Investment Villas for Sale at First Landing Resort

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The contents of this memorandum and any attached financial forecasts should be read in conjunction with the Confidentiality and Disclaimer Notice at the end of this document.

First Landing Resort is pleased to announce the limited release of one, 2 bedroom beachfront villa and three, 2 bedroom luxury garden villas for immediate sale. This investment opportunity combines the benefits of owner holiday time in their villa, annual returns and good prospects for capital gains on the initial investment. As one of the selected investors who have previously expressed interest in purchasing a villa at the resort you are being given the first opportunity to secure an existing villa on the favourable terms set out in this document. The villas are already built and have more than two years of successful operations behind them.

The villas are a unique product in the Fiji market at the present time. They are priced competitively when compared on $ per square metre value to what else is on the market in Fiji. While First Landing has plans to expand the resort, the detailed plans are not yet finalized. Future construction of villas like the ones offered will only be a limited offering and definitely not at the prices offered in this document.

There are two investment options available which are discussed in this document and summarized below (amounts in $Fijian exclusive of value added tax).

Option 1: Purchase a villa with immediate entitlement to net income (after expenses) paid quarterly to the owner by First Landing. The owner receives 8 weeks per year occupancy entitlement. The Beachfront Villa Price is $F895,000 and the Garden Villa Price is $F695,000 under this option.

Option 2: Purchase a villa at a substantial discount and the owner foregoes the first three years of net income which is retained by First Landing as the manager. The owner still receives 8 weeks per year occupancy entitlement to their villa. The Beachfront Villa Price is reduced to $F725,000 and the Garden Villa Price is reduced to $F550,000 under this option.

BEACHFRONT VILLA “VILLA NALAMU”

 Legend recalls that the first Fijians arrived over 3,500 years ago landing on the beach at First Landing. The beach is known as Nalamu which, in Fijian means “pierced”. The name comes from the canoe that hit the reef and was forced to land on the beach bringing the first Fijians to these islands. As the Beachfront Villa looks on to this site it was thought fitting to name it “Villa Nalamu”.

This villa is also conveniently located near the reception at First Landing Resort and has its own tropical garden yard with lawn area and brick patio. The swimming pool has a spa and is 13 square metres (5.7m x 2.45m). The villa faces west looking out towards the Mamanuca Islands. The yard area is approximately 300 square metres.

Spacious and magnificent is how our guests describe the villa. The internal floor area is 111 square metres and 41 square meters of veranda and patio area. The entire villa is air conditioned. The lounge has a high cathedral ceiling lined with the tropical timbers of Fiji. The veranda is screened with a dining area. A DVD/ TV entertainment system with a cozy sofa and lounge chairs enhance the home like feel of the villa. At the back of the lounge is a full kitchen with a coconut timber counter top.

The downstairs bedroom has a tropical timber wardrobe and can have two single beds or one king sized bed. The private ensuite has an indoor and outdoor shower. The upstairs bedroom is accessed from a gallery walkway overlooking the lounge. This bedroom has a tropical hardwood floor and wardrobe with a full spa in the private ensuite. This upstairs bedroom has nice sea views as well.

 GARDEN VILLAS

 Enter into your own tropical wonderland. The Garden Villas have their own private yard with lush tropical gardens and a 10m wide swimming pool complete with spa which is 24.6m2. The private yard area is approximately 300m2.

The two bedroom villas are spacious having 130 m2 of internal floor space including a private outdoor shower. The villa is 10m wide. The large covered terrace and surrounding pool patio is 61 m2. A high ceiling lined with the tropical timbers of Fiji give the lounge and adjoining kitchen area a unique feeling. Both bedrooms are on the ground floor and each have their own private ensuite. Both ensuites have outdoor showers and the master ensuite has a private spa. Granite counter tops are featured in the kitchen and bathrooms. The villas are fully air conditioned and have a TV/ DVD entertainment system.

 BACKGROUND ON FIRST LANDING BEACH RESORT & VILLAS

First Landing Beach Resort & Villas has been established for over 11 years.

The resort is located at Vuda Point on a white sandy beachfront of 400 metres, the only one in the Nadi Bay area. First Landing is 15 minutes from Nadi International Airport and Lautoka City and 20 minutes by boat across Nadi Bay from Denarau Island. The resort is in an ideal location to access numerous activities on the mainland and nearby islands. The Vuda Yacht Marina borders the resort.

The current resort is located on 6 acres comprising lush tropical gardens along the beach. There are 37 bures at a quality 3.5 star rating in addition to the four villas which are to a 5 star standard. In addition to the popular award winning steak and seafood beachside restaurant, the resort has a large fresh water swimming pool, boutique, travel centre, health and beauty spa, water sports and scuba diving services. The resort has enjoyed high annual average occupancies of around 75% over 2005 and 2006, and anticipates a return to such levels as the political situation in Fiji normalizes after the events of December 2006. First Landing is well received by most of the international travel wholesalers marketing Fiji. The Resort was awarded the Fiji Hotel Association best resort in the Quality Accommodation category in 2002.

First Landing Beach Resort and Villas is owned by Barstock Investments ( Fiji) Limited ( Barstock). The shareholders in Barstock are:

Barstock is a resort and residential development company which also manages the current First Landing Resort.

 LAND TENURE AND THE NATUE OF THE INVESTMENT

 Purchasers will receive a 99 year native lease title to their villa under an arrangement very similar to strata title overseas. They will be able to sell their property and will be responsible through levies for upkeep of certain common facilities (pool, waste treatment etc). Native title comprises approximately 85% of the land in Fiji and is the most common form of title on which the major resorts in Fiji are built. All native land in Fiji is administered by the Native Land Trust Board who issues all leases. Annual rent payable is calculated as a percentage of gross revenue earned by villa.

This is not a timeshare investment. Owners will have title to their villa. They can sell their investment and can use it as security for bank finance. Foreign investors are able to fund 50% of their investment with local borrowings. This will reduce currency risk for prospective investors and allow them to take advantage of the tax deductions available on interest.

INVESTMENT CLIMATE IN FIJI

 Tourism is now the number one sector in the Fijian economy. Fiji has a natural affinity for tourism, given the friendly nature of the people and beautiful tropical environment. There is a wide range of tourism properties in Fiji, from quality backpacker to brand name international 5 star hotels. Fiji enjoys substantially higher visitor numbers than other South Pacific island destinations. It is the policy of government to encourage the further development of the tourism sector.

It is no secret that Fiji has had political unrest during its history with the most recent event being a takeover of the Government by the armed forces in December, 2006. An interim administration was quickly appointed with the Army Commander at its head. Through the media it appears a lot of people feel that longer term the recent events may be a positive for Fiji in reducing corruption and waste and providing a foundation for sound economic management. At present the country is peaceful and law and order has probably improved with the army presence. Investors should note that at no time during periods of unrest over the last 20 years have individual property rights or asset title ever been affected. Tourism has been affected since December 2006 with lower occupancies and full recovery may still be 12 to 18 months away.

Fiji also gets cyclones which affect business. However the longer term business trend is solid and during 2004, 2005 and most of 2006, Fiji’s tourism enjoyed record growth and high occupancy levels.

There has in the last five years been record investment by individuals to purchase managed tourism accommodation units with owner occupancy entitlements. There has also been record growth in the real estate market for holiday residential purposes. Fiji’s close location to Australia and New Zealand is an important factor regarding individual investment in Fiji. Fiji has a well structured and reasonably efficient investment procedures and approval processes for overseas investors.

The principals of Barstock have always taken a long term view of investment which over time shows continued growth despite political and natural events.

 VILLA MANAGEMENT

Initially First Landing will manage the four Villas as part of the resort inventory. First Landing may examine options including engaging a regional branded hotel operator to manage these villas, together with the existing First Landing Resort, at a later date, depending on the resort expansion plans. We have set the management fees at a level that we believe will be acceptable to such an operator. If further development proceeds, purchasers who bought the existing villas would then move into a body corporate structure with the owners of any new villas. This would ensure all villa owners access to any common facilities.

Villa owners will be able to spend up to a maximum of 8 weeks per annum in their Villa, with three weeks of this allowed during the peak tourism periods as designated from time to time. If owners choose to stay in low season or stay on a standby basis for all or part of their entitlement they may be able to preserve their investment returns while enjoying high levels of owner occupancy. Owners can use their entitlement themselves or give it to their friends and relatives. If not utilized this will reflect in an increased return to the investor as opposed to the investor that uses 100% of their entitlement. Owners wishing to spend more than 8 weeks a year in their Villas will be offered a competitive “owners rate” for the extra stay . During their entitlement stay the owners will pay charges related to villa house keeping (options for daily or twice weekly), utilities, and other fixed charges related to the operation of the villa.

Under the management structure all insurances, utilities, security and villa upkeep will be performed by First Landing or the international/ regional hotel operator selected.

METHOD OF OFFERING THE VILLAS FOR SALE

 Barstock are offering these villas for sale under arrangements designed to meet differing needs and financial considerations of purchasers. Two options are offered.

Option 1

The villas are being offered for purchase with immediate entitlement to income from the letting of the villa together with 8 weeks per year owner occupancy entitlement.

Option 2

The villas are being offered for purchase at a substantial discount off the current listed price. The purchaser will become entitled to investment income from the villa after three years from the settlement date. This will protect the owner from any continued downturn in earnings from the villas as a result of reduced visitor arrivals in Fiji following the political events of December 2006. It gives the investor guaranteed income up front in the form of a cash discount on the purchase price. The owner will still be entitled to 8 weeks owner occupancy per year during the first three years and only pay a utility and housekeeping fee while staying in the villa. Unused owner occupancy entitlement cannot be accrued to the next year. Barstock will take the income from the villas, meet all other cost obligations and bear the risks associated with the uncertainty of the income for the next three years. Under this option should the owner wish to sell the villa within the three year period, the condition of foregoing any net income would apply to the new owner for balance of the three year term.

In summary the Fiji Dollar purchase price (excluding value added tax) of the villas under the different options is as follows:

Villa Purchased with Immediate Purchased with Income

The purchase option with income entitlement after 3 years represents a $F170,000 discount for the Beach Villa and $F145,000 discount for each of the Garden Villas. This equates to approximately a 20% discount.

At the current exchange rates (25/06/07) the discounted purchase price of the villas with income entitlement after 3 years is:

 FINANCIAL & TAX CONSIDERATIONSS

 The purchase price is payable in Fiji dollars. This price is exclusive of 12.5% VAT (value added tax) payable, however investors are able to claim this back when they register as an investor in Fiji. Investors will need to consult their tax advisors as to whether earning income after three years under the discounted purchase arrangement will impact their ability to claim back the VAT on the purchase.

Returns on investment (ROI) will depend on a number of factors including future visitor arrivals in Fiji, achieved occupancies and rates and the amount of time you spend in your villa.

We attach to this memorandum the actual financial performance of the beachfront and garden villas over the last two years together with three year forecasts in Fiji Dollars. We believe the product has the advantage of an actual track record as opposed to just forecasts and provides a more secure basis for estimating future results. The actual results to June 30, 2007 show the impact on returns due to the down turn in the tourism sector which essentially started at the beginning of November 2006. We believe  ROI’s of 6% are achievable after year threes for both types of villas assuming 65% occupancy. If the imputed value of a minimum of 8 weeks owner occupancy per year is added, then the total returns may be as high as 10%. Investors who select the discounted purchase price option will find their returns even greater when they commence earning income after year three. First Landing will ensure a balance of income spread between the three garden villas during the year. The beach villa is a separate category of villa and the only one presently at the resort.

The attached financials show revenue exclusive of Fiji value added tax and hotel turnover tax, and overseas travel agent commissions. Charges relate to daily servicing of occupied villas, utilities (gas, water and electricity), insurance (material damage, liability and loss of profits due to fire or cyclone damage), rent paid to the NLTB, credit card commissions, incentives as part of room charges such as inclusive breakfast or free add ons for long stays (ie village trip, snorkeling trip, dinner etc.), general overheads (security, gardening, routine maintenance etc), management, marketing, reserve fund for furniture, fitting and repairs, and a management incentive based on achieving specified returns. These charges are in line with other types of managed resort investment units.

Investors in Fiji will pay tax on their net income from the villa at the Fiji tax rate of 31%. Net income is derived after deducting all applicable expenses including depreciation and interest on loan funds. Any loss incurred can be carried forward for up to 8 years. All investors and particularly those who take up the discounted purchase option should consult a professional advisor in Fiji on the tax and VAT implications of the purchase.

There is no general capital gains tax in Fiji which means premium properties, particularly beachfront and near to the beach can be a very tax effective form of investment. The Fiji Income Tax Act does allow for the taxation of gains from the sale of property where the property was purchased for the purpose of profit making by sale or where the investor is deemed to be dealing in properties.

Negative gearing is also permissible. Any secondary sales will be subject to a 2% of sale price charge paid to the Native Land Trust Board which will ultimately pass to the indigenous landowners.

FUTURE RESORT DEVELOPMENT

 First Landing have recently secured a 99 year lease over an additional 42 acres of prime beachfront and oceanview land on which future tourism development will take place. First Landing have also made an application for a foreshore lease over the reef in front of the resort which will secure a further 33 acres of crown lease for development over the water. Future plans may provide for “scraping’ of the reef to create 24 hour water at the beachfront which could increase the value of all property at First Landing. 33 acres of prime ocean view residential land two kilometers from the resort has also been acquired on a 99 year lease.

The 42 acre lease adjacent to the existing resort has the option for a residential development component which will add to the growth and reputation of the Vuda area as an alternative destination to the high density large hotel projects of Denarau, Momi and Natadola. The adjacent Vuda Yacht marina has plans for future expansion which will further complement the First Landing plans.

 These existing Villas are the first product available in the First Landing integrated resort development and give an investor the opportunity to gain ground level entry at competitive pricing. Further stages of development will be subject to appropriate funding structures and market demand studies.

 TIMETABLE

 Investors will secure their purchase by the payment of a deposit currently estimated at 10% of the purchase price into a solicitor’s trust account on entering into a binding purchase & sale agreement. Settlement will take place on completion of any conditions in the contract including necessary government approvals and the issuing of the title sublease by the NLTB. It is anticipated that settlement will take place within 60-120 days of exchange of contracts.

For more information on this exclusive offer contact us:

jokhanreators@connect.com.fj    or    jokhanreators@gmail.com  

CONFIDENTIALITY AND DISCLAIMER NOTICE

 This memorandum and forecasts are provided to selected parties in order to assist them in making their own evaluation of a private offer to purchase a Villa at First Landing Resort. The memorandum and forecasts do not purport to contain all the information that a prospective purchaser may require. Rather, they are designed to assist the recipient in making their own independent inquiries in connection with the evaluation.

The memorandum and forecasts are provided on a “Strictly Private and Confidential Basis” and must not be discussed or made available to any other person(s) without prior written approval of the Directors of Barstock. Barstock does not make any warranty or representation as to the completeness or accuracy of this document, nor to the attached forecasts available to the recipient.

Statements contained in this memorandum have been given in good faith and have been derived from information believed to be reliable at the date of preparation, June 2007. The financial forecasts attached to this memorandum were prepared using various assumptions as at June 2007. Such assumptions may or may not prove to be valid. While the assumptions have been developed in good faith and on the basis of information available at June 2007, no representations or warranties are made by Barstock or its Directors as to the accuracy and completeness of the forecasts and assumptions. In particular investors should make their own determinations as to the extent or timing of the recovery of the tourism industry after the events of December 2006.