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INVESTMENT MEMORANDUM

1. Index 2. Cape Town Reasons to invest 3. Investment Summary Development and Operator 4. Rental Return 5. Legal and Security 6. Taxation 7. Price & Availability List

2. CAPETOWN REASONS TO INVEST: WORLD CLASS BUSINESS LOCATION

Cape Town is a metropolis on the move, with a character very different from that of any other city in Africa. Its vibrant cultural diversity, rich European heritage and spectacular scenery make it one of the most attractive cities in the world. Having developed into a truly exceptional place in which to live and work, South Africas Mother City is well positioned for a rapidly changing global environment. A world-class business environment with: - a skilled and competent workforce - an internationally respected research base - highly competitive factor costs - a wide range of professional business support services - excellent infrastructure Access to world markets via preferential trade agreements between South Africa and the other major markets such as Europe, facilitated by the SA-EU trade agreement, and the United States, supported by the Africa Growth and Opportunity Act (AGOA). A diverse and balanced economy as reflected by the wide range of value-adding manufacturing and service-oriented industries. Cost-competitive opportunities in both the metropolitan and rural areas. A low cost-of-living index rated second by the World Competitiveness Yearbook. An excellent quality of life an open cosmopolitan society, a Mediterraneantype climate and an unspoilt natural environment.

DYNAMIC BUSINESS ENVIRONMENT

Cost-effective, Skilled Workforce:

The Western Cape has on of the highest literacy rates and levels of education of all provinces in South Africa about 12% higher than the national average of 73%. Wage levels compare well with other industrialised countries. Excellent Infrastructure:

Cape Town International Airport handles 4.5 million passengers a year and was recently rated the top airport in Africa. The ports in Table Bay and Saldanha offer excellent shipping and cargo services, and well-developed road and rail networks strategically link the City and the province with the rest of South Africa and its neighbouring countries. In terms of IT infrastructure, Cape Town is serviced by a fibre optic-based Metropolitan Area Network (MAN). International links are fed via submarine cable and satellite networks. Cape Town lies in the same time zone as most major European cities, thus facilitating communications and eliminating jet lag for international travellers. Telecommunications:

Local and international call rates are comparatively low by international standards with a competitive environment amongst private telecom operators. Prime Office and Industrial Space:

The Central Business District (CBD) has consistently maintained higher occupancy levels than any other CBD within South Africa. A-grade premises are also available at decentralised business parks such as Century City, Tyger Valley, Golden Mile and Cavendish at the rates competitive with the best in the world. Investor-friendly Environment: The strong commitment of local and provincial government to assisting business investors in Cape Town is characterised by innovative mechanism such as public-private partnerships. A prime example is the internationally acclaimed V&A Waterfront, one of the most successful waterfront developments in the world. Attractive Incentives:

In order to attract foreign and local investment to the City, a wide range of national incentive schemes is available in the form of grants, rebates and tax breaks (similar to Section 23 reliefs), as well as loans and other funding options.

KEY BUSINESS SECTORS Tourism

Cape Town has been voted one of the worlds top tourist destinations, as well as Africas premier attraction, with 53% of all overseas visitors to South Africa also visiting the Cape. The phenomenal growth in this sector stems largely from the Capes natural beauty, its wide variety of world-renowned tourist attractions and its well-established infrastructure. Metal Processing

The industrial sector is characterised by the high value-added processing of metals for automotive components, maritime equipment, food, wine, and beverage equipment, medical equipment and other niche products. In recent years, exports of automotive components have more than tripled. Agri-Processing

With Cape Towns hinterland producing much of the local and export produce from the Western Cape and South Africa, the agri-processing sector is a major revenue earner. Canned and preserved fruits, vegetables, fish and meat products account for the most of the processed food exports. Financial and Professional Services

Cape Town has a well-established and growing base of banking, insurance and financial services, combined with many consulting firms. South Africas insurance giants Old Mutual, Sanlam, Santam and several others are headquartered in the Cape. ICT, Software, Call Centres and Services

Cape Towns excellent skills base provides a wealth of opportunities for software development, website development and ICT outsourcing and training. With a wellestablished IT infrastructure and an abundance of language-proficient, semi-skilled workers, Cape Town has become a popular location for international call centres. Film Production

The film industry is viewed as one of the top five growth industries in the region. Foreign production companies are lured not only by the Capes scenic beauty and filming infrastructure, but also by the fact that filming in Cape Town costs 20% less than in Australia and 30-40% less than in Europe or the United States.

Quality Clothing and Textiles

The Cape has traditionally been a major player in the South African top quality clothing and textile industry and is renowned for its operational flexibility. With AGOA in place, export opportunities are opening up to the United States especially in the area of quality clothing, including African designer clothing, sportswear, protective clothing and nichedesigner apparel. Publishing and printing

Some 60% of all books sold in South Africa are published within the country; the rest are imported mainly from the United Kingdom and the United States. About 86% of the countrys publishing and 35% of its printing turnover is undertaken in the Cape Town area. Boat-Building

As one of the leading port cities in the world, Cape Town has developed a strong tradition and culture of boat-building. About 75% of South Africas boat building companies are located in Cape Town. Since 1994, the boat-building industry has grown by 120% with exports making up 83% of the growth. High-value Crafts

The craft industry reflects a cultural diversity of design influences from Africa, Europe, the Middle East and the Far East. Crafts vary from textiles, leather, woodwork and beadwork to ceramics, metalwork and jewellery.

Investment Facts: General Motors R18-billion investment. Barclays R30-billion reinvestment. Vodafone R16-billion expanding investment. SABMillars is the second largest brewer in the world and supplies 50% of Chinas beer. Eskom is one of the top 10 electricity suppliers in the world. South Africa provides 66% of Africas electricity and is the second cheapest in the world. 10 South African companies listed in New York out performed all other foreign listings. Baragwanath Hospital, Soweto, is the worlds biggest. South Africa is twice the size of Texas and 17 times bigger than Ireland. Kruger National Park is the size of Wales.

3. DEVELOPMENT & OPERATOR 2009 will see Oscar Pearse as a new landmark on the Cape Town skyline. Its design, dcor, luxury, sophistication and elegance will provide the city with a new dimension in hospitality. Operated and managed by a leading international hotel operator, Oscar Pearse will operate as a five-star deluxe hotel. . Discerning investors are offered this unique opportunity to become the owners of a fully furnished luxury suite at Oscar Pearse, an investment which provides a guaranteed income without any of the costs associated with traditional ownership as follows: Excellent central location Min return of 8.00% guaranteed by Barclays bank Rental payable monthly 5 Star Operator NH Hotels Major capital appreciation potential Full title ownership Completion Spring 2009 Legal fees less than 1% Taxation; located in tax designated area, section 23 type relief Price from R1,265,000 / Euro 126,500 Free stay for owners for 28 days per year 2010 Soccer World Cup to be held in Cape Town / South Africa.

Unique Location Situated in the heart of a vibrant Cape Town, literally adjacent to the HQ of Cape Town Tourism, Oscar Pearse offers an amazing location in the CBD with special tax incentives. The Operator Golding Hotel Investment Consultants are the leading facilitator in the hospitality and leisure industry in South Africa. GHIC have been responsible for the facilitation of transactions in this industry exceeding R1.5 billion over the past 6 years. Phelan Holdings have appointed GHIC to facilitate the management contract with the selected hotel operator. The 5 star NH Hotel Group have now secured the rights to operate the hotel.

 Investment From a property investment perspective the current political and economic factors provide a highly positive background for accelerated demand and capital growth. South Africa is perceived as a safe location not just for tourism but as a stable investment location. Tourism in South Africa, previously under exploited, has shown remarkable growth, with a resultant demand for quality luxury property in some of the more outstanding locations such as Capetown. There is a major hotel room shortage in the peak seasons. It is expected that increased tourism, and the unique property opportunities availability particularly in the Western Cape will drive prices in the luxury end of the market closer to international standards in the short to medium term. House prices have had double digit growth in the last few years and Barclays / ABSA bank has forecast double digit growth for the coming five years.

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4. RENTAL RETURN The rental return is guaranteed at 8.00% return on investment per annum for first two years by Barclays / ABSA bank. Thereafter income will compromise your proportional share of 25% of the gross revenue received from hotel room revenue, with a projected return of up to 13.40% - see projections in table below. Rent is payable at the end of each month.

RENTAL PROJECTIONS TABLE

2009 Achievable Room Rate Average Room Occupancy Room Revenue Owner Income @ 25% Return on Investment 2010 2011 1,923 68% 477,341 119,335 8,00% 8,00% 9,10% 2012 2,077 72% 545,850 136,462 10,20% 2013 2,243 73% 597,705 149,426 11,00% 2014 2,423 74% 654,363 163,591 11,18% 2015 2,616 75% 716,261 179,065 12,70% 2016 2,826 76% 783,876 195,969 13,6% 2017 3,052 77% 857,724 214,431 14,60% 2018 3,296 78% 938,371 234,593 15,70%

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6. TAXATION Oscar Pearse tax advantages There are substantial tax advantages associated with this investment. In many respects these are similar to Section 23 tax reliefs in Ireland. These incentives are focused on specific areas for urban renewal and the Oscar Pearse development is located in such an area with 30% of the purchase price available to be set off against rental income over a 5 year period. Any losses may also be carried forward. In addition any interest on loans may be offset against rental income. Summary of Urban Development Zones and the Tax Incentive At the end of 2003, a tax incentive connected to the establishment and promulgation of Urban Development Zones UDZ in selected cities of South Africa, including Cape Town, was signed into law. This tax incentive is generally directed at the stimulation of capital investment in building and economic development. The Income Tax Act (58 of 1962) now permits owners/developers to write off building costs against the income of businesses in promulgated UDZ areas. The Income Tax Act has been amended through the promulgation of section 33 (7) of the Revenues Law Amendment Act (45 of 2003) and includes section 13 Quat- Deductions in respect of erection or improvement of buildings in urban development zones. The Oscar Pearse building on the corners of Burg and Castle Street is in the hearth of the Cape Town, Central Business District, Urban Development Zone, and as such is a fully qualifying building/location. General Application and Requirements The tax incentive will only be of benefit to taxpayers, who earn a taxable income or operate a profitable business (taxable) for the applicable building. The legislations sets out the following requirements for the operation of the tax incentive.

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7. PRICE & SAMPLE AVAILABILITY LIST

AVAILABILITY & PRICE LIST Unit 201 207 404 405 502 608 Size sq m 45 36 36 36 45 36 Price - ZAR 1,584,000 1,584,000 1,265,000 1,265,000 1,265,000 1,584,000 Price - Euro 160,000 160,000 127,650 127,650 160,000 127,650

ZAR = South African Rand. Conversion based on indicative rate of 10.00

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