Big 5 Game Lodge

Private Nature Reserve

Kwa-Zulu Natal

Hluhluwe

Contents

1. Business Description 3

1.1 Background 3

1.2 Core activities of proposed business 3

1.3 Location 4

1.4 Service description 6

1.5 Suppliers 7

1.6 Ownership structure 8

2. Opportunity 9

2.1 Customer description 9

2.2 Geographical area where the product or service will be offered 9

2.3 Total customer potential 10

2.4 Competition 10

2.5 Competitive advantage 11

2.6 SWOT 11

3. Marketing 12

3.1 Costing and pricing 12

3.2 Sales projections 12

3.3 Marketing plan 13

4. Operations 13

4.1 Key operational functions 13

5. Finance Projections 14

6. Big 5 Lodge 16

7. Contact details 17

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1. Business Description

1.1 Goals

To establish and provide world-class accommodation on a Big 5 game reserve with a proudly South African feel and promote investment in the hospitality sector within the Zulu Kingdom - Kwa Zulu Natal.

Promote global awareness of South Africa’s diverse cultures, incredible natural beauty as well as to showcase South Africa as being the financial hub of Africa.

To create job opportunities where none existed by creating a platform for local entrepreneurs and tour operators to offer their services.

To establish 5 star accommodations at half the rates of the established 5 Star Big 5 Phinda Private Game Reserve bordering this piece of Africa. www.phinda.co.za

To drop fences between this property and Phinda Game Reserve and become part of the Big 5 Phinda Corridor.

By developing a “C” class Mercedes next to the “S” class Mercedes Phinda Game Reserve and by doing this attracting 500% more tourists to the more affordable Big 5 Development.

The lodge developments will be 100% on the same standard as our successful neighbour.

1.2 Core activities of proposed business

1. The 1st activity would involve acquiring a well stocked and well maintained game reserve within Kwa-Zulu Natal that will be managed by a resident game ranger.

2. Immediate lodge investment recovery by developing 12 African feel chalets of 250 sq/m units with braai, boma and Jacuzzi and which would be sold off plan to local and foreign investors.

3. Promote and encourage day trips for game drives.4. Development of the lodge comprising of 20 Room Guest Accommodation in a Big 5

environment by dropping fences with Phinda Private Game Reserve.5. The 5 Star 20 room Lodge will be developed with the profit from selling the 12 mini

lodges.6. Establish a restaurant and pub, convenience shop / pharmacy, wedding / conference

facilities, a gym & health spa and a farmyard with petting zoo.7. Promotion of the lodges threw a number of tourism organisations.8. Having a positive and workable relationship with our neighbour.

1.3 Location

This private game lodge is situated on a 245 ha private nature reserve in KwaZulu Natal. The lodge borders the 5 star Phinda game reserve for about 4 km, along the Msinene river which is home to permanent hippos and crocks. The river has large dams that always had water even during the worst drought. It is close to the Hluhluwe Umfolozi Game Park and the Greater St Lucia Wetlands Park, which is a World Heritage Site.

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Stand 1 = 125ha Develop the 20 bedroom Lodge Stands 6 = 20ha Develop 12 x 4 bedroom Lodges

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The only restrictions on the 20 ha properties, is that you are only permitted to build 2 dwellings, no size specified, on each 20 ha. It comes down to a dwelling every 10 ha. With 6 x 20 ha you will be permitted to build 12 dwellings and an additional 2 dwellings on the 127ha property giving you 14 in total.The 127 ha is very flat to the river and there are only 2 places that you can build, the rest is flood plain.

The game lodge is a 2.5 hour drive from Durban and a 5.5 hour drive from Johannesburg and offers visitors the opportunity to relax and unwind amidst magnificent surroundings on prime conservation land.

Seven distinct habitats shelter an abundance of wildlife including Africa’s Big Five (lion, leopard, elephant, black and white rhino, buffalo) and over 380 bird species, while the marine diversity off the nearby coast of Sodwana is said to rival the Great Barrier Reef in Australia.

The park is home to other wildlife such as giraffe, zebra, wildebeest, antelope and a wide variety of bird species.

The proposed lodge would be tucked away amongst the trees to allow for maximum privacy. It would afford visitors a stay of comfort and luxury. The lodge will be let out to tourists and holiday makers and would make a perfect honeymoon get-away or a gentleman’s private retreat.

Besides the attractions in the immediate surroundings, there are also a host of eco-tourism and cultural activities to enjoy close by.

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Guests can look forward to exciting game-drives in open 4x4 safari vehicles led by experienced rangers and Zulu trackers, as well as thrilling optional activities on the water, in the air and on the beach.

1.4 Service description

The Game Lodge would initially comprise of 12 privately owned sectional title chalets on the 6 x 20ha stands.

All rooms would be spacious and available for single or double occupancy with views of the African bushveld. All chalets would have TV with various DSTV channels, tea/coffee facilities, mini bar, air-conditioning and hairdryers. Standard rooms would feature en-suite bathrooms with spa bath and shower. Deluxe rooms would include a fire place, jacuzzi spa bath and both indoor and outdoor shower facilities.

The lodge would further develop an additional 20 rooms Guesthouse on the remaining 125ha stand. This development would include a Clubhouse with restaurant and pub, convenience shop / pharmacy, wedding / conference facilities, craft market and a farmyard with petting zoo. A gym & health spa would offer unique health spa packages as a perfect accompaniment to a day on the game range. All guests would be encouraged to utilise the

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spa hydro facilities before, during and after their spa packages. Therapists would structure all treatment packages according to guests’ specific requirements.

Sport and activity

Big 5 Game drivesHorseback safaris Lake St Lucia KayakingPetting ZooGame walksBubbling Jacuzzi Fully equipped gym

Amenities and Services:

Laundry services Photocopy services Fax facilities Conference / Wedding VenueDay Clinic / Rehab / Resident DoctorConvenience store / ChemistSafe deposit box in roomRestaurant and PubBush Air Strip

The safari experience would cover 245 hectares of “Malaria Free“ true African Bushveld. The lodge is considered a Nature Reserve first and a Game Lodge second. You will not be disappointed on the Game Drives. Phinda Nature Reserve, is adjacent to the lodge and hosts “The Big 5“. They will drive you on the reserve where it is very common to encounter Elephant, Rhino, Hippo, as well as most of the antelope species found throughout Africa. Your Safari experience through two Reserves will be a memorable one – guaranteed. For the Bird lovers the game lodge is a bird watcher’s paradise, with in excess of over 150 species of birds. It just does not get any better.

1.5 Suppliers

A 245ha game farm needs to be secured in KZN. Shepstone and Wylie would be the conveyance attorneys responsible for all sectional

title units/chalets. LJP Developers would be the consulting designer and project manager responsible

for all development on the game farm which includes the proposed chalets, petting farm and stables, the club house (reservations desk & reception, restaurant, pub, conference and wedding venue, convenience store, chemist, health spa, gym facilities, clinic and craft market)

Remax Heritage would have sole mandate but will list the properties with Pam Golding Properties, Sotheby’s International Realty, Kimberley Klair Estates as well as Imranne Bux & Associates would be responsible for soliciting investors both locally and abroad to invest in the 12 sectional title chalets on the game farm.

And Beyond website and their network of travel agents would be the primary supplier of patrons to the game lodge.

Phinda will also be approached as a supplier of overflow guests.

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Agreements

The present property owner have accepted to give REMAX Heritage a first refusal The property owners have assured that no gazetted land claims have been made on

the said property. The property is available immediately.

Proposed Services

Expofin could be the accounting firm responsible for all finance and accounting. Reaction Unit South Africa can provide 24/7 security on the property as well as be

responsible for disaster management. KZN Aviation can operate aerial tours at the game farm and helicopter charter from

Durban. Federal Air could offer charter flights to the game farm from Johannesburg

International Airport. Zebu Hydro Spas could manage and operate the health spa and gym. Drs Singh & Harilall and partners could operate the day clinic and pharmacy. Dr N. Debba could operate the rehab centre. Vintage Group of Restaurants could manage and operate the restaurant and pub. Khuleni’s 24/7 could be responsible for laundry at the lodge as well as provide

cleaning and maintenance staff. Roy’s café could operate the convenience store on a lease. City Line Transport could operate their coach on the route between Durban and the

game lodge.

1.6 Ownership structure

Shareholders/owners/Developer

To be secured o Development module

12 x 4 Bedroom Lodges 1 x 20 Bedroom Lodge

Shareholding

100%

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2. Opportunity

2.1 Customer description

The game lodge sectional title chalets would cater for multiple customers ranging from corporate companies to private individual investors with the desire to own a small piece of land and manage it in an ecologically sustainable way or to merely utilize as a retreat to combat stress.

The game lodge sectional title chalets would also be promoted as a platform for entrepreneurs to establish mini game lodges within a Big 5 game lodge and nature reserve.

The game lodge would cater for business executives on conferences and team building exercises, institutions like school groups on day trips and other business, leisure and medical tourists.

2.2 Geographical area where the product or service will be offered

Regional Information

Kwa-Zulu Natal - Greater St Lucia Wetland Park & Elephant Coast

Covering about 240,000ha, with a further 84,000ha in, on or under the sea, this is a large chunk of sub-tropical paradise stretching 220km along the East Coast from St Lucia to the Mozambique border.

As well as a mind-blowing range of natural systems, ranging from dune, swamp and coastal forests to rocky and sandy shores, coral reefs and submarine canyons, mangroves, savanna grassland, thickets, woodlands, and the largest protected wetland in southern Africa, it is a culturally fascinating area and - more importantly - has immense fun potential. Game viewing opportunities range from self-drive to luxury lodges, and the birding is awesome. You can paddle on the various lakes, checking out hippos, birds and game on the shore.

The St Lucia site consists of thirteen contiguous protected areas with a total size of 234,566 hectares. The site is the largest estuarine system in Africa and includes the southernmost extension of coral reefs on the continent. The site contains a combination of on-going fluvial, marine and aeolian processes that have resulted in a variety of landforms and ecosystems.

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Features include wide submarine canyons, sandy beaches, forested dune cordon and a mosaic of wetlands, grasslands, forests, lakes and savannah. The variety of morphology as well as major flood and storm events contribute to ongoing evolutionary processes in the area. Natural phenomena include: shifts from low to hyper-saline states in the Park's lakes; large numbers of nesting turtles on the beaches; the migration of whales, dolphins and whale-sharks off-shore; and huge numbers of waterfowl including large breeding colonies of pelicans, storks, herons and terns. The Park's location between sub-tropical and tropical Africa as well as its coastal setting has resulted in exceptional biodiversity including some 521 bird species.

Justification for inscription:

(vii). To contain superlative natural phenomena or areas of exceptional natural beauty and aesthetic_importance.(ix). To be outstanding examples representing significant on-going ecological and biological processes in the evolution and development of terrestrial, fresh water, coastal and marine ecosystems and communities of plants and animals.(x). To contain the most important and significant natural habitats for in-situ conservation of biological diversity, including those containing threatened species of outstanding universal value from the point of view of science or conservation.

Source: UNESCO

2.3 Total customer potential (for purchase of individual sectional title stands)

Potential customer base

o The potential customer base would include the overseas investor who capitalizes on the favourable rate of exchange thereby affording them the opportunity to make large investments locally.

o The potential customer base across South Africa is in excess of 350,000 medium to large enterprise owners.

(Article Information: Title: Managing International Trade: An analysis of South African SME’s. Author: W. Stoonteins)

Typical spending on product/service

o The typical spending on similar developments hovers in the region of USD 1,500,000 to USD 2,500,000 million (approximately 15 to 20 million Rand)

Target Customers

o Based on the identified number of potential (local) customers 0.0035% or 12 of these customers will be required to invest in sectional title units to reach projected sales targets.

2.4 Competition

Phinda Game Reserve remains a direct competitor. Phinda Game Reserves core business or business activity involves promoting eco-

tourism and safaris in KZN - South Africa offering guests 5 star hospitality. Phinda Game Reserve is a neighbouring game reserve. Phinda’s geographical areas of operation extends from north of St Lucia Estuary up

to the coastline spanning 21000ha of nature reserve. Phinda Game reserve started with a natural bush farm and later introduced the Big 5

game. Hence the name Phinda, which means ‘to bring back’ in the local Zulu language’. Partnerships were forged with neighbouring farms and reserves and their borders had expanded rapidly.

Phinda has successfully captured a niche overseas market, by offering 5 star hospitality in the heart of the African Bushveld. Their marketing is done exclusively on the Internet, via their website.

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Phinda Game reserves strengths remain in the size and location of their well stocked and well maintained game lodge an up market accommodation.

Their weakness being, that they only cater for the Mercedes “S” class and this development can be the Mercedes “C” class.

They also only cater for the top 1% of the upper class traveller, this development can be for the 20% mid upper class traveller.

2.5 Competitive advantage

The proposed game lodge will succeed with the early recovery of establishment costs through the sale of sectional title units and working in partnership with our neighbouring game lodges. Our competitive advantage being, utilization of the ample space for development of accommodation on the property in partnerships and in mutually beneficial developments.

2.6 SWOT

Strengths

1. The proposed Big 5 game lodge is ideally situated within a nature reserve with conservation sanctuaries, cultural villages and the coastline just a stone throw away and ample space for development.

2. There is a huge demand for sectional title stands in the area and we have already been approached by estate agents requesting a mandate market the same to their databases of potential investors.

3. They are established online in accommodation reservations and have booked over 1 million bed nights to date via our website, alliance partners and a network of over 150 travel agents abroad.

4. With the economy being on a downswing, most foreign investors seek solutions whereby they could capitalize on favourable rates of exchange when investing.

Weaknesses 1. Lack of operating capital.

Opportunities

1. The opportunity to create over 50 new jobs locally, 30 permanent at the game lodge.2. The opportunity to assist local entrepreneurs in establishing mini lodges within our

game lodge.3. The opportunity to network internationally and promote KZN - Tourism.4. The opportunity to become self funded within year two of acquiring the game reserve.

Threats

We remain very optimistic about the future of our country and South Africa will remain one of the hottest and most vibrant tourist and investment destinations in the world. No threats have been identified at present and nothing foreseen in the near future.

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3. Marketing

3.1 Costing and pricing (Sectional title stands with chalets)

Cost Price

o Each sectional stand would comprise of either a 3 or 4 bedroom chalet. o The 3 bedroom chalet would retail R5,900,000-o The 4 bedroom chalet would retail R6,500,000- o Total cost includes the 10ha stand with a 3 or 4 bedroom mini-lodge. o The total retail price includes the above and R 400,000 agent commission but

excludes transfer duty & VAT. o Each unit will be serviced with a servant, chef and guide and would attract a

monthly levy. o Each lodge will be rented out on the behalf of the owners on a 30 / 70 split

after costs and levy have been taken into account. o Lodge rooms are loose standing, 2nd , 3rd and 4th Bedrooms

3.2 Sales projections

Unit saleso 1 unit is expected to be sold per month over a period of 12 months.

Increase in saleso An aggressive online marketing campaign would be run over the short term.o The 12 sectional title units will be offered initially as a personal investment

option to all within our REMAX network. All agents work for commission and R 400,000 set aside per lodge is very attractive to ensure that all concerned will go the extra mile to promote sales of the sectional title units.

o Sales of the 12 sectional title units will also be promoted by other estate franchises but REMAX Heritage as sole mandate.

3.3 Marketing plan

The following marketing actions will be employed to achieve the expected sales.

Online advertising will capture both local and international audiences. Promotion REMAX existing network of Estate agents abroad. Displays outside Johannesburg & Mumbai Stock Exchanges to attract the ‘right’

standard of investors. Existing local and foreign representatives would be given the added responsibility

of ensuring sales on an incentive basis. Being flexible on payment with foreign buyers whereby 50% deposit secures the

sale.

o All online marketing and other campaigning undertaken by will be at no cost to the lodge. This arrangement will remain in force until such time that all 12 units have been sold.

o Independent estate agencies advertise at their own expense.

4. Operations

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4.1 Key operational functions

Management

AdministrationAccounting.Human Resources.Procurement.

Marketing and salesA network of agents, affiliates and independent estate agents would execute

the marketing plan as described. All sectional title enquiries would be handled by REMAX Heritage

5. Finance

Finance required for Show LodgeProperty 12,700,000Infrastructure 1,200,0003 Bedroom Lodge 2,240,000Total 16,140,000Vat 313,600Total 16,453,600

Cost per 3 Bedroom Lodge

Land purchase 1,058,333Infrastructure 100,000Per Lodge 2,240,000Total 3,398,333Vat 475,766Total 3,874,099Agents commission 400,000Total 4,274,099Developer Profit 1,625,901Selling 5,900,000

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Cost per 4 Bedroom Lodge

Estimated developers Profit

3 Bedroom Profit 1,625,90112 x 3 Bed Lodges 19,510,812

Estimated income to Lodge Owner and Managing Agent / Developer

12 x Lodge’sOccupancy per Month

Rate 50% of Phinda's Zuka Lodge 80% 30%

12,500Rand per night 310,000 116,250

p/m

Expenses 50% of Income

155,000 58,125p/m

Profit of 50% of Income

70% of Profit Owner 108,500 40,687p/m

30% of ProfitManaging Agent 46,500 17,437

p/m

12 Lodges Rent

Managing Agent 12 Lodges 558,000 209,250 p/m

Link to Phinda Zuka Lodge:

Land purchase 1,058,333Infrastructure 100,000Per Lodge 2,740,000Total 3,898,333Vat 545,766Total 4,444,099Agents commission 400,000Total 4,844,099Developer Profit 1,655,900Selling 6,500,000

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http://www.andbeyondafrica.com/luxury_safari/south_africa/phinda_private_game_reserve/and_beyond_phinda_private_game_reserve/accommodation/and_beyond_phinda_zuka_lodge

50 sq/m Floor Area

4.9

7m

7.84m

6. Big 5 Lodge

Estimated Big 5 Lodge Development Cost on 125 Ha

Building Cost 12000000Furniture 3000000Marketing 500000Management 1000000 Quarters Other 2000000Cash flow 500000Total Cost 19000000

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Estimated income of Big 5 Lodge

New Develop Lodge Occupancy per MonthRate 50% of Forest Lodge 80% 50% 30%

     

1,648Rand per Night 40,858 25,536 15,321

per room p/m

     

Expenses 50% of Income

     

1 Guest Sharing 20,429 12,768 7,660per room p/m

     

Profit 50% of Income

     

2 Guests Per Room Profit 40,858 25,536 15,321 p/m per Room

20 Room Lodge

     

Per Month Profit 20 Room 817,160 510,725 306,435p/m for Lodge

     

20 Room Lodge in Year

     

Per Year Profit 20 Room 9,805,920 6,128,700 3,677,220p/y for Lodge

Link to Phinda Forest Lodge:

http://www.andbeyondafrica.com/luxury_safari/south_africa/phinda_private_game_reserve/and_beyond_phinda_private_game_reserve/accommodation/and_beyond_phinda_forest_lodge

Estimated Development Combined Profit:

80% 50% 30%

20 Room Lodge Profit in Year

9,805,920 6,128,700 3,677,220 p/y 12 Lodges Year Profit to Managing Agent

6,696,000 4,185,000 2,511,000p/y

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Development Per Year Profit

16,501,920 10,313,700 6,188,220 p/y

7. Contact information

REMAX Heritage

Physical addresso 09 Dolphin Avenue, St Lucia

Postal addresso P.O. Box 267, St Lucia, 3936

Contact persono Lourens de Lange

Contact detail o Tel - 035 590 1717o Cell - 072 735 0138o Fax - 086 613 4768o E-mail - info@remax-heritage.co.za o Website - www.remax-heritage.co.za

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