Investment Guide

Modern... Mysterious... Exotic...

Tunisia
The new Dubai of the Mediterranean

Contents
Factsataglance........................3 GettingThere............................4 TheessenceofTunisia...............5 TunisianCuisine.........................6 NorthernTunisia.......................7 Hammamet...............................8 Sousse.......................................9 PortElKantaoui.......................10 TunisiasEconomy...................11 WhyInvestinTunisia...............12 TheRentalMarket...................14 RentalExpectations.................15 ReturnonInvestment.............16 TheDunesGolf&Spa.............17 5starResort

GEOGRAPHY
Tunisia is the northernmost country in Africa lying just 50 miles southwest of Sicily. It measures 465 miles from north to south and only 93 miles from west to east making it comparable to the size of England. The northern and eastern coastlines are bordered by the Mediterranean, while most of the southern half of the country is within the Sahara Desert.

Facts at a glance

Tunisia CLIMATE
Summers are hot and dry. In July and August daytime temperatures on the east coast average 30 C with 12 hours of sunshine. In the desert it can reach 45 C. In the far north, winters are mild but quite wet, with occasional snow. Daytime temperatures average 20 C all year long, however in the desert they rapidly fall at night to freezing.

PEOPLE
Tunisia has a population of around 10 million with more than half the population under the age of 18. The Berbers are generally considered to be the original Tunisians. Arabic is the official language whilst French is considered to be the language of business. English and German are spoken mainly on the coast and in the tourist areas. 3

Getting There

BY AIR
Tunisia has long been established as a tourist destination with many direct and indirect flights from the UK and Europe. Currently there are five airlines offering direct flights from UK airports with this figure set to increase once the new airport opens in 2009, which will allow budget carriers such as EasyJet and Ryanair to fly into the country. Thomas Cook & Thomson Fly offer direct flights from the following UK airports to Monastir:
London Gatwick London Luton Manchester Birmingham Coventry Bristol Doncaster Newcastle Glasgow

The following airlines also offer direct flights from the UK to either Tunis or Monastir airports: British Airways Tunis Air Nouvel Air Tunisie XL airlines

Additionally there are many excellent indirect connecting flights from most UK airports to Tunisia via Air France.

BY SEA
There are many frequent and inexpensive ferry services from Europe to Tunis, the capital, leaving from Marseille in France and from Genoa, La Spezia, Naples, Palermo and Trapani in Italy.
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The essence of Tunisia

Many visitors have been drawn to Tunisia for its sunny climate and its bargain beach-resort holidays: the white sandy beaches are glorious, the sea a clear turquoise, and some of the resorts are among the best the Mediterranean has to offer. However, this small country has so much more to offer, mostly within easy reach of the coast, and is now at last starting to promote it: friendly people, well-preserved whitewashed medinas, green forests in the north, a vast desert and lush oasis in the south, an amazing wealth of archaeological treasures inland, as well as an exciting and delicious cuisine, based on fresh local produce.

Tunisia is a mainstream holiday destination but it still attracts a lot of first time visitors to the country. Those that visit tend to come back again and again each time absorbing more and more of the culture. In the mysterious medinas, there is the feeling that a thousand secrets lurk behind every studded door; shops and stalls in the souqs and surrounding streets spring to life to serve the homeward bound with the freshest food. Fish are only minutes out of the sea, bread is baking on the spot and stacks of colourful vegetables are haggled over with 5 shouts and handshakes!

Tunisian Cuisine

Although international food is served in most resorts, many holidaymakers will want to try at least some local cuisine. The Arabs, Turks and French have all had an influence on the countrys cooking. With such a long coastline, fish is given pride of place on any menu and restaurant owners compete with each other to display the freshest catch. Bream, grouper, sea bass and red mullet are amongst the most widely available, while seafood speciality dishes are based on prawns, lobster and squid. In all but the cheapest restaurants customers are nearly always welcomed with complimentary hors doeuvres which may

of black olives and some delicious crusty bread. In most places the bread will also be accompanied with a small saucer of fiery red harissa paste made from hot chillies. A popular starter is the famous brik, a unique Tunisian dish which consists of a triangular-shaped envelope of crispy pastry containing a lightly cooked egg, often topped with fresh herbs, prawns or tuna. Couscous is an obvious main course, a tasty vegetable, meat or fish stew served on a bed of steamed semolina grains. Dessert is often a choice of fresh fruit or very sweet pastries like baklava, 6 filled with nuts and honey.

Northern Tunisia

For a small country, Tunisia offers plenty of variety besides its glorious beaches. The north, particularly around Ain Draham, has large oak forests and lakes, making it feel more like Europe than Africa. Tabarka is emerging as Tunisias northern flagship resort, while the charming old port town of Bizerte is still debating whether it really wants to entice international tourists or is quite content to remain a sleepy fishing town. For more than 3000 years, Tunis, the capital has been among the great cities of the Med and it still has plenty to offer.

Carthage is one of the best known of Tunisias archaeological sites on the outskirts of the capital. Founded in 814 BC by the Phoenicians, by the fourth century BC, Carthage had become the centre of their vast maritime empire. In 146 BC it was destroyed by the Romans who only 25 years later began rebuilding on the same site to become the 3rd largest city of the Roman empire. Today ancient ruins still remain and are a firm favourite with visiting tourists.

Hammamet

Hammamet, the longest established resort in Tunisia has been attracting holidaymakers since the 1960s. Less than an hours drive from Tunis airport and only slightly more than that from Monastir airport, Hammamet is geared up to yearround tourism. Easy-going and lively, with a good choice of restaurants, Hammamets first hotels were built in the centre close to the medina but shortly afterwards started stretching along the coast almost as far as Neubul, making the most of some of the finest beaches in the country.

10km from the centre is the new resort of Yasmine Hammamet which boasts a large marina with 740 moorings, a walled medina area with covered markets, luxury 5-star hotels, casinos, many Thalasso therapy centres, a theme park and much more. The town offers an excellent promenade lined with shops and cafes, gardens and parks, and entertainment complexes. Two 18-hole golf courses, Yasmine and Citrus are situated only 5 kilometres away from Hammamet.

Sousse

Sousse used to be just an excursion destination for day trippers; now it is a busy holiday centre in its own right. Packed with atmosphere and hundreds of years of history, Tunisias leading city beach resort offers a great selection of quality hotels, a wide choice of affordable restaurants and endless possibilities for shopping in both traditional markets and exquisite boutiques to rival those in Europe. Along with Carthage, Sousse was one of the Phoenicians three great coastal cities, with the earliest archaeological finds dating from

the 6th century BC. The charming medina seen above is the old heart of the city. A popular choice for Tunisians and foreign tourists alike, Sousse is a destination open for business all year round. The beaches stretch as far as the eye can see and the wide promenade is bustling with families enjoying their ice creams and traditional Tunisian sweets. Situated less than 20 minutes from Monastir airport, Sousse is an excellent choice for a rental investment due to its 9 popularity and year round appeal.

Port El Kantaoui

Purpose built around a picturesque marina which now draws luxury yachts from all over the world, Port El Kantaoui opened in 1979 and has been Tunisias most outstandingly successful tourist centre. With the look and feel of an elite residential district, it is the second home of the President, top politicians, diplomats and the fabulously wealthy. Millions of dinars have been poured into landscaping, with palm trees, shrubs and grass borders immaculately lining every road. The resorts hotels are equally sparkling; whitewashed palaces with

terraced gardens awash with bougainvillaea. Port El Kantaouis pride and joy are its beautifully manicured 18-hole championship golf courses. There are no membership requirements and while golfers with their own equipment are welcome, whose who prefer to travel light can rent everything they need from clubs to caddies at very reasonable rates. Dubbed as Tunisias Puerto Banus, Port El Kantaoui is the most exclusive Tunisian resort situated minutes from 10 Sousse and 30 mins from Monastir.

Tunisias Economy
Tunisia has for the past decade been a shining example to other African and Middle Eastern nations on how to grow and prosper as a developing nation. In 2007 the World Economic Forum ranked the country as the number 1 most competitive African economy (29th in the world) with also the highest ranking out of all the countries in the Arab speaking world. Comparing with other nations in the region, Morocco ranked 64th and Egypt came in 77th place out of 131. In the same report, Italy was placed 42nd on the list.

Inflation within the country has averaged just 3% p.a. for the past 10 years whilst economic growth has averaged 5% p.a. for the same period. In 1996 Tunisia entered into an "Association Agreement" with the EU which removes tariff and other trade barriers on most goods by 2008.

Tunisia has had to work extra hard to develop its industry and economy to the level it is at today. Unlike its larger neighbours, Libya and Algeria, Tunisia produces very little oil and so the country has had to develop and excel its other industries such as tourism, manufacturing and agriculture. Needless to say, Tunisia's economic reform program has been lauded as a model example by international financial institutions.

Tunisian Economic Facts at a glance

Highest economic competiveness in all of Africa and the Middle East. Highest GDP growth rate in Africa Consistently low inflation levels Government is very eager to encourage foreign investment into the country Free trade agreement signed with the EU. Member of the World trade Organisation and GATT.
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Why Invest in Tunisia?

Considering the strong economic factors you have read on the previous page, you may be asking yourself why hasnt Tunisia already exploded on the international property market? Well the question is fairly easy to answer. The forward-thinking government wanted to ensure that the Tunisian population wouldnt be out-priced out of their home market preventing them from buying homes in their own country, much like has happened in Morocco in recent years. They had prevented foreigners from purchasing property in Tunisia for a considerable length of time and nationals of some countries are still unable to buy there. Once the local home ownership figure was over 80% (higher than in the UK), where it stands today, they introduced an approval system whereby each foreigner would require approval from the Governor of the region before being entitled to buy. This permission still stands today but is pretty much a formality and there are generally never any problems with Europeans buying in Tunisia.

The fact that the home tenure figure is so high in Tunisia is excellent news for the foreign investor as it means that there is a strong local market in place when they need to realise their investments and sell their properties. This is particularly important when dealing with new and emerging markets as investors always need a clear exit strategy and be able to realise their investments when the time is right.

Tunisians are very wealthy in comparison to other countries in the region and the current GDP per capita stands at $8,800. The country is situated only 50 miles south-west of Sicily and this proximity to Europe has enabled them to forge strong ties with the EU which hasnt gone unnoticed elsewhere in the region. The largest developers from Dubai have recently started to invest very heavily into Tunisia, realising the stability of the country and the proximity to Europe making Tunisia an ideal link between Africa, Middle East and Europe. In the capital Tunis, they are currently investing over $20bn in projects such as Tunis Financial centre and Tunis Sports City. Further south, Emaar, the Dubai developers of the worlds only 7-star hotel are investing $2bn on the coast, creating an artificial marina, a world class golf course, exclusive residential properties and a number of luxury 5-star hotels.

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Why Invest in Tunisia?

Tunisia is perhaps best compared to one of their western neighbours, Morocco. Although Morocco doesnt bode as well as Tunisia in terms of economic growth and stability, UK and European Investors have been buying property there for a few years now and the price of Moroccan property has risen considerably during that time. It is difficult to determine exactly how much prices have risen, as with any emerging market, but reports from developers tend to suggest that the selling price has tripled in some areas. Infrastructure and transportation to and within and the country are excellent as Tunisia offers 7 international airports ensuring that no matter where you are in the country you are never further away than 2 hours from an airport. The largest airport in Northern Africa is currently under construction in Tunisia scheduled for completion in late 2009 which will offer cheap and inexpensive flights with carriers such as Ryanair and Easyjet. Within 10 minutes drive of this airport, the largest deep water port in the southern Mediterranean is also being built enabling the globes biggest trade ships and cruise liners to dock in Tunisia. Rental yields are very high in Tunisia (discussed in detail on the following page). To summarise, below are the key points explaining why you should be buying in Tunisia.

Why buy property in Tunisia?

Low property prices High Rental Yields Dubai developers investing heavily High rate of growth Low rate of inflation Most stable country on the continent Very cosmopolitan society Modern thinking nation Excellent relations with EU Relaxed restrictions on foreign ownership Fantastic Infrastructure Many direct flights from the UK & Europe 3 hours from UK / less than 2 from Europe Great weather all year round

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The Rental Market

The rental market in Tunisia is very strong due to the high domestic demand for rental accommodation in addition to the demand from Europe and Tunisias neighbours Algeria and Libya. Furthermore, due to the countrys location, Tunisia benefits from all year sunshine ensuring the rental season is much longer than in Europe. In fact, over the past years temperatures in early spring have been recorded as high as 40 degrees Celsius, however most of the time they are in the region of 25C to 35C. Having the highest home-ownership rate in Africa and certainly one of the highest in the world, Tunisia is a middle-income country which has outperformed most of its African neighbours both in terms of economic growth and political stability. As a result of their relative wealth, the Tunisian people are able to take frequent holidays in the most popular regions of Tunisia such as Sousse and Hammamet boosting the demand of the rental market. Tunisias larger neighbours, Libya and Algeria do not offer tourist facilities, resorts or hotels anywhere near the scale that Tunisia does, and as a result many Libyan and Algerian nationals tend to take their holidays in Tunisia boosting the demand for rental properties even higher. Last, but not least, we have the European contingent of holiday makers who arrive in Tunisia in their millions each year looking for a warm, sunny climate to spend their holidays. Being less than 3 hours from the UK and most of Europe, Tunisia offers something new and exciting for everyone and has been an established tourist destination with Europeans over the past 2 to 3 decades.
Tunisian weather chart from the BBC website

Generally, tourists who visit Tunisia tend to come back year on year, and those on their return trips will prefer to rent accommodation giving them more flexibility than a hotel does. As a result, there is considerable demand for rental properties all year round. In the summer, couples and families with younger children tend to visit the country whereas in the winter we see a lot of retirees and Golfers in particular. Whatever they are looking for, Tunisia offers it all!

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Rental Expectations
We have carried out a comprehensive survey of a number of different rental agencies located in Tunisia and abroad. The following rates are based on durations of one week and split into 3 seasons, low, medium and high. The resorts considered are the most popular ones with holiday makers, and the rental stock comprises of apartments currently available to rent in 2008.
Low Season Medium Season 1st Nov - 31st March 1st April - 15th June 15th Sep - 31st Oct 1-bed Apartment 2-bed Apartment 300 350 400 475 500 600 High Season 16th June - 14th Sep

The difficulty with comparing rental potential of existing properties to those of The Dunes Golf & Spa Resort is that currently there are no other true 5-star resorts in Tunisia offering all of the below: 24hr gated security Spa centre on-site 2 swimming pools Supermarket and Caf on-site On-site rental management agency Exclusive private beach for residents ONLY 20% residents discount on Spa and Golf facilities All-inclusive optional Platinum service As a result, we believe that there will be approx a 15% premium (excluding price inflation over the 2 year build time) on top of the above quoted prices for the Dunes Golf & Spa Resort giving the estimated rental figures below. (Please note rental values may vary. The figures below are merely estimates.)
Low Season 1st Nov - 31st March Medium Season 1st April - 15th June 15th Sep - 31st Oct 1-bed Apartment 2-bed Apartment 350 400 460 550 575 690 15 High Season 16th June - 14th Sep

*Someoftherentalagenciessurveyed:holidaylettings.co.uk,locasun.co.uk,villarenters.com,rentholidayhomes.com

Return on Investment
Using the estimated rental figures on the previous page, we can work out the projected rental yield on the properties. We will make the following assumptions:

Rental Yield
Property is a 1-bed apartment priced at 47,900 Property is rented out for 13 weeks per year (quarter of the year) 6 weeks rental in the peak season at 575 per week 4 weeks rental in the medium season at 460 per week 3 weeks rental in the low season at 350 per week Total annual rental return = 6,340 Gross Yield = 6,340 / 47,900 = 13.24% Net Yield (gross yield minus 10% rental management charge) = 11.92% Time taken to pay off the property = 100 / 11.92 = 8.39 years The above figure shows that even using a conservative rental window of only 13 weeks per year you may be able to pay off the property in just over 8 years using rental income alone. (Please note that rental rates can vary and are not guaranteed.) Below we examine the potential capital growth using the same apartment.

Capital Growth Potential

Current price 47,900 Initial Investment (on exchange) of 50% = 23,950 Appreciation during construction potentially up to 25% per year Possible value of apartment on completion in 2 years = 71,850 Profit of 71,850 - 47,900 = 23,950 potentially made during construction alone. Since only 23,950 was invested, potential return on capital in only 2 years =

100%

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Prices from 20,000

Development Overview
Situated on Tunisias Gold Coast, within easy reach of its most exclusive resort, Port El Kantaoui, The Dunes Golf & Spa Resort is a beachside development situated conveniently between two of Tunisias busiest airports offering direct and inexpensive flights to major European cities. The development itself comprises of studios, one, two and three bed apartments in a low rise setting in a prime residential area close to all facilities including two 18hole golf courses, marina and restaurants. The Dunes Golf & Spa resort is directly located next to glorious white sandy beaches that stretch as far as the eye can see. The resort offers on-site world class Thallasso Spa facilities including an indoor swimming pool, Turkish baths, a sauna, gymnasium and beauty & massage treatment rooms with discounts for residents. One can enjoy a massage on the exclusive private beach set aside for residents only or play a round of golf at the finest African golf courses located on your doorstep. The Dunes is a gated 5 star resort offering 24hr security and concierge facilities as well as on site amenities including a restaurant, snack bar, supermarket, bank, bakery and a rental management company. Rental income is high in this region due to the strength of the local, neighbouring and European markets ensuring yields can reach 10% to 14% per year.

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Prices from 25,995

Development Facilities
5-Star beach, spa and golf resort 100m from an exclusive private beach for residents only with sunbeds and umbrellas On-site 1st class Spa facilities with 20% discount for residents Gated community 24hr Security and Concierge Underground and off-street parking Two outdoor pools with lounge facilities (one adult and one childrens pool) Whirlpool Jacuzzi Poolside cabana bar Indoor pool in the Spa centre On-site rental management agency with low fees (10% current estimate) Laundry and cleaning service from as little as 1 per hour Optional Platinum service for seniors offering full services including airport transfers and welcome packages Satellite Television Video Entry System Private beach Electrical and water connection included Low community fees Show flat on-site

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High Rental Yields

Nearby facilities
On the doorstep of two world class 18-hole golf courses 20% Golf Discount Card for residents Water Sports/Fishing/Diving and Boat excursions running all year round Cultural excursions including Arabian nights and Belly dancing shows Shopping centres Excellent international cuisine Palm tree lined promenades Childrens water and theme parks including a petting zoo Horse and camel riding Hospital and Pharmacies nearby Traditional Medina offering bargain shopping

Payment terms 3000 euro reservation 50% on exchange of contracts 10% in March 2009 Balance on completion by the end of 2010

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Fantastic Capital Growth Potential

Property Specification
Stainless Steel door handles Phonic and Thermic isolation between floors Solar power system throughout the development Aluminum external carpentry with rolling blinds manufactured in Germany Outdoor solar lighting throughout the project Excellent interior carpentry First choice sanitary and electrical equipment and fittings Pre-installation for hot and cold air conditioning throughout the apartments Pre installation for washing machine Italian style kitchen including oven, hob and extractor, stainless steel sink and fridge freezer Anti slip ceramic tiles in kitchen and bathroom Fine Tunisian marble floors in lounge, bedrooms and corridors Satellite Television with over 5000 channels 24-hour concierge service Underground (at extra cost) and open-air car parking Freehold Land ownership Certificate

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