Feasibility Study for Pointe 91

CONFIDENTIAL

Feasibility Studyfor

Pointe91at

Chu Lai Open Economic Zone(CLOEZ)

Disclaimers:Study conducted by the Quang Nam Province

September 2007

Updated by PHILAND Corporation based on CBRE-Vietnam ResearchJune 2008

NOTE:Complete due diligence archives available at

http://www.philandcorp.com/investorsonly/site/login.phpPassword upon request

The purpose of this feasibility study is to provide information and current statistics on the demographics,infrastructure and plans for the development of the Quang Nam Province, the Chu Lai area to attract more high-profile

projects into the region such as Pointe91 by PHILAND Corporation.

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Feasibility Study Report for Pointe91 at Chu Lai

Table of Contents

Description Page

Table of Figures 3

Introduction 4

PART I RATIONALE FOR RESEARCH AND INVESTMENT 5I. FOUNDATIONS FOR THE ESTABLISHMENT OF THE PROJECT 5

1. Legal Foundation 52. Tourism Development Strategy 5

II. RATIONALE FOR INVESTMENT 6III. NATURAL, SOCIO-ECONOIC CONDITIONS OF CHU LAI OPEN ECONOMIC ZONE (CLOEZ)

IN DEVELOPING TOURISM AND SERVICE INDUSTRY 71. Natural Conditions 72. Area Demographics 11

IV. MARKET STATISTICS 151. Market of Visitors 152. Tourism Income and Tourism Turnover 183. Tourism Facilities 204. Labor in Tourism Industry 225. Tourism Investment 236. Tourism Marketing and Promotion 24

V. SECOND HOME MARKET STUDY IN VIETNM AND CENTRAL COAST BY CBRE 261. Resort Villa Projects in Central Coast Province 262. Current and Near Future Projects 303. Comparables 32

PART II PROJECT OVERVIEW by PHILAND Corporation 33I. COMPANY INFORMATION 33II. REPRESENTATIVE OFFICES 33III. INVESTMENT LICENSES 33IV. INVESTMENT OBJECTIVES 34V. MILESTONES 34

PART III CONSTRUCTION REQUIREMENTS BY CLOEZ 35I. GENERAL ARCHITECTURE 35II. INFRASTRUCTURE REQUIREMENTS 36

1. Electricity Supply 362. Water Supply 363. Drainage 364. Natural Ventilation and Lighting Solutions 365. Communications 36

III. ENVIRONMENT PROTECTION AND LABOR SAFETY METHODOLOGY 371. Environment Protection 372. Labor Safety 373. Fire Prevention Plan 37

IV. REQUIREMENTS ON EQUIPMENT AND COMFORTS 37V. REQUIREMENTS ON SERVICES IN TOURIST AND SERVICE AREA 38VI. GENERAL CONSTRUCTION PLAN 38


VII. ENGINEERING SOLUTION 38

Table of Figures

Table Description Page

1. Area, Population classified by Communes & Wards 11

2. Labor and Population Demographics 12

3. Visitors into the QN Province & Central Focal Economic Zone, 1997 – 2006 15

4. Comparison between the QN Province and others Provincesin the Central Focal Economic Zone, 2005 - 2005 16

5. Forecasted Arrivals into the QN Province 17

6. Foreign Visitors into the QN Province, 2005 17

7. Actual vs. Forecasted Comparison of Foreign Visitorsinto the QN Province, 1999 ÿ 2006 18

8. Domestic Visitors into the QN Province and others provincesas part of the Central Focal Economic Zone, 2000 – 2005 18

9. Actual vs. Forecasted Comparison of Domestic Visitorsinto the QN Province, 2000 – 2006 18

10. QN Province Tourism Revenue Summary, 2000 – 2006 19

11. QN Province Tourism Structure, 2001 – 2005 19

12. QN Province Daily Average Visitor Expenditure, 2006 – 2010 20

13. Structure of Accommodation Establishments in the QN Province, 2006 21

14. QN Province Tourism Labor Force Statistics, 2001 - 2006 22

15. QN Province Labor Force Statistics, 2001 – 2005 23

16. QN Province Investment into Tourism Infrastructure, 2001 – 2006 23

17. QN Province Tourism Investment Projects, 2006 24


INTRODUCTION

A once war ravaged country, Vietnam has emerged as Asia’s second fastest growing economy,behind China with an outstanding annual GDP growth rate of 8.2% as an average since 2000. Under thenew direction of the ‘Doi Moi’ Policy adopted in 1986, the Vietnamese government has taken steps toopen up the economy toward a more capitalistic society. Vietnam continues to closely monitor thegrowth and expansion of China and taken careful steps in planning and implementing new programs tohelp the country move forward toward an open capitalist economy. With the ASEAN bilateralagreement in December 2001 and ascension into the WTO in January 2007, Vietnam is positioned to beat the forefront of new global market opportunities for decades to come.

The developing country of Vietnam is filled with many opportunities, but the mystique of thissmall country of over 86 million people attracted over 4.4 million international visitors in 2007, a 14%y/y increase compared to 2006. Consequently, over 40% (1.8 million) visited the central region ofVietnam, mainly to witness historic places chosen by UNESECO as World Heritage sites such as HoiAn City, the ancient town and My Son Temple. They are both evident of Vietnam’s culture and traditionthat dates back to the late 15th Century. Other tourist attractions in the central area include the Island ofCham, Marble Mountain and the old capital city of Hue.

Chu Lai is located in the southern most part of the Quang Nam Province. Investments into thearea are managed by the Chu Lai Open Economic Zone (CLOEZ), notably recognized as the home to 20domestic and foreign manufacturing companies in two large industrial parks located in North Chu Laiand Tam Hiep, occupying over 150 hectares (370 acres). Chu Lai continues to successfully offerfavorable tax and duty incentives for the first 15 years of operations to attract new clientele into theregion. With the success of these industrial parks, it has created thousands of jobs for the localpopulation, helping to build new skill sets and raising the socio-economic status and modernization ofthe region and country. The CLOEZ continues to show a high-level of support, cooperation andaccommodation to large, high profile projects, especially tourism.

Tourism has emerged as one of Vietnam’s key industries, creating thousands of jobs, new marketopportunities for local shop owners and attracting an unprecedented number of foreign developers toinvest throughout the entire country. In comparison to Ha Noi in the North and Ho Chi Minh City in thesouth, the land, beaches and natural resources of the central region remains in tact. With the growth oftourism in Vietnam, the Central government has taken the necessary steps to pass new rules and laws totransform the area to become a premiere destination resort.

To meet this mandate, the CLOEZ fully supports long-term, sustainable projects into the regionto be the catalyst for its tourism development. Currently, the CLOEZ has awarded 9 licenses occupyingover 80 hectares (197.6 acres) of land to tourism operators for hotel resorts, various forms ofentertainment, restaurants and etc.


PART 1RATIONALE FOR RESEARCH AND INVESTMENT

I. FOUNDATIONS FOR THE ESTABLISHMENT OF THE PROJECT

1. Legal Foundation

The Pointe91 project establishment is:

· Pursuant to Law on Investment and Law on Enterprises in 2005;

· Pursuant to Decision No.148/2004/QD-TTg approved by the Prime Minister dated13 August 2004 on major orientation for socio-economic development of CentralFocal Economic Zone up to 2010 and vision for 2020;

· Pursuant to Decision No.253/2006/QD-TTg dated November 6, 2006, approvedby the Prime Minister on promulgation of Regulation of Operations of Chu LaiOpen Economic Zone, Quang Nam Province.

· Pursuant to socio-economic, weather, hydrographic features and conditions of theproject site.

2. Tourism Development Strategy

2.1 Development Strategy of the GovernmentThe government has adopted an aggressive plan to transform the central region tobecome a premiere tourist destination by 2010, taking advantage of the naturaland ecological conditions, as well as cultural and historic traditions. Thegovernment has aligned its budget and domestic resources for internationalcooperation and support to help realize the industrialization and modernizationprocess for the region and country with particular objectives, but not limited to:

· In 2006, foreign visitors coming to Vietnam reached the level of 4.5 to 5.5million and domestic visitors reached the range of 21 to 25 million andtourism turnover amounts reached more than USD 4.1 billion.

· In 2010, it is expected that foreign visitors coming to Vietnam will reach thelevel of 6.1 to 8 million and domestic visitors reach the range of 31 to 36million and tourism turnover amounts to more than USD 7.5 billion.

Today, Vietnam focuses on the development and expansion of its domesticmarket, bringing into play advantages of tourism development of each province,meeting integration requirement while adhering to national prerequisites.Consequently, the desire for tourist investments into the area is of the utmostpriority under the socio-economic development strategy of the provinces, localregions and country as a whole.


2.2 Tourism Development Strategy of Quang Nam Province

· Resolution No.08/NQ-TU dated April 30, 2003 of Provincial StandingCommittee of Communist Party has determined the development objective ofQuang Nam to become a industrialized province during the period of 2015-2020 with requirements of economic and labor structural change fromagriculture toward industry and services

· Resolution No.9/NQ-TU dated July 15, 2003 of Provincial StandingCommittee of Communist Party on orientation of tourism developmentstrategy of Quang Nam province was executed and maintained to 2015.

2.3. Orientation of Tourism Construction and Development in the Chu Lai OpenEconomic ZoneIt is determined that the tourism and service sectors will play a supporting role inthe development of Chu Lai Open Economic Zone, a unique competitiveadvantage compared to other economic and industrial zones in Vietnam.Furthermore, priority shall be given to the investment and development ofecological tourism projects with the desire to achieve a five star rating with anupscale and luxurious amenities and other type of services.

II. RATIONALE FOR INVESTMENT

Chu Lai Open Economic Zone, Quang Nam province is located in the middle of Central andHighland Focal Economic Zone (Hue – Da Nang – Dung Quat) with a territorial surface,adjacent to several economic activities not only within national boundary but also over theworld. The Government of Vietnam has shown support for investments into the area by grantingthe Quang Nam Province the authority to pioneer a trial of various extreme incentive programsand policies with the aim of multiplying this development model nationwide. The care andmaintenance of local resources, environment and beautiful coastal areas is highly attractive tostrategic investors. Moreover, the accession to the World Trade Organization (WTO) and fullintegration to ASEAN Free Trade Agreement (AFTA) of Vietnam has boosted tourism andservice potential for the province.The Quang Nam Province is home to two UNESCO-recognized world heritage sites, Hoi An, theOld Ancient Town and My Son, The Holy Land alongside other historic communities andarchitectural vestiges and sites such as the Cham Islands which includes the Cham Relics andCham Museum. In addition, Phu Ninh Lake, Thanh Beach, Ky Anh Tunnel, rich reed plains atthe Dam River, Bien Rang and Ky Ha Harbor. Moreover, more than 125 km-length of fresh andclean seashores have been designated to be preserved as beautiful beaches without deep-waterbay such as in Dien Ban, Tam Ky, Nui Thanh, and others. The Quang Nam Province hasincludes about 40 islands (with a total of around 6,000 ha of water surface, 11,000 ha of forestaround the lake area), traditional trade villages, colorful and attractive cultural types of 10different minority ethnic groups, unpolluted and fresh natural environments.


With a deeply enriched culture and diverse array of natural resources, historic and culturalattractions, the Quang Nam Province posses strong and viable conditions to attract more tourisminto the area. Investment and development of a premium grade, ecological tourist attractions andentertainment into the region are of strong interest to the Chu Lai Open Economic ZoneAuthorities.

III. NATURAL, SOCIO-ECONOMIC CONDITIONS OF CHU LAI OPEN ECONOMICZONE IN DEVELOPING TOURISM AND SERVICE INDUSTRY

1. Natural Conditions

1.1 Geographical locationChu Lai Open Economic Zone includes the town of Nui Thanh and its Communesof Tam Nghia, Tam Quang, Tam Giang, Tam Xuan I and II, North Tam Anh,South Tam Anh, Tam Hoa, Tam Tien of Nui Thanh Suburban District; TamThanh, Tam Phu, Tam Thang Communes and Ward An Phu of Tam Ky City,Quang Nam Province.

Chu Lai Open Economic Zone is bordered by:

· East Sea in the East

· Tam My and Tam Thanh Communes of Nui Thanh Town, Quang NamProvince in the West

· Binh Son Suburban District, Quang Ngai Province in the South

· Thang Binh Suburban District, Quang Nam Province in the NorthMain traffic routes through the Economic Zone include National Highway 1A andthe national railway that runs from the north to the south.

1.2 TopographyThe Chu Lai Open Economic Zone has a diversified topography across the region.It consists of sand dunes, plain and low hills transitioning from the western highmountainous area. Generally, the topography slopes from the West to the East,gradually downward sloping toward the Ky Ha port, an estuary area with a widewater surface and other rivers. The topography of the different areas found is asfollowing:

Seaside sand-dune area

This area has a gentle slope with prevailing heights as following:

· Average heights from 3.5 to 4.5m


· Lowest heights from 2 to 2.5m (accounting for a small area adjacent to thesea)

· Highest heights of 32m found on in the island of Tam HaiIn general, the topography slopes toward the direction of the sea and TruongGiang river.

Tam Phu areaBetween the Truong Giang and Tam Ky branch rivers, the area has plain andriverside sand dunes with the prevailing topographic heights as follows:

· Average heights from 3.5 to 4.5m (accounting for 70% of whole total area)

· Highest heights from 12 to 22m are top of sand dunes adjacent to TruongGiang river

· Lowest heights from 0.6 to 1.5m are low field adjacent to the lake and swamparea, and Cam Tu and Tam Ky rivers

Generally, the topography slopes toward the direction of the Cam Tu, Tam Kyand Truong Giang Rivers, with average slope ranging from 0.2% to 5%.

Chu Lai- Ky Ha area

This area has a plain and low hill topography, transitioning from the western highhill area. The prevailing height is as follows:

· Average height ranging from 3 to 8m

· Highest height averaging from 12 to 40m (height of hilltop)

· Lowest height reaching the level of 0.1 to 1.5m belongs to the low riversidefield and the valley of Tan An river. Topography slopes toward rivers withaverage slope ranging from 0.2 to 10%.

In general, the Chu Lai Open Economic Zone area has a topography convenientfor construction and natural water drainage, except areas adjacent to river and seawith topographic height of lower than 3.0 m, thus needing a ground leveling ifconstruction is to implemented.

1.3 Weather conditionsChu Lai is located in the Southern Central weather region that has a non-coldwinter, the daily and yearly temperature amplitude is low. It experiences 2seasons every year, dry and humid, and the rainfall level is rather high.According to the records over the last 20 years from the Tam Ky weather station,the region’s weather is as follow:


1.3.1 Temperature Celsius Fahrenheit

· Average/year 25.6 78.1

· Maximum average 29.7 85.5

· Minimum average 22.7 72.9

· Average temperature amplitude/month 7.0 44.6

1.3.2 Humidity

The average humidity level per month is about 82%. From September to October,the relative humidity is about 82 - 88%. From April to September, the humiditylevel is 75 -81%.

1.3.3 RainfallGenerally, the area experiences rainfall during the months of September toDecember.

Millimeters Inches

· Average rainfall/year 2,491 98

· Yearly maximum rainfall 3,307 130

· Yearly minimum rainfall 1,111 44

· Daily maximum rainfall 332 13

1.3.4 Wind

The region has 2 main wind flows; East and North East

· The East wind flow is from March to August

· The North East wind flow is from October to November

meters/second

· The wind speed

Yearly average 2.9Maximum (in storm) 40

Average high: 14 - 28


1.3.5 Special weather

· Storms are usually from May to July. On average, this region has 0.5 directstorm, and is influenced by 2 to 3 other storms and tropical low pressure

· Hot dry West wind: the South West wind appears from May to August. Theareas experiences 10 - 15 hot dry days during these months.

1.4 HydrographyGenerally, high tides occur in October with a duration period of up to two weeks.The remaining time experiences half the daily tide line. Average water levelamounts to 1.2m with large tide intensity ranging from 1.2 to 2m and small tideintensity averaging 0.5m. Average flow speed ranges from 0.2 to 0.3m/s, withmaximum speed of 2.5 m/s. Under large storm conditions, the water levels havebeen recorded at 1.5 to 3m.

· During 1964-1975 there were four great floods, notably the historic flood of1964 that flooded the city of Tam Ky with flood levels of 3m (118 inches) inone week.

· The research area is affected directly by hydrographical regime of the Tam Kyriver. The river is a confluence of ten small rivers and streams originatingfrom the western mountains, flowing from west to east into to the main riverat Xuan Dinh - Phu Tho, Tam Tra commune in Nui Thanh suburban district,then following Northwest – Southeast direction to reach An Hoa seaport ofNui Thanh. The basin area averages 800 km2. Due to its location, the heavyrain area, is controlled by heavy forestry with relatively, stable upstream flow.The flood crest flow intensity of the main stream ranges from 4,000 to5,000m3/s.

· River at the basin is affected by tidal regime, with rather strong flow, shortriver length, and river slope of more than 2%.

· Tan An tributary river originates from Nui Thanh and is slightly affectedwhen large flood inundated the field at western area of Nui Thanh town.

· Truong Giang tributary river is a saline one, flowing near the sea and linkingAn Hoa estuary with the Dai Seaport in Hoi An. In the event of a large flood,only the adjacent areas of the river are adversely effected.

1.5 Hydrogeology, Project Geology, Earthquake1.5.1 Hydrogeology

Underground water level exists at the depth level of 2 to 10m. Thus, it is requiredto be considered carefully when implementing the construction work.

1.5.2 Project geology


This region is similar to Da Nang-Hoi An region, a part of caledmi tectonicstructure. Quang Nam-Da Nang region has experienced geological developmentperiod from aleczoi – kainozoi.

Average land bearing intensity reaches the level of 1.5-2.5 kg/cm2.

1.5.3. EarthquakeAccording to Institute of Geological Physics, the project site lies in a region thatmay be affected by earthquake with intensity of 6 Richter scale.

2. AREA DEMOGRAPHICS

2.1.1. Population and LaborThe population in Chu Lai Area is predominantly Vietnamese. The estimated populationis 150,000 people, with an average growth rate of 1.76%. The population distribution isunequal with a low-density rate with a wide range amongst comparable areas based onsize and distribution of the agricultural land area. Total population is estimated to be150,000 people, amongst the:

· Urban population: about 16,900 (11.2% of total population)

· Rural population: about 123,100 (82% of total population)Population density found in the towns of Tam Quang and Tam Xuan I is approximately1,000 people/km2.

Lower density towns of Tam Nghia (122 people/km2) and Tam Anh were recorded withless then 200 people/km2 .

The major livelihood found amongst the population is agriculture (including forestry)with 118,300 workers, approximately 84.5%. A majority of the remaining work in thefishing industry, a small portion of the population found near Ky Ha works in themanufacturing industry and handicraft sector. Living standards and education level arenot high. They are strongly dependent on the natural living conditions.

Table 1: Area, Population classified by Communes and Wards

No. Communes, Wards Natural area (ha) No. of houses PopulationTotal Female

A Nui Thanh 23,601 24,380 111,200 56,7301 Nui Thanh 457.48 2,446 9,800 5,1002 Tam Hiep 3,758.35 2,587 9,971 5,0643 Tam Quang 1,137.96 2,889 13,000 5,9004 Tam Hai 1,560.71 1,851 7,745 3,9265 Tam Anh 4,290.59 3,435 14,865 7,5906 Tam Hoa 2,260.81 1,995 8,430 4,3017 Tam Giang 1,150.74 1,494 11,872 6,0508 Tam Tien 2,091.42 2,631 11,070 5,6209 Tam Nghia 5,165.74 2,638 12,750 7,100

10 Tam Xuan I, II 1,727.11 2,415 11,700 6,084B Tam Ky Town 5,738 6,547 28,580 14,850


10 Phuong An Phu 1,457 1,600 7,205 3,67511 Tam Phu 1,603 1,800 8,113 4,14012 Tam Thanh 630 1,434 6,391 3,32013 Tam Thang 2,048 1,713 6,868 3,570

A+B The whole EZ 29,340.0 30,928 140,000 71,580

2.1.2. Labor

· Population of the working age in the area is 66,500, approximately 47.5% of the totalpopulation

· Labor force in all industries is 40,300, about 70% of working age population

· The majority of local laborers are in the Agriculture and Forestry sector with 8.7%,while a small portion is in the Service & Administrative and Industry & LaborerSectors with 8.7% and 12.1%, respectively.

· Labor in Sector I (Agriculture, Forestry & Fishery) is 31,930 people, 55.5% oftotal labor force.

· Labor in Sector II (Industry & Laborer) is 3,500 people, 6% of total laborforce.

· Labor in Sector III (Services & Administration) is 4,870 people, 8.4% of totallabor force.

· Population in working age of other sectors (students, disabled, housewives,etc.) is 17,225 people, 29.9% of total population of working age.

Table 2. Labor and Population Demographics

No. Item Unit Total Percentage (%)

1 Total population person 150,000 -2 Total household house 30,928 -3 Working-age population person 66,5004 Labor in economic sectors person 57,525 100.0

a Sector I (Agriculture, Forestry & Fishery) person 31,930 55.5b Sector II (Industry & Construction) person 3,500 6.0c Sector III (Services & Administration) person 4,870 8.4d Other sectors person 17,225 29.9

2.2. Economic - Technical Basis, Architecture of Buildings2.2.1. Industry, Small Scale IndustryCurrently, there are 2 centralized industrial parks (North Chu Lai and Tam Hiep) withmany different kinds of businesses. A majority of these high-profile investors are fromEuropean and Asia Pacific countries with substantially large investment budgets. Otherindustrial parks are in the process of promoting infrastructure investment.


2.2.2. Tourism, Service and Trade

Currently, there are 3 tourism projects in operation with small scale, low quality andincapable of meeting the international standard of tourism services.

2.2.3. Public works

Aside from the Office of the People’s Committee at district level in the town of NuiThanh, public works at the ward/commune level include:

· A medical station

· Several education infrastructures for kindergartens, preliminary and high school, etc.

· Commercial infrastructure such as markets, stores, restaurants, mini hotels, etc.

2.2.4. Supporting infrastructure

a. By AirwayThe Chu Lai Airport was formerly a Class I airport per American Standards witha main runway of 3,050m x 45m (length x width) and an auxiliary runway. Therunway surface quality is in operating condition.

The airport upgrade has been finished and has been under operation since March3rd 2005 with 3 flights a week from Ho Chi Minh City operated by VietnamAirlines, Vietnam’s largest Carrier. With the growth and demand of travelers intothe region, Vietnam Airlines is planning for a new route from Chu Lai to Ha Noiin the near future.

b. By Railway

The independent national railway connecting the north and the south, extendsmore than 40 km long through the Chu Lai Open Economic Zone. The train flowthrough the area is 15 couples/day, including 1 couple/day for public missions.

c. By Road

The National Highway 1A runs parallel with the national railway, extending 40km in length and 12km in width covered in bitumen concrete through the Chu LaiOpen Economic Zone. The section from Da Nang to Quang Ngai of the NationalHighway 1A experiences the highest amount of traffic with shops, marketplaces,and people residing on both sides of the highway.

d. By Waterway

Due to its geography, Vietnam is accessible by the ocean and inlet waterwayscomprised of its streams and rivers.

i. By way of Sea


The Ky Ha Seaport is 12km away from National Highway 1A. It wasoriginally established and occupied by the US military. With plans toimprove the entire region, the province has allocated a sizable budget torehabilitate and upgrade the newly constructed Ky Ha Sea Harbor withimproved inlet roads for freighters and accessible docking stations forlarge ship liners.Before 1996, the Ky Ha Harbor had a 300m-long Quay No.1 allowing shippassage of 150m-wide and 8m-deep, able to receive 10,000 DWT ship. In1997, the Quang Nam Province started construction of Quay No.2 that is300m-long and 100m-wide with reinforced concrete structure. It has beenin operation since May 2002 and has the capacity to receive 5,000 DWTships. Since May 2002, Ky Ha Port has been receiving 50 shipments with45,000 metric tons of goods, together with 271 TEU of containers. Anumber of buildings have been constructed on site to be used aswarehouses as part of the port operations.

ii. By way of Inland WaterThe river system within the Open Economic Zone includes:

· Tam Ky River is 28km in length, 16km exploitable, classified as a IVriver with average water level of 1m

· Tan An River is 16km in length, classified as a VI river with anaverage water level of 1m

· Truong Giang River originated from the Thu Bon River and flowsfrom along the coast at meeting the ocean at the Ky Ha Bay

Generally, the river and arroyo systems in the Open Economic Zone is naturalwith a prevailing technical standard of class VI. Traffic occurs mostly in the rainyseason and moderately used during the dry season.

e. Drainage

There is almost no drainage system in the area. Rainwater and wastewater aremainly disposed naturally to local rivers Tam Ky and Truong Giang, and thenflowed to the sea at An Hoa seaport.In order to reduce flood intensity for the Tam Ky river basin, some largereservoirs have been constructed:

· Phu Ninh Lake with total area of 18.9¸36km2, volume of 344 million m3

· Thai Xuan with total surface area of 6.8km2

· other small lakes such as Lake May, Lake Doc Co, and a few others serve aswater reservoirs to help reduced flooding in the basin areas.

f. Water supply


In the Chu Lai Open Economic Zone, a water treatment plant has been built withthe capacity of 5,000 m3/day. This plant pumps the water from Thai Xuan Lakeand supplies it to the North Chu Lai Industrial Park.

Tam Ky City, which is adjacent to Chu Lai Open Economic Zone, has built awater supply system with the designated capacity of 15,000 m3/day. The watertreatment plant is located at the west wing of this town. Water from Phu NinhLake flows itself to the water treatment plant through reinforced concrete pipesystem of F 600 and 7,000m in length.

Water treatment technology process is as the following:

Water ® Pump station ® Mixing pool ® First water filtration pool ®Second water filtration pool ® Sterilization ® Clean water pool ®Water supply pipe system

g. Electricity supply

Currently, the Quang Nam Province and the Chu Lai Open Economic Zone issupplied by two electricity supply sources:

· Tam Ky station supplies:110/35/10 KV – Capacity 1x16MVA

110/35/22 KV – Capacity 1x25MVAThis station is the main supplier for Tam Ky City and surrounding southernsuburban districts in the Province.

· Cau Do stations supplies:

110/35/15 KV - Capacity 1x25MVAThis station is the main supplier for the town of Hoi An and other suburbandistricts within the Province.

h. Power GridSeveral high voltage lines are found extend through the Quang Nam Province.They include:

· 220 KV Da Nang-Doc Soi line is approximately 135km in length.

· 110 KV Cau Do-Quang Ngai single-line is approximately 130 km in length,mainly supplied to the Quang Nam Province.

· 35 KV line is approximately 205.9 km in length, mainly supplied to thesuburban districts of Quang Nam Province.


IV. MARKET STATISTICS

1. Market of Visitors

Quang Nam’s tourism plays an important role in the overall development of tourism aspart of the Central Focal Economic Zone. In recent years, the growth rate of Quang Namtourism and the country as a whole has demonstrated a strong growth, with the number ofvisitors into to Quang Nam Province, relatively higher than that of the Central FocalEconomic Zone (the average growth rate about 25.1% p.a. compared with 17.15% p.a. inthe period of 1997 -2000, respectively). In 2005, the number of visitors into Quang Namaccounted for about 49.85% of total visitors to Central Focal Economic Zone. There wereover 1,650,000 visitors into Quang Nam in 2006 (Source: CBRE Vietnam).

Table 3. Visitors into the QN Province & Central Focal Economic Zone, 1997 – 2005Unit: Person

Place 1997 2000 2003 2004 2005Average

growth/year(1997 - 2005)

Quang Nam 227.016 402.973 826.000 1.024.412 1.362.126 25,1%Central FocalEconomic Zone 1.450.866 1.702.775 1.649.394 2.144.290 2.732.274 17,15%

Ratio 15,64% 23,66% 50,01% 47,76% 49,85%

Source: Quang Nam Tourism Service and Tourism R&D Institute

1.1 Foreign visitorsThe Quang Nam Province is an attractive destination for foreign visitors. Yearafter year, the number of foreign visitors into Quang Nam continues to exceed thenumber of domestic visitors. The average growth rate of foreign visitors in the1997 - 2005 period was 22% p.a, much higher than that of other provinces in theregion, such as Da Nang (8.77%), Quang Ngai (15.53%), Thua Thien Hue(12.24%) and Binh Dinh (12%)

Table 4. Comparison between the QN Province and other provinces as part of the Central Focal EconomicZone, 2000 – 2005

Unit: Thousand people

Province,City 1997 2000 2002 2003 2004 2005

Avg.growth/year(1997 - 2005)

Quang Nam 144.820 226.838 400.441 402.229 493.217 712.529 22,0%Da Nang 185233 194.670 121.437 174.453 236.459 272.491 8,77%Quang Ngai 4620 6.400 8.600 6.800 10.000 11.400 15,53%TT - Hue 204.028 223.200 272.000 210.000 260.000 369.000 12,24%Binh Dinh 18588 20.336 23.412 18.174 25.000 32.000 12,00%



Foreign visitor records according to CBRE – Vietnam in 2005, reflect a largenumber of visitors from France (largest percentage), Australia, England, Germanand American. Records reflect a steady increase from Australian and Americans,while the Japanese and other markets have slowly declined. Visitors from nearbyrepresent a small percentage, but that number in 2005 was higher than in 2004.

Table 5. Forecasted Arrivals into the QN Province, 2006 – 2010

FORECAST ARRIVALS TO QUANG NAM PROVINCE 2006-2010

No. Items Units 2006 2007 2008 2009 2010Averagegrowth

rate (%)1 Total visitor

arrivals arrivals 1,500,000 1,700,000 1,950,000 2,250,000 2,600,000 14.74

Foreign visitorarrivals arrivals 700,000 800,000 900,000 1,030,000 1,200,000 14.42

Domestic visitorarrivals arrivals 800,000 900,000 1,050,000 1,220,000 1,400,000 15.02

a Total overnightvisitor arrivals arrivals 470,000 526,000 620,000 730,000 860,000 16.31

Foreign visitorarrivals arrivals 320,000 360,000 420,000 500,000 580,000 16.03

Domestic visitorarrivals arrivals 150,000 166,000 200,000 230,000 280,000 16.89

b Number of visitors arrivals 1,030,000 1,174,000 1,330,000 1,520,000 1,740,000 14.01Foreign visitorarrivals arrivals 380,000 440,000 480,000 530,000 620,000 13.02Domestic visitorarrivals arrivals 650,000 734,000 850,000 990,000 1,120,000 14.57

2 Number of hotels hotels 85 90 96 106 120 9.00

Number of rooms rooms 3,400 4,300 5,000 6,000 7,500 21.87

Table 6. Foreign Visitors into the QN Province, 2005

No. Nationality Persons Percentage(%)

1 France 51,350 17.932 Australia 45,338 15.833 England 25,947 9.064 Germany 25,201 8.805 America 24,893 8.696 Japan 13,338 4.667 Spain 12,168 4.258 Canada 8,936 3.12


9 Holland 8,065 2.8210 Switzerland 5,832 2.0411 New Zealand 5,819 2.0312 Denmark 5,772 2.0213 Thailand 5,772 2.0214 Swiss 5,645 1. 9715 Belgium 5,339 1.8616 Italia 4,845 1.6917 Israel 2,922 1.0218 Ireland 2,913 1.01719 Norway 2,652 0.9320 Austria 2,230 0.9221 China 1,901 0.6622 Korea 1,712 0.6023 Singapore 1,522 0.5324 Finland 1,013 0.3525 Others 14,824 5.18

Total 286,342 100.00

Table 7. Actual vs. Forecasted Comparison of Foreign Visitors into the QN Province, 1999 - 2006

Unit: PersonForeign Visitors 1999 2000 2001 2002 2003 2004 2005 2006*Actual 167.400 226.838 314.219 400.441 402.229 493.217 712.529 797.899Forecasted 74.000 88.000 100.000 110.000 122.000 134.000 145.000 NA:

Variance 93.400 138.838 214.219 290.441 280.229 359.217 567.529

1.2 Domestic visitors:The market share of domestic visitors to Quang Nam compared with other provinces inthe Central Focal Economic Zone is significant.

Table 8. Domestic Visitors into the QN Province and other provinces as part of the Central Focal EconomicZone, 2000 – 2005


During the 2000 - 2005 period, the forecasted annual average growth rate of domesticvisitors into Quang Nam was 12%. The actual recorded number was 29.5% p.a, higher

City.Province 2000 2001 2002 2003 2004 2005

Avg. growthrate/year

(2001 - 2005)Quang Nam 176,135 229,260 259,137 423,771 531.195 649,597 29.5%Da Nang 208,485 291,462 351,059 339,381 412,647 486,383 13.66%Quang Ngai 79,406 86,600 93,400 83,200 130,000 152,000 15.10%TT - Hue 278,363 328,000 391,000 400,000 500,000 681,000 20.04%Binh Dinh 102,302 126,060 139,167 165,166 250,000 348,000 28.90%


than the entire region’s average growth rate of 19.98% as well as other provinces in theimmediate region.

Table 9. Actual vs. Forecasted Comparison of Domestic Visitors into the QN Province, 2000 - 2006Unit: Person

Domestic Visitors 2000 2001 2002 2003 2004 2005 2006Actual 176,135 229,260 259,137 423,711 531,195 649,597 881,158Forecast 30,000 36,000 43,000 50,000 57,000 65,000 NAVariance 146,135 193,260 216,137 371,711 474,159 584,597 -

In general, the number of foreign and domestic visitors into the Quang Nam Province hasgradually increased year over year. The number of foreign visitors is substantially largerthen that of domestic visitors. On average, foreign and domestic visitors are reported tostay, 2.19 and 1.54 days, respectively.

2. Tourism Turnover & Tourism Income

Tourism revenue is calculated under two main facets in Vietnam:A. Tourism turnover is revenue directly generated from tourism companies whereby

visitors purchase products and services through travel agencies and otheraccommodating establishments.

B. Tourism income is revenue indirectly generated from visitors purchasingaccommodations such as food, beverage, transportation and other services providedby local and foreign parties.

Table 10. QN Province Tourism Revenue Summary, 2000 - 2005.Unit: Billion VND


The tourism turnover of Quang Nam has increased continuously in term of absolute valueand maintained at high growth rate. In 2000, Quang Nam’s tourism turnover was 43.515billion VND, accounting for 7.62% of total turnover of the Central Focal Economic Zone.That number was 290 billion VDN in 2005 and 414 billion VND in 2006. The annualaverage growth rate was 39.70% during 2000-2006 period.

Province. City 2000 2001 2002 2003 2004 2005 2006*Average

growth rate(2000-2005)

Quang Nam 43,515 78,782 121,108 123,209 180,000 290,000 414,000 39.6 %Central FocalEconomic zone 570,799 694,167 866,933 851,599 996,674 1,097,800 - 12.14%

QN/Region 7.62% 11.35% 13.97% 14.47% 18.06% 25.50% - -


In tourism turnover structure of Quang Nam Province, the main proportion comes fromaccommodations, accounting for 61.27% of the total turnover; turnover from food anddrink, transportation accounts for 29.42%; travel turnover holds the share of 1.57%;turnover from other services makes up the rest of 7.74%. From those figures, we can seethat the region is lacking supporting and value-added services for better serving demandsof visitors, thus increasing the average staying days of visitors and spending of visitors aswell. In order to be higher satisfied by customers, we need to improve tourismsupplement services.

Table 11. QN Province Tourism Structure, 2001 - 2005.Unit: Billion VND

No. Item 2001 2002 2003 2004 20051 Travel 1.485 2.330 2.160 3.061 4.5002 Accommodation 47.053 75.960 80.619 114.360 170.0003 Food & Drink 15.265 24.830 22.973 33.281 41.3664 Goods 0.204 0.692 0.782 2.947 -5 Transportation 1.383 1.711 1.469 3.060 -6 Entertainment 9.530 13.199 12.055 15.191 22.0007 Others 3.862 2.386 3.151 5.625 83.500

Source: Department of Tourism of Quang Nam Province

Table 12. QN Province, Daily Average Visitor Expenditure, 2006 - 2010 (per $USD)

Total Accommodation Food Transport Sight-seeing Shopping Entertainment Healthcare Others

AVERAGE 119.1 24.8 18.2 11.5 7.1 42.4 4.2 0.9 10.1

MEANS OFTRANSPORT 8.9 7.0 6.8 40.2 4.3 0.8 1.2

By air 14.2 8.2 4.2 21.7 4.6 0.4 4.9 0.7 14.0

By car 8.6 7.2 3.4 49.9 6.5 1.8 4.8 1.0 8.4

By train 16.7 7.5 24.9 62.3 3.1 - 25.0 0.7 13.2

By ship 17.7 10.0 4.4 42.8 3.7 1.4 10.1 3.3

PURPOSE OFVISIT 14.1 8.2 4.2 25.9 4.6 0.7 4.7

Leisure 18.1 12.9 7.6 45.6 4.5 0.9 10.1 0.9 7.7

Visit relatives 24.7 16.9 9.5 57.4 3.0 1.4 19.9 2.8 8.3

Press 19.1 7.9 7.0 43.7 3.6 0.7 8.4 - 32.4

Business, TradeAffairs 18.3 12.3 11.3 52.7 8.2 0.8 9.6 - 73.2

Conference - 61.1

Others 17.7 11.8 6.7 37.7 3.6 0.8 11.1 0.4 15.4

PROFESSION 18.7 11.2 7.6 47.7 4.9 0.9 9.0

Businessmen 150.8 31.6 21.2 15.7 8.6 48.6 3.9 1.1 20.0


Journalists 145.5 31.3 14.5 8.0 10.4 62.2 1.9 - 17.3

Teacher,Lecturers 115.6 21.4 20.9 10.4 6.5 44.3 5.8 1.3 5.0

Architects,Engineers,

Doctors,Pharmacists

162.9 28.1 26.7 20.2 58.1 2.9 0.3 13.3

Retired 87.6 18.5

Students 77.3 19.2

Gov't employees 107.1 24.9

Others 114.8 24.8

AGE

15-24 81.0 18.7

25-34 123.8 24.1

35-44 166.5 33.7

45-54 111.9 21.5

55-64 150.9 37.9

GENDER

Male 114.5 25.1

Female 124.4 24.4

3. Tourism Facilities

Tourism facilities are factors creating uniqueness and differentiation for tourismproducts, giving a distinct image and experience. They are one of the most importantselection criteria for visitors seeking a new place or location to visit.

3.1. System of Accommodation EstablishmentsWith the increase of visitors, Quang Nam has steadily increased the number ofaccommodation establishments and services at a scalable rate to meet the basicgrowing demands of visitors in terms of quantity as well as quality.A majority of the existing hotels are located in town of Hoi An and Tam Ky. In2006, the Quang Nam Province recorded 87 hotels with 3,159 rooms and 4,716beds.

Table 13. Structure of Accomodation Establishments in the QN Province, 2006

Items No. of Hotels No. of Rooms No. of Beds

1. Total 87 3,159 4,7162. Hotel Rating

1-star 14 366 6112-star 12 423 1.2363-star 5 336 4074-star 7 671 1,030


5-star 1 163 204Qualified 20 299 508Un-rated 28 901 711

3. Type of CompanyState-owned 8 506 957Limited 26 645 1,349Private 40 497 1,282Household Business 16 165 203Other 7 258 377

Source: Quang Nam Tourism Department and Tourism R&D Institute

3.2 System of Food and Drinks Trading EstablishmentsGood food and refine beverages are a national pastime of Vietnamese culture. Thenumber of specialtly food and beverage establishments are abundant. They include awide range of coffee shops, bars, fast-food eateries, bakeries and family restaurants,mostly specializing in Vietnamese and French cuisine. More popular and larger venuescan be found in the sleepy town of Hoi An and the city of Tam Ky. In general, the QuangNam tourism industry has been developing strongly, and other types of internationalcuisines can also be found, such as Italian, Greek, American as well as Chinese food.

3.3. Travel & Transportation for VisitorsThere are 17 travel and tourism transportation agencies in the Quang Nam Province.

· 3 International Travel Agencies

· Hoi An International Travel Center

· An Phu Limited Company

· Le Nguyen Private Company

· 2 Domestic Travel Agencies

· Quang Nam Tourism and Investment Company

· Quang Nam Labor Union Tourism Company

· 12 transportation travel companies with 3 of located in other provinces.The number of transportation companies in this service industry is relatively small butvery competitive. Tourist transportation includes tour bus, taxi and shuttle services havegrown rapidly to accommodate the number of visitors into the area. Based on unofficialstatistic figures, there were 1,200 new vehicles registered into the region in 2006designated for tourism transportation.


4. Labor in Tourism Industry

The tourism industry creates thousands of jobs for Central Vietnam, both direct andindirect labors. Direct labors are categorized as those whom directly work for the travelcompanies, such as hotels, restaurants and other service establishments. Indirect laborsare categorized as those whom work for business related to tourism activities. As awhole, the province is limited in delivering international service and quality because theylack the knowledge and formal training.

Table 14. QN Province Tourism Labor Force Statistics, 2001 – 2006Unit: Person

Labor 2001 2002 2003 2004 2005 2006Direct 885 1,232 1,600 2,072 3,280 4,321Indirect 1,500 2,800 5,100 6,200 15,600 20,550Total 2,385 4,032 6,700 8,272 18,880 24,871

Source: Quang Nam Tourism Department

The labor force found in the Quang Nam Province has not developed proportionately tomeet its tourism potential. The number of skilled labors is still low. With the number oftour guides steadily increasing, they come from universities whom teach theory andlanguage but are inefficient in terms of practicality and implementation.

There is still a great demand of tour guides who can speak Japanese, Korean, andGermany. However, in 2006, the number of certified tour guides was recorded at 197,with:

· 81 tour guides who spoke English fluently

· 11 tour guides who spoke French fluently

· 2 tour guides who spoke Chinese fluently

· 2 tour guides who spoke German fluently and· 1 tour guide who spoke Japanese fluently.

Furthermore, figures in the table shown below illustrate the quality of labor found intourism. In 2005, the percentage of labor having undergraduate and college degree in allmajors is 21.83%, compared to that of the unskilled labor force, which accounts to nearly60%. The ability to effectively communicate using a foreign language has also beendetrimental to the expansion of the tourism industry in Quang Nam.

Table 15. QN Province Labor Force Statistics, 2001 – 2005

Criteria 2001 2002 2003 2004 2005


Total labor 885 1,232 1,600 2,072 3,280Undergraduate/College 19.21% 17.37% 16.69% 22.25% 21.83%Intermediate/Primary 12.09% 11.36% 13.75% 15.49% 18.29%Others 68.70% 71.27% 69.56% 62.26% 59.88%

5. Tourism Investment

5.1 Infrastructure for tourismInvestment in tourism infrastructure accounts for 5.1% of total infrastructureinvestment for Vietnam. Additionally, the central government has consistentlyinvested into the Quang Nam Province during the 2001- 2006 time period in theamount of VND 589,711 million. A summary of the infrastructure investmentprojects to develop Quang Nam’s tourism are as follows:

Table 16. QN Province Investment into Tourism Infrastructure, 2001 – 2006

No Investment Project Total Investment(VND million )

1 Nam Phuoc – Tra Kieu – My Son Road 169,8832 Cam An – Dien Duong – Dien Ngoc Road 275,0003 Duy Xuyen Tourism Routes 34,0004 Youth Road along the Beach 71,5835 Dong Vong – Phu Ninh Tourism Road 3,4746 Infrastructure of Bai Chong. Cu Lao Cham Resort 1,2717 Infrastructure of My Son – Thach Ban Tourism Centre 34,500

Total 589,711


5.2. Investment of Infrastructure for TourismAt the end of 2006, over 178 tourism projects invested VND 5,755.71 billion,approximately $USD 1,520.9 million. Project status is as follows:

· 92 in operation

· 14 in the construction stages

· 65 are being submitted for construction permits


At the end of 2006, there are 16 additional projects registered to invest into theQuang Nam Province with a total investment of VND 114.1 billion and $USD 87million. The central government continues to increase investment into tourisminfrastructure in order to attract and motivate the number of investors into theregion.

Table 17. QN Province Tourism Investment Project, 2006

No. ProjectNo. of

projectsInvestment Capital

(billion VND)Investment Capital

(million USD)A Progress of the project 187 5,755.71 1,520.91 In Operation 92 642.42 12.32 In Construction Stage 14 1,044.80 82.83 Submitting for Permission 65 3,954.39 1,338.84 Registered 16 114.10 87.0

B Sources of Capital 187 5,755.71 1,520.91 Domestic Investment 166 5,755.71 -2 Foreign Investment/Joint Venture 21 - 1,520.9

C Investment Region 187 5,755.71 1,520.91 Hoi An 95 2,046.5 80.02 Dien Ban 24 1,168.1 1,115.03 Dai Loc 5 9.05 -4 Duy Xuyen 6 52.6 -5 Tam Ky 9 22.97 -6 Chu Lai Open Economic Zone 43 2,448.29 325.97 Other Regions 5 8.235 -

Total 187 5,755.71 1,520.9


6. Tourism Marketing and Promotion

With the support of the provincial committee, tourism marketing and promotionalactivities have vastly improved the awareness of Quang Nam’s culture, social communityof life and its people as well as identify hidden cultural charms found in the region. Theprogram has largely in part, propelled the number of domestic and foreign investors intothe region for work and play on a day-to-day basis.Quang Nam Tourism Promotion Center and Hoi An Trade – Tourism Department hascreated two tourist information rooms in Hoi An to supply and properly guide tourist with


updated information for visitors and companies studying investment opportunities inQuang Nam. Brochures and destination profiles are published in large quantities, withpromotional billboards, posters and others used for advertising. Additionally, the QuangNam tourism website is updated on regular basis in 3 languages: English, Vietnamese andJapanese.

In cooperation of the central and local tourism offices, the Province hosts a number ofcalendar events such as “Hoi An – Summer Feeling” to celebrate the diversity andrichness of Quang Nam’s people and its way of life. Other festivals include the HeritageItinerary Festival, Ba Thu Bon Festival and cultural and art exchange program betweenVietnam and Japan.Other marketing and promotion activities outside the Province are as follows:

· Road shows, Exhibitions, Forums in foreign countries.

· Conference for tourism marketing and promotion at Ho Chi Minh City and HaNoi

· Tourism stands of Quang Nam at Exhibitions and Fairs held in Quang Binh, HaiPhong, Hue and Da Nang

· Participating in the tourism cultural exchange between Vietnam – Japan at Ho ChiMinh City and in Hoi An Town

VI. SECOND HOME MARKET STUDY IN VIETNAM AND CENTRAL COASTPROVINCES by CBRE – Vietnam

1. Resort-Villas projects in central coast provinces. Vietnama. Nam Hai Resort, Hoi An/Da Nang

The Nam Hai is one of Vietnam's most exclusive luxury oceanfront resorts and features60 one-bedroom villas and 40 pool villas, ranging from one to five bedrooms, each withits own infinity pool located on 35 hectares of landscaped gardens along Vietnam'sfamous China Beach. The pool villas feature expansive stone decks and oversized privateinfinity pools. The average occupancy rate of The Nam Hai was approximately 28.50%as of end 2007. The average daily rate ranges $USD 750 to $USD 3,400 and is subjectedto 5% service.

Room Categories * Avg Daily Room Rate

($USD)

Size (sqm)

One-bedroom Villa 750 80

One-bedroom Beach Front Villa 850 80

One-bedroom Pool Villa 1.200 250

Two-bedroom Pool Villa 1.700 400

Three-bedroom Villa 2.300 520

Three-bedroom Beach Front Villa 2.960 520


Four-bedroom Pool Villa 2.600 590

Five-bedroom Pool Villa 3.400 660

* Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

b. The Golden Sand Resort in Hoi AnThe five start Golden Sand Resort in Hoi An is managed by the Swissbel Hotel Group

opened in March 2005 located on Cam An Beach is less then 5 km from the ancient town

of Hoi An. The resort has 195 rooms with an occupancy rate of 56% on average in 2007.

It occupies 4 hectares of land, offering a private beach that extends up to 400m with the

shore width of 100m.

Currently this resort has 195 rooms with approximately 56% as of end 2007.

Room Categories * Room Rate Size (sqm)

Superior 160 34

Deluxe Garden View 210 45

Deluxe Partial Ocean View 222 45

Deluxe Ocean View 230 45

Ocean View Suite 450 90



c. Victoria Hoi An ResortThe four star Victoria Hoi An Resort & Spa in Hoi An was open in April 2001 along a

private white sand beach, situated 30 km (18 miles) from Da Nang International Airport

and 5 km (3 miles) from the ancient town of Hoi An. The resort revolves around a

traditional fishing village theme, with small streets, water ponds and village homes with

clay-tiled roofs, providing a warm and restful environment. This resort features 105

rooms and its average occupancy rate here is approximately 75.50% as of end 2007.

Room Categories * Room Rate Size (sqm)

Superior Garden View 190 34

Deluxe River View 190 34

Deluxe Seaside 220 36

Deluxe Beach Front 245 36

Family Beach Front Suite 325 67

Honeymoon Beach Front Suite 325 63



d. Evason Hideway, Ninh Van Bay in Nha TrangThe Evason Hideaway Resort features 39 hotel villas, managed by the Six Sensesmanagement team whom manage the Evason Hideaway & Spa at Ana Mandara. Thisluxurious retreat is only accessible by boat from Nha Trang, nestled away in Ninh Vanbay with a deserted white sand beach at miles of beautiful coral reefs with an impressivemountain backdrop. The resort adopts an architectural style reflective of Vietnam’sculture and traditions.

Room Categories * $USD Room Rate Size (sqm)

Beach Villa 660 176

Hilltop Villa 770 158

Spa Villa 880 164

Water Villa 1050 154

Rock Villa 1050 187

· Source: CB Richard Ellis Vietnam. Current pricing is subjected to 25% increase after March 2008.

2. Current and Near Future Projects

a. VinaCapital Square, Da NangVinaCapital Square is located on North Tran Hung Dao Street is developed by VinaLand.The developer has been given 9ha of land to develop a 5 star hotel, offices for lease,villas, condominiums trade and entertainment centers and an international school. Theproject’s investment capital is estimated at US$320 million and the developer is lookingfor a foreign partner to form a joint venture to implement this project. Expectedcompletion of the first phase will be in 2012.


b. Kreves DevelopmentKreves Development is located north ofTuyen Son Bridge with capitalinvestment of US$200 million. Thiscompany has been given 9 ha of land todevelop a luxury Condominiums (28 &30 floors) of 1600 units of 120 to 125sqm each. The 42-floor building is foroffice and serviced apartments. Inaddition, this complex also has 3-storyshopping mall including duty-free shop,5-start hotel with 600 rooms, a trade & entertainment centers. The project is currently thedesign phase and expects to be completed by the year of 2012.


c. Da Phuoc City and Golf CourseThe Daewon Development company plans to develop a 210 ha resort near Thuan PhuocBridge with capital investment of $USD 250 million for the first phase, includingcommercial and high rise buildings, an18-hole golf course, resort hotel and 635townhouses, a shopping mall, and an international school. The project is underconstruction and is scheduled to be complete by the end of 2017.

d.

e.f.

g.h.

i.

d. Recent DevelopmentsOver the last several years, Retirement, Vacation and Second Home locations inSoutheast Asia have continued to become very attractive due to lower cost of livingstandards and warmer climate conditions. Emerging countries such as Singapore,Malaysia and Vietnam are rapidly increasing their inventories to compete with the marketleader, Thailand. Government support with new laws for Free Ownership and Long TermLeasehold requirements under Decree 84 allow more favorable conditions for domesticand foreign ownerships.

Development plans into the central region continue to soar with large developmentgroups such as Sama Dubai and VinaCapital. In 2007, Sama Dubai, the real estatedivision of Dubai Holdings has made acommitment to construct a $150 millionbridge that will span Cua Dai (Great Rivermouth) of Thu Bon river and connect Hoi Anto the southward beachfront strip thatextends to Chu Lai in the central region ofVietnam, slated to begin as early asSeptember 2008. Sama Dubai is currentlyworking with their team of internationaldesigners and developers to prepare theirmasterplan for their allotted piece of land, south of Hoi An. It is scheduled to be revealedin early 2009. Their total estimated investments of $17 billion into the region will includeresidential homes, extravagant hotels, golf courses and other recreational andentertainment venues.VinaCapital, a Vietnam focused investment company with their own real estate division


has secured over 5,000 acres of land in the central region with their own developmentplans. No date has been confirmed in regards to their plans for submittal.The culmination of investors with billions of dollars into the Quang Nam Province willpropel the central region to achieve the mandate set by the government. The constructionof the new Highway 1A, which will run directly from Hoi An to Chu Lai stretches over80 km. Accordingly to the CLOEZ officials, this road is scheduled to begin constructionin the fourth quarter of 2008.

3. Comparables

The following comparables are based on CBRE-Vietnam findings as of June 2007

A. Land ComparablesSubject

PropertyDescription Location Price $/sq ft. Comment

Da NangCoast

One side sea, one sidestreet

Son Tra-DienNgoc

$8.25 M $34.84 60 villas scheduledto be built

Bai But Bai But Bay Resort Central Coast $4.54 M $30.10 50-70 Villa; 20-25Apartment Suite

Vung Tau Complete LandInfrastructure

Vung Tau,Ho Chi Minh

City

$1 M $61.93 Beachfront, OnTran Phu Street, in

the cityPhu Quoc

IslandBeachfront ResortDevelopment site

South $600 K $27.87 Ocean waterfront,stunning sunset

view, 10 mins fromairport

B. Residential Unit ComparablesSubject Property Developer Description Avg sqft/Unit Selling Price Price/sqft

*MontgomerieLinks

Indochina 3 Bedrooms 2,970 $825 $278

Golf Course 3 Bedrooms 3,605 $1,000 $277Villas 3 Bedrooms 4,250 $1,625 $382

**Nam Hai Indochina 1 Bedroom 3,185 $1,000 $314Villas 3 Bedrooms 6,564 $2,500 $381

Avalon Phuong NamCo.

2 Bedrooms 1,100 $288 K $260

D1, HCMC Penthouse 2,225 $580 K $260Garden Plaza Phu My Hung

Corp.14 Retail

Shops1,500 $195 K $130

D7, HCMC 96 Condos 2,400 $312 K $130The Manor - Binh

ThanhBitexco 2 Bedrooms 1,180 $254 K $215

3 Bedrooms 1,500 $320 K $215


4 Bedrooms 2,400 $516 K $215Pasteur Court Van Thinh Phat

Co Ltd & AnThai Co.

2 Bedrooms 900 $180K $200

D3, HCMC 3 Bedrooms 1,450 $290K $200*Data collected in May 2008** Data collected September 2007

PART IIPROJECT OVERVIEW

(as approved by the CLOEZ -to be amended to cover a total of 224 – 388 acres)

I. COMPANY INFORMATION

PHILAND Vietnam (PHILAND VN) is Limited Company (“the Company”), a majority-ownedsubsidiary of PHILAND Corporation, a US-based company.

II. REPRESENTATIVE OFFICES

PHILAND Corporation has a representative office that is physically located at 246 Trung NuVuong Street, Tam Ky City, Quang Nam Province of Vietnam. In addition, the PHILANDCorporation has a marketing branch located at 6 Thai Van Lung Street 11th Floor, District 1, HoChi Minh City in Vietnam, conducting business in accordance to Vietnamese current regulations.

The US Corporate Office is located at 17011 Beach Blvd., Suite 1230, Huntington Beach, CA92647.

III. OPERATING LICENSES

No. Code Industry01 5511-551100 Hotel service business02 5521 Food and drink full services

The operation has been granted a 50-year license, beginning the investment licensedated granted*.

*See JSM Mayer Brown Legal Opinion related to Decree 84 for 75-year renewableland lease @ www.philandcorp.com/investorsonly

IV. INVESTMENT OBJECTIVE

The Company‘s objective for Pointe 91 is to develop a masterplan community that includes thesuccessful elements of living. To use the natural topography of the land to maximize the value,


the natural resources and views of the hilltop, ocean and beachfront while providing aaesthetically pleasing and safe community. The plan includes the construction of a hotel/resortcommunity including 227 residential living units, accompanied by a 70-suite, 32 detached villabeach hotel resort and spa. The community will also feature an outdoor amphitheatre, localmarketplace, international commercial and shopping centre, a management-executive trainingfacility, and various forms of media and entertainment venues on the property. Local andinternational cuisine will be celebrated and enjoyed at one of the many Pointe91 cafes and fineeating establishments.

The masterplan community of Pointe91 is designed to serve as a catalyst for the tourismdevelopment region of Chu Lai. Pointe91 will feature a marina living community with a divecenter, recreational water activities and a boardwalk, as well as a fishing pier where local artisansand talents can gather to display their unique creativity in products, services and entertainment.Pointe91 will facilitate and manage a year around calendar of social and entertaining events toattract the local and foreign visitors.

Recreational amenities at Pointe91 will also include extensive pathways for walking, running,hiking and biking along the property, beach and hilltops. Other facilities include communityfitness centre, swimming and dive pools, clubhouses and recreational parks with soccer fields,volleyball courts, and open fields to enjoy the natural environment at any given time of the day.

The development of Pointe91 will introduce new construction methods that will be easilytransferable and the use of the most innovative and high-quality materials and products found inthe region. Pointe91 will create a new demand of skills and labor force for the immediate area tohelp sustain the local population over the long-term with future PHILAND and otherdevelopments in the near future.

V. MILESTONES

The Company plans to use its equity and bank loans to invest into the infrastructure,construction, equipment and working capital expenditures. The project is scheduled to becomplete within 60 month time period.

On project implementation progress:

· December 2007 – to sign investment contract and survey project site

· March 2008 - compensation for site clearance, submittal of primary architecture and identifyland leasing procedures.

· July 2008 - attain Construction Permit with the submittal of Development Plans

· August 2008 – Construction Breakground

· January 2009 – Begin Phase 2 of Construction plans

· August 2013 – Completion of entire Project


PART IIICONSTRUCTION REQUIREMENTS set by CLOEZ

(Development Scope as approved by CLOEZ)

I. GENERAL ARCHITECTURE includes:

1. Lobby, Reception2. Central building of resort area

3. Swimming pool4. Tennis court

5. Swimming pool and underwater activities6. Lazy river

7. Wave creation lake (artificial sea)8. Landscape lake

9. Stream10. Hill, bonsai

11. Spa, massage, karaoke, discotheque12. Resort

13. Recreation, Restaurant, Cafeteria14. Pub 1

15. Pub 216. Bridge

17. Area of underwater activities for children18. Hotel, office for lease spaces, office of the Authorities

19. Villas20. Presidential Suites

21. Rescue watchtower22. Parking

23. Duplex bungalows


II. INFRASTRUCTURE REQUIREMENTS

All construction items are constructed according to international standards, using modernequipment, serviceable as required by different types of customers and characteristics of visitors.The hotel will include a international club rooms, banquet hall, specialty rooms for conferencesand seminars fully equipped with innovative, digital, technology for both audio and videoappliances with wireless technology accompanied by LCD projectors, laptops and etc. Thecentral operating building will include a operation and management office, reception lounge,functional and technical rooms to support the daily activities, a security office and other rooms asneeded. The hotel resort area will be equipped with firefighting equipment, elevator, technicaland functional rooms and other facilities as determined.The design and customization of the villa and bungalow units will be designed and constructedto meet 5-start standards.

1. Electricity Supply

Electricity supply for the whole commercial and tourist area is provided by 180 KVAtransformer station from available power grid. It will be supplied to provide electricity forthe resort, bungalow, office for lease buildings, management office, entertainment venuesand etc. The energy will provide a low voltage transformer.

The lighting system for the area will be installed underground via a technical trench,automatically monitored and controlled based on time of day and season.

2. Water supply

Water supply is from underground water and water supply pipe system is designedcoaxially.

3. Drainage

Drainage system is designed as a closed-loop. Waste water from separate living units,offices, and hotel resort is treated by water filtration pool.

4. Natural Ventilation and Lighting Solutions

Lighting is designed under standards of “natural lighting: TCXD 29 - 68”. All areas aredesigned and guaranteed with sensible and with good, natural ventilation and lightning.All areas of the hotel and resort, separate living units, offices, and entertainment sites areall equipped with air conditioning and automated heat reducing systems. Other workingspaces will be equipped with other air conditioning systems or ceiling fan/wall fansystem subject to its usage.

5. Communications

The project site is accessible to four mobile phone networks to include: Vinaphone,Mobiphone, Viettel and EVN. It is also accessible to premium high-grade cable phonenetwork.All separate living units, hotel rooms and other building will be equipped with an internalphone connected via switchboard. They will all be equipped with a separate directhardline, as part of the phone network.


Television system and other video satellite systems will be equipped with internal cablesystem and parabolic antenna of 40-60 channels.All public places will be installed with public telephone booths accessible by phonecards.

III. ENVIRONMENT PROTECTION AND LABOR SAFETY METHODOLOGY

1. Environment Protection

The following solutions are selected:

· Waste water will be collected within closed pipe system installed underground.,directed to water filtration pools, treated by a biological method to sterilize andreused for watering the landscape which includes trees, plants and grass.

· Solid waste will be collected from capped wastebaskets installed at designatedlocations on the property. Solid waste are collected daily and moved to local generalwaste treatment area for disposal as per schedule.

2. Labor Safety

The staff will be equipped with the proper labor equipment and safety gear as perassigned tasks that may include: masks, gloves, floats, walkie-talkie and other necessarydevices. With the use of machinery and equipment, training and guidance will beconducted on a per assignment basis. Warnings and Caution signs will be notedthroughout public sites at visible locations to help prevents accidents.

3. Fire Prevention Planning

As per standard TCVN 2622 – 95, all areas will be equipped with a fire extinguisher andautomated fire alarms with a strategically located fire department with 2 fire truckengines readily available.

4. Medical Center

The Quang Nam Provincial General Hospital is 7.5 km from the project site. However, amedical center will be constructed within the designated area with an emergency team of3 - 5 medical staff members and necessary equipment for medical examination andtreatment.

IV. REQUIREMENTS ON EQUIPMENT AND COMFORTS

· Air conditioning systems will be installed in all public areas.

· Separate Elevators will be installed for visitors and staff for all buildings with more then onestory.

· All items in general architecture including hotel rooms, the lobby, reception area, centralbuildings for the spa, massage parlor, karaoke bars, discotheques, game rooms, restaurant &cafeterias, lease spaces and hotel will be installed with separate and central air conditioningsystem and heating system as well as other automated devices for fire and explosionprevention, evacuation, antitheft and etc.


V. REQUIREMENTS ON SERVICES IN TOURIST AND SERVICE AREA

· Safety room for the safe-keeping of monetary and valuable goods

· Public services to include a courier/postal services, public telephones, film developments,faxes, xeroxing, typing, stationary for rent and athletic apparatus.

· Disability access for wheelchair and other handicapped visitors

· On-staff emergency team for rescue and medical emergencies

· Entertainment services, Tourist Concierge Services, Car Keeprs, Rental cars and bicyclesMoreover, a minimum of at least 30 - 50 cars, 2-3 tourist boats, 7 canoes and other means ofwater transport available to meet the needs of visitors.

VI. GENERAL CONSTRUCTION PLAN

With an initial project area of 42 hectares, the land area is apportioned as follows:

· Total construction area: 22% (approximately 5ha)

· Construction area for public utilities: 18%

· Area for traffic: 2 %

· Area for green trees and water surface: 59%

· (Note: Amended construction plan will account for additional land allocation of 40 – 115additional hectares in the near future).

VII. ENGINEERING SOLUTION

· Magnum Sheething Boards reinforced by Cold Steel Construction

· International Standard Elevators with evacuation stairs and fire preventing and fightingsystem in accordance with the law.

· Innovative and Stable WiFi Network

Feasibility Study for Pointe 91

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Transcript of Feasibility Study for Pointe 91