***A SUITES & APARTMENTS ANTELIAS STREET - BEIRUT - LEBANON. BUSINESS PLAN Architect Meguerditch L. Bouldoukian Owner-General Manager June 20, 2006

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1 ***A SUITES & APARTMENTS ANTELIAS STREET - BEIRUT - LEBANON BUSINESS PLAN Architect Meguerditch L. Bouldoukian Owner-General Manager June 20, 2006

2 General Information Business Name MOT license : GARDEN TOWER HOTEL : ***A Hotel Business Address : Antelias Street, Beirut Lebanon Telephone : Fax : info@gardentowerhotel.com Website : Owner Business Structure : Architect Meguerditch Bouldoukian : Sole proprietorship

3 COMPETITIVE ANALYSIS In 1995, Garden Tower Hotel was the first hotel built in the area extending from Zalka to Debayeh. Garden Tower Suite Hotel has been targeting the specific niche market of Lebanese expatriates, large families from Arab countries, embassies and corporate guests by providing a friendly homelike atmosphere and appropriate facilities for extended stay guests.

4 LOCATION Garden Tower Hotel is located in a calm spot at Antelias, North-East of Greater Beirut, at 16 kms from the Hariri International Airport and 7 kms from Beirut Central District, in a commercial and residential zone, mid-way between Beirut, Jounieh and the mountain resorts. It is at a walking distance from Dbayeh Marina Waterfront, Emile Lahoud Convention Center, Cilicia Museum, major malls (City Mall, ABC Mall), health clubs, superstores and famous restaurants.

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6 Lebanon Opportunities, in its April 2006 issue, indicated that Dbayeh Marina area is to witness major developments. It has been attracting investors and real estate development companies, who are buying huge plots of land for future projects. The projects will include major attractions, for both locals and tourists, such as luxury hotels, shopping malls, residential projects, an Olympic swimming pool, and a public garden. Joseph Khoury, owner of about 300,000 square meters in the Marina area and Majed AlFuttaim Group owner of 55,000 square meters, which he bought from Khoury five years ago are venturing together. The joint venture is to include the Carrefour commercial center and several residential buildings, to be completed in three years. With Solidere reaching saturation levels, the Marina has become attractive to developers. According to Massaad Fares of Prime Consult, when news first circulated about the deal between Khoury and Al-Futtaim a few month ago, prices in the Marina area increased from $800 per m2 to about $1,200 and now the price stands at $1,500.

7 Being located in the immediate vicinity of the Dbayeh Marina zone where more than 350,000 square meters of sea front land shall be developed within the next few years by the Majed Al Futtaim Group, the Dubai based Waterfront Company and others, occupancy rates at the Garden Tower Hotel are expected to have a substantial increase during and after the construction period of the mega-projects and at the same time enjoying a boost in its real estate value.

8 GARDEN TOWER CENTER

9 GARDEN TOWER HOTEL ***A Description of the existing property Date of construction Total built-up area : 1995 : 6500 m2 Number of floors : Basement floor projected F&B outlets & parking Ground floor shops and entrance lobbies First floor lounges and coffee shop 5 typical floors of 4 suites and 4 apartments/floor 6th floor 4 suites and 4 apartments Total number of apartments Number of Block A suites Number of Block B apartments : 46 : 23 : 23 + roof apartment Number of bedrooms Number of beds Total capacity : 79 (excluding living rooms, kitchens & bathrooms) : 100 single and double beds : 138 persons

10 TYPICAL FLOOR PLAN BLOCK A & B

11 Description of Block B Apartments Total construction area Total number of apartments Number of floors : 2619 m2 : 23 : Basement parking, 5 typical floors, 6th & 7th floors Number of 2-bedroom apartments Net area of 2-bedroom apartment :9 : 74 m2 Number of 3-bedroom apartments Net area of 3-bedroom apartments : 10 : 96 m2 Number of two bedroom luxury apartments : 4 Net areas of luxury apartments : 96 and 74 m2

12 GARDEN TOWER HOTEL BLOCK B APARTMENTS

13 TYPICAL FLOOR PLAN BLOCK B

14 SIXTH FLOOR PLAN BLOCK B

15 LOUNGE

16 . Customer retention Treating our guests as friends, caring for their comfort and wishes constantly in a homelike atmosphere and facilities have proved to be a sustainable method for customer retention, growing network of repeat guests and mouth to ear publicity. Partnerships Garden Tower Hotel website is associated with ReservInternational (a global GDS provider) and it is listed in most of the online hotel reservation systems, providing a growing percentage of the total reservations done online.

17 GARDEN TOWER HOTEL CURRENT ONLINE SEARCH RESULTS Garden Tower Hotel Yahoo: 905 Google: 727 MSN: 1,168 Garden Tower Hotel Yahoo: 4,470,000 Google: 20,400,00 MSN: 1,311,533 Monday Forum Yahoo: 10,300 rank #1 & 10 Google: 15,300 rank #1 MSN: 2,229 rank #2 & 3 Monday Forum Yahoo: 61,600,000 rank #1 Google: 157,000,000 rank #1 MSN: 7,946,839 rank # 6

18 Opportunities: past, present, & future Growing regional interest in Lebanon as a business, cultural and recreation destination Growing number of Lebanese expatriates buying apartments in their homeland Increasing international conferences and longer summer vacation season Growing number of Arab nationals visiting Lebanon and investing in real estate Growing public and private real estate development between Zalka and Dbayeh Through spill over from high occupancy rates in Beirut Central District generate high occupancy rates in hotels between Zalka and Dbayeh Increasing demand and rise in the cost of new constructions affect positively the reevaluation of existing real estate

19 FINANCIAL OPTIONS Sale of 23 two and three bedroom apartments in Block B, as hotel apartments. Total built up area: 2619 m2 of apartments. Value of the property including FF&E: US$ 2,380,000. The concept enables investors to buy a fully-fitted, furnished and serviced hotel apartments that may be used free of charge for a certain period yearly. Profits from the rental of the serviced apartments during the remaining period of the year will then be distributed to individual part owners in the rental pool, after deducting cost of operations and management.

20 ADVANTAGES OF THE PRODUCT FOR THE LEBANESE EXPATRIATES Having a permanent vacation home in a hotel adjacent to the Dbayeh Marina zone where within the next few years several mega-projects shall turn the seafront into an upscale residential, commercial and recreational area. Investing in a value added property, in the form of fully serviced hotel apartment. And, vacationing free of charge for up to 2 months per year. Investing in a property that optionally may generate yearly net income of 6.54%12.10% of the initial investment, in addition to the expected capital gain in the appreciated unit value, within the next few years. Buying an hotel apartment at almost the same price of what is offered in other anonymous residential buildings with comparable specifications. Investing in a property with a well known address, an important commercial goodwill, well established international marketing partners, a valuable portfolio of long dated customer-friends and repeat guests. Several Lebanese banks have special long term (up to 15 years) housing loan programs, to encourage Lebanese expatriates to invest in real estate in Lebanon

21 ADVANTAGES OF THE PRODUCT FOR REGIONAL VACATIONERS Having a permanent vacation home in a hotel adjacent to the Dbayeh Marina zone where within the next few years several mega-projects co-owned by Majid Al Futtaim of Arab Emirates shall turn the sea-front into an upscale residential, commercial and recreational area. Investing in a value added property, in the form of fully serviced and maintained hotel apartment that may be ready occupation within a very short notice. Vacationing free of charge for up to 2 months per year in a hotel setting, located midway between Downtown Beirut, Jounieh and mountain resorts, in a commercial and recreational zone. Investing in a property that optionally may generate yearly net income of 6.54%12.10% of the initial investment, in addition to the expected increase in its real estate value within the next few years. Buying an hotel apartment at almost the same price as what is currently being offered in anonymous residential buildings with comparative quality Investing in a property with a well known address, an important commercial goodwill, well established international marketing partners, a valuable portfolio of long dated customer-friends and repeat guests

22 OPTIONAL USE OF APARTMENTS 1. TO BE USED UNIQUELY BY THE OWNER OF THE DEED OR HIS FAMILY MEMBERS, ANY TIME OF THE YEAR. COMMON AREA CHARGES AND MANAGEMENT FEES, SHALL BE APPLICABLE, PROPORTIONAL TO THE VALUE OF THE PROPERTY. 2. TO BE USED BY THE OWNER OF THE DEED OR HIS FAMILY MEMBERS, FREE OF CHARGE, FOR UP TO TWO MONTHS PER YEAR AND THE REMAINING PERIOD OF THE YEAR TO PARTICIPATE IN THE RENTAL POOL WITH RETURN ON INVESTMENT VARYING FROM 6.54%-12.10% ACCORDING TO THE REALIZED OCCUPANCY RATES.

23 TYPES & PRICE RANGE OF APARTMENTS 1. TWO-BEDROOM APARTMENTS 13 Apartments varying in size from square meters Price range: US$ 65,000-89, THREE-BEDROOM APARTMENTS 10 Apartments varying in size from square meters Price range: US$ 101, ,000

24 YEARLY COST OF OPERATIONS & MANAGEMENT The yearly estimated cost of operations shall be variable according to actual rates of occupancy. The following is a summary schedule of the main cost centers: 1. Salaries and Social Security charges: US$ 10, Cost of utilities, (EDL and private electricity generators) and water expenses: US$ 20,000-33, Maintenance and supplies US$ 4,800-8, The estimated total cost of operations, including insurance, taxes, marketing and miscellaneous expenses: US$ 48,850-67,850 Reserve for replacement: 4% of gross revenue Management fees: 5% of the yearly gross revenue +10% of gross profit as incentive fees

25 RETURN ON INVESTMENT 1. LOW RISK OPTION: at extended stay promotional rates BASED UPON CURRENT EXTENDED STAY MARKET RATES Up to two months / year free stay option: 40% occupancy: 6.54% 50% occupancy: 8.43% 60% occupancy: 10.29% 70% occupancy: 12.10%

26 The real estate boom, which started in 2002, was mainly directed towards Solidere and the surrounding area. This was the first phase. The second phase of the boom spilled over into the suburbs of Beirut, but the third phase of the boom is now heading in the direction of Metn, Dbayeh and Kesrouan. Dbayeh is now the third phase, which really began in , and interest in the area is expected to increase further. Mario Mhanna, general manager of Patrimoine Conseil, Lebanon Opportunities, April 2006