for return

on investment of up to 19% per annum, when finance is obtained. Investment criteria are based on a

deposit amount of 30% plus associated purchase costs and taxes.

Projected Rental Yields & Occupancy

Tourism and rental occupancy levels are showing ongoing increases year on year, which is particularly prevalent in the key Spanish coastal destinations such as the Costa del Sol.

Inbound tourism to Spain totalled 60,173,586 visitors between January and August 2014, showing a 4.3% increase on the previous year.

ANNUAL ROI ANNUAL ROI ANNUAL ROI

Valuation 2020 Valuation 2020 Valuation 2020

40% Appreciation 30% Appreciation 20% Appreciation

19.05% 14.29% 9.52%

Andalucía province enjoyed an increase in tourism over the same term of 8% - with the peak season holiday period (May, June, July & August) showing a 12.3% increase in 2014!

The Institute of national statistics reported that average occupancy levels of touristic apartments on the Costa del Sol reached in excess of 83% in August 2014, the most desirable locations near amenities can achieve up to 100% occupancy during peak season. Average monthly occupancy figures are detailed below:

Source: Instituto Nacional de Estadistica.

In traditional establishments (hotels etc), tourist receipt rate grew by a mere 0.4% in 2014, whereas homes

for rent enjoyed 19.1% increased popularity than in 2013. 1.2 million Tourists visited Spain in July and

August, of which only 16.8% stayed in hotels, 15.4% in their proprietary dwellings and a staggering 57.8%

in a rented apartment.

Marbella was the third most popular location for self-catering bookings in Europe according to holidaylettings.co.uk showing a 34% increase on the previous year. In terms of gross income, the highest levels of bookings were generated from 1 bedroom apartments in the region, showing at typical annual occupancy of 26 weeks at an average weekly rate of £818 (€965) - generating an average gross annual income of €25,096. Two and three bedroom apartments also offer excellent income potential as the gross income is considerably higher as these properties cater for larger sized families and groups.

Cosmo Beach Marbella is situated in a favourable position, beach front and West of Marbella centre, the area is a preferred golf and family destination. The proximity of 5 star hotels, resorts and restaurants make this a higher end resort and able to achieve premium bed prices in comparison to standard resorts in Marbella & Estepona.

0.00%

10.00%

20.00%

30.00%

40.00%

50.00%

60.00%

70.00%

80.00%

90.00%

Costa del Sol - Apartment Occupancy Levels September 2013 - August 2014

Property Management Schemes

Cosmo Beach offers guaranteed and flexible rental management schemes, operated via a pool of vetted professional management agencies. These agencies fully manage the property and short term rentals on behalf of the investor.

Existing owners are privately letting apartments through either one of our vetted management companies or third party agencies and achieving income levels of €2,000 per week peak season for three bedroom units in 2014. In addition to this, evidence shows an individual owner achieving 8% gross yield on a three bedroom property even with personal use of the property through the year.

Guaranteed rental scheme

Income levels of the investment will be reviewed in 6 month increments and any shortfall in achieving

a 7% gross yield on the purchase price of the property will be paid on the 12 month anniversary of the

scheme. The guaranteed funds are underwritten by the developer either in the form of a bank

guarantee or monies deposited in the lawyers escrow account. It is important to note that there is no

upper ceiling on rental income for participants in this scheme, the guarantee is simply in place for

security to ensure that a 7% yield is realised in the first year of participation.

Terms and conditions of the scheme require the property to be furnished to an acceptable standard

for holiday rental purposes (further details outlined below), the property must be available for rental

occupancy for 100% of the (personal use is permitted providing this has been agreed with the property

management company. However, any usage will be accounted for at the market rate for gross income

during this term and will contribute towards the total annual income calculation in relation to the

guarantee). The letting management agency should either be one of the three vetted / recommended

agencies or if an alternative agency is required, a review will be undertaken to ensure that the agency

satisfies the necessary service levels. Once all requirements have been fulfilled the guaranteed rental

terms will take effect and run for a 12 month term.

Flexible management schemes

Our flexible schemes are in place for owners who may also wish to utilise the property for personal use throughout the year at no cost, but accepting there will be a loss of potential rental income during these periods.

Our forecast returns based on short term rental contracts provide estimated annual gross yields4 running at 11% of the purchase price (based on no personal use of the property), if leveraging finance of up to 70%5, annual gross yields on investment are forecast to return in the region of 13% even after annual mortgage repayments!

Forecast income levels that have been provided by our panel of vetted property management

agencies range between €18,625 and €39,350 depending on the size and type of property.

4 Gross annual yield based on projected gross annual income versus total investment with 70% finance, associated buying costs and furniture package as required by the rental management Company. 5 Finance estimates and repayments based on a 70% capital and interest repayment mortgage over a 25 year term with interest set at 4.5%

These rental projections are well justified when comparing with actual holiday let booking statistics

provided by www.holidaylettings.co.uk (read the full report here) who as previously stated, reported

that an average gross income for a one bedroom apartment in the region generated £21,268 or

€25,096 in 2013. These rates obviously vary according to desirability of location and increase

accordingly in line with apartment sizing and bedrooms – beach front apartments always attain a

premium.

To partake in the rental management scheme, the property management companies require a

suitable quality furniture package to be installed. For the investor’s convenience, quality subsidised

packages are available and offered at the following rates:

Cosmo Beach – “Essential” Furnishing Package

1 Bedroom Apartment: €9,995 – view detailed package information

2 Bedroom Apartment €11,995 – view detailed package information

3 Bedroom Apartment: €14,995 – view detailed package information

Bespoke furnishing packages are also available upon request.

Disclaimer: No representation or warranty of accuracy - While Dukesen Sistemas S.L. (the owner of Cosmo Beach Marbella) has made all

reasonable efforts to ensure that all information in this document is correct, accuracy cannot be guaranteed and Dukesen Sistemas S.L. does

not assume any responsibility for the accuracy, completeness or authenticity of any information contained in third party statements and

statistics. This document, and all information, assumptions and materials contained herein, are for initial interest only and accuracy should

be ascertained in following communications.