le meridien

SIO Properties

Le Méridien Grand Towers and Apartments, Lagos

April 2009

2SIO Properties 22

Disclaimer

This document and the information contained herein are strictly confidential and are meant solely for the selected recipient. This document may not be altered in any way, transmitted to, copied or distributed, in part or in whole, to any other person or to the media or reproduced in any form, without prior written consent of SIO Properties Ltd.

The distribution of this document to the addressee in certain jurisdictions may be restricted by law. Persons into whose possession this document comes are required to inform themselves about, and to observe, any such restrictions. No action has been or will be taken in any jurisdiction by SIO Properties Ltd, Goldman Sachs International or their respective affiliates that would permit the distribution of this information in any jurisdiction where action for that purpose is required. This document may not be used in any jurisdiction where its distribution is not authorised or it is unlawful to distribute this document.

The investment described in this document may not be protected against sovereign risk including risks arising from any changes in applicable laws and may involve a high degree of risk. Investors’ capital is not guaranteed in any respect and they could lose all or substantial portion of their investment. Please familiarize yourself with all the terms and conditions pertaining to the specific products and services prior to availing of it. Goldman Sachs International is not acting as your advisor or in a fiduciary capacity in respect of the products and services referred to in this document, and accepts no liability nor responsibility whatsoever with respect to the use of this document or its contents. Nothing in this document is intended to constitute legal, tax, securities, or investment advice, or an opinion regarding the appropriateness of any investment, or a solicitation of any type. The contents in this document are intended for general information purposes only and should not be acted upon without first obtaining independent legal, tax, and investment advice from a licensed professional concerning your own situation and any specific investment questions you may have before entering into any financial transaction.

Any reference to target returns in this document are only indicative and should not be construed to refer to any commitment by SIO Properties Ltd or its respective affiliates, or any other service provider.

The financial or other projections etc. set out in this document have been prepared based upon projections that have been determined in good faith and from sources which SIO Properties believes to be reliable. There can be no assurance that such projections will be accurate. SIO Properties and its respective affiliates do not accept any responsibility for any errors whether caused by negligence or otherwise or for any loss or damage incurred by anyone in reliance on anything set out in this document. Past performance cannot be a guide to future performance. No reliance may be placed for any purpose whatsoever on the information contained in this document or on its completeness. The information set out herein may be subject to updating, completion, revision, verification and amendment and such information may change materially.

Any investment in any securities described in this document will be accepted solely on the basis of the final appropriate legal documentation (the “Documentation”). Accordingly, this document should not form the basis of, and should not be relied upon in connection with, any subsequent investment in the Company. To the extent that any statements are made in this document in relation to the investment, they are qualified in their entirety by the Documentation pertaining to the investment, which must be carefully reviewed prior to making any decision to invest.

This document does not constitute an offer to sell or a solicitation of an offer to sell any securities to any person in any jurisdiction. The securities described herein have not been, and will not be, registered under the US Securities Act of 1933, as amended (the “US Securities Act”), the securities laws of any state of the United States or the securities laws of any other jurisdiction, nor is such registration contemplated. The securities described herein are subject to restrictions on transferability and resale and may not be sold, transferred, pledged or otherwise disposed of except as permitted under the US Securities Act and the applicable state and non-US securities laws pursuant to registration or an exemption therefrom, and then only to the extent permitted by the issuing entity's constitutional documents. The issuing entity of the securities described herein has not been, and will not be, registered as an investment company under the US Investment Company Act of 1940, as amended, in reliance upon exemptions from registration thereunder.

SIO Properties

1. Introduction

4SIO Properties 44

Over 40 years real estate development, and insurance industry, experienceFellow of the Chartered Insurance Institute in Nigeria and UK and the Chartered Institute of Insurance Brokers of NigeriaRecipient of the top National Honour of Commander of the order of the Federal Republic of Nigeria (CFR)Recipient of about half a dozen honorary Doctorate Degrees from various Universities including Lincoln University, Pennsylvania, USAPioneer of the Nigerian insurance industry, having started in 1948 as a trainee at Norwich Union in Lagos1998 recipient of the World Bank-IMF African Business Leadership Award

Photo

Chief (Dr.) Sonny Iwedike Odogwu, CFRChairman

B.Sc, M.Sc (Economics), University of Lagos, NigeriaLL.B, University of Abuja, NigeriaCertificate in Macro-Economic Policy and Management, Harvard UniversityFellow, Chartered Institute of Management Accountants, UKFellow, Institute of Chartered Secretaries and Administrators, EnglandFellow, Institute of Chartered Accountants of NigeriaChartered Stockbroker and Authorised Dealing Clerk of the Nigerian Stock ExchangeFormer Director of the Bureau of Public Enterprises, NigeriaFormer Board Member of the Nigerian Bank for CommerceBoard Member, Royal Exchange Plc (listed company)

Chief Uwadi Okpa-ObajiChief Operating Officer

The Sponsor and the Operating CompanyKey Management of SIO Properties Limited/Robert Dyson & Diket Limited

LL.B (University of Sheffield, UK), B.L. Nigerian Law School, Lagos, NigeriaB.A. History, Economics (University of Sheffield, UK)MBA (New York University, USA)Worked at Sofunde, Osakwe, Ogundipe & Belgore (top firm of Legal Practitioners in Lagos)Partner, Mansfield & Granville (Attorneys at Law), LagosBoard Director, FinBank PlcChairman, Royal Exchange Plc. A financial services group that owns the oldest insurance company in Nigeria. The company is quoted on the Nigerian Stock Exchange

Ken E. OdogwuChief Executive Officer

Graduate of University of Benin, Nigeria (BA Accounting)Fellow of the Institute of Chartered Accountants of Nigeria (ICAN)Deputy Director/Special Assistant to the Director-General, Budget Office of the Federation & Special Adviser to the President on Budget (2004-2008)Nigerian Deposit Insurance Company (NDIC) from (1989-2004)

Esther OyeroChief Financial Officer

5SIO Properties 55

The Sponsor Group Structure and Track Record

SIO Properties was incorporated in 1962 to fulfil Chief Sonny Odogwu’s real estate interests, and has grown to become one of the largest property and estate development companies in AfricaSIO Properties previously owned Radisson Plaza, Manhattan Beach, LASIO Properties previously owned and managed No. 1, Times Square, New York, New YorkSIO Properties developed, owns and manages Grand Hotel, Resort and Convention Centre, Asaba, NigeriaSIO Properties owns, and has owned, various residential and commercial developments in the UK, the US and in Nigeria

Odogwu Group Africa

SIO Properties Track Record

Real Estate(SIO Properties)

Oil and Gas(Africoil & Gas)

Financial Services (Insurance –Banking)

Telecoms(SioTel)

Manufacturing(SIO Industries)

Others (Trading, Publishing and Tourism)

6SIO Properties 66

Project Overview

15-story, five star Starwood operated, Le Méridien hotel314 keys:– 234 rooms– 80 suites (inc. 5 Presidential Suites)

Le Méridien Grand ApartmentsLe Méridien Grand Hotel

15-story, Le Méridien branded apartment block125 apartments:– 74 serviced apartments– 51 apartments to be sold

Construction started in early-2008, total projected cost of $337m$124m of senior debt finance being arranged by Diamond CapitalNairda (MEP contractor) providing vendor financing of $35m

SIO Properties has already invested $77m to the projectSeeking to raise $100m of equity from investors

7SIO Properties 77

Key Parties

SIO Properties Ltd (Sponsor)Robert Dyson & Diket (Operating Company)

Technical PartiesManagement and Advisors

Sponsor Ingenieur und Tiefbau Limited (ITB)Building Contractor

Starwood Hotels and Resorts Worldwide Inc.Manager Hamilton Project Management, DubaiProject

Managers

Goldman Sachs InternationalEquity Placement Agent

GL & H Associates, South AfricaAdeniyi Consultants Limited

Architects

Diamond Capital & Financial Markets LtdDebt Arranger

LC ConsultingIAA Associates Limited

Structural Engineers

Mansfield & Granville Chambers (SIO)Templars Attorneys (Transactional Counsel)Olaniwun Ajayi (Placement Agent)

Nigerian Counsels

DEL QS, South AfricaEL-Rufai & Partners

Quality Surveyors

Sullivan & Cromwell (Placement Agent)UK CounselNairda LimitedWSD Consulting Engineers

Mechanical/ Electrical/ Plumbing

Jide Taiwo & Co.Real Estate Valuation Agent

Brunelli Construction & Co (Nig) LimitedPiling Engineers

W Hospitality Ltd (investors)Industry Consultant Lionel Levin & PartnersInterior

Designers

8SIO Properties 88

Key Investment Highlights

Strong demand for high quality hotel and apartment accommodation in Lagos

Premium Lagos positioning with excellent location in Ikoyi

Increasing inward investment and interest in Nigeria as the key West African business hub

Investor friendly structure protectsdownside and allows for

significant upside participation

Sponsor with 40-year track record in the real estate and hospitality industry locally and internationally

Five star hotel productbacked by a world class operator and the Le Méridien brand

Grand Towers

SIO Properties

2. The Project

10SIO Properties 1010

Overview

15

Le Méridien Grand ApartmentsLe Méridien Grand Hotel

Floors

To maximise views, the two towers will have an “X” and “Y” shape planTowers will sit on a podium that will house all the entrances, receptions, function halls, support services, parking and security

Design

Hotel Facilities will include: three restaurants, spa, gym, swimming pool and a function hall for 850 peopleFacilities

Electricity to be supplied from the national gridPower backup from six generators to ensure uninterrupted supply

Power

15

314# Rooms/Apartments 125

107,586m²Floor Area

19,912m²Land Area


Overview


The site is located on Ikoyi Crescent, a fulcrum of the Ikoyi peninsula in LagosIkoyi is connected to Lagos Island by Carter Bridge and to Victoria Island by Falomo BridgeThe population of Lagos Island, Ikoyi and Victoria Island is highly cosmopolitan and the area constitutes the centre of economic life of Nigeria

Location and Status of Build

Status of BuildLocation

Construction started in early-2008

The de-watering and piling have been completed and the first floors erected

All relevant building permits and approvals have been obtained (this has been confirmed by local counsel)

Excellent development team made up of South African, Dubai and Nigerian-based firms

Construction is due to be completed, with hotel fully operational, by Jan-2011

Pre-selling of apartments to start end of June 2009

Atlantic Ocean

Victoria Island

Badagry Creek Lagos Harbour

Island Port

Lagos Murtala Muhammed

Airport

Ifako-Ijayi

Ikeja

Agege

Oshodi-Isolo

SurulereLagos

Lagoon

MushinShomolu

Lagos Mainland

Ikoyi

Lagos IslandAjegunle

ApapaApapa PortTin Can


The Manager – Starwood

Luxury and upscale hotels, resorts and residencesEuropean-inspired brand with a French accentEach hotel has a distinctive character driven by its individuality and the Le Méridien brand values

SIO Properties has signed a 15-year management and technical agreement with Starwood Hotels & Resorts Worldwide Inc. (“Starwood”)Starwood is a leading hotel management company with a portfolio of 897 hotels with approximately 275,000 rooms across 100 countries under management(a)

Overview

The Le Méridien Brand Starwood Brands

(a) As at 31-Dec-2007, includes owned, leased, managed and franchise hotels.


Le Méridien Grand Hotel

Le Méridien Room Breakdown

Room Types Number of Rooms Average Room Size (m2) Total Floor Area (m2)

Complementary Rooms 46 43 1,978

Classic Rooms 188 44 8,272

Suites 71 84 5,955

Diplomat Suites 4 217 905

Presidential Suites 5 263 1,315

Total 314 22,411

The hotel will be of extremely high quality; its positioning will be at a significant premium to any other hotels in Nigeria or Sub-Saharan Africa

The hotel rooms will be the most spacious in the country with an average size of 71m2 (and a minimum of 43m2 )

– The Four Seasons in New York, a benchmark for luxury hotels, has an average room size of 65m2

The facilities will be in keeping with an international 5-star hotel of this calibre


Le Méridien Grand Apartments

Apartment block will have 125 apartments; comprising of 51 Le Méridien branded, 4 bedroom apartments and duplexes occupying the 7th to the 11th floors, a large Penthouse on the 12th floor and 74, 1 and 2 bedroom serviced apartments to be operated as part of the hotel by Starwood situated on the 1st to the 7th floors

Will provide more spacious rooms and living/dining areas affording between 55 to 161 square meters for 1 and 2 bedroom apartments, between 358 to 504 square meters for 3 and 4 bedroom apartments, and 407 to 516 square meters for the duplexes and a 654 sqm penthouse

Le Méridien Apartment Breakdown

DescriptionNo. of Units Floor Area (m2)

Total Floor Area (m2)

Apartments for sale

Types 1-3 Three Bedroom Apartments 46 358 – 504 20,929

Duplex Type 1 Duplex Apartment 1 (2 floors) with terraces 2 516 1,034

Duplex Type 2 Duplex Apartment 2 (2 floors) with terraces 2 407 813

Penthouse Penthouse (above central units) 1 654 654

Serviced Apartments Operated as Hotel

Type 1 One Bedroom Apartments 53 55 – 108 4,116

Type 2 Two Bedroom Apartments 21 154 – 161 3,304


Facilities for the Hotel

A large Porte Cochere and Foyer will welcome guests into the Le Méridien Grand Hotel. The Foyer will be vertically extended by an atrium going the full height of the tower and roofed by the central dome over the 13th floorReception

There will be a main lounge on the ground floor. A VIP Lounge consisting of meeting rooms and a kitchen area will also be located on the twelfth floor overlooking the surrounding lagoon. There will be a cigar lounge with an adjoining cigar safe roomThere will be four lifts at the lounges on the ground floor leading to the main hotel floors. VIP's will be given special access cards granting them preferential access to the VIP reception and lounge on the 12th floor

Lounges

The main restaurant will be located on the ground floor. Two other restaurants – an African and an Oriental restaurant will be located on the Mezzanine floor, directly over the main restaurant. These two restaurants will have their own atmosphere; one will overlook the lower garden and link to the Pool area, while the second will have an intimate setting. Both restaurants will be serviced from a common kitchen linked to the main service core of the Le Méridien Grand HotelThere will be three bars in the hotel; one attached to the main lounge on the ground floor, another attached to the VIP lounge on the 12th floor and a third at the pool side

Restaurants and Bars

Meeting and banqueting facilities include a main function hall on the ground floor with a capacity to sit 850 people. The main function hall can be sub-divided into two smaller facilities. There will also be six (6) breakaway rooms on the mezzanine floor and two (2) board rooms – a 16-seater and a 12-seater located at the VIP area

Banqueting and Meeting Facilities

These health and exercise amenities will be situated on the mezzanine floor and will be accessible to guests from the main lifts via a bridge overlooking the Lounge area. The spa and the gym will be located along a link between the Le Méridien Grand Hotel tower and the Le Méridien Grand Apartments tower. They will both open onto the main garden where they can split out onto two large and secluded terraces and pool area. The pool, about 25 meters long, will be surrounded by a garden. A water feature will cascade down into the lower garden. The pool will have a large separate relaxation pool as well as a baby pool

Spa, the Gym and the Swimming Pool

This will be located on the mezzanine floor above the lounge and can serve normal guests as well as the VIP guestsBusiness Centre

A small retail component to support only the guest of the suites will be located on the ground floor along the lounge area. It will comprise shops such as an exclusive boutique, a small pharmacy, a hairdressing saloon and a bookstore. Additional shops will be located on the ground floorRetail

There will be 252 parking bays in the Le Méridien Grand Hotel and 43 shared bays in the functional areas. 100 of the parking bays will be used by hotel guests while the reminder will form part of the 252 slots to be operated as paid-parking lotsCar Parking

SIO Properties

3. Market Review


Nigeria

Nigeria is the most populous country in Africa and the 8th most populous country in the world

The economy is dominated by the oil and gas sector (accounts to approximate 85% of government revenue); however the non-oil economy has exhibited high growth (10% in 2007)

Since the election in 1999 of its first democratic civilian leader, Nigeria has seen a number of significant political and economic reforms

The IMF forecasts 8.1% real GDP growth in 2009; and GDP growth above 7% from 2009 to 2013

OverviewGDP and Population

$147$167

$220

$256

$303

$347

$387

$418

6.2%5.9%

6.2%

8.1%7.7%

7.4% 7.4%7.0%

140 144 148 152 156 160 165 169

2006 2007 2008 2009 2010 2011 2012 2013

Nominal GDP ($bn)Real GDP Growth (%)Population (milllions)

Source: International Monetary Fund, October 2008


Lagos

The commercial, financial and business centre of Lagos and of Nigeria are the business districts of Lagos and Victoria Island, where most of the country's largest banks and financial institutions are located

Lagos State has 60 per cent of the country’s total industrial investments and foreign trade while also attracting 65 per cent of Nigeria’s commercial activities. It also accounts for more than 40 per cent of all labouremoluments paid in the country

The headquarters of multinational conglomerates like UAC, Unilever, John Holts, British American Tobacco (BAT), Leventis, Churchgate, Chevron, Shell, Mobil, Zain, Etisalat, MTN Nigeria and some of Nigeria’s large public enterprises are all located within the State

Whilst foreign embassies are obliged to be located in Abuja, many countries, and all of the larger trade partners, maintain a consular presence in Lagos. The diplomatic community generates high demand for hotel accommodation

Commercial ActivityOverview

Lagos lies in the southwest of Nigeria on the Atlantic coast in the Gulf of Guinea, west of the Niger River delta

It is the primary gateway to Nigeria and the rest of the West African region

Its population of 15 million inhabitants makes it Africa’s most populous city

Lagos is Nigeria’s most economically important city, therefore Nigeria's most prosperous city, containing much of the nation's wealth and economic activity, fueled by one of the largest seaports in Africa

Nigeria

Ghana

Togo

Benin

NigerMali

Chad

CameroonCentralAfrican

Republic

BurkinaFaso

Lagos

Abuja

Port Harcourt

OgbomoshoIbadan


Lagos Hotel MarketDemand Trends

The oil-boom fuelled massive demand for accommodation until the mid 1990s

During this period the Sheraton Ikeja achieved occupancies well above 90 per cent due to a lack of hotel supply as well as the increasing demand levels

Late 1980s

1993 to 1998 was a checkered period in terms of the demand for accommodation, especially from foreign visitors, when Nigeria’s military government was isolated from the international community

The hotel industry suffered significant reductions in occupancy levels in the mid-1990s, which eventually picked up in the late 1990s due to greater economic and political stability in the country

Mid-1990s

From 1998, Nigeria’s transition towards a democratically elected government caused a resurgence in demand levels

Greater economic and political stability in this period saw increased inward investment from the international community, particularly but not only in the hydrocarbons and telecommunications sectors, which in turn brought a need for further accommodation

Democracy

Whilst there is still a huge amount to do to recover from the neglect of the past decades, Nigeria is experiencing strong economic growth, with several new internationally-branded hotels under construction in Lagos to cater to the ever-increasing demand

2000 Onwards


Lagos Hotel MarketDemand Characteristics

Corporate demand is the largest market sector generating demand for hotel accommodation in Lagos

High levels of international and domestic demand from corporates is likely to continue

In Nigeria, hotels in Lagos have the highest occupancy and command higher rates than other commercial centers in Nigeria

Average occupancy levels for highly rated hotels in Lagos can be as high as 85%+

Given the extreme under supply of high quality hotels, supply of new hotels unlikely to negatively impact rates or occupancy levels

Development of Rates(b)

(a) Weighted by number of rooms.(b) Average (weighted by number of rooms) for Sheraton, Eko, Federal Palace and Sofitel; the four hotels for which consistent data is available.(c) Excludes Federal Palace.Source: W Hospitality Group

Occupancy Levels

2007 2008

Sheraton (Ikeja) 88.1% 89.8%

Eko Hotel & Suites (Vic. Is.) 83.7% 85.2%

Federal Palace (Vic. Is.) 77.6% NA

Sofitel Moorhouse (Ikoyi) 77.8% 78.9%

Average(a) 83.6% 86.2%

$181.5 $194.0 $207.8 $237.2

$340.5

2004 2005 2006 2007 2008

CAGR: 17.0%

Source: W Hospitality Group

(c)


Lagos Hotel MarketSupply: Existing Hotels

The current supply of hotels (and their relative room volume) of international standard in Victoria Island and Ikoyi is limited

There is only one internationally branded hotel, the 96-room Sofitel Moorhouse in Ikoyi, located there, and the increase of approximately 400 rooms since 2003 has been in 13 small hotels, with an average size of just 30 rooms

Prior to the re-opening of the renovated 150-room Federal Palace, operated by Sun International, in July 2008, there had been no new hotel of any significant size opened in Lagos since the Sheraton Hotel in Ikeja in 1985

Quality Hotels in Lagos (Victoria Island and Ikoyi)

No of Rooms

Published Rate ($)

Hotel Standard Deluxe Suites from Location

Victoria Crown Plaza 45 - 435 530 Victoria Island Annexe

Protea Victoria Island 58 379 485 566 Victoria Island

Protea Kuramo 60 271 339 932 Victoria Island Annex

Sofitel Moorhouse 96 403 479 560 Ikoyi

Federal Palace 150 495 533 677 Victoria Island

Eko Hotel & Suites 586 497 516 1,769 Victoria Island

Le Méridien 314 540 675 1,035 IkoyiSource: W Hospitality Group


Lagos Hotel MarketSupply: New Hotels Under Construction

In the deluxe category, the only new supply under construction is the InterContinental which is in a significantly worse location for parking and accessibility purposes

There are currently no international 5-star standard hotels in Lagos

New Quality Hotels Under Construction in Lagos State

Location No of RoomsEstimated

Opening Date

Wemco Victoria Island Annex 160 2009

Radisson SAS Victoria Island 170 2009

Ikoyi Hotel (Southern Sun) Ikoyi 200 2009

Eko Hotel Extension Victoria Island 125 2010

InterContinental Victoria Island 346 2010

Le Méridien Ikoyi 314 2011

Source: W Hospitality Group Research


Lagos Real Estate MarketDynamics in the Deluxe Real Estate Sector

Source: W Hospitality Group Research

Rentals in Lagos are among the highest in the country with Ikoyi and Victoria Island considered the most expensive. Annual rent for a good quality serviced apartment in Ikoyi ranges between $50,000 and $85,000 depending in configuration

Apartments in Ikoyi are mostly occupied by executives of oil companies, multinationals and big corporations who can afford them and apartments record occupancy rates as high as 100% for most parts of the year

Rents are usually paid in advance and it is not uncommon for property owners in Ikoyi to demand 3 years rent in advance and agents are said to have long waiting lists of persons seeking accommodation in Ikoyi and Victoria Island

Rental MarketPurchase Market

Deluxe residential property in Lagos continues to meet strong demand

Ikoyi in particular is the most expensive real estate in Africa because of its proximity to the Lagos central business district and its aesthetics

Increasing demand is resulting from:

– Economic growth in the country, with new companies entering the economy, requiring accommodation for senior local and expatriate staff

– The resultant increase in wealth of the managerial and executive classes

There are no apartments in Lagos of the quality proposed by the Project, and no serviced apartments with an international operator

There is a large quantity of poor quality accommodation on the market, with erratic services, and with reluctant occupiers due to the lack of any alternative. New apartments are therefore in high demand, provided they can offer guaranteed power and water supply, parking, and good security


Lagos Real Estate Market

Selected Apartment Complexes

Apartment Apartment Location Components Sales per Unit (US$)Trenchard Place Gerrard Road 3 Bedroom

4 Bedroom$1.0m$1.1m

Luxury Garden Alexander Avenue 4 Bedroom5 Bedroom Penthouses

$1.5m$2.0m

Luxury Apartments Mulliner Road 3 Bedroom $1.5m

Admiralty Towers Gerard Road 3 Bedroom4 Bedroom

$1.9m$3.7m

Luxury Apartments Bourdillon Road 3 Bedroom4 Bedroom

$1.0m$0.9m

Wemabod Towers Mosley Road 3 Bedroom4 Bedroom Penthouse

$1.8m$2.7m

Compound Annual Growth Rate in Apartment Prices - Ikoyi

Apartment Type 2006 2007 2008 CAGR ‘06-’083 Bedroom $650,000 $800,000 $950,000 21%4 Bedroom $800,000 $1,000,000 $1,200,000 22%Penthouse $1,200,000 $1,500,000 $1,900,000 26%Average $883,333 $1,100,000 $1,350,000 23%

Source: W Hospitality Group (Jan-2009)

Source: Jide Taiwo & Co (Jan-2008)

SIO Properties

4. Key Assumptions and Summary Financials


Sources and Uses of Capital

Being arranged by Diamond Capital6 year maturity, local currencyExpected rate c.18% p.a.

Uses of Funds

From Nairda (constructor)5-year maturity, in USDExpected rate c.7.0% p.a.

Corresponds to a 57.8% equity ownership

Sponsor has already injected over USD73m

Sources of Funds

Land: $35.2mPiling: $10.0m

Construction and FF&E: $258.5m

Start-up Costs: $25.8m

Total: $329.5m Total: $329.5m

Sponsor’s Equity (Land & Piling):

$45.3m

Sponsor’s Other Equity: $28.5m

New Equity Investors: $100.9m

Vendor Finance: $35.0m

Bank Loan: $120.0m

Equi

ty:

53%

Deb

t: 4

7%


Revenue: Hotel Rooms and Serviced Apartments

Hotel Rooms

Number Rate ($)(a)

Connecting (Classic 35) 46 540

King/Twin (Classic 45) 188 675

Suites 71 1,035

Diplomat 3 1,872

Diplomat G 1 2,238

Presidential 5 3,065

Total 314 791

(a) Assumed end-2008 rate.(b) Assumed to grow at 5% per annum.

Breakdown

Serviced Apartments

Number Rate ($)(a)

Type 5a (2 bed) 11 540

Type 5b (1 bed) 11 405

Type 6 (2 bed) 10 540

Type 7 (1 bed) 10 405

Type 8 (1 bed) 10 405

Type 9 (1 bed) 11 405

Type 10 (1 bed) 11 405

Total 74 443

YearAv. Room Rate ($)(b)

Av. Discount

Av. Discounted Rate ($)

Occupancy Rate

Revenue ($m)

2011 2012 2013 2014 2015 2016916 962 1,010 1,060 1,113 1,169

20.1% 15.2% 10.6% 10.6% 10.6% 10.6%

732 815 903 948 996 1,046

60.0% 75.0% 75.4% 75.8% 76.1% 76.5%

50.4 70.1 78.0 82.3 86.9 91.7

2011 2012 2013 2014 2015 2016513 539 566 594 624 655

20.1% 15.2% 10.6% 10.6% 10.6% 10.6%

410 457 506 531 558 586

60.0% 75.0% 75.4% 75.8% 76.1% 76.5%

6.6 9.3 10.3 10.9 11.5 12.1


Revenue: Apartments Sales

Breakdown Number Price ($m)4 Bed (Types 1-4) 46 3.85

4 Bed Duplex (Types 11-14) 4 4.10

Penthouse (4 bed) 1 4.90

Total 51 3.89

Year 2009 2010Number of Apartments Sold4 Bed (Types 1-4) 22 24

4 Bed Duplex (Types 11-14) 2 2

Penthouse (4 bed) 0 1

Total 24 27

Discount to Sale Price 5% 0%

Sales Cost 5% 5%

Revenue from Properties Sold ($m)Sold in 2009 41.8 41.8Sold in 2010 0.0 100.2Total 41.8 142.0

Instalment PaymentsSold in 2009 50% 50%Sold in 2010 0% 100%


Summary Income Statement

USD m 2009 2010 2011 2012 2013 2014 2015 2016

Room Revenue 50.4 70.1 78.0 82.3 86.9 91.7

Serviced Apartment Revenue

6.6 9.3 10.3 10.9 11.5 12.1

Food & Beverage 14.3 19.8 22.1 23.3 24.6 25.9

Other income 7.4 10.2 11.3 11.9 12.5 13.2

Hotel 78.6 109.3 121.7 128.4 135.5 143.0

Apartment Sales 41.8 142.0 0.0 0.0 0.0 0.0 0.0 0.0

Service Charges 0.8 0.8 0.8 0.9 0.9 1.0

Total Revenue 41.8 142.0 79.4 110.1 122.5 129.3 136.4 143.9

Total Direct Costs (17.8) (24.6) (27.4) (28.9) (30.5) (32.1)

Indirect Cost (15.7) (21.9) (24.3) (25.7) (27.1) (28.6)

Operating Profit 41.8 142.0 45.8 63.7 70.8 74.7 78.9 83.2

Fixed Costs (5.9) (8.1) (8.9) (9.4) (9.9) (11.1)

EBITDA 41.8 142.0 40.0 55.6 61.9 65.3 68.9 72.1

EBITDA Margin 50.3% 50.5% 50.5% 50.5% 50.5% 50.1%

Depreciation (34.0) (8.3) (8.9) (9.4) (10.0) (10.7)

EBIT 41.8 142.0 6.0 47.2 53.1 55.9 58.9 61.4

Interest (21.7) (22.3) (16.4) (13.5) (8.9) (4.2) 0.0 0.0

Profit Before Tax 20.2 119.7 (10.4) 33.7 44.2 51.7 58.9 61.4

Tax Payable 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (7.7)

Deferred Tax 0.0 0.0 5.8 (6.3) (8.5) (10.0) (11.5) (12.0)

Profit After Tax 20.2 119.7 (4.6) 27.4 35.7 41.7 47.4 41.8

25% of revenues from rooms and serviced apartments

Car parking, minor operating departments and other12.8% of revenues from rooms and serviced apartments

22.3% of revenue

Administration, marketing, property operations etc19.9% of revenue

Property tax & insurance and management fee7.3% of revenue

Write off of start-up costs

Positive as a result of initial capital allowance

“Pioneers status” – no corporate taxes for first five yearsThereafter, 30% income tax and 2% education tax


Summary Cash Flow Statement

USD m 2008 2009 2010 2011 2012 2013 2014 2015 2016

EBITDA 0.0 41.8 142.0 40.0 55.6 61.9 65.3 68.9 72.1

Change in Working Capital 0.0 0.0 0.0 (4.7) (1.8) (0.7) (0.4) (0.4) (0.4)

Tax 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 (7.7)

Cash from Operations 0.0 41.8 142.0 35.3 53.8 61.2 65.0 68.5 64.0

Investing Cash Flows (162.2) (113.7) (53.8) (1.6) (3.3) (5.4) (5.7) (6.0) (6.3)

Equity Financing 86.0 60.3 28.5 0.0 0.0 0.0 0.0 0.0 0.0

Debt Financing 155.0 (3.5) (31.9) (31.9) (31.9) (31.9) (24.0) 0.0 0.0

Interest 0.0 (21.7) (22.3) (16.4) (13.5) (8.9) (4.2) 0.0 0.0

Change in DSRA (6.6) (7.0) 1.2 1.2 1.2 3.1 7.0 0.0 0.0

Cash From Financing 234.3 28.1 (24.5) (47.1) (44.2) (37.6) (21.1) 0.0 0.0

Total Cash Flow 72.1 (43.8) 63.7 (13.4) 6.3 18.2 38.1 62.6 57.7

Dividends 0.0 0.0 0.0 78.6 6.3 18.2 38.1 62.6 57.7

Cash Balance 72.1 28.2 92.0 0.0 0.0 0.0 0.0 0.0 0.0

Debt Balance 155.0 151.5 119.6 87.7 55.9 24.0 0.0 0.0 0.0

FF&E replacement reserve equal to 2% and 3% of hotel revenue in years 1 and 2 respectively and 4% thereafterAdditional 500k p.a. assumed from 2013

Assumes 1 year repayment grace period on bank loan

Assumed to equal 25% of following year’s interest a repayment obligation

First dividend at end of first year of operation


Indicative Equity Returns

Exit Assumptions

Assumed Exit Year 2013

Assumed Exit EBITDA Multiple 8.0

EBITDA in 2013 ($m) 61.9

Implied Exit EV ($m) 495.5

Net Cash / (Debt) in 2013 (24.0)

Implied Exit Equity Value ($m) 471.5

Return Sensitivities

Exit Multiple IRR

5.0x EBITDA 22.8%

6.5x EBITDA 29.1%

8.0x EBITDA 34.3%

9.5x EBITDA 38.8%

11.0x EBITDA 42.9%

USD m 2008 2009 2010 2011 2012 2013

Equity Investment from New Equity Investors 12.2 60.3 28.5 0.0 0.0 0.0

Equity Investment from Sponsor (Land + New Equity) 73.8 0.0 0.0 0.0 0.0 0.0

Total Equity Investment 86.0 60.3 28.5 0.0 0.0 0.0

Dividends 0.0 0.0 0.0 78.6 6.3 18.2

Exit Enterprise Value (8.0x EBITDA) 0.0 0.0 0.0 0.0 0.0 495.5

Adjustment for (Debt) / Cash 0.0 0.0 0.0 0.0 0.0 (24.0)

Cash Outflows 0.0 0.0 0.0 78.6 6.3 489.7

Equity Cash Flows (86.0) (60.3) (28.5) 78.6 6.3 489.7

Blended Equity IRR 34.3 %

New Investors Equity IRR 40.2 %

SIO Properties

5. Conclusions


Investment Highlights

Strong demand for high quality hotel and apartment accommodation in Lagos

Premium Lagos positioning with excellent location in Ikoyi

Increasing inward investment and interest in Nigeria as the key West African business hub

Investor friendly structure protectsdownside and allows for

significant upside participation

Sponsor with 40-year track record in the real estate and hospitality industry locally and internationally

Five star hotel productbacked by a world class operator and the Le Méridien brand

Grand Towers


Electronic Data Room Contents

Document Comments

Financial Model SIO model incl. Management case and a Flex case (based on W Hospitality assumptions)

PKF ReportSeptember 2006 Financial Estimates for Proposed Hotel and Apartments Complex in Ikoyi, Lagos (commissioned by SIO Properties)

W Hospitality Investor Due Diligence ReportJanuary 2009 Market Report on Le Méridien Grand Towers (commissioned by Goldman Sachs and SIO Properties)

Jide Taiwo Report(s)Land Valuation Report (2005) and Lagos Market Apartment Letting and Sales Rates (2008) by JideTaiwo & Co

Actual Marketing Report Marketing Report on Apartments for Sale

Main Contractor Contract Executed Contract between SIO Properties and ITB Nigeria

Le Méridien Management Contract (Old + Revised) Executed Contract between SIO Properties and Starwood

Bank Financing Memo Expression of Interest from Domestic Senior Banks (Memorandum from Diamond Capital)

Legal Memorandum on Status of Licence and Permits Memorandum from Nigerian Counsel, Templars

Floor Plans and Project Images Submitted by SIO Properties

Odogwu Group Profile Submitted by SIO Properties

SIO Properties

Appendix A: Technical Parties


Technical Parties (1/4)

Ingenieur-und Tiefbau (I.T.B) Nigeria Limited, a company within the construction division of the Chagoury Group, was formed in 1995 and has about 1,000 employees with a presence in major cities in Nigeria. It is one of the few civil engineering and construction firms whose head office and main operations are in AfricaRelevant projects done by I.T.B in the past include– National Assembly Complex, Abuja– Eko Hotel – Construction of a 9 storey concrete structure, comprising 8 floors of luxury suites and 1 floor for services/reception– Federal Secretariat Complex, Abuja– Sapetro Towers, Victoria Island – 13 storey residential development for Sapetro

I.T.B Nigeria Limited

Hamilton Project Management (HPM) was established in Dubai nearly 10 years ago and has accumulated a portfolio of major projects related to the hotel and leisure industry as well as quality office/commercial buildings such as shopping malls and residential buildings. Hamilton is staffed with qualified engineers with local and international experience in Project Management, Construction and Design ConsultancyProjects handled by the firm include numerous hotels, beach resorts and high-rise buildings such as– J.W Marriott Hotel – Phase II, Dubai– Le Méridien Hotel (Hotel & Resort), Mauritius– Hilton Hotel, Doha, Qatar

Hamilton Project Management (U.A.E)

One of the leading MEP Contractors in Nigeria with extensive track record of participating in Landmark Projects in NigeriaSome of the relevant projects recently handled by Nairda include:– World Bank Headquarters - Abuja (M&E) (alongside Asokoro District Hospital)– Afribank Head Office, Broad Street, Lagos– Chevron/Gulf Oil - Complex at Lekki Peninsula– Texaco - Headquarters Complex - Warri– Habib Bank - Headquarters, Ikoyi– State Oil Nigeria Limited - Lagos– Novotel Hotel in Festac, Lagos– Le Meridien hotel in Akwa Ibom– Tinapa Shopping and Entertainment Centre in Calabar

Nairda Limited(Nigeria)

Mechanical, Electrical and Plumbing (MEP) Sub-Contractor

Project Managers

Main Building Contractor



ACCL was established some 18 years ago as a firm of Architects and Engineers. ACCL has designed and supervised the successful construction of over 100,000 sqm of commercial office space and has also been involved in the oil industry as well as several institutional projects. Projects handled by ACCL in the past include– Frith Hill Apartments – A block of 10 luxury apartments situated in a high brow area of Lagos– Univest Apartments, Ikoyi, Lagos - A residential development comprising 4 living units located at Osborne Foreshore, Ikoyi, Lagos– O’Callaghan Court, Ikoyi Lagos - A three-storey block of 12 luxury apartments located in the residential area of Ikoyi

GLH & Associates (South Africa)

Grosskopff Lombart Huyberechts & Associates (GLH & Associates) was established in 1945 in South Africa. The Practice prides itself in having contributed to the Johannesburg architectural landscape with its landmark buildings such as the Johannesburg Civic Theatre (1962), The Market Theatre (1984) and the Ponte Residential Complex (1976)Other projects handled by GLH & Associates include– The Illovo Boulevard, Johannesburg– The Vodacom Buildings Phases 1 to 6, Midrand– Nedbank Head Office, Johannesburg– Microsoft’s Regional Head Office, Bryanson– International Finance Corporation (IFC) building, Johannesburg

Adeniyi Coker Consulting Engineers Limited (Nigeria)

Architects

Piling Engineers

BrunelliConstruction Co Limited (Nigeria)

Brunelli Construction Company (Nigeria) Limited was incorporated in 1972. The company specializes in piling and foundation works, diaphragm wall installation, construction of jetties, shore-line protection works, dredging of canals and construction of drainages, roads and bridgesPiling and foundation works handled by Brunelli Construction Nigeria Limited include– Re Insurance Corporation– Chellarams building (now WEMA Bank building), Marina, Lagos– Trade House, Lagos.– African Continental Bank, Broad Street, Lagos



IAA Associates Limited is an independent organization providing consultancy and advisory services in the fields of civil and structural engineeringThe company is capable of handling a wide variety of projects, including development engineering, conceptual engineering, detailed design, construction and project management– LAMATA Recurrent Maintenance Work, Lagos– 22-storey Intercontinental Hotel, Victoria Island, Lagos– Office Block Development for AIICO Insurance Plc– Addax Headquarters on Victoria Island, Lagos

IAA Associates Limited (Nigeria)

Structural Engineers

Pinconsult Associates based in Lagos Nigeria, was established in 1985 to provide highly competent professional consultancy services in the fields of civil engineering, structural engineering, and building management. This practice became a limited liability company Pinconsult Associates Limited in 1993 for a wider coverage of engineering activities and a better corporate image. Previous projects handled by the firm include:– NIDB Head Office, Abuja– Ecobank Head Office, Victoria Island, Lagos – Sapetro Towers, Lagos – 7-Up Bottling plant, Enugu – Teslim Balogun Stadium, Surulere Lagos – Head Office for Dubri Oil

PinconsultAssociates Limited (Nigeria)

WSP Structures (Civil & Structural Engineers) (South Africa)

WSP Consulting Engineers is part of the WSP Consulting Group based in UK. WSP is one of the world’s fastest-growing design, engineering and management consultancies specializing in property, transport and environmental projects. WSP Group was established in the UK in the '70s and was listed on the London Stock Exchange (LSE) in 1987. The company has grown through strategic development into one of the largest international consultancy groups in the world employing around 8,000 staff worldwide. Relevant projects handled by WSP Consulting Engineers include:– Holiday Inn Garden Court, Sandton– Le Tuessrok Hotel, Mauritius – Mirage Hotel and Conference Centre, Dubai – Royal Swazi Spa, Swaziland – Grand Palm Casino, Botwana– Ridgeway Hotel, Zambia – Hampton Park, Sandton– University of Witwatersrand Business School, Johannesburg



Del QS is one of the world’s leading service providers to the construction and property industries specialising in quantity surveying and property valuation. Del QS was involved in the following projects– Sheraton Hotel, Pretoria, South Africa– Sheraton 4 point hotel, Kuwait– Southern Sun hotel, Tinapa, Calabar, Nigeria

Del QS (South Africa)

Quantity Surveyors

El-Rufai & Partners was established in 1982. The firm provides consultancy services in quantity surveying, building and engineering construction cost management and project managementThe following are some of the projects handled by the firm in the past– NIDB Head Office, Abuja– NDIC Head Office Building, Abuja– NITEL Management Staff housing, Ikoyi, Lagos

El-Rufai & Partners (Nigeria)

Lionel Levin & Partners was established in 1974 and is one of Africa's leading interior design companies. The firm specialises in hotel and leisure design and has completed a number of shopping centres and prestigious corporate projects in many African countries as well as in Europe. The firm is involved in all aspects of the design process from master planning through to graphic and uniform design

Lionel Levin & Partners (Nigeria)

Interior Designers

le meridien

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