INVESTMENT IN SPARTA, GREECE - FIRST CLASS BOUTIQUE HOTEL

The investment plan that is presented, in brief, on this webpage refers to the renovation and conversion of a preservable (listed) building in the historic city of Sparta, Greece into a first class boutique hotel of nine luxury rooms, with restaurant and cafeteria.

The property is a preservable three storey building (with its adjacent supportive storehouse), on a two sided plot of 894.30 m². It is located within the urban plan of the city of Sparta, at the junction of two of the main the roads of the city, three blocks away from the central square of the city.

The covered surface of the plot totals 351.80 m². The rest of the plot, a surface of 542.50 m², includes a yard and two peripheral fenced gardens with orange trees, lemon trees etc. The total covered space (on three levels) is 856.69 m².

The building was completed in the year 1859, one of the first buildings of the new city of Sparta, and it is characterized as a preservable monument by the Greek Ministry of Culture.

With the sole purpose of the conversion and operation of the above mentioned building into a first class hotel, there has been founded a Societe Anonyme, with a sole shareholder the above mentioned owner of the building. The share capital of the company of 60,000 € has been paid in full.

For the conversion of the above mentioned building into a hotel, the following licenses were required as a preliminary:

All the above have been undertaken and the licenses have been issued in the name of the Legal Entity.

The investment falls under the favorable provisions of the New Development Law 3908/2011. The law refers to subsidizing certain investments, from 30% to 50% of the project’s total cost, depending on the province where the investment resides. The province of Laconia, due to its low income per capita, gained the maximum percentage of 50%. The New Development Law has been active since January 1st, 2011.

The cost of investment comes to the amount of 2,068,770 € and is analyzed as follows:

Building Works	48.2%	996,997
Electro-Mechanical Equipment	24.6%	508,936
Landscape Design	8.0%	166,116
Infrastructure	1.9%	38,963
Hotel Equipment	17.3%	357,758
TOTAL	100.0%	2,068,770

At present, the owner of the building is indented to proceed to an increase of the share capital of the company, by contributing the building itself. Since the contributor is simultaneously a share holder of the company, the law states that an evaluation of the building is required, which is performed by a state appointed committee (Committee of Article 9) and an approval of the evaluation by the provincial authorities. All the above have been undertaken in favor of the Legal Entity.

The Committee of Article 9 has evaluated the building to the amount of 1,300,000 €

In parallel, an independent valuation firm has evaluated the market value of the building to the amount of 1,330,000 €.

For the completion of the investment plan, an extra cash increase of the share capital of 1,000,000 €, with the issuance of new shares, is required.

According to the Feasibility Study of the investment plan, the investment of 1.000.000 € appears to be extremely profitable, even under the most pessimistic scenarios.

Within five years of the Hotel being in operation, the investor will therefore possess a share in a company whose book value (let alone the market value) exceeds by 70% the initial investment, and the Internal Rate of Return (IRR) of the investment exceeds the rate of 9%.