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Pepper Club

Pepper Club. The Hottest Address in Cape Town. The Investment. Consists of: An apartment (Sectional Title Ownership) A furniture pack by a leading hotel designer, A rental pool operated by experienced hotel operators 1. Payment terms. Apartment & Parking Bay

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Pepper Club

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  1. Pepper Club The Hottest Address in Cape Town

  2. The Investment Consists of: An apartment (Sectional Title Ownership) A furniture pack by a leading hotel designer, A rental pool operated by experienced hotel operators 1

  3. Payment terms • Apartment & Parking Bay • 20% deposit : 7 days from signature • Balance of purchase price on Transfer • Note: Investors also purchase a standard furniture pack (not financed by the banks) priced from R180 000 3

  4. Projected Revenue • 8.5% for the first year of operation (Mar 2010 to Mar 2011) increasing by 10% pa Or • guaranteed 6% pa - for 2 years 4

  5. Taxation - Allowances • UDZ Allowance • 55% of unit cost • 11% in the first year – then 4.4% for 10 years • Depreciation Allowance • 20% pa on the cost of the Furniture pack • Tax Deductable Interest • Interest payable on all funds borrowed to finance the investment is tax deductable • Assessed Tax Losses • Tax Losses may be set off against any other taxable income or may be carried forward to following tax periods 5

  6. Taxation – Based on R1,4m Investment plus R180 000 Furniture Pack 80% Mortgage Projected Interest Total Tax Net Rental UDZ Dep. @ 9.5% Allowances • Year 1 132,600 (154,000) (36,000) (106,400) (296,400) • Year 2 145,860 ( 61,600) (36,000) (103,911) (201,511) • Year 3 160,446 (61,600) (36,000) (99,926) (197,526) • Year 4 176,491 (61,600) (36,000) (94,176) (191,776) • Year 5 194,140 (61,600) (36,000) (86,357) (183,957) • Total 809,537 (400,400) (180,000) (490,770) (1,071,170) 6

  7. Total Return – 80% Mortgage Net Capital Total Return on Income Appreciation Return Investment After Mortgage Interest R R R • Year 1 26,200 156,000 182,200 39,609% p.a. • Year 2 41,949 171,600 213,549 46,423% p.a. • Year 3 60,520 188,760 249,280 54,191% p.a. • Year 4 82,314 207,636 289,950 63,032% p.a. • Year 5 107,783 228,400 336,183 73,083% p.a. Average 54,480% p.a. Total 318,766 952,396 1,271,162 7

  8. INVESTOR – 80% LOAN • Projected Income, Tax Free to Year 8 • Projected period to repay loan only out of projected income In year 10 8

  9. 30 Days Free Usage • An Investor may occupy his apartment for 30days each year, free of rental. 9

  10. Pepper Club The Hottest Address in Cape Town Only the contents of Agreements signed by the parties may be relied upon. All other representations, written or verbal, are not warranted

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