mirage resort & spa rarotonga presentation 9.3.2015

Information Memorandum 2015 MIRAGE RESORT & SPA RAROTONGA

MIRAGE RESORT & SPA RAROTONGA

PROJECT INTRODUCTION 03

HOTEL SUMMARY 04

DESIGN & LAYOUT - FACILITIES 05

GUEST ACCOMMODATION 08

RAROTONGA TOURISM MARKET OVERVIEW 10

ABOUT MIRAGE GROUP 12

DISCLAIMER 13

INTRODUCTION

The Mirage Resort & Spa Rarotonga is a 216 room resort, comprising 198 hotel rooms and 18 over water bures, set within a beautiful 26 acre property contained by the main road on the north, east and west and by the lagoon on south side. The buildings on the land were built in the early 1990's and the hotel almost reached completion as the "Sheraton Rarotonga" but due to a series of circumstances, the hotel was never completed. The property has been left unattended for the past 20 years and is to be renovated and further developed by Mirage Group Limited.

It is intended that the property be renovated and opened with construction scheduled for commencement in September this year and completion and handover to the operator in March 2017.

Following the renovation stage, the property has further development potential - stage 2 will comprise development of the 330m of beachfront with suite only or multiple room units. Estimated yield from stage 2 is between 32 and 64 rooms depending on the type of product delivered. Stage 3 will comprise expansion of blocks A, B and C by the addition of up to 188 rooms.

The property has the potential therefore, for a total of up to 468 rooms. There are no other sites in Rarotonga with this potential and to date there are no other International hotel groups represented. MIRAGE HOTEL

AIRPORT


HOTEL DEVELOPMENT SUMMARY

Following the completion of the renovation stage of the Mirage Resort & Spa, the resort will consist of the following facilities and amenities:

Central facilities building

Guest accommodation blocks (A, B and C), 198 rooms

Over water bures, 18 suites

Staff building

Housekeeping / managers quarters

Maintenance building

Spa and health centre

Garden pool bar and restaurant

Beach front bar/restaurant and pool.

Pools, lagoon and lakes

Tennis courts & parking facilities

Landscaping

Building & site services

Main road diversion

Please refer to the following pages for the specific details of each accommodation block, central and other facilities.

CENTRAL FACILITIES BUILDING

ACCOMODATION - BLOCK A ACCOMODATION - BLOCK B

ACCOMODATION - BLOCK C

RESTAURANT


The central facilities building is a

three storey structure.

The upper floors serve as the main

entrance, public areas, bar and

Teppanyaki restaurant.

The lower floor is predominantly bar

and dining.

BUILDING FACILITIES

Central facilities Main entrance porte-cochere

Reception, group assembly

Rental concession and toilets

Conference and business centre

Administration

Te Vaka lounge bar

Te Puara shopping centre

Ui Rangatira entertainment area

Teppanyaki restaurant

Kitchen & stores

Staff coffee bar

Tumu Nu Bar and restaurant

Tarekareka games room

Punanga crèche

PROPERTY DESCRIPTION

HOTEL DESIGN & LAYOUT


ARTISTS IMPRESSION

ARTISTS IMPRESSION


HOTEL DESIGN & LAYOUT - GYM, POOL AND SPA

BEACHFRONT BAR AND RESTAURANT LAYOUT

BEACHFRONT BAR AND RESTAURANT ELEVATIONS

Gym

The building previously designed to be the maintenance building will now be completed as a gym.

Spa & Health Centre

The building previously intended to be the staff building will be fitted out and

completed as a spa and health centre.

Beach front bar, restaurant and pool area

This will be an additional facility to the hotel and will be located centralised

on the Beach.

Pool bar and restaurant

The existing pool bar structure is to be extended to accommodate a larger

kitchen and restaurant facility, to serve guests on the beach and lagoon. The

facility will be named Vaimaanga.

Housekeeping / managers quarters

The existing housekeeping building will be completed as originally intended,

but amended to provide separate accommodation for the resort manager.



HOTEL DESIGN & LAYOUT - ADDITIONAL FACILITIES

POOL AND LAGOON LANDSCAPING EXAMPLE

Pool, lagoon and lakes

The garden swimming pool next to the Vaimaanga Pool Bar & Restaurant is

to be completed as originally intended and for the use of families.

Tennis courts and parking facilities

The two existing tennis courts will be completed as originally intended.

Parking

The existing bus and car parking and roading, including the roundabout road

serving the porte cochere will be completed as originally intended.

Suitable covered pathways will be developed throughout the property for

foot traffic, buggies, trailers, etc. as required to transfer guests and luggage.

Landscaping

Extensive landscaping and a nursery will be carried out using local plants and

trees, including the transplanting of grown coconut trees to achieve a garden

setting. The beach will be manicured and maintained with additional sand as

required.

Building and site services

All building services and plant and equipment installed will be to 5 star

international brand expectations.

Main road diversion

The main road will be diverted around the resort, along with mains services

as necessary. A wall for aesthetic purposes and security will be constructed

along the road boundary.

ARTISTS IMPRESSION


Upon the completion of the Mirage Resort & Spa Rarotonga the resort will offer 198 guest rooms and an additional 18 over water bures. All room sizes are generous and include balconies or outdoor living areas.

TWIN 34m2 KING SUPERIOR 36m2

JUNIOR SUITE 44m2 VIP SUITE 73m2

BURE 100m2

BUILDING FACILITIES

Accommodation Block A 82 Hotel rooms

4 VIP suites

12 Junior suites

18 King superior rooms

48 Twin rooms

Accommodation Block B 68 Hotel rooms

4 VIP suites

12 Junior suites

40 King superior rooms

10 Twin rooms

2 Disabled King rooms



VIP SUITE LAYOUT - 73M2

JUNIOR SUITE LAYOUT - 44M2


BUILDING FACILITIES

Accommodation Block C 48 Mixed hotel room configurations

Over water Bures 18 bure rooms



SITE VIEW - OVER WATER BURES

KING SUPERIOR LAYOUT - 36M2

TWIN ROOM LAYOUT - 34M2


RAROTONGA TOURISM MARKET OVERVIEW

The Cook Islands comprise 15 islands in the heart of the South Pacific spread over an area of approximately 2 million square kilometers. The population is approximately 23,400, of which 11,400 are residents. Rarotonga, the main island in the group, is 32 kilometers in circumference and contains the only international airport.

The Cook Islands has basic commerce and industry throughout the group albeit largely centered in Rarotonga where more than half of the population reside. The climate is typically warm all year round with the cooler months of June to August averaging maximums of around 23 – 24 degrees Celsius, while November through March being the warmer season averages maximum temperatures of around 27 degrees Celsius.

ECONOMY

The Cook Islands is linked to New Zealand in regard to its monetary union and integrated labour market, which underpins social and economic stability. The economy is heavily dependent on tourism which accounts for over half of nominal GDP.

Tourism has experienced solid growth in recent years which has contributed to positive economic conditions and rising income levels.

Economic Indicators

Opportunities, tourism is the most significant and important segment of the Cook Islands economy, both in terms of employment and income. An estimated 64% of GDP is generated by tourism- related activities and 26% of the workforce is directly or indirectly involved with tourism activity.

TOURISM

As a Pacific Island holiday destination, the Cook Islands is widely recognized as third only to Fiji and Tahiti in the South Pacific. With a limited ability to provide other industrial and commercial

opportunities, tourism is the most significant and important segment of the Cook Islands economy, both in terms of employment and income. An estimated 64% of GDP is generated by tourism- related activities and 26% of the workforce is directly or indirectly involved with tourism activity.

ARRIVALS AND DEPARTURES

Air New Zealand is the principal carrier to the Cook Islands with Virgin (Pacific Blue) increasing its presence in recent years. Air Tahiti Nui operates a code share service with Air Rarotonga providing twice weekly flights to Tahiti.

Pacific Blue commenced services to the Cook Islands in March 2005. Flights from Brisbane and Sydney are routed via Auckland which opened up the extensive Australian market. Pacific Blue currently operates three weekly flights from Australia.

Air New Zealand however remains the dominant carrier to the Cook Islands and accordingly is critical to the country’s continued growth. New Zealand flights operate from both Auckland and Christchurch utilising A320, B767, and B777 aircraft, and report consistently high load factors, up to 93%.

Following the success of the trial flights to and from Sydney in 2010, Air New Zealand has entered into a three year agreement to continue the service and also to continue with its weekly direct flight to and from Los Angeles. This should underpin the continued solid growth in visitation to the destination. Air Pacific has also negotiated to re-establish its weekly flight to and from Nadi which will provide access to the Asian markets via Hong Kong.

Year GDP (NZD’s) GDP Growth GDP/Capita CPI

2006 $290m 11.7% $12,223 3.36%

2007 $310m 7.1% $14,769 2.53%

2008 $332m 7.1% $15,028 7.83%

2009 $344m 3.5% $15,208 6.65%

2010 $354m 3.0% $14,941 -0.25%

2011 $362m 2.3% $19,380 2.20%

2012 $379m 4.7% $19,659 2.98%


RAROTONGA TOURISM MARKET OVERVIEW

ARRIVAL STATISTICS PER QUARTER

Holiday 84%

Business 2.4%

Employment 0.35%

Conference 0.9%

VFR 9.6%

Other 2.96%


Period Mar June Sept Dec Total

2005 16,355 21,391 27,422 23,237 90,410

2006 16,664 22,465 28,030 25,169 94,334

2007 18,634 24,666 28,858 25,158 99,323

2008 18,814 23,356 28,086 24,520 96,784

2009 19,089 25,235 31,319 25,586 103,238

2010 18,451 24,992 33,886 35,936 115,275

2011 19,460 28,470 36,296 28,888 115,125

2012 20,567 31,133 39,113 31,571 124,396

2013 20,493 29,732 39,031 31,902 123,171

2014 21,294 30,627 38,102 31,435 123,472

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

45,000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

ARRIVAL STATISTICS PER QUARTER

Mar June Sept Dec

ACCOMODATION

There are over 1,500 accredited rooms in the Cook Islands according to data from the Cook Islands Tourism Corporation.

Whilst Rarotonga accounts for only 54% of available room stock, the majority of hotel and self-catering stock is located in Rarotonga. Room stock has grown by around only 300 units since 2001, most of which has occurred at the low (budget/self catering) end of the market.

Inventory growth slowed significantly in 2008 and no significant growth has occurred subsequent. Any additions that have occurred have been in the boutique, high end market.

Summary of accommodation is as follows:

The two largest properties are the Edgewater Hotel (3.5 star 208 rooms) and The Rarotongan Beach Resort and Spa (4 star, 157 rooms). These two properties currently account for 50% of the hotel rooms available on Rarotonga.

Hotels Self-Catering Holiday rentals

Budget Total

Rarotonga 725 279 109 134 1,247

Aitutaki 98 58 41 39 236

Atiu 6 17 23

Mangaia 16 16

Mauke 7 7

Manihiki 2 2

TOTAL 823 343 159 206 1,531

VISITOR PURPOSE

Holiday visitors dominate the market as expected. The existing properties do not offer conferencing facilities and the MICE market is undeveloped. A breakdown of visitor purpose is summarised as follows:

ABOUT MIRAGE GROUP

MIRAGE GROUPS OBJECTIVE

Mirage Group objective is to fully renovate the subject property and establish it as Rarotonga’s premier resort and the only 5 star internationally branded property in the Cook Islands.

Mirage is seeking an experienced operator with a brand that will ensure the success of the Hotel and is aligned with the property and the objectives of the owners.

Selection Criteria

Mirage Group views the following key qualities as being important.

Experienced in the profitable operation of high quality resort hotels and with specific experience relevant to the South Pacific.

A demonstrable record of increasing the investment value of Hotels under

Management.

A 5 star brand commensurate with the quality and positioning of the property.

A positive attitude to full and open communication with the owners.

Substantial financial capacity.

A willingness to underwrite the performance of the Hotel.

A willingness to align operator objectives with Mirage Group objectives through an incentive-based fee structure.

Demonstrable strength of brand, marketing and distribution resources in the Hotel’s key source markets.

Supplier relationships that add value to the Hotel beyond its existing business.

Process, Construction and Timing

Mirage Group has received all necessary approvals to proceed with the project with the exception of the EIA (Environmental impact assessment.) approval which is in process. The approvals received include government approval to relocate the road around to the rear of the property thereby allowing exclusive and uninterrupted access to the pristine beach and marine environment.

Mirage Group is an Auckland-based property investment company with a broad portfolio of property interests. Some of the company’s more notable investments include the following:

The Mirage Apartment and Resort, a $42m project completed in 2003. This outstanding two-tower apartment in Auckland’s exclusive Parnell, consists of 125 apartments and many unique features including several pools and a lagoon with a beach area for tenants, owners and guests. This resort development incorporates a hotel/serviced apartment function. This project was completed on time and within budget with finance of $15m provided by WBC.

Bayswater Marina is a 415 berth marina facility in Auckland Harbour directly opposite the city center. This is currently a passive investment however future plans incorporate a development of both terrace housing and apartments on the 3.5ha of development space with an estimated in value in excess of $100m over a ten year horizon.

Hobsonville Marina is New Zealand’s third largest Marina. With 592 berths accompanied by a comprehensive marine service center and hard-standing for 72 vessels, Hobsonville Marina is currently a passive investment with a long term view of undertaking an intensive residential development project.

246 Queen Street in the heart of Auckland’s CBD is a $25m high rise retail and office investment. This landmark property was divested in 2007. This property was financed by ANZ.

The principals of Mirage Group are Simon Herbert and Greg Kernohan both of whom possess extensive experience in property and have a strong record of successful projects.

Greg Kernohan has a long history in property investment and development in addition to a background in sales and marketing. Greg has project-managed a number of Mirage Group’s developments, including the highly successful Mirage Apartments project noted above.

Prior to entering business as a property investor in 2002, Simon Herbert had a distinguished legal career specializing in resource management and planning law, corporate structuring and finance. Simon practiced with two of New Zealand’s leading law firms, six years with Russell McVeagh, and 12 years as a partner with Minter Ellison Rudd Watts.


DISCLAIMER

This document has been prepared by Mirage Group solely for the purposes of providing initial information to a select number of potential investors to assist them in deciding if they are sufficiently interested in the Mirage Resort & Spa Rarotonga to proceed with further investigation. It is provided on a confidential basis and is not to be re-supplied to any other person or reproduced in whole or in part without the prior written consent of Mirage Group.

The information contained in this document is intended as a guide only; it does not constitute advice and does not constitute any offer or contract for sale or lease or otherwise.

Mirage Group accepts no responsibility or duty of care whatsoever to any party who maybe provided with this report.


mirage resort & spa rarotonga presentation 9.3.2015

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