Section 1

Summary

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[ap_tab title=”Executive Summary”]

[su_dropcap]S[/su_dropcap]ignature Investments Montenegro D.O.O. (“SIM”), which owns c. 108,000 m2 parcel of freehold land and controls additional adjoining unique c. 400,000 m2  parcel overlooking Dobrec Beach and the majestic Adriatic Sea, is raising €20 million of new financing to develop Auberge Resorts Montenegro―a luxury resort and branded residences project. The project will be managed by Auberge Resorts Collection (“Auberge”), an award-winning lifestyle brand and hotel operator, which will be making the project the cornerstone of its European expansion. SIM and the project consortium have created a compelling master plan to develop this unique property.

Business Model: The branded residences will be sold to retail investors (base case price of €5,500/m2), who will earn an attractive yield on their respectively owned units (based on an assumed at the fully-operational 46% annual occupancy rate) plus enjoy not only Auberge’s resort facilities but the project’s complementary components (wellness, performing arts, town center).

Phase 1

  • Luxury resort
  • Marina/beach facilities and
  • 148 branded apartments and villas

Apartments and Villas to be sold off-plan and 100% of the units will participate in the Rental Pool Program, projected to yield & > 9% to owners.

Phase 2
a number of synergistic components:

  • Town Square
  • Wellness Center
  • Performing Arts Center

Creating an Eco-system for resort guests and visitors and deliver higher occupancy and year-round sustainability.

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[ap_tab title=”Location”]

Located in Herceg Novi, western part of Lustica Peninsula, overlooking the Adriatic

Accessible by road via three international airports and only a 30- minute drive from the well-known Porto Montenegro Marina:

  • Tivat (16 miles)
  • Podgorica (66 miles)
  • Dubrovnik in neighbouring Croatia (45 miles)

Area attracting international 5-star / luxury operators such as the Four Seasons, One & Only , with the landmark Porto Montenegro already established since 2012.

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[ap_tab title=”Investment Highlights”]

Potentially attractive returns for the investors: est. 3.4x MoM within a 6-year investment horizon

  • Auberge Resorts Montenegro will stand out in a fast-growing market, driving premium pricing, robust profitability and accelerated sales of branded residence units.
  • Rental Pool Program, which covers 100% of branded residence units, delivers attractive ~9% – 12% yield to unit owners, on an unlevered basis net of carrying costs, supporting off-plan sales to generate near-term development finance and leveraged equity return.

Attractive Market Dynamic

  • Montenegro is experiencing significant growth in its nascent tourism/hospitality sectors.
  • Over 200 days of sunshine annually, peerless sailing conditions, dramatic mountain ranges plunging vertically to Blue Flag waters, and pristine beaches.
  • Growing number of global tourists via popular cruises that stop along the coast from Venice to Greece. Furthermore, as airlines offer increased service to the region and visa regulations become more favorable, the number of visitors arriving annually continues to improve.

High Quality Project Consortium

  • Brings experience, innovation, and skills to project execution design, development, construction and sales.
  • Auberge Resorts Collection is distinguished as a strong, global luxury brand, with an experienced operation and execution team.
  • Auberge hotels, resorts and residences are characterized by a set of common elements: intimate, understated elegance; magnificent natural settings; inspired cuisine utilizing the very best regional ingredients; spa experiences to enhance one’s well- being; and attentive yet unobtrusive service.

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[ap_tab title=”Returns Summary”]
Returns Summary for the €20m Financing Investment

  • Apartments will be sold to retail investors at price of €5,500/m2 (”Base Case”) and who will earn a yield on their respectively owned units based on the assumed Auberge’s 46% annual occupancy rate (when the property is fully operational in year 8)
  • The €20m financing to be structured in a 3-year mezzanine loan with 12% annual cash interest with a 20% stake in SIM (anticipated to be realized when the Sponsor exits their investment in SIM anticipated in year 6).
  • The Project has a current estimated value of €38m, thus the €20m financing is approximately 1.9x covered

All returns are estimated based on Sponsor’s business plan and forecasts AND Cushman & Wakefield opinion of value and market valuation.

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[ap_tab title=”Indicative Terms”]Indicative Terms for Mezzanine Loan

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[ap_tab title=”Indicative Structure”]

Indicative Structure

Present  shareholders,  SGIRE  Investment  Ltd.  and  Eden  Rock  Management  (“ERM”),  USA,  will  establish  an  investment  vehicle  (SIM International) in a jurisdiction which will allow for the agreed respective terms and conditions.

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[ap_tab title=”Sponsor Consortium”]

Sponsor Consortium

SIM’s consortium consists of a ‘core’ experienced proven team, whose members (see below) are reputable firms with deep international expertise in their fields. This list shall grow further as the project develops (e.g., ambience creators, operators for each business cluster, international marketing agents, and other specialists) as the project requires.

Key Members

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[ap_tab title=”Sources and Uses”]Sources & Uses Through Year 6

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[ap_tab title=”Projected Returns”]

Project Timeline from presentation

Auberge Resorts Montenegro construction is planned to be completed within three years of funding, with its business components opening by Q4 2018. Signature Group, along with Mace D.O.O. will oversee the project management to ensure effective time and resources allocation throughout the development stage with Auberge reviewing the architecture conformity as per its requirements. The key steps are outlined below:


Key Milestones Achieved

  • 108,000 m² land with freehold title has been purchased, and the long term lease of the adjoining government and (~400,000 m²) with beach is agreed in principle with the municipality.
  • Hotel Operator LOI signed with Auberge Resorts Collection.
  • LW Design Group has completed the concept master plan, based on the Geodetic Survey and is in advanced stages of designing individual business clusters.
  • Mace D.O.O. appointed as project consultants and agreed for project construction management engagement.
  • Submissions made to municipality for project permits and approvals.

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Executive Summary[/ap_toggle]

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A – Master Plan
B – Compelling Investment for Owners of Apartments & Villas
C – Resort[/ap_toggle]

[ap_toggle title=”Section 3″ status=”close”]Montenegro, the Country[/ap_toggle]

[ap_toggle title=”Section 4″ status=”close”]Project Consortium[/ap_toggle]

[ap_toggle title=”Section 5″ status=”close”]Competitive Landscape[/ap_toggle]

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[ap_toggle title=”Appendix” status=”close”]Additional Information[/ap_toggle]

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