Luxury houses and golf course in Sibiu / Hermannstadt in Romania

Romania's data: Population:

Total surface: Vastest city: Religion: Politic:

Country member of:

22.303.552 inhabitants approximately. Compared to Germany: 82.422.299 inhabitants. Compared to Spain: 40.397.842 inhabitants. 237.500 km2 Bucharest, country's capital with 2.200.00 inhabitants. 90% Christians and 10% ethnic groups. Democratic government with a Parliament (2 Chambers). Democratic elections called every 4 years (next 2008). NATO, European Council, Organization for Security and Cooperation in Europe, WTO, International Monetary Fund, World Bank and other organizations. Romania joined the European Union in 2007

Economy in Romania: GDP growth: Gross domestic product:

GDP per person: Unemployment rate: Foreign currency stocks:

8.1 % in 2005 (Germany 1.7% and Spain 2.6%) 184.000 millions (in 2005) Compared to Germany: 2'504'000 millions (in 2005) Compared to Spain: 1 '029'000 millions (in 2005) 7'700 US dollars

6. 5% (Germany: 11. 6%; Spain: 10. 1 %) 22.7 thousand million/ debts 29,47 thousand million/ Deficit 6.77 thousand million.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Germany has a deficit of 3 '529 thousand million Spain has a deficit of 1 '231 thousand million

Languages:

Romanian (Latin origin). Lots of people speak English, French and German too.

Sibiu / Hermannstadt: the great city Geographic location: Hermannstadt is in the southeast area of Siebenburgen, by the river Zibin, and it is in 45°47 North latitude (with an altitude similar to Lyon's) and in 24°05 West longitude (in line with Athens), near to the geographic centre of Romania. Height above the sea level ranges from 415 meters (in the lowest place of the city) to 431 meters (in the highest place of the city). Sibiu is the seventh biggest city in Romania. European motorways E 68 (Arad-Hermannstadt-Kronstadt (Brasov)) and E 81 (Klausenburg (Cluj))-Hermannstadt-Pitesti-Bucharest) cross Hermannstadt. This city is also an important railway intersection and it has an international airport with scheduled flights to Germany, Austria and Italy.

Population: City's population is about 170.000 inhabitants. Its ethnic structure is: 95% Romanians, 2% Hungarians, 1,6% Germans, 1,4% other population groups. Most of the people profess Orthodox Christianity; only a 4% are Protestants or Catholics. 25% of the population is more than 50 years old. 18% of the population has either a Bachelor's degree or higher education qualification Sibiu is the only Romanian city with a German mayor, who was elected with 99% of the vote in the last election.

Climate: The city is a continental area and it is near the mountains so it has thermal influence. The average annual temperature is 8. 9°C. The highest temperature (37. 6°C) was recorded in Boita in 1949 whereas the lowest (-34. 4°C) was recorded in Hermannstadt in 1888). In winter there is not any harsh storm, spring is pleasant, summer is normally cool and autumn usually arrives late. The average annual precipitation is 623 mm; the lowest levels are reached on February and the highest on June. Climate, relief and land structure make Hermannstadt a fertile place for vegetation and fauna. The city is surrounded by oak trees and holms oak forests. The temperatures correspond for instance to those from Zurich/Switzerland and the amounts of precipitation for instance those from Barcelona/Spain.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

History: At the beginning of the XX century Hermannstadt was one of the most developed cities, as well as a lively place. It was the third city of the Austro-Hungarian Empire with electric lighting and the second with tramway. The first cinema opened in 1909 and the first public toilets were made in 1910. World War I stopped urban, economic and social development. The union of Siebenburgen with Romania (1st December 1918) came after the war, and demographic country data changed too: in 1920 there were 32,748 inhabitants; in 1925 Hermannstadt had 44'643 inhabitants (23,199 were Germans). City name changed officially in 1919 from Hermannstadt to Sibiu, and streets received Romanian names. Deportation of Saxons to the USSR started in 1945, at the end of World War II. 2 .800 German people were deported and most of them never came back. Communist authorities kept the town centre intact, except for some places, and Hermannstadt became in 1968 the capital of the same name province.

Tourism: Sibiu and its surrounding area offer a lot of possibilities to tourists: the lovely old centre of the town, several museums, vast parks, historical churches, and lakes with curative salt water, rafting, ski resorts, trekking, downhill races, tennis, swimming, fishing, hunting, paragliding and much more. Sibiu is the 2007 European Capital of Culture and more than 1 '000 events are going to take place there. At present Sibiu receives about 100,000 tourists yearly, and it is expected that the number will rise to 500'000 this year. Pope's visit is planned too. The journey can be made through the Sibiu's international airport and its facilities, which are being enlarged in a big way at the moment. There are international links: daily flights to Munich, Stuttgart, Dusseldorf, Vienna and Italy. The most important airline from Siebenburgen, called Carpatair, offers daily direct links to Munich, Bergamo and Treviso and three flights to Bologna, Verona, Rome and Stuttgart everyday. Other destinations available: Paris, Florence, Venise, Ancona, Turin, Naples, Dusseldorf, Vienna, Rome and Verona. TAROM is the Romanian national airline and it offers five flights to Munich and Bucharest weekly. National flights to Bucharest and Timisoara are available too.

Infrastructure: Sibiu is in the centre of Romania. The city is well communicated by several approaches through main roads, wich are in very good conditions. There is a motorway in process, so that the traffic of the centre of Bucharest pass to the north of the city. A new motorway is planned, from Bucharest to Sibiu and Timisoara. The access to Sibiu can be also gained by railway and by air (international airport). The old town has been almost completely cleaned and its beautiful pedestrian zones and its well-conserved monuments are admirable.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

In Sibiu / Hermannstadt there are 38 hotels, motels and guest houses with 2,000 beds. There are 3 four-star hotels at your disposal (Romancer Kaiser, Palace Dumbrava and Continental) and several three-star hotels, like the Hotel Ana and the Hotel Silvia. There are two five-star hotels that will open in 2007; one of them belongs to an international chain of hotels called RAMADAN. Several international cuisine restaurants, live music bars and discotheques will make your stay more pleasant.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

In Sibiu there are also several universities with different lines of specialty, so there are a lot of young people with high intellectual level. A lot of foreign companies have chosen this city for their central offices because of this location.

In Sibiu there is no unemployment, there is full employment! Health cares are covered by two big hospitals and a private one. Shopping can be done in supermarkets like Metro, Real, Galaxy Market (Media Market), Baumaxx, a new shopping center and many more little shops. More shopping centers have already been planned.

Investments: Reasons to invest in Sibiu: • • • • • • • • • • • •

It is in the centre of Romania and of European southeast too (European corridor). Hermannstadt / Sibiu is in the way of many important roads and at the same time it woks as a railway connection between the East, West, North and South of Romania. International connection by daily flights to Munich, Stuttgart, Dusseldorf, Vienna, Italy, etc. Industrial regions with infrastructure included (power, water, access road...) The German economy is by far the leader in this city. Prevailing German influence for 850 years Q employees are German speakers Q University of Hermannstadt. Sibiu is an attractive place with attractive surroundings: mountains (ski), lakes (swimming), culture (music and art) and bars. General German Consulate from Hermannstadt. Romanian-German foundation from Hermannstadt. Open Town Hall Q Administration branch 2007 European Capital of Culture. World important enterprises like Siemens, Continental, Metro, Real, Deutsches Kugellager, etc are settled in Sibiu,

For further information visit the website: www.sibiu.ro (also in German).

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

PROJECT: Luxury houses and golf course in Sibiu / Hermannstadt in Romania Present situation: At present there are three golf courses in Romania. One of them is in Breaza, to the North of Bucharest 90 km far from the capital. Another golf course is the Diplomatic Club, in the northern boundary of Bucharest. The third course is in Romania centre, 75 km far from Sibiu, in the mountains. Golf courses in Romania have only 9 holes; there are not courses with 18 holes. Furthermore, these golf courses do not have the complete required infrastructure like hotels, for example. The only exception is the Braeza's one, that has a small hotel with 4 apartments, 9 holiday-houses, a restaurant and 2 tennis courts. The Diplomatic Club has 8 uncovered tennis courts, 2 covered tennis courts and 2 swimming pools. Tennis courts are quite old-fashioned. Romania's first golf course was Diplomatic Club (founded in 1929). There is a new golf course project in south-eastern Bucharest.

Existing golf courses

New golf course in Sibiu

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Location: Sibiu/ Hermannstadt is in the centre of Romania. It is a very well-communicated city with important public and private transports. Because of this reason Sibiu has a vast influence area. Climate make possible to play golf approximately from April to October, approximately. Tourist attractions and infrastructure meet golf courses customer requirements. The Sibiu Town Council is very interested in the golf course installation and it would support the project. The plot chosen for building the golf course is in the northeast of Sibiu, approx 5 km far from the city. It is very well-communicated thanks to the new motorway. Despite this, traffic cannot be heard and road cannot be seen from the plot because it is behind a hill. There are three different accesses to the site: one from a village called Bungard and two more from the highway to Daia. All these accesses are approx. 2 km far from the golf course. Power, gas and water are near (1 km approx). Sewage will have to be wiped up in a septic tank, because there is not any sewer system yet. The plot borders on a stream and on two small lakes with fishes. From two sides of the plot you can enjoy the beautiful views of the Southern and Eastern Carpats.

Project data: • • • • •

Construction of approx 350 high quality luxury houses. Golf course with 18 holes. Hotel resort (at least a four-star hotel), 100 rooms approx covered and uncovered swimming pool SPA and related services. Tennis courts and bid for kids.

Resources: Luxury houses will have the use of, at least 1.000m2 of ground or more (in this region the minimal plots surface is about 500 m2/per house). With a total of 350 houses it amount to a whole surface of 35 ha. The golf course, with its infrastructure, needs an approximate surface of 75 ha. The hotel resort will have approximately 4 ha. Tennis courts and leisure spaces will need 6 ha approx. The development of the communications (region / roads) will require 15 ha approx. Total surface is about 135 ha/ 1.350.000 m2.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Carrying out the project: Each golf course must have 300/400 members at least, to make sure its profitability. To reach this number we will sell to each new owner, automatically, a golf course share. The price of this share is incorporated in the building price. Therefore, by the time all the plots will be successfully sold, there will be approximately 350 members of the golf course, so its building expenses will be covered. Luxury houses are built high quality prefabricated homes from Germany or Austria (for example: ELK, Hanse, and Kampa). High quality prefabricated homes, fast construction, definite construction expenses, security against earthquakes, acoustic insulation according to the last ED directive and a several-years warranty from an important company are assured. It does not need previous financing. Prefabricated homes builders will set one or two houses up as a sample, and customers will make an idea of their appearance. Customers can choose a house between several models. It is possible to build a house by private plans too, with an extra price. Customer will have to offer either a bank warranty or he will ask to his bank for a financing. The prefabricated home producer will be paid only after the complete construction of the house. We will look for a prominent international hotels group to make and finance the project of the hotel resort. This hotel will also serve as a golf club so, due to the friends/guests of the owners, it will have more sales and more customers. This way the property developer will only pay the project expenses, including license and communications development. When he acquires the license, the property developer can ask for a bank credit. The purchase of the land has to be paid by the property developer.

Plausibility and economic effects to the region: Golf courses market potential in Romania is very high. There are only three golf courses, and only one of them can be considerate as a "professional" course. Furthermore, it there is not any golf course in Romania with 18 holes and its respective infrastructure and hotel. Golf request in Europe is either high or very high, it depends of the country. From our point of view, Romania has a high request but it is not supplied. Golf market according to development phases: Classification Countries with the highest golf development Countries with a high golf development Countries with golf development Countries with inminent golf development Countries with small golf development

Examples Ireland, Island, Scotland, Sweden, Canada, USA England, Denmark, Norway, Finland, Luxembourg Austria, Netherlands, Switzerland, France, Belgium Germany, Spain, Portugal, Italy, Slovenia, Czech Republic, Hungary, Greece

Inhabitants/ 18 holes from 4'000 to 25'000 from 25'000to70'000 from 70'000to 140'000 from 140'000 to 500'000 morethan500'000

Different European countries compared: Country Sweden Denmark England Norway Finland Netherlands Austria Switzerland Spain Germany

Year 2002 2000 2002 2002 2000 2000 2002 2002 2002 2002

Number of members 503 '786 108 '922 1'214'749 84 '500 76'522 160 '600 66 '707 39'883 195 '096 399'016

Population 8 '940 '788 5'000'OOOapprox 59 '778 '002 4 '552 '000 5'000'OOOapprox 5'000000approx 8'169'929 7 '30V 994 40 '077 '100 82 '440 '300

Golfers % in total population 5,63% 2,18% 2,03% 1 ,86% 1 ,53% 1 ,00% 0,82% 0,55% 0,49% 0,48%

Number of golf courses 418 131

2.591 115 97 130 114 76 263 619

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Golf demand: Important canons to select the golf club (affiliation): • Economic aspects. • Distance (time). • Course quality and game possibilities. • Extra aspects (life at the club, clubhouse, gastronomy) and other offers in the surroundings. • Organization of the golfers' service.

Important canons to select golf journey destination: • Good weather. • Golf course and environment attraction. • Golf course prices and other offers in the surroundings.

Based on comparative values above, we consider that, regarding to golf courses, Romania is not supplied enough. In our opinion, the golf demand in this country has these approximate numbers: Number of golf courses: Number of members: Number of members:

30 golf courses approx. 22 '000 members approx (it is a 0. 1 % of the total population) 733 members per golf course approx.

Profitability of the golf course depends on many aspects (source GTC 2001): • • •

Minimal number of members needed. In this case this number is ensured by the sale of golf shares together with houses. 18-holes facilities make its situation more propitious than 9 or 27-holes courses. This circumstance exists on this project. Golf courses near the urban zones are more profitable. Sibiu has a big influence area because of its central situation. In 325 km approx (road kilometers) there live more than 5.000.000 inhabitants.

Comparative values: plots prices in the region of Sibiu (November 2006 situation): •

Industrial lands to urbanize, near the airport, first-line of the road, communicated Euro 100.-/m2

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

• • • • • • •

• •

Industrial lands to urbanize, near the airport, second-line of the road, communicated Euro 45.-/m2 Lands to urbanize in Deva (approx 3 km far from the centre), communicated Euro 60.-/m2 Lands to urbanize in Cisnadie, approx 12 km far from Sibiu, communicated Euro 28.~/m2 Lands to urbanize in Cisnadie, approx 12 km far from Sibiu, not communicated Euro 10.~/m2 Lands to urbanize in Saliste (Begdorf), approx 35 km far from Sibiu, not communicated Euro 5.-/m2 Lands to urbanize in Sibiu in the centre of the town, communicated Euro 1 '300.-/m2 Lands to urbanize in Sibiu (old factory), communicated Euro 400.~/m2 Lands to urbanize in Timisoara (old factory), communicated Euro380.-/m2 Commercial lands to urbanize in Sibiu, bordering the city, communicated Euro 35.~/m2

Demand potential: Important points of the golf course location and its corresponding demand: • • • • • •

Proximity to important tourist places with good infrastructures and with tourist offers for people that do not play golf. Good hotel and restaurant services, with four and five-star hotels. Attractive landscape. Good communication by the road. Possibility to play golf from May to October. Possibility to connect to other golf facilities.

Sibiu's location fulfill all these requirements. What is more, the rest of golf courses is easily accessible from Sibiu (these courses are from 80 to 300 km far from the city).

Economic profitability of the golf course: The full project have to be made by two societies: one to build and exploit the golf course, other to process the construction and communication development for the houses. A Romanian society was created last November in Sibiu; its commercial name is: S.C.SWISSINVESTS.R.L

Now the only way for a foreign individual or a legal entity to buy lands and buildings in Romania is through a Romanian society. Its members are owners of 100% of the shares.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Members: The minimal number of the golf course members is ensured by the sale of golf shares together with houses.

Green fee / Turnover: Turnover in green fee field is secure by the golf club members and their annual quota. It is also necessary to get daily visitors. These visitors will be from the golf course hotel and from the region of Sibiu. To get daily visitors we have to offer an active publicity, good customer service, staff kindness, well-preserved golf facilities and other offers like tennis, SPA, infantile parks, etc.

Business plan to golf course exploitation: It is necessary to make a detailed business plan, with its expenses and its revenue. This plan will permit to confirm the economic profitability of the golf course and to specify social quotas and green fee expenses. This plan must be made by specialists, taking other golf courses as an example.

Photos:

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

Valuation and market prospects: After years of communist repression headed by a dictator, Romanian people want to be definitely FREE. Freedom in Romania means to expend and status symbols. There is a huge consumerist obsession and people buy luxurious goods as cars, cellular telephones, expensive clothes, jewelers and others. Romanians want to live in a beautiful and fine atmosphere. Time of grey buildings and industrial areas is over. Like in other countries, distance between rich and poor people is larger. Last years, with the explosive economic increase, a lot of people have raised big capitals. Important international societies have noticed this fact and have set up successfully in Romania. These companies are, for example: Carrefour, Real, Metro, Baumaxx, Siemens, Alcatel, Continental, IBM, Loreal (Romania has become its second market in Europe) and many more. Economic effects in the country would complete and extend the existent tourist attractions. 500,000 predicted tourists want an offer of high quality activities. A professional golf course will contribute and will create new synergies. A golf course is attractive for people with high purchasing power. These tourists will also buy houses as a second property for holidays. This way, the region will acquire more regular customers. That also means more revenue for Town Councils and an increase of the employment. So the whole country economy will benefit with this situation. Sibiu City Council is very interested in the golf course installation and it would support the project resolutely. Romanian people, especially from Sibiu region, are desirous for another positive economic development and they want to do one's utmost. People from Sibiu region are of German extraction and their mentality and diligent spirit are a proof of this origin. In Romania corruption does exist, as in all countries, and also juridical uncertainty; but corruption appears only in big cities and in tourist holidays resorts in Black Sea. In rural regions like Sibiu corruption is in a "normal" European level. New Constitution assures and applies juridical certainty, as requested in European law. In our opinion, Sibiu has the abilities for a successful implantation of the golf course with luxury houses. There are a lot of potential possibilities.

Extract from a newspaper article: [...] Interesting data for investors: new Constitution protect private property and, what is more, it assure private property. It also makes easier for European people to buy buildings. Acquiring rustic lands at cheap prices and turning them into holiday residences with a golf course. That is what Aga Khan made in Sardinia: he converted the Emerald Coast in one of the most expensive holidays region in Italy.

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]

See you soon in Sibiu / Hermannstadt!

Sedasma S.L. Avda. San Augustin 164, 07839 San José (Ibiza/Baleares) Tel: 971 34 89 39 Fax: 971 34 60 17 www.sedasma.com - Mail: [email protected]