REAL ESTATE INVESTMENT ALTERNATIVES LIMA, PERU

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1 REAL ESTATE INVESTMENT ALTERNATIVES LIMA, PERU

2 INDEX 1. Executive Summary About Us Economic Indicators of Peru Luxury Condo Rental Investment Alternatives 7 5. Luxury Residential Real Estate Development Land Banking Investment Alternatives Mixed Use Subdivision Real Estate Development Contact Information. 30

3 Executive Summary Peru is a proven emerging market and it boasts solid Investment alternatives in real estate. In the following report one will learn about four diversified, yet profitable real estate investment alternatives. Luxury Residential Rentals Luxury Residential Development Project Land Banking Opportunities Mixed Use Subdivision Development Project

4 About Us Palo Alto Inmobiliaria is a leading Peruvian real estate developer and brokerage firm. For 20 years, they have built luxury condominiums in Lima s most exclusive locations. The Palo Alto brokerage firm is engaged in real estate transactions in all segments of the industry, such as residential, commercial and industrial; targeted for individual buyers and real estate developers. We have the expertise to help you enter the Peruvian real estate market in any capacity, from investing in a single property to developing large-scale projects. Palo Alto Construction Miraflores, Lima Palo Alto real estate brokerage San Isidro, Lima

5 Economic Indicators of Peru Latin America is a strategic real estate investment destination. It is rich in natural resources and has a strong emerging market. None richer than Peru. Peru boats several of the world s biggest mining projects and is a world leader in the production of gold, silver, copper, zinc among others. It also has a large market cap in industries such as agriculture, fisheries, textiles and energy. One of the world wonders is located in Peru, Machu Picchu, one of the world s biggest tourist attraction fuels a booming tourism industry in Peru. In the last 20 years, Peru has benefited from political stability and strong economic policies, which have led to a fast growing middle class. Demand for goods and services has increased demand for residential, commercial and industrial real estate. As per the Interamerican Development Bank, the Peruvian middle class has grown fivefold in the last nine years. (1) Middle Class Growth Percentage of the Population Source: 1

6 Economic Indicators of Peru Peru has a housing deficit of 1,800,000 units. Every year 80,000 new units enter the market. The demand for housing is so drastic due to the poor living standards the majority of the population currently survives. There is a shortage of commercial and residential real estate in every mayor city of Peru. The demand has created a booming construction companies in Peru. The largest construction company in Peru, Graña y Montero, who specializes in massive middle class developments, is currently listed in the NASDAQ stock exchange in New York, USA. Construction Boom in Peru The World Bank forecasts Peru to have the fastest growing GDP growth in the region. (2) This is thanks to major mining projects that will be in full effect on 2017 and Forecasted GDP Growth Percentage Source: 2

7 Luxury Condo Rental Investment Alternatives City Center, Lima Peru

8 Luxury Condo Rental Investment Alternatives San Isidro, Miraflores, Lima City Center San Isidro is known as Lima s most exclusive residential district. San Isidro is home to: Over 60 world embassies The financial district where all major banking head offices are located The business district that features numerous luxury office towers The three facts are the main driver for a strong rental market in San Isidro. San Isidro Business District Miraflores is recognized as Lima s most exclusive commercial, entertainment and residential district. Miraflores feature the following: Several luxury hotels Highly desirable tourist attractions such as shopping, restaurants and nightlife The Malecon, a 20km seawall filled with public parks and amazing ocean views Miraflores has been highly sought after for international rentals due to its high quality of life, security, ocean views and proximity to San Isidro. LarcoMar, Miraflores Oceanfront Luxury Shopping Mall

9 Luxury Condo Rental Investment Alternatives Miraflores, Lima City Center Option #1 Malecon de la Marina 588 Historically most luxury condominiums were located in the most exclusive areas of San Isidro. Recently the Miraflores Malecon has become highly sought-after and it has become a destination for upper echelon condominiums developments. Malecon de la Marina 588, is an exclusive luxury condo tower designed by Peru s most famous architect, Bernardo Fort Brecia, he runs Latin America s most successful firm Arquitectonica*. Constructora Palo Alto** is the builder; they are a boutique developer with a 20-year track record of providing the highest level of luxury condominiums in San Isidro. The malecon is sought after because of its amazing ocean views, but also thanks to its numerous public parks, bike lanes and walkways. There are also sporting facilities such as soccer fields, tennis courts, sports multiplex and a skate park. Project completion is scheduled for September The building will be a new luxury standard for the malecon. The lobby will be one and a half meters from the street level, will feature vaulted ceilings and will be complexly finished in marble and granite. The amenities include a heated swimming pool, fully-equipped gym, events room and a BBQ terrace. * **

10 Luxury Condo Rental Investment Alternatives Miraflores, Lima, Peru. Option #1 Project: Malecón de La Marina 588 Ocean view luxury condominiums Ready: September 2016 Miraflores, Lima, Peru 127m2, 2-bedroom apartment Average Unit Cost $550,000 Furnished Rental $3,000 per month Number of years for investment return Unfurnished rental $2,500 per month Number of years for investment return m2, 4-bedroom apartment Average Unit Cost $1,000,000 Furnished Rental $4,500 per month Number of years for investment return Unfurnished rental $4,000 per month Number of years for investment return Average cost of furnishing and apartment: $15,000 - $25,000 Av. Malecón de la Marina 588, Miraflores, Lima - Peru

11 Luxury Condo Rental Investment Alternatives San Isidro, Lima City Center Option #2 Jorge Basadre 1216 Historically most luxury condominiums have been located in San Isidro because it is the most prestigious residential district. It is where all the major banks and large transnational corporations have their head offices. There are also over 60 world embassies located in the most exclusive areas of San Isidro. There are also monumental landmarks that provide a high quality of life. Jorge Basadre 1216, is an exclusive luxury condo tower designed by Peru s most famous architect, Bernardo Fort Brecia, he runs Latin America s most successful firm Arquitectonica*. Constructora Palo Alto** is the builder; they are a boutique developer with a 20-year track record of providing the highest level of luxury condominiums in San Isidro. * ** Project completion was March The lobby is one and a half meters from the street level and is completely finished in marble and granite. The amenities include a heated swimming pool, fully-equipped gym, events room and a BBQ terrace. It is conveniently located in the heart of San Isidro.

12 Luxury Condo Rental Investment Alternatives City Centre. Lima, Peru. Option #2 Project: Jorge Basadre 1216 Financial District luxury condominiums San Isidro, Lima, Peru Ready: Immediately 150m2, 3-bedroom apartment Average Unit Cost $480, Furnished Rental $2,500 per month Number of years for investment return Unfurnished rental $2,000 per month Number of years for investment return m2, 4-bedroom apartment Average Unit Cost $650,000 Furnished Rental $3,000 per month Number of years for investment return Unfurnished rental $2,500 per month Number of years for investment return Average cost of furnishing and apartment: $15,000 - $25,000 Av. Jorge Basadre 1216, San Isidro, Lima - Peru

13 Luxury Residential Real Estate Development San Isidro, Lima City Center Peru

14 Luxury Residential Real Estate Development San Isidro, Lima City Center Peru San Isidro is recognized as Lima s most exclusive residential district. San Isidro is home to: Over 60 world embassies The financial district where all major banking head offices are located The business district that features numerous luxury office towers The three facts are the main driver for a strong rental market in San Isidro. The Lima Golf Club is Lima s most exclusive social club. It is surrounded by the most expensive real estate in San Isidro. Having a view of the golf course is considered not only a luxury but also a secure, stable investment. The Olive Tree Forest is a Heritage Park featuring several hundred 500-year old olive trees. It is a major tourist destination and a highly sought after location not only because of its natural beauty but also because of its proximity to Conquistadores Av. An exclusive drive that has several boutiques, coffee shops and restaurants. The proposed luxury condominium site is closely located to all these San Isidro landmarks.

15 Luxury Residential Real Estate Development San Isidro, Lima City Center Peru The proposed Project site boasts 2257m2 in area (68.40m x 39.80m). The current zoning permits allows for a high-rise 15-story residential tower. There are very few golf course facing lots available. Potentially in the future one could apply for a zoning change that could see the land turn into commercial use or also to allow for more floors being permitted. Such move would generate a significant windfall. This would require the proper lobbying efforts.

16 Luxury Residential Real Estate Development San Isidro, Lima City Center Peru Economic feasibility study Lot Size m2 Non buildable area 35.00% Buildable area per floor m2 Service area per floor 50 m2 Total Area for Sale per floor m2 Area for sale rooftop m2 No. of floors for sale 14 Maximum building height 15 Total area for sale m2 No. of underground levels 4 Total area underground m2 Avg. Selling Price $ 3,500 /m2 Revenue $ 69,452,331 Aggregate Construction Costs* $ 26,696,703 PROFIT (minus cost of land) $ 42,755,627 *Does not include the cost of the land

17 Land Banking Investment Alternatives Asia, Lima South Peru

18 Land Banking Investment Opportunity Asia, Lima South Peru There lies an attractive land banking opportunity in the municipality of Asia, located in the south Lima, Peru s capital city. Peru has proven to have the fastest growing economy on the LATAM region thanks to its rich natural resources such as mining (gold, copper, silver, zinc, etc.), oil and gas, fisheries, agriculture and tourism. Peru has the highest forecasted GDP for 2017 and 2018 in LATAM, as per the World Bank. (3) Solid economic policies and political stability over the last 20 years has led the Peruvian middle class to grow at a fast rate. In the last ten years alone, the middle class has grown from 11.3% to 50.6% of the population, as per the Interamerican Development Bank. (4) Industrial space is at a premium in Lima. The Price of industrial use land is the highest in LATAM. This is due to two factors: 1) A shortage of large space for industrial use due to the nature of the urban sprawl and 2) Large industry demands thanks to the fast growing economy. Several future infrastructure projects will positively affect Peru and specifically the south of Lima. For example the interoceanic highway that will connect the Pacific and Atlantic ocean, new port terminals for ocean freight and a train connecting the south of Lima to the city center. Sources:

19 LOT #1 Km89 Panamerican Hwy, Asia, Lima Peru Location: Km 89 Panamerican Hwy, Asia, Lima, Peru. Surrounding area: Beach communities, housing developments, shopping strips nearby. Potential: Housing complex, shopping center, educational grounds. Size of the lot: 1.7 hectares. Price: $3,150,000

20 LOT #2 Km100 Panamerican Hwy, Asia, Lima Peru Location: Km 99 Panamerican Hwy, Asia, Lima, Peru. Surrounding area: Prime luxury Beach communities, housing developments, large commercial strips featuring restaurants, bars, cinemas, shopping. Potential: Housing complex, self-storage, commercial, hotel. Size of the lot: 2.1 hectares. Price: $3,200,000

21 LOT #3 Km103 Panamerican Hwy, Asia, Lima Peru Location: Km 103 Panamerican Hwy, Asia, Lima, Peru. Surrounding area: 10 minutes from Prime luxury Beach communities, housing developments, large commercial strips featuring restaurants, bars, cinemas, shopping. Adjacent to the town of Asia. Potential: Mixed use, industrial, commercial, services and residential. Size of the lot: 93 hectares. Price: $121,000,000

22 LOT #4 Km103 Panamerican Hwy, Asia, Lima Peru Location: Km 107 Panamerican Hwy, Asia, Lima, Peru. Surrounding area: Several Beach communities, housing developments. Walking distance to the beach. Ocean view thanks to the slope of the land. Potential: Mixed use, low and midrise, residential and commercial. Size of the lot: 19.2 hectares. Price: $25,000,000

23 Mixed Use Subdivision, Residential/Commercial, Real Estate Development Sarapampa, Lima South, Peru

24 Mixed Use Subdivision, Residential/Commercial, Real Estate Project Sarapampa, Asia, Lima South, Peru Sarapampa is located on the 107km of the Panamerican Hwy, right in front of great Pacific Ocean beaches. There are several middle class Beach homes communities, which house roughly 20,000 people during the summer months and 10,000 all year round. It is conveniently 10km away from the Asia Shopping mall which features luxury restaurants, nightlife and shopping. Due to the slope of this 200,000km lot (20 hectares), all homes have ocean views. Traditionally this area would be targeted for season beach goers, but the recent trend is that middle class families are buying property in this area as their primary home due to the recent increase of industrialization in nearby municipalities such as Lurin (70km north), Chilca (40km north) and Chincha (100km south). It is also a short two-hour drive from the Lima City Center. The mixed-use subdivision proposed in this document is located on the second row of developments in Sarapampa, which is approximately 500m2 away from the beach. This poses a more affordable option than beachfront properties. This project is targeted to the rising middle class segment. We are proposing 5-story towers with 100m2 condominiums, 120m2 and 90m2 housing lots and a large shopping center that would service this development and all the other communities nearby. It should be noted that currently there is no shopping available in Sarapampa.

25 Mixed Use Subdivision, Residential/Commercial, Real Estate Project Sarapampa, Asia, Lima South, Peru

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27 Mixed Use Subdivision, Residential/Commercial, Real Estate Project Sarapampa, Asia, Lima South, Peru

28 Mixed Use Subdivision, Residential/Commercial, Real Estate Project Sarapampa, Asia, Lima South, Peru

29 Feasibility Study Mixed Use Subdivision, Residential/Commercial, Real Estate Project Sarapampa, Asia, Lima South, Peru

30 Contact Information Alfredo Rolando Grosman General Manager, Palo Alto Inmobiliaria Address: Av. Conquistadores 461, San Isidro, Lima - Peru Cell: Wechat: PaloAltoPeru arolando@paloalto.com.pe Website: