Content:1. Project2. Location3. Development ideas4. Market outlook5. Investment opportunity
1. ProjectPlease find ideas for the development andcompletion of an unfinished hotel in Kaunas,Lithuania.Project consist from two phases: I’st – hotel,II’nd - officesFor the I’st phase is planned to install:• A wing (left) 144 room hotel• B wing (right) up to 7 000m2 for hostel or office, with a possibility to equip spa, amusements, etc.• 365 (147 on ground, 218 underground) parking places on site; 2 400 parking places within 200m of the building;The building is comprised of two 10 floor wings(26 000 m2 gross area), joined by a mid-section.The mid-section is planned to be demolished.The two remaining buildings will share groundlevel and underground parking.
1. Project• The primary purpose of this building (as a hotel) is 40% completed.• It is situated on an 8 497 m2 land plot, leased from the state for long term period.• An architectural study by G.Natkevičius and Partners has been prepared. Pre-design solutions and 3d drawings are also available.• Kauno arka, UAB (KA) is a special purpose vehicle, which owns the unfinished hotel building.• The building has been bought from equity and the company has no liabilities to the banks or other financiers.• Kauno Verslo Rumai (KVR) is the owner of 100% KA shares. KVR was established as a development company in 2004.• KVR also owns two plots of land (4 398 m2 and 2 992 m2) adjacent to the hotel. The company plans to develop in II’nd phase offices and commercial premises.• KVR is owned by two corporate shareholders from Lithuania and the Netherlands with 5 other private shareholders also involved.
2. Location – Kaunas, Lithuania Distances from Kaunas: • Vilnius 100 km • Klaipėda (sea port) 220 km • Riga (Latvia) 265 km • Warsawa (Poland) 405 km Information about Kaunas city: • Wikipedia http://en.wikipedia.org/wiki/Kaunas • Kaunas city http://bit.ly/gbXH3W • Invest in Kaunas http://www.invest-in-kaunas.lt/
2.Location – Kaunas centerKaunas central district – closer view Kaunas central district – satellite viewAn interactive map can be found at the following link: http://bit.ly/eccZuZ (Google maps) orhttp://binged.it/omNFWQ (Bing maps)Location summary:• central district of Kaunas.• borders to 6 lane central city street.• Waterfront.• distances: o 200 meters - Main pedestrian street. o 300 meters - Sports arena and park on the island of the river Nemunas. o 1.0 km - City council. o 6.5 km - Access to national motorways Vilnius - Klaipeda and Via Baltica (Warsaw - Tallin). o 15 km - Kaunas airport → http://www.kaunasair.lt/index.php?lang=en.
2. Location - SurroundingsVDU - University Medical academywww.vdu.lt www.kmu.ltPedestrian street Shopping centerhttp://goo.gl/XxGM3 www.akropolis.ltK.Mindaugo str. Parking6 lane road for 2 400 carsIsland park “Zalgiris” arena www.zalgiris.lt
3. Development - IdeasMain functions of the building:• Left wing – hotel and reception.• Right wing – student house, hotel, hostel, office, spa, restaurants, conference hall, reception.• Underground and ground level parking will serve both buildings.• Hotel rooms and reception will be equipped according to operator requirements.• Building construction is predefined for ~23 m2 rooms, which can be joined together for bigger suites.
3. Development – Space utilization Left wing Right wing Total Number Size, Net area, Gross Number Size, Net area, Gross Number Net area, Gross Floor Function of rooms m2 m2 area, m2 Function of rooms m2 m2 area, m2 of rooms m2 area, m2 10 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 9 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 8 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 7 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 6 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 5 ho 24 22 528 865 hs 22 22 484 765 46 1 012 1 630 4 tc tc - 3 re, off, ofc, tc 735 865 off 650 765 1 386 1 630 2 re, off, ofc, tc 735 865 off 650 765 1 386 1 630 1 rc, off, tc 735 865 off, cf, re 2 350 2 765 3 086 3 630 0 tc - sp, tc - -Total 144 5 374 7 785 132 6 555 8 885 276 11 929 16 670 Function list: ho Hotel cf Conference hall, ballroom hs Hostel re Restourant, bar, amusement sh Student house rc Reception ofc Office - cabinet layout sp Spa off Office - free layout tc Technical, other purpose
3. Development – Layouts Double room solution (5-10th floors) Single - double room solution (current situation, 5-10th floors)
3. Development – Parking • Parking entrances will be from two adjacent streets for easy access from any direction. • 365 (147 ground level and 218 underground) parking places on site. • 2 400 parking places in 200m reach;
4. Market outlook - Lithuania • Territory: 65,300 km2 • Common borders with: Latvia Belarus Poland Russia (Kaliningrad Region) • Population: 3.4 million 84% of Lithuanians 7% Polish 6.5% Russians • Capital and biggest cities: Vilnius (capital): 550,000 Kaunas: 320,000 • State language: Lithuanian • State Government: Democratic Republic • Religion: 80% of Roman Catholics, 5% OrthodoxMore information about country could be found at http://www.investlithuania.com/
4. Market outlookMacroeconomic outlook and forecastsIn the first quarter of 2012 Lithuania’s real GDP increased by 3.9 per cent on an annual basis. Taking into mind unfavorableeconomic climate in Europe, economic growth in Lithuania remained rather robust. Good export diversification and increasingefficiency at company level were important growth factors. Meanwhile domestic demand was strong and contributedsignificantly to economic development.On the one hand, GDP growth was slower than in 2011. On the other hand, it was higher than expected, and the situation inmain economic sectors remained stable what gives ground to more optimistic expectations about the nearest future. Sectorsoriented to domestic demand demonstrated the fastest growth in the first quarter of 2012, i.e. value added in constructionincreased by 10.8 per cent year-on-year, IT and communications by 6.5 per cent, real estate operations by 5.6 per cent,manufacturing industry by 5.0 per cent, retail and wholesale trade, transport and logistics, accommodation and catering by 4.9per cent. Other sectors grew slower than the whole economy on the average.Despite the ongoing euro zone crisis, Lithuanian exports grew fast both to Western and Eastern markets. At the beginning of2012, exports to European Union countries increased even faster than exports to CIS countries. Regardless lower demand inmost of euro zone countries (except Germany), Lithuanian-origin exports remain competitive in terms of prices. Source: SEB, 2012
4. Market outlook Hotel market in Lithuania vs Europe Number of places to stay in hotels and campsites per 1 000 inhabitants. Lithuania Lithuania <=10Source: Eurostat
4. Market outlook - Hotels Nights in hotels - Country Nights in hotels - Kaunas400 000 30 000350 000 25 000300 000 +63% 20 000 +46%250 000 15 000200 000 10 000150 000 -22%100 000 5 000 2005M04 2005M10 2006M04 2006M10 2007M04 2007M10 2008M04 2008M10 2009M04 2009M10 2010M04 2010M10 2011M04 2006M01 2006M07 2007M01 2007M07 2008M01 2008M07 2009M01 2009M07 2010M01 2010M07 2011M01 2011M07 2012M1 Nights in hotels - Country 12m moving average Nights in hotels - Kaunas 12m moving average Source: Lithuanian statistic department
4. Market outlook - Hotels Nights spent in Kaunas - Room occupation in hotels - 4q country share moving average11.00% 60.00% Park In Kaunas opening 232 rooms10.00% 55.00% +25% of Kaunas market 9.00% 50.00% 8.00% 45.00% 7.00% 40.00% 6.00% 35.00% 5.00% 30.00% 2005M04 2005M07 2005M10 2006M01 2006M04 2006M07 2006M10 2007M01 2007M04 2007M07 2007M10 2008M01 2008M04 2008M07 2008M10 2009M01 2009M04 2009M07 2009M10 2010M01 2010M04 2010M07 2010M10 2011M01 2011M04 2011M07 2011M10 2012M1 2012M4 2006Q3 2003Q1 2003Q3 2004Q1 2004Q3 2005Q1 2005Q3 2006Q1 2007Q1 2007Q3 2008Q1 2008Q3 2009Q1 2009Q3 2010Q1 2010Q3 2011Q1 2011Q3 2012Q1 Nights spend - country share 12m moving average Occupancy rate of rooms - country Occupancy rate of rooms - Kaunas Source: Lithuanian statistic department
4. Market outlookKey facts• Kaunas city has 355 th. inhabitants, placed in centrum of Lithuania.• Near Kaunas crosses two main motorways: Via Baltica (Warsaw – Helsinki) and A1 (Vilnius – Klaipeda)• Total amount of keys in Kaunas hotels – 1152• Total number of hotels - 24• Recent developments in Kaunas: – Kaunas City ** (44 rooms) started in August 2011 – Ibis ** class hotel (125 rooms, 3 143 m2) in March 2012
5. Investment opportunityWe would like to discuss your investment goals, therefore no firm scenariohas been defined.Possible development scenarios:• Development of 168 room hotel (left corpus) only• Development of 168 room hotel and 138 room student house/hostel• Development of 300 room hotel – Additionally some space could be installed for conference hall, office, amusement, spa• Complex development of hotel and adjacent land plots (~0,7 ha) for hotel, office and/or housingFinancially could be considered:• Joint venture by share acquisition and/or equity raising• Sale of shares or assets• Convertible bond debt
Contacts: Vaidas Repečka Development adviser +370 686 46800 email@example.com http://lt.linkedin.com/in/vaidasjrepeckaDisclaimer: The information contained in this presentation is for information purposes only, and may not apply to your situation. Theauthor, publisher, distributor and provider provide no warranty about the content or accuracy of content enclosed.Neither the Presenter nor Author shall be liable for any loss of profit or any other commercial damages resulting from use of this guide. Alllinks are for information purposes only and are not warranted for content, accuracy, or any other implied or explicit purpose