Modern... Mysterious... Exotic...

TunisiaThe new Dubai of the Mediterranean

InvestmentGuide

Contents

Facts at a glance........................3

Getting There............................4

The essence of Tunisia...............5

Tunisian Cuisine.........................6

Northern Tunisia.......................7

Hammamet...............................8

Sousse.......................................9

Port El Kantaoui.......................10

Tunisia’s Economy...................11

Why Invest in Tunisia...............12

The Rental Market...................15

Rental Expectations.................16

Return on Investment.............17

The Dunes Golf & Spa.............185-star Resort

2

Tunisia is the northernmost country

in Africa lying just 50 miles southwest

of Sicily.

It measures 465 miles from north

to south and only 93 miles from west

to east making it comparable to the

size of England.

The northern and eastern coastlines

are bordered by the Mediterranean,

while most of the southern half of the

country is within the Sahara Desert.

GEOGRAPHY Facts at a glance

Summers are hot and dry. In July and

August daytime temperatures on the

east coast average 30° C with 12 hours

of sunshine. In the desert it can reach

45 ° C.

In the far north, winters are mild but

quite wet, with occasional snow.

Daytime temperatures average 20° C

all year long, however in the desert they

rapidly fall at night to freezing.

CLIMATE

Tunisia has a population of around

10 million with more than half the

population under the age of 18.

The Berbers are generally

considered to be the original Tunisians.

Arabic is the official language whilst

French is considered to be the

language of business. English and

German are spoken mainly on the

coast and in the tourist areas.

PEOPLE

Tunisia

3

Getting There

BY AIR

Tunisia has long been established as a

tourist destination with many direct and

indirect flights from the UK and Europe.

Currently there are five airlines offering

direct flights from UK airports with this

figure set to increase once the new airport

opens in 2009, which will allow budget

carriers such as EasyJet and Ryanair to fly

into the country. Thomas Cook & Thomson

Fly offer direct flights from the following UK

airports to Monastir:

• London Gatwick

• London Luton

• Manchester

• Birmingham

• Coventry

• Bristol

• Doncaster

• Newcastle

• Glasgow

The following airlines also offer direct

flights from the UK to either Tunis or

Monastir airports:

• British Airways

• Tunis Air

• Nouvel Air Tunisie

Additionally there are many excellent

indirect connecting flights from most UK

airports to Tunisia via Air France.

BY SEA

There are many frequent and inexpensive

ferry services from Europe to Tunis, the

capital, leaving from Marseille in France

and from Genoa, La Spezia, Naples,

Palermo and Trapani in Italy.

4

The essence of Tunisia

Many visitors have been drawn to Tunisia for

its sunny climate and its bargain beach-

resort holidays: the white sandy beaches are

glorious, the sea a clear turquoise, and some

of the resorts are among the best the

Mediterranean has to offer. However, this

small country has so much more to offer,

mostly within easy reach of the coast, and is

now at last starting to promote it: friendly

people, well-preserved whitewashed

medinas, green forests in the north, a vast

desert and lush oasis in the south, an

amazing wealth of archaeological treasures

inland, as well as an exciting and delicious

cuisine, based on fresh local produce.

Tunisia is a mainstream holiday

destination but it still attracts a lot of first

time visitors to the country. Those that

visit tend to come back again and again

each time absorbing more and more of

the culture. In the mysterious medinas,

there is the feeling that a thousand

secrets lurk behind every studded door;

shops and stalls in the souqs and

surrounding streets spring to life to serve

the homeward bound with the freshest

food. Fish are only minutes out of the sea,

bread is baking on the spot and stacks of

colourful vegetables are haggled over with

shouts and handshakes!5

Tunisian Cuisine

Although international food is served in most

resorts, many holidaymakers will want to try

at least some local cuisine. The Arabs, Turks

and French have all had an influence on the

country’s cooking. With such a long

coastline, fish is given pride of place on any

menu and restaurant owners compete with

each other to display the freshest catch.

Bream, grouper, sea bass and red mullet

are amongst the most widely available, while

seafood speciality dishes are based on

prawns, lobster and squid. In all but the

cheapest restaurants customers are nearly

always welcomed with complimentary hors

d’oeuvres which may be as simple as a bowl

of black olives and some delicious crusty

bread. In most places the bread will also

be accompanied with a small saucer of

fiery red harissa paste made from hot

chillies. A popular starter is the famous

brik, a unique Tunisian dish which consists

of a triangular-shaped envelope of crispy

pastry containing a lightly cooked egg,

often topped with fresh herbs, prawns or

tuna. Couscous is an obvious main

course, a tasty vegetable, meat or fish

stew served on a bed of steamed

semolina grains. Dessert is often a choice

of fresh fruit or very sweet pastries like

baklava, filled with nuts and honey.6

Northern Tunisia

For a small country, Tunisia offers plenty of

variety besides its glorious beaches. The

north, particularly around Ain Draham, has

large oak forests and lakes, making it feel

more like Europe than Africa. Tabarka is

emerging as Tunisia’s northern flagship

resort, while the charming old port town of

Bizerte is still debating whether it really

wants to entice international tourists or is

quite content to remain a sleepy fishing

town. For more than 3000 years, Tunis, the

capital has been among the great cities of

the Med and it still has plenty to offer.

Carthage is one of the best known of

Tunisia’s archaeological sites on the

outskirts of the capital. Founded in 814

BC by the Phoenicians, by the fourth

century BC, Carthage had become the

centre of their vast maritime empire. In

146 BC it was destroyed by the Romans

who only 25 years later began rebuilding

on the same site to become the 3rd

largest city of the Roman empire. Today

ancient ruins still remain and are a firm

favourite with visiting tourists.

7

Hammamet

Hammamet, the longest established resort

in Tunisia has been attracting holidaymakers

since the 1960s. Less than an hour’s drive

from Tunis airport and only slightly more

than that from Monastir airport, Hammamet

is geared up to year-round tourism.

Easy-going and lively, with a good choice of

restaurants, Hammamet’s first hotels were

built in the centre close to the medina but

shortly afterwards started stretching along

the coast almost as far as Neubul, making

the most of some of the finest beaches in

the country.

10km from the centre is the new resort

of Yasmine Hammamet which boasts a

large marina with 740 moorings, a walled

medina area with covered markets, luxury

5-star hotels, casinos, many Thalasso

therapy centres, a theme park and much

more. The town offers an excellent

promenade lined with shops and cafes,

gardens and parks, and entertainment

complexes. Two 18-hole golf courses,

Yasmine and Citrus are situated only 5

kilometres away from Hammamet.

8

Sousse

Sousse used to be just an excursion

destination for day trippers; now it is a busy

holiday centre in its own right. Packed with

atmosphere and hundreds of years of

history, Tunisia’s leading city beach resort

offers a great selection of quality hotels, a

wide choice of affordable restaurants and

endless possibilities for shopping in the

traditional markets or the equisite boutiques

which rival those of its European neighbours.

Along with Carthage, Sousse was one of the

Phoenicians’ three great coastal cities, with

the earliest archaeological finds dating from

the 6th century BC. The charming medina

seen above is the old heart of the city. A

popular choice for Tunisians and foreign

tourists alike, Sousse is a destination

open for business all year round. The

beaches stretch as far as the eye can see

and the wide promenade is bustling with

families enjoying their ice creams and

traditional Tunisian sweets.

Situated less than 20 minutes away from

Monastir airport, Sousse is an excellent

choice for a rental investment due to its

popularity and year round appeal.9

Port El Kantaoui

Purpose built around a picturesque marina

which now draws luxury yachts from all over

the world, Port El Kantaoui opened in 1979

and has been Tunisia’s most outstandingly

successful tourist centre. With the look and

feel of an elite residential district, it is the

second home of the President, top

politicians, diplomats and the fabulously

wealthy. Millions of dinars have been poured

into landscaping, with palm trees, shrubs

and grass borders immaculately lining every

road. The resort’s hotels are equally

sparkling; whitewashed palaces with

terraced gardens awash with

bougainvillaea. Port El Kantaoui’s pride

and joy are its beautifully manicured 18-

hole championship golf courses. There

are no membership requirements and

while golfers with their own equipment

are welcome, those who prefer to travel

light can rent everything they need from

clubs to caddies at very reasonable rates.

Dubbed as Tunisia’s Puerto Banus, Port El

Kantaoui is the most exclusive of Tunisia’s

resorts situated only minutes along from

Sousse and 30 mins from Monastir.10

Tunisia’s Economy

Tunisia has for the past decade been a shining example to other African and Middle

Eastern nations on how to grow and prosper as a developing nation. In 2007 the World

Economic Forum ranked the country as the number 1 most competitive African economy

(29th in the world) with also the highest ranking out of all the countries in the Arab

speaking world. Comparing with other nations in the region, Morocco ranked 64th and

Egypt came in 77th place out of 131. In the same report, Italy was placed 42nd on the list.

Inflation within the country has remained

below 3% for the past 10 years whilst

economic growth has constantly been above

5% for the same period. In 1996 Tunisia

entered into an "Association Agreement"

with the EU which removes tariff and other

trade barriers on most goods by 2008.

Tunisia has had to work extra hard to develop its industry and economy to the level it is at

today. Unlike its larger neighbours, Libya and Algeria, Tunisia produces very little oil and so

the country has had to develop and excel its other industries such as tourism,

manufacturing and agriculture. Needless to say that Tunisia's economic reform program

has been lauded as a model example by international financial institutions.

Tunisian Economic Facts at a glance

• Highest economic competiveness in all of

Africa and the Middle East.

• Highest GDP growth rate in Africa

• Consistently low inflation levels

• Government is very eager to encourage

foreign investment into the country

• Free trade agreement signed with the EU.

• Member of the World trade Organisation

and GATT.

11

Why Invest in Tunisia?

Considering the strong economic factors you have read on the previous page, you may be

asking yourself why hasn’t Tunisia already exploded on the international property market?

Well the question is fairly easy to answer. The forward-thinking

government wanted to ensure that the Tunisian population

wouldn’t be out-priced out of their home market preventing

them from buying their homes in their own country, much like

has happened in Morocco in recent years. They had prevented

foreigners from purchasing property in Tunisia for a considerable

length of time and nationals of some countries are still unable to

buy there. Once the local home ownership figure neared 80% (higher than in the UK),

where it stands today, they introduced an approval system whereby each foreigner would

require approval from the Governor of the region before being entitled to buy. This

permission still stands today but is pretty much a formality and there are usually never any

problems with Europeans buying in Tunisia.

The fact that the home tenure figure is so high in Tunisia is excellent news for the foreign

investor as it means that there is a strong local market in place when they need to realise

their investments and sell their properties. This is particularly important when dealing with

new and emerging markets as investors always need a clear exit strategy and be able to

realise their investments when the time is right.

Tunisians are very wealthy in comparison to other countries in the region and the current

GDP per capita stands at $8,800. The country is situated only 50 miles south-west of

Sicily and this proximity to Europe has enabled them to forge strong ties with the EU which

hasn’t gone unnoticed elsewhere in the region.

The largest developers from Dubai have recently started to

invest very heavily into Tunisia, realising the stability of the

country and the proximity to Europe making Tunisia an ideal

link between Africa, Middle East and Europe. In the capital

Tunis, they are currently investing over $20bn in projects

such as Tunis Financial centre and Tunis Sports City based

on the popular concepts from Dubai itself. Further south,

Emaar, the Dubai developers of the world’s only 7-star hotel

are investing $2bn in a picturesque coastal region creating an artificial marina, a world

class golf course, exclusive residential properties and a number of luxury 5-star hotels. 12

Why Invest in Tunisia?

Tunisia is perhaps best compared to one of their western neighbours, Morocco. Although

Morocco doesn’t bode as well as Tunisia in terms of economic growth and stability, UK and

European Investors have been buying property there for a few years now and the price of

Moroccan property has risen considerably during that time. It is difficult to determine

exactly how much prices have risen, as with any emerging market, but reports from

developers tend to suggest that the selling price has tripled in some areas.

Infrastructure and transportation to and within and the country are excellent as Tunisia

offers 7 international airports ensuring that no matter where you are in the country you

are never further away than 2 hours from an airport. The largest airport in Northern

Africa is currently under construction in Tunisia scheduled for completion in late 2009

which will offer cheap and inexpensive flights with carriers such as Ryanair and Easyjet.

Within 10 minutes drive of this airport, the largest deep water port in the southern

Mediterranean is also being built enabling the globe’s biggest trade ships and cruise liners

to dock in Tunisia.

Rental yields are very high in Tunisia and are discussed in detail on the following page. To

summarise, below are the key points explaining why you should be buying in Tunisia.

Low property prices

High Rental Yields

Dubai developers investing heavily

High rate of growth

Low rate of inflation

Most stable country on the continent

Very cosmopolitan society

Modern thinking nation

Excellent relations with EU

Relaxed restrictions on foreign ownership

Fantastic Infrastructure

Many direct flights from the UK & Europe

3 hours from UK / less than 2 from Europe

Great weather all year round

Why buy property in Tunisia?

13

How is the credit crunch affecting

Tunisia?

Tunisia seems to be one of the few countries around the world which seems to have

escaped relatively unscathed from the global financial crisis which is affecting so many

other developed and developing economies around the world.

Gross Domestic Product in 2008 is estimated to have increased by 23.53% from the

2007 figures; in real terms an increase in GDP growth from 5.1% in 2007 to 6.3% is

expected in 2008 (Source: CIA World Factbook).

Direct foreign investment in the country has gathered pace with billions currently being

invested by Dubai property groups, whilst giant corporations such as Airbus have also

been relocating their production facilities from Europe to Tunisia, benefiting from a highly

skilled workforce and savings of €1 Million per day on their operating costs.

Tunisia’s excellent relations and the free trade agreement with the EU is ensuring that

other corporations in similar positions to Airbus will follow their lead in order to maximise

their profits and streamline their costs.

Additionally, since the Tunisian Dinar is a closed currency for now, Tunisian banks have not

been exposed to American toxic debt which has engulfed the worldwide banking sector,

ensuring that lending within Tunisia to local businesses and Tunisian people is completely

unaffected and not harming its economy. The Tunisian Dinar is expected to become fully

convertible at the end of 2009 and it is predicted that once it happens, loans to foreign

buyers will become available ensuring added demand for property in Tunisia.

How is the Tunisian property market being affected?

Although Tunisia is well insulated from the worldwide toxic debt, it attracts property buyers

from all over the world including regions which have been affected by the credit crunch.

Fortunately, the client base for property in Tunisia is well diversified and not reliant on

British or Irish markets unlike most other European and North African property hot spots.

Buyers of Tunisian property come from all over the world, from Australia to Canada and

South Africa to Scandinavia. A large number of Middle Eastern investors have been

attracted due to the stability of the country and the exposure created by multi-billion UAE

investments. Additionally, unlike with most other emerging property markets, there is large

domestic demand for property in Tunisia as Tunisians at home and those living abroad are

seasoned property investors. This means that as well as attracting local demand for off-

plan property, there is also a secondary market to which foreign buyers can resell their

properties when the time comes to realise their investments. This in itself is a major plus

point as emerging markets typically do not attract much local demand for property. 14

The rental market in Tunisia is very strong due to the high domestic demand for rental

accommodation in addition to the demand from Europe and Tunisia’s neighbours Algeria

and Libya. Furthermore, due to the country’s location, Tunisia benefits from all year

sunshine ensuring the rental season is much longer than in Europe. In fact, over the past

years temperatures in early spring have been recorded as high as 40 degrees Celsius,

however most of the time they are in the region of 25C to 35C.

Having the highest home-ownership rate in Africa and certainly one of the highest in the

world, Tunisia is a middle-income country which has outperformed most of its African

neighbours both in terms of economic growth and political stability. As a result of their

relative wealth, the Tunisian people are able to take frequent holidays in the most popular

regions of Tunisia such as Sousse and Hammamet boosting the demand of the rental

market.

Tunisia’s larger neighbours, Libya and Algeria do not offer tourist facilities, resorts or

hotels anywhere near the scale that Tunisia does, and as a result many Libyan and

Algerian nationals tend to take their holidays in Tunisia boosting the demand for rental

properties even higher.

Last, but not least, we have the European contingent of holiday makers who arrive in

Tunisia in their millions each year looking for a warm, sunny climate to spend their holidays.

Being less than 3 hours from the UK and most of Europe, Tunisia offers something new

and exciting for everyone and has been an established tourist destination with Europeans

over the past 2 to 3 decades.

Generally, tourists who visit Tunisia

tend to come back year on year, and

those on their return trips will prefer

to rent accommodation giving them

more flexibility than a hotel does. As a

result, there is considerable demand

for rental properties all year

round. In the summer, couples and

families with younger children tend

to visit the country whereas in the

winter we see a lot of retirees and

Golfers in particular. Whatever they

are looking for, Tunisia offers it all!

The Rental Market

Tunisian weather chart from the BBC website

15

We have carried out a comprehensive survey of a number of different rental agencies

located in Tunisia and abroad. The following rates are based on durations of one week and

split into 3 seasons, low, medium and high. The resorts considered are the most popular

ones with holiday makers, and the rental stock comprises of apartments currently

available to rent in 2008.

Rental Expectations

Low Season Medium Season High Season

1st Nov - 31st March 1st April - 15th June 16th June - 14th Sep

15th Sep - 31st Oct

1-bed Apartment € 280 € 340 € 390

2-bed Apartment € 350 € 435 € 550

The difficulty with comparing rental potential of existing properties to those of The Dunes

Golf & Spa Resort is that currently there are no other true 5-star resorts in Tunisia

offering all of the below:

24hr gated security

Spa centre on-site

2 swimming pools

Supermarket and Café on-site

On-site rental management agency

Exclusive private beach for residents ONLY

20% residents discount on Spa and Golf facilities

All-inclusive optional Platinum service

As a result, we believe that there will be a minimum 15% premium (excluding price

inflation over the 2 year build time) on top of the above quoted prices for the Dunes Golf &

Spa Resort giving us the expected rental figures found below.

Low Season Medium Season High Season

1st Nov - 31st March 1st April - 15th June 16th June - 14th Sep

15th Sep - 31st Oct

1-bed Apartment € 320 € 390 € 450

2-bed Apartment € 400 € 500 € 630

*Some of the rental agencies surveyed: holidaylettings.co.uk, locasun.co.uk, villarenters.com, rent-holiday-homes.com

16

Using the rental figures on the previous page, we can work out the annual rental yield on

the properties. We will make the following assumptions:

Return on Investment

Rental Yield

Property is a 1-bed apartment priced at €52,000

Property is rented out for 22 weeks per year

12 weeks rental in the peak season at €450 per week

8 weeks rental in the medium season at €390 per week

2 weeks rental in the low season at €320 per week

Total annual rental return = €9,160

Gross Yield = €9,160 / €52,000 = 17.61%

Net Yield (gross yield minus 10% rental management charge) = 15.85%

Time taken to pay off the property = 100 / 15.85 = 6.31 years

* Weekly rental estimates provided by Well Placed Apartments Ltd.

The above figure shows us that by assuming your apartment is only rented out for less

than half a year you are able to pay off for the property in just over 6 years using rental

income alone. Below we examine the potential capital growth using the same apartment.

Capital Growth

Current price €52,000

Initial Investment (before completion) of 50% = €26,000

Appreciation during construction of 25% per year

Value of apartment on completion in 2 years = €81,250

Profit of €81,250 - €52,000 = €29,250 is made during construction alone.

Since only €26,000 was invested, the return on capital invested in only 2 years is =

112% 17

Development Overview

Situated on Tunisia’s “Gold Coast“, within easy reach of its most exclusive resort, Port El Kantaoui, The

Dunes Golf & Spa Resort is a beachside development situated conveniently between two of Tunisia’s

busiest airports offering direct and inexpensive flights to major European cities. The development itself

comprises of studios, one, two and three bed apartments in a low rise setting in a prime residential

area close to all facilities including a 36-hole golf course, marina and restaurants. The Dunes Golf & Spa

resort is directly located next to glorious white sandy beaches that stretch as far as the eye can see.

The resort offers on-site world class Thallasso Spa facilities including an indoor swimming pool, Turkish

baths, a sauna, gymnasium and beauty & massage treatment rooms with discounts for residents. One

can enjoy a massage on the exclusive private beach set aside for residents only or play a round of golf

at the finest African golf courses located on your doorstep. The Dunes is a gated 5 star resort offering

24hr security and concierge facilities as well as on site amenities including a restaurant, snack bar,

supermarket, bank, bakery and a rental management company. Rental income is very high in this region

due to the strength of the local, neighbouring and European markets ensuring yields are between 10%

and 14% per year.

18

Development Facilities

5-Star beach, spa and golf resort

100m from an exclusive private beach for residents only with sunbeds and umbrellas

On-site 1st class Spa facilities with 20% discount for residents

Gated community

24hr Security and Concierge

Underground and off-street parking

Two outdoor pools with lounge facilities (one adult and one children’s pool)

Whirlpool Jacuzzi

Poolside cabana bar

Indoor pool in the Spa centre

On-site rental management agency with only 10% fees

Laundry and cleaning service from as little as €1 per hour

Optional Platinum service for seniors offering full services including airport transfers and

welcome packages

Satellite Television

Video Entry System

Private beach

Electrical and water connection included

Low community fees

Show flat on-site

19

Close-by facilities

On the doorstep of two world class 18-hole golf courses

20% Golf Discount Card for residents

Water Sports/Fishing/Diving and Boat excursions running all year around

Cultural excursions including Arabian nights and Belly dancing shows

Shopping centres

Excellent international cuisine

Palm tree lined promenades

Children’s water and theme parks including a petting zoo

Horse and camel riding

Hospital and Pharmacies nearby

Traditional Medina offering bargain shopping

Payment terms

€3000 euro reservation

50% on contract

10% six months after reservation

Balance on completion in June 2011

Due to the low property prices, one can easily obtain a personal loan for the first 50% with

payments as low as £75/€95 per month.

20

Property Specification

Stainless Steel door handles

Phonic and Thermic isolation between floors

Aluminum external carpentry with rolling blinds manufactured in Germany

Outdoor solar lighting throughout the project

Excellent interior carpentry

First choice sanitary and electrical equipment and fittings

Pre-installation for hot and cold air conditioning throughout the apartments

Pre installation for washing machine

Italian style kitchen including hob and extractor, stainless steel sink and fridge freezer

Anti slip ceramic tiles in kitchen and bathroom

Fine Tunisian marble floors in lounge, bedrooms and corridors

Satellite Television with over 5000 channels

24-hour security

Underground and open-air car parking

Facilities on site include a supermarket, bank, bakery, cafe/bar and a management company

Freehold Landownership Certificate

21

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Image Gallery

New investment concept – Modular Studios

Studios within the Dunes were designed to be modular allowing investors the possibilities of combining 2, 3 or more studios together in order to offer the highest potential for rental income and excellent capital growth whilst at the same time minimising the risk for shrewd investors.

23

New investment concept – Modular Studios

Studios within the Dunes are designed to be modular allowing investors the possibility of combining two,

three or more studios together in order to offer the highest potential for rental income and excellent

capital growth whilst at the same time minimising the risk to shrewd investors.

By introducing a simple connecting door in between adjoining studios upon completion, investors are able

to rent out studios individually when required whilst at other times the property can be used as a fully

functioning one or two bedroom apartment with each bedroom having its own en-suite facilities. This type

of investment ensures that each owner of these modular studios is able to capitalise on changing rental

demand throughout the year, whilst at the same time ensuring that each studio can ultimately be resold

as a separate unit hence benefitting from the highest rental & capital appreciation potential out of any

other apartments in the Dunes Golf & Spa Resort..