feasibility report - tresvista · • a booming tourist destination, mount kenya offers a multitude...

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XYZFeasibility Report

Table of Contents

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Page No.

Executive Summary…….………………………………………………………………………………………. 3

Macro Overview……….………………………………………………………………………………………… 4

Tourism in Kenya…...………………………………………………………………………………………….... 9

Mount Kenya.....…………………………………………………………………………………………………. 14

XYZ Holiday Homes…………………………………………………………………………………................. 18

XXX………………………………………………………………………………………………. 26

Financing And Cash Flow Projections………………………………………………………………………... 30

Conclusion………………………………………………………………………………………………….......... 36

Appendix…………………………………………………………………………………………....................... 38

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LogoExecutive Summary

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Kenya Macro

• Kenya displays strong macroeconomic fundamentals and strong demographics with a

young and ethnically diverse population.

• Real disposable income in Kenya is on the rise and FDI inflows are expected to strengthen

over the next five years, on the back of increased government reforms.

Tourism Growth

• Tourism in Kenya is on an upward trajectory, with the sector’s total contribution to GDP

increasing by XX% in XXXX from XXXX. High net-worth individuals are demanding more

and more luxury residences.

• A booming tourist destination, Mount Kenya offers a multitude of adventures activities and

exquisite beauty of flora and fauna, making it an attractive real estate destination.

Salient Features

of the Resort

• XYZ Holiday Homes is a mixed use residential and holiday homes with planned

development of 67 villas, 214 town houses/apartments and 75 hotel suites. Currently

owned by XXX. and its sister company, it will be managed and operated by XXX, a global

hospitality company.

• Currently, a funding of KES XX mn (USD XX mn) is being sought to complete the first

phase of construction 19 villas, of which as of date, 11 villas are contracted and 8 villas are

in inventory.

• Other major attractions include a 9 hole golf course, extensive biodiversity in the region,

various recreational activities and a boutique hotel.

Financial Viability • A robust cash flow for XYZ Holiday Homes is projected even under extreme circumstances.

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MACRO OVERVIEW

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2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

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1. IMF World Economic Outlook, XXXX XXXX

2. African Economic Outlook, XXXX

3. Trading Economics

Kenya Macroeconomic Overview

Strong Macro Fundamentals

Robust GDP Growth1 Increasing GDP Per Capita (USD)1

HighlightsControlled Inflation1

• Kenya’s GDP growth has been primarily driven by

expansion in construction, manufacturing, finance and

insurance, information, communications and technology,

and wholesale and retail trade2.

• The Government has implemented relatively sound

macroeconomic policies in recent years, resulting in

stable macroeconomic fundamentals, as demonstrated

by:

o Stable and manageable inflation of under XX% in

XXXX

o Controlled fiscal deficit of under XX% in XXXX3.

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

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2010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

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2. World Bank, World Development Indicators

3. African Economic Outlook, XXXX; Net Enrolment: The share of children of official primary school age that are enrolled in primary school; Gross enrollment: The share of children of any age that are enrolled in primary school

4. CIA World Factbook

5. Daily Nation

6. Daily Nation

Demographics

Growing Consumer Base

Stable Population Growth (mn)1 Favourable Demographics (% of Total)2

Highlights

• Population growth remains high, expected to grow at a CAGR of XX% over XXXX-X, compared to XX% in East Africa1.

• Kenya has made significant strides in achieving universal primary education. The net enrolment ratio increased from

XX% in XXXX to XX% in XXXX, while the gross enrolment ratio in XXXX amounted to XX%3.

• The literacy rate of the total population over 15 years of age, stood at XX% in XXXX and the education expenditure

stood at XX% of GDP in XXXX4.

• Kenya’s emerging middle class is wealthier than peers in developed economies such as Britain and the United States

and saves six times more than their American and British financial peers in the West5.

• The number of high-wealth Kenyans is rising rapidly, and the country is now among the top five in Sub-Saharan Africa

with a high number of dollar millionaires. It has 8,500 millionaires, the largest number in the East African region6.

42.1%

55.1%

2.8%

Ages 0-14

Ages 15-64

Ages 65 and above

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2008 2009 2010 2011 2012 2013 2014

2008 2009 2010 2011 2012 2013 20142010 2011 2012 2013 2014 2015E 2016E 2017E 2018E 2019E 2020E

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1. World Bank, World Development Indicators (Per Capita)


3. Euromonitor

4. Biz Connect

5. Trading Economics

Consumer Spending and External Investment

Growing Consumer Spending

Growing Household Consumption (USD)1 Growing Gross National Savings (% of GDP)2

Highlights

• Kenya’s real disposable income stood at around USD

XX bn in XXXX and is expected to grow at a CAGR of

XX% over XXXX-XX3.

• Since XXXX, Kenya received 5% of Africa’s total FDI for

new projects and XX% of capital invested. As the hub of

East Africa, it has seen robust investment growth,

especially into manufacturing-led and consumer-facing

activity4:

o In XXXX, foreigners invested in at least 78 projects

including a social impact energy project where the

largest wind farm in Africa is being set up in Turkana.

Foreign Direct Investment (USD mn)1

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LogoBusiness Climate

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1. African Economic Outlook, XXXX

2. World Bank

3. World Bank Doing Business

4. Fortune of Africa – Tax Incentives

Favourable Business Environment

Monetary Policy

• The Central Bank of Kenya (CBK) has pursued prudent monetary policy stance, and has been able

to provide relative stability in domestic prices and exchange rate since XXXX.

• To control inflation, the CBK retained the central bank rate of XX% between May XXXX and March

XXXX.

• The lending rate was reduced from XX% in XXXX XXXX to XX% in XXXX XXXX1.

Ease of Doing

Business

• Kenya has a relatively market-friendly business environment, due to strong financial inclusion and

small-business access to credit.

• The country ranked 108th out of 189 economies in the World Bank Doing Business XXXX ranking,

which is an improvement of 21 positions from XXXX2.

Reforms

• The Government has mainly focused on bureaucratic and fiscal reforms, and has been able to

bring down corruption in the country’s public sector.

• It has also focused on business reforms and has taken steps to make the process of starting a

business, getting credit and electricity and registering property easier, especially for small and

medium businesses3.

• In XXXX, the Government undertook VAT and other taxation reforms, leading to higher revenues1.

Taxation

• The Government is providing a wide range of tax incentives to businesses to attract greater levels

of Foreign Direct Investments into the country and exports.

• It is granting tax incentives in the form of enhanced investment deductions and allowance

structured according to lead and priority sectors which include agriculture, agro based industries,

manufacturing, mining4.

• Tax incentives for real estate are available in the form of tax breaks, remissions and allowances.

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TOURISM IN KENYA

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Tourism Industry on a Growth Trajectory

Overview

• Kenya’s tourism sector has been negatively affected by the country’s economy and terrorist

attacks in recent years.

• President Uhuru Kenyatta is expected to drive the growth of the country's tourism industry and

tackle challenges in the sector, since he was a former chairman of the Kenya Tourism Board.

• In XXXX XXXX, the Government announced a number of plans to boost tourism, including the

lifting of visa fees for children younger than 16, extending incentive packages for charter

operations and lowering entrance fees to national parks.

Key Developments

• Kenya is known for its safari holidays, coastal resorts & well-developed tourism infrastructure. It

enjoys the status of a safe destination with good facilities for the risk-averse travellers.

• It is one of the more diversified tourism markets in Africa, attracting visitors across the globe,

making the hotel industry a lucrative market for investors. A number of prominent international

hospitality chains operate in Kenya.

• The sector’s total contribution to GDP, including both direct & indirect activity, was over USD XX

bn in XXXX, around XX% of GDP, a XX% increase from XXXX (USD XX bn, XX% of GDP)1.

• The tourism industry is the third biggest foreign exchange earner for Kenya, behind tea exports &

remittances from Kenyans living abroad.

Government Initiatives

• In XXXX XXXX, Kenya was voted the world's leading safari destination at the World Travel

Awards, a recognition that could boost the tourism sector.

• The Masaai Mara National Reserve won a World Travel Award in XXXX for being Africa's leading

National Park, and Diani Beach won Africa's leading beach destination.

• The Government is investing heavily in air travel, and there have been talks about further

increasing Kenya's air links, with the country expecting the start of direct flights to and from the

United States, possibly by XXXX XXXX.

1. Oxford Business Group

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2015E 2016E 2017E 2018E 2019E 2020E2014E 2015E 2016E 2017E 2018E 2019E 2020E

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1. Kenya Tourism Report, BMI Research, XXXX XXXX

Kenya – Travel and Tourism Industry Forecasts

Increasing Tourist Arrivals Contributing to Growth

International Tourism Receipts (KES bn)1 Tourist Arrivals (‘XXX)1

Highlights

• Inbound tourism is forecast to grow from XXXX. Over the long term this growth will increase at a faster pace than

previously expected, with total arrivals projected to hit XX mn by XXXX1.

• High-end travelers are increasingly seeing Kenya as a favoured tourism destination, which is expected to boost tourism

receipts and arrivals after XXXX.

• The Kenyan Tourism Board (KTB) is working on a USD XX mn global tourism campaign, targeting markets in Asia,

Europe, Africa and the US. It has also recently identified regional markets such as Ghana and Nigeria as potential

source markets and has been working on promotional campaigns to boost their interest. These steps are expected to

help the sector recover after the recent years of decline1.

• Europe is set to remain the largest regional source market for Kenya, with 316,650 arrivals expected in XXXX. North

America is the second largest, with 294,190 arrivals expected in XXXX1.

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Kenya – Hospitality Industry

Luxury Accommodation Sector Showing Positive Signs

Hotel and Restaurant Industry Value (KES bn)1 Luxury Hotel Market

Highlights

• Hotel industry investors are finding room for growth in the luxury accommodation sector, particularly in Nairobi's

business district, as seen by recent expansions by major international chains. More low-cost chains are looking to

expand outside of the capital, with Asian hotel chains showing particular interest.

• In XXXX, 870 hotels and establishments were present in Kenya, expected to increase by XX% to 910 in XXXX. There

are a number of hotel chains planning to enter the market (or expand their presence)1.

• Most international hotel groups are located in Nairobi and cater to the business traveller market, while smaller domestic

groups dominate the safari and wildlife markets.

• By XXXX, the higher number of inbound tourists will push international tourism receipts up, to KES XX bn.

2014E 2015E 2016E 2017E 2018E 2019E 2020E

• International hotel chains are continuing to expand into

the market, focused on attracting business and higher-

income leisure travellers, reflecting the growing demand

for luxury accommodation in Kenya.

• Kenya is beginning to be seen as a preferred destination

for high-end travellers. As international receipts are

expected to grow during XXXX-XX, it is important to

consider the rise of the luxury tourism market in Kenya

and the growing demand for luxury resorts.


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LogoKenya – Real Estate

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Luxury Real Estate Attracting Increased Investments

• Kenya was upgraded to middle-income status last year by the World Bank, following a

recalculation of its GDP.

• Kenya’s attractiveness as an investment destination for luxury properties is driven by:

o a burgeoning middle and upper middle class that is demanding western-style goods.

o increase in the number of foreign investors coming to the country and requiring high-end

living spaces.

o attractive returns in the luxury homes space.

Real Estate

Investment

Overview

• Kenya dominates the East African property market because of its stability and investment

opportunities.

• A recent positive development in the country’s real estate sector is the implementation of the Real

Estate Investment Trust (REITs) structure and tax dispensation for companies, indicating that the

listed property market in the country has developed markedly over the past few years.

• From here on, more REITs are expected to list on the Nairobi Stock Exchange.

• Mixed-use developments have entered into the market, with the construction of several malls. The

growing middle class, willing to pay premium prices for quality goods and services, has driven the

development of these mixed-use complexes.

Luxury Real

Estate

• Prices of high-end homes in Kenya rose by XX% in XXXX from the marginal XX% in XXXX1.

• The two major factors that supported this growth were:

o luxury homes considered to be an attractive investment by high net-worth individuals after

other investment classes such as equities underperformed.

o demand outstripping supply for luxury homes1.

• Kenya has a mixed market, predominately attracting tourists through its beaches and safari

offerings as well as business travellers, principally to Nairobi.

1. Cytonn Investments

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MOUNT KENYA

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LogoMount Kenya - Overview

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• Mount Kenya is an extinct volcano that lies immediately south of the

Equator. The second highest mountain in Africa after Kilimanjaro, it is

located in central Kenya, about 16.5 kilometre south of the equator, and

150 km north-northeast of Nairobi.

• The highest peaks of the mountain are Batian (5,199 metre), Nelion

(5,188 metre) and Point Lenana (4,985 metre).

• Mount Kenya is the main water catchment area for two large rivers in

Kenya: the Tana, which is the largest river in Kenya, and the Ewaso Ngiro

River. The ecosystem provides water for over 2 million people.

• There are several retreating glaciers on Mount Kenya. In less than 30

years the mountain may be completely free of ice.

• The mountain houses ecological diversity with 81 species of plants found

nowhere else in the world.

• Among the wildlife sighted in the forest zone is buffalo, elephant, sykes

monkey, bushbuck, hyena, leopard, buffalo and civet cats.

• The mountain has a typical equatorial mountain climate with large daily

temperature fluctuations.

• The mountain receives direct sunlight which causes the temperatures to

rise quickly during the day. At night, the sky is usually clear with winds

blowing down the valleys.

Mount Kenya Houses a Variety of Flora and Fauna


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LogoMount Kenya - Overview

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• The mountain attracts over 30,000 enthusiasts every year1. While Lenana

can be reached by any reasonably fit person, the twin peaks of Batian and

Nelion are accessible to only those with technical mountaineering and

rock climbing experience.

• Mount Kenya is in fact considered to be more technically challenging than

the higher Kilimanjaro (5,894 metre).

• Hotels, lodges and tented camps have proliferated all around the

mountain in the last fifty years, providing base accommodation for

mountaineers and for other tourists.

• The Mount Kenya National Park protects the region surrounding the

mountain and is a UNESCO Biosphere Reserve. The national park and the

forest reserve, combined, became a UNESCO World Heritage Site in

XXXX. The park attracts over 16,000 visitors each year2.

• Although hiking and mountaineering are popular here, wildlife viewing and

bird watching are also popular activities at the park. About 340 species of

birds can be seen here.

• The National Park’s major attractions include wilderness, lakes, tarns,

glaciers, geological variety, forest, mineral springs, rare and endangered

species of animals, alpine vegetation with 11 species of endemic plants.

The Region Offers Plenty of Tourist Attractions

1. Kenya Travel Ideas

2. Primary Facts

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LogoMount Kenya - Nanyuki

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Attractive Tourist Destination with Proximity to Nairobi

Overview

• The town of Nanyuki, which is about 190 km north of Nairobi by rail, lies at the northwestern foot of

the mountain.

• The climate in this region is sought to be the best in Kenya, enjoying a temperature range of 10°C-

28°C and an average rainfall of 68 mm.

• The development site is located 24 km from Nanyuki and is easily accessible by road and by air.

• There is also a local airport at Nanyuki, a 20 minutes’ drive from the site which is served by daily

domestic flights from Wilson Airport, which takes about 35 minutes from Nairobi.

Tourism and

Competition

• One of the most popular tourist attractions in Nanyuki is Mount Kenya National park at the heart of

Mount Kenya. It houses wilderness with lakes, tarns, glaciers and dense forests.

• Ol Jogi Wildlife Conservancy is located in the heart of Nanyuki, Laikipia and has a magnificent

wildlife and stunning scenery.

• In Nanyuki, a strong competitor is the Fairmont Mt. Kenya Safari Club that serves the same market

segment. The hotel offers a total of 120 rooms and charges over USD 300 per night for double

occupancy.

Real Estate

• The Nanyuki Mall is in the heart of the town and rents out spaces at KES 140 per square foot.

Other buildings coming up in the vicinity sell at an average of KES 60 to 80 per square foot1.

• Land prices increase as one gets nearer the town. Further from the town, an acre of land can go

for anything between KES XX to KES XX mn, while nearer the town an acre fetches between KES

XX mn to KES XX mn1.

• New developers flocking the area have seen land prices rise as much as ten-fold, with an eighth-

acre selling at between KES 700,000 and KES XX mn in XXXX from KES XX in XXXX2.

• Many holiday home developments have come up, spurred by demand from expatriates, foreign

buyers and wealthy Kenyans.

1. Minto Real Estates

2. Star Kenya

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XYZ HOLIDAY HOMES

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XYZ Holiday Homes

123-acre Holiday Homes and Golf Resort

• A mixed use residential, holiday homes and golf resort located in the foothills of Mount Kenya offering outstanding

natural beauty with spectacular views of preserved natural forest areas in Central Kenya.

• The development site is located 24 km from Nanyuki and consists of a triangular plot of approximately 123 acres of

gently undulating and sloping well drained land.

• The outstanding beauty of Mount Kenya and the easy access to the site location are excellent selling features which will

appeal to an international audience.

• The project offers 3 and 4 bedroom apartments giving owners value for their investment and residents a luxury break

from the everyday. Other recreational facilities include restaurants, villa spa, golf club house, gym, swimming pool and

car park.

• The property is owned by XXX Ltd and its sister company XXX. It will be operated and managed by XXX, a global

hospitality company catering to business and leisure travellers.

• The Company is seeking a funding of KES XX mn (USD XX mn) to complete the first phase of construction of 13 Batian

and 6 Nelion villas, of which, as of date, 11 villas are contracted and 8 villas are in inventory.

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Overview

• Spectacular views of Mount Kenya and The Aberdare.

• Traditional safari and lifestyle activities such as bird watching, bush spa, etc.

• A nine hole international standard ‘Executive Golf Course’.

• Club House, ample parking and Helipad.

• High quality boutique hotel with leisure facilities such as a gym, swimming pool and spa.

• Abundant natural reserve with animal attractions such as zebra, ostriches, etc.

Key Attractions

• A total of 123 acres divided into:

o 17 acres for the nature reserve.

o 50 acres for the golf course, the hotel and roads, car parking etc.

o 56 acres for development of apartments and villas.

• 67 3-4 bedroom villas for sale, each on their own self-contained plot of 0.5 acre, and up to

214 town houses/apartments.

• Boutique hotel with initial capacity of 75 suites.

About the Site

Accessibility

• Nestled at the heart of Mount Kenya, the largest mountain in Kenya and the second

largest mountain in Africa.

• Located approximately XX km by road from XXX, taking XX hours to reach from Nairobi

CBD.

• Also, it is located only 15 minutes away from XXX with 20-minute flights from XXX.

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XYZ Holiday Homes

3 and 4 Bedroom Units with Exquisite Natural Beauty

Batian Design Lenana DesignNelion Design

• Batian is a 4 bedroom holiday

home. It comes with elegant

interiors and contrasting textures

which makes the luxury home

characterful.

• It provides a 262 square meter

vintage country style décor

against the backdrop of Mount

Kenya.

• Lenana is the 3 bedroom 200

square meter home styled

offering with exposed beams,

wooden floors and rustic

exteriors.

• A distinguishing feature about

Lenana is its fireplace in the

master bedroom providing for

perfect evenings.

• Nelion is a 240 square meter 4

bedroom home offering rustic

exteriors and fine finishing.

• Its wood-clad ceilings and rustic

stone walls create a mountain

lodge appeal. It also has a double

vault window in the living room.

• Nelion owners will enjoy views

and open spaces.

Home owners at XYZ Holiday Homes & Golf Resort have a selection of 3 beautiful house designs to pick

from; Grand Batian, Exquisite Nelion and Cozy Lenana.

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Exclusive Facilities Offered

A Golfer’s Dream

• The golf course is set in the valley between Mount Kenya and The

Aberdares.

• A 9 hole golf course, with double tees, enabling 18 holes to be played.

• International standard Bent grass greens have been established and will

provide some of the finest putting surfaces in the country.

• The construction is complete and the course is due to open in XXXX.

• The gold club the golf club will have its own changing rooms, pro shop and

an equipment storage area.

Biodiversity

• Lush green forests, mountains, sapphire lakes and meadows awash with

wildflowers of Mount Kenya create a beautiful landscape and experience

for the home owners.

• It is home to over 100 species of birds and wildlife.

• At its centre, the site incorporates a natural reserve of 17 acres fully

fenced with indigenous species such as zebra, gazelle, dik diks, ostrich as

well as a range of birds.

• This nature reserve is supported by the Kenyan Wildlife Service and

enhances the green and ecological attributes of the development.

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Recreational Activities

• XYZ Holiday Homes, will offer a wide array of lifestyle options to relax,

refresh and rejuvenate the mind.

• Lifestyle options will include health spa situated in the forest, gym, sauna

& steam facilities, picnic and recreational facilities and indoor sports and

games facilities.

• Inhabitants can also enjoy various recreational activities such as catch and

release fishing at the dam, nature walks amongst the wildlife and bird

watching, cozy log fires, camping, and jogging at 2,000 m above sea level.

Provision for Boutique Hotel

• The Company has now acquired further land on the south-east boundary

of the site for the hotel.

• The new location enables a stand-alone hotel to be constructed with

attractive views of Mount Kenya and the wildlife conservatory.

• Its location will also ensure easier access and management of the town

house and apartment accommodation, with better operational access to

the outdoors areas earmarked for weddings and other functions.

• Initial plan for the hotel is 75 suites.

Exclusive Facilities Offered

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XYZ Holiday Homes

Competitive Properties

This is a first of its kind property in the region combining hotel, luxury homes, conservancy with animals

and golf courses, giving it a competitive edge over other properties.

XXX Club

• Located approximately 20km from XYZ HolidayHomes, XXX Club is a 15-minute drive from theNanyuki Airport.

• Has a 9 hole golf course, abar and offers a wide rangeof cuisines.

• It has a total of 120 rooms1.

XXX Lodge

• XXX Lodge is located on aprivate wildlife sanctuary, XXXreserve, between Mount Kenyaand Aberdare Mountains,directly north of Nairobi.

• It is home to a diversepopulation of wildlife, includingboth black and white rhino andis few minutes drive from XYZHoliday Homes.

• It is a small and intimate campwith only six rooms2.

XXX Lodge

• XXX lodge is located in theXXX Group Ranch in thenorth of Lewa WildlifeConservancy, north-west ofNanyuki.

• It has 6 individual cottages,which can hold a maximumcapacity of 17 guests3.

• The lodge offers guests avariety of activities – culturalvisits to villages on foot orby camel, swimming, gamedrives, sundowners.

1. Booking.com

2. Go2Africa

3. Eco Tourism Kenya

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Current Status

• XXX, a global hospitality company, and XYZ Holiday HomesLtd. have announced their

commitment by signing a MoU on XXth XXX, XXXX.

• As per the agreement, they will co-develop a resort with a total of 67 villas, 214

apartments and townhouses and a 75 suite hotel.

• The deal is in the final stage and is expected to be finalized by mid XXXX. The project will

then be called XXX XYZ Holiday Homes.

XXX Partnership

• The project operates on a build and transfer model whereby deposits are collected from

the home owners and then constructed by the developer.

• Phase One of the project started in the XXXX for the construction of 19 homes (6 Nelion

and 13 Batian).

• Each house is at a different stage of completion. 11 houses are under contract and 8 are

held as inventory for resale.

Development

Status

Increasing

Demand and

Prices

• Increasing demand has resulted in an increase in prices – recent sale at KES XX mn, a

12% increase from the first contract at KES XX mn.

• The recently announced partnership with XXX will lead to global branding and international

quality of facilities and services.

• This combined with the increase in demand for luxury homes and foreign visitors in Mount

Kenya will further drive demand and prices –expected to increase to upto KES XX mn.

The partnership with XXX will result in a global brand recognition, international quality standards driving

demand for XYZ Holiday Homes.

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XXX

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XXX

A Hospitality Company with Swiss Values at its Core

• The XXX Hospitality Commons is a global hospitality company catering to the up scale to upper up scale market for

business and leisure travellers. Its international services center is located in Ras Al Khaimah, UAE, which gives the

Company easy access to fast developing markets.

• The Company is centered on Swiss values and believes that it needs to strive to involve these values in its own

initiatives, as well as in the member hotels of the XXX Hotels & Resorts and the hotels operated by the Company.

• XXX envisions to expand globally via strategic co-operations and alliances. It has signed several co-operations across

the globe in more than 50 countries:

Asia (Greater China, Southern Asia).

Africa (Western and Eastern Africa).

Middle East and North Africa.

Europe (Southern, central and Northern).

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XXX

Brands and Concepts

The Brands

Food and

Beverage

Meetings and

Events, Leisure

Loyalty Program

XXX’s portfolio of own brands and partnerships.

Company

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XXX

Advantages of XXX

High level of prestige, trust and experience in the market.

Powerful global distribution and revenue management systems.

Advanced sales, marketing and social media initiatives undertaken.

Continuous support and customized services to its partners which includes extensivecommercial and operational business support sessions.

Global team of professionals with local expertise enhancing the output.

Flexible design capable to adapt to a range of site needs, constraints and geographiclocations.

Appealing existing portfolio of hotels and food and beverage.

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FINANCING AND CASH FLOW PROJECTIONS

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Financing

Financing to Help Fast Track Completion

Financing

• The Company is seeking a funding of KES XX mn (USD XX mn) to complete the first phase of construction of 13 Batian

and 6 Nelion villas, of which, as of date, 11 villas are contracted and 8 villas are in inventory.

• The homes are for sale, and can either be used for residential or rental purposes, which adds to their value in terms of

both an investment and a fulfilling living experience. The rental and leasing out process will be managed by XXX to

maximize rental income for home owners.

• Financing is required to fast track development and overcome the challenges of erratic payments and cash flow

constraints.

• The Company has financed KES XX mn so far. Mr X has financed an additional KES XX mn for the golf course, dam,

irrigation, electric fence and generator.

Balance Sheet – as at XX XXXX XXXX (KES mn)

Equity Bank Deposits Payments

Presales XX Contractor payments XX

Owner Equity XX Management expenses XX

Consultant payments XX

Government taxes XX

Bank charges XX

Total Bank Deposits XX Total Payments XX

Bank Balance: XX

Phase 1 Cost Summary (KES mn)

Phase

1A XX

1B XX

1C XX

Total XX

Certificates Presented* XX

Balance to Complete XX

*Refer to Appendix II for detailed breakup; The total contractor’s certificates received is KES XX mn and the total paid is KES XX mn.

Note: In addition to the cash deposits of KES XX mn, the owner has built the golf course entirely from his personal cash amounting to

approximately KES XX mn, which brings the total equity to KES XX mn. The costs exclude cost of land.

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Cash Flow Projections

Base Case – Interest Rate XX%

Month

(in KES mn) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Total

Cash Inflows

Houses on sale - 12.4 11.5 44.0 8.3 30.0 8.3 4.3 8.3 4.3 9.8 2.1 - - - - - - - - - - - - 143.0

Inventory houses - - - - - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 - - - - - - - - - - 252.0

Golf club inflows - - - 0.1 0.2 0.2 0.3 0.3 0.3 0.3 0.4 0.4 0.4 0.4 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.7 0.7 8.8

Loan draw down - 30.0 30.0 20.0 30.0 25.0 25.0 10.0 20.0 10.0 - - - - - - - - - - - - - - 200.0

Total Cash Inflows - 42.4 41.5 64.1 38.4 83.2 61.5 42.5 56.6 42.6 38.1 30.5 28.4 28.4 0.5 0.5 0.5 0.5 0.6 0.6 0.6 0.6 0.7 0.7 603.8

Cash Outflows

Contractors payment - - 34.4 35.6 24.6 35.6 29.5 28.5 14.8 25.1 6.2 17.3 6.2 13.9 6.2 9.6 - - - - - - - -

Unpaid bills - 12.6 - - - - - - - - - - - - - - - - - - - - - - 12.6

Office expenses 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 2.4

Payments to consulants - - 3.0 - - 3.0 - - 3.0 - - 3.0 - - 3.0 - - 3.0 - - 3.0 - - 3.0 24.0

Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - - 32.5

Principal repaid - - - - - - - - - - - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - - 200.0

Total Cash Outflows 0.1 12.7 37.9 36.5 25.8 40.2 31.4 30.8 20.2 27.7 9.0 23.1 29.0 36.4 31.4 31.6 21.7 24.4 21.2 20.9 23.6 20.4 0.1 3.1 271.5

Surplus / Deficit (0.1) 29.7 3.5 27.5 12.6 43.0 30.1 11.8 36.3 14.9 29.2 7.4 (0.6) (7.9) (31.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4)

Balance b/f 9.0 8.9 38.6 42.2 69.7 82.3 125.3 155.4 167.1 203.5 218.4 247.5 255.0 254.4 246.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1

Bank Balance c/f 8.9 38.6 42.2 69.7 82.3 125.3 155.4 167.1 203.5 218.4 247.5 255.0 254.4 246.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1 53.7

Loan

Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - - - - - - - - - - - - -

Interest @ 16% - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - -

Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - -

Principal repaid - - - - - - - - - - - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - -

Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - -

Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0) - - -

In the base case scenario, the Company will generate a cash flow surplus of KES XX mn in XXX years.

Firm A

Logo

XYZ

Logo

33


Scenario 1 – One Month Sales Delay

Month

(in KES mn) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Total

Cash Inflows

Houses on sale - 12.4 11.5 44.0 8.3 30.0 8.3 4.3 8.3 4.3 9.8 2.1 - - - - - - - - - - - - 143.0

Inventory houses - - - - - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 - - - - - - - - - - 252.0


Loan draw down - 30.0 30.0 20.0 30.0 25.0 25.0 10.0 20.0 10.0 - - - - - - - - - - - - - - 200.0


Cash Outflows


Unpaid bills - 12.6 - - - - - - - - - - - - - - - - - - - - - - 12.6

Office expenses 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 2.4


Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - - 32.5



Surplus / Deficit (0.1) 29.7 3.5 27.5 12.6 43.0 30.1 11.8 36.3 14.9 29.2 7.4 (0.6) (7.9) (31.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4)

Balance b/f 9.0 8.9 38.6 42.2 69.7 82.3 125.3 155.4 167.1 203.5 218.4 247.5 255.0 254.4 246.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1

Bank Balance c/f 8.9 38.6 42.2 69.7 82.3 125.3 155.4 167.1 203.5 218.4 247.5 255.0 254.4 246.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1 53.7

Loan

Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - - - - - - - - - - - - -

Interest @ 16% - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - -

Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - -


Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - -

Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0) - - -

The company will generate a Cash flow surplus of KES XX mn over XX years, with XX month delay in

sales.

Firm A

Logo

XYZ

Logo

34


Scenario 2 - Two Months Sales Delay

Month

(in KES mn) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Total

Cash Inflows

Houses on sale - 12.4 11.5 44.0 8.3 30.0 8.3 4.3 8.3 4.3 9.8 2.1 - - - - - - - - - - - - 143.0

Inventory houses - - - - - - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 - - - - - - - - - 252.0


Loan draw down - 30.0 30.0 20.0 30.0 25.0 25.0 10.0 20.0 10.0 - - - - - - - - - - - - - - 200.0


Cash Outflows


Unpaid bills - 12.6 - - - - - - - - - - - - - - - - - - - - - - 12.6

Office expenses 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 2.4


Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - - 32.5



Surplus / Deficit (0.1) 29.7 3.5 27.5 12.6 15.0 30.1 11.8 36.3 14.9 29.2 7.4 (0.6) (7.9) (3.0) (31.1) (21.2) (23.9) (20.6) (20.3) (23.0) (19.7) 0.6 (2.4)

Balance b/f 9.0 8.9 38.6 42.2 69.7 82.3 97.3 127.4 139.1 175.5 190.4 219.5 227.0 226.4 218.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1

Bank Balance c/f 8.9 38.6 42.2 69.7 82.3 97.3 127.4 139.1 175.5 190.4 219.5 227.0 226.4 218.5 215.5 184.4 163.2 139.3 118.7 98.4 75.3 55.6 56.1 53.7

Loan

Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - - - - - - - - - - - - -

Interest @ 16% - - (0.4) (0.8) (1.1) (1.5) (1.8) (2.1) (2.3) (2.5) (2.7) (2.7) (2.7) (2.4) (2.1) (1.9) (1.6) (1.3) (1.1) (0.8) (0.5) (0.3) - -

Interest paid - - 0.4 0.8 1.1 1.5 1.8 2.1 2.3 2.5 2.7 2.7 2.7 2.4 2.1 1.9 1.6 1.3 1.1 0.8 0.5 0.3 - -


Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - -

Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0) - - -

With a XX month delay in sales, the Company would comfortably pay down the loan as per terms.

Firm A

Logo

XYZ

Logo

Scenario 3 - Interest Rate Spike to XX% With Two Months Sales Delay

35


Month

(in KES mn) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Total

Cash Inflows

Houses on sale - 12.4 11.5 44.0 8.3 30.0 8.3 4.3 8.3 4.3 9.8 2.1 - - - - - - - - - - - - 143.0

Inventory houses - - - - - - - 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 28.0 - - - - - - - - 252.0


Loan draw down - 30.0 30.0 20.0 30.0 25.0 25.0 10.0 20.0 10.0 - - - - - - - - - - - - - - 200.0


Cash Outflows


Unpaid bills - 12.6 - - - - - - - - - - - - - - - - - - - - - - 12.6

Office expenses 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 0.1 2.4


Interest paid - - 0.6 1.1 1.5 2.0 2.5 2.9 3.1 3.5 3.7 3.7 3.7 3.3 2.9 2.6 2.2 1.8 1.5 1.1 0.7 0.4 - - 44.6



Surplus / Deficit (0.1) 29.7 3.4 27.2 12.2 14.4 1.4 11.0 35.5 13.9 28.2 6.4 (1.6) (8.8) (3.8) (3.8) (21.8) (24.4) (21.0) (20.6) (23.2) (19.8) 0.6 (2.4)

Balance b/f 9.0 8.9 38.6 42.0 69.2 81.5 95.9 97.3 108.2 143.7 157.7 185.8 192.3 190.7 181.9 178.1 174.3 152.5 128.1 107.1 86.5 63.2 43.4 44.0

Bank Balance c/f 8.9 38.6 42.0 69.2 81.5 95.9 97.3 108.2 143.7 157.7 185.8 192.3 190.7 181.9 178.1 174.3 152.5 128.1 107.1 86.5 63.2 43.4 44.0 41.5

Loan

Loan drawdown - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - - - - - - - - - - - - -

Interest @ 22% - - (0.6) (1.1) (1.5) (2.0) (2.5) (2.9) (3.1) (3.5) (3.7) (3.7) (3.7) (3.3) (2.9) (2.6) (2.2) (1.8) (1.5) (1.1) (0.7) (0.4) - -

Interest paid - - 0.6 1.1 1.5 2.0 2.5 2.9 3.1 3.5 3.7 3.7 3.7 3.3 2.9 2.6 2.2 1.8 1.5 1.1 0.7 0.4 - -


Net position - (30.0) (30.0) (20.0) (30.0) (25.0) (25.0) (10.0) (20.0) (10.0) - - 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 20.0 - -

Loan Balance - (30.0) (60.0) (80.0) (110.0) (135.0) (160.0) (170.0) (190.0) (200.0) (200.0) (200.0) (180.0) (160.0) (140.0) (120.0) (100.0) (80.0) (60.0) (40.0) (20.0) - - -

The Company will generate a cash flow surplus of KES XX mn over XX years, at higher interest rates

and XX months delay in sales.

36

CONCLUSION

Firm A

Logo

XYZ

LogoConclusion

37

XYZ Holiday Homes is a Promising Investment Opportunity

• Mount Kenya attracts over 30,000 enthusiasts every year owing to favourable climate and beautiful

landscapes.

• Located at the foothills of Mount Kenya, XYZ Holiday Homes offers homes with natural beauty with

spectacular views of preserved natural forest areas in Central Kenya.

• The outstanding beauty of Mount Kenya and the easy access to the site location by air and road

are excellent selling features which will appeal to an international audience.

Strong Financials

• Kenya’s economy has experienced a strong GDP growth and increase in household consumption.

• The number of high-wealth Kenyans is rising rapidly, and the country is now among the top five in

Sub-Saharan Africa with a high number of dollar millionaires.

Strong Macro-

economic Landscape

Growing Tourism

Industry

• Kenya is beginning to be seen as a preferred destination for high-end travelers with total tourist

arrivals projected to increase to from XX mn in XXXX to XX mn in XXXX

• The hotel and restaurant industry is expected to grow at a CAGR of XX% from XXXX to XXXX

• XYZ Holiday Homes, a one of its kind offering a combination of luxury homes, golf course and hotel

suites, has a competitive advantage in the region.

• Along with 3 beautiful house designs with its own unique characteristics, it offers various exclusive

attractions such as a nine hole international standard golf course, traditional safari and lifestyle

activities, high quality boutique hotel and abundant natural reserve of flora and fauna.

Favourable Location

• XXX, having managed a vast portfolio of hotels and various brands worldwide, will bring high level

of prestige, trust and experience in the market, resulting in global branding for XYZ Holiday Homes

• It offers powerful global distribution and revenue management system and advanced sales,

marketing and social media techniques.

Competitive

Attractions

• A strong positive cash flow is projected ensuring debt servicing even under extreme scenarios.

• As of date, all expenses have been financed through equity and money raised from deposits and no

debt has been raised.

XXX Advantage

38

APPENDIX

Firm A

Logo

XYZ

Logo

39

Appendix I - Site Map

Strategically Located and Easily Accessible Homes

XYZ Holiday Homes is located at the heart of Kenya in the valley between the beautiful Mount Kenya and The Aberdare

ranges. It is well connected by air and road, providing ease of access.

Map of XYZ Holiday

Homes

Firm A

Logo

XYZ

Logo

40

Appendix II - Phase 1 Total Certificates

Phase 1A Cost Summary

(KES mn)

Certificate Amount

Valuation No. 01 XX

Valuation No. 02 XX

Valuation No. 03 XX

Valuation No. 04 XX

Valuation No. 05 XX

Valuation No. 06 XX

Valuation No. 07 XX

Valuation No. 08 XX

Total Certificates XX

Phase 1B Cost Summary

(KES mn)

Certificate Amount

Valuation No. 01 XX

Valuation No. 02 XX

Valuation No. 03 XX

Valuation No. 04 XX


Phase 1C Cost Summary

(KES mn)

Certificate Amount

Valuation No. 01 XX

Valuation No. 02 XX

Valuation No. 03 XX

Valuation No. 04 XX


Phase 1 Cost Summary (KES mn)

Total Certificates for Phase 1 XX

Total Payments XX

Balance payable as at XX

XXXX XXXX

XX

Note: The total contractor’s certificates received is KES XX mn and the total paid is KES XX mn.

feasibility report - tresvista · • a booming tourist destination, mount kenya offers a multitude...

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