September 16, 2008
Dear investor, I am writing to you on behalf of Sunset Valley Property Development Company to invite you to explore investment opportunities at Hacienda El Dorado, a one-of-a-kind lifestyle resort community situated in Santa Ana, a suburb west of Costa Rica's capital San Jose. There is no doubt the global economy is hurting. Rising commodity prices, falling US dollar and the continued volatility and insecurity of equity markets are some of the principal factors that have motivated investors to re-consider their investment strategies and explore new markets. There is no need for despair however. The real estate market in the Central Valley of Costa Rica is strong, healthy and presents innumerable investment opportunities. CNBC's On The Money called it "the hottest real estate market in the world." On the macro level, Costa Rica has had a stable government and economy for decades. It is one of the oldest democracies in the Americas characterized by rule of law, educated workforce, and excellent and affordable healthcare. The currency has also been stable and there are no currency restrictions. The low taxation regime has been put in place with the explicit intention of creating a favorable investment climate. Construction in Costa Rica has grown 12.44% during the first six months of 2008 as compared to the same period in 2007. Contrary to what most people think and say, it is the San Jose Greater Metropolitan Area (GMA) which is the most active and dynamic region for construction - not the beach. Construction in the GMA has expanded 42.3% as compared to 0.1% in Guanacaste, a province oftentimes marketing itself as the home to many high end luxury developments and resorts. In the province of Puntarenas, which includes the Central and South Pacific coast, construction in fact declined 15.4%. Land prices, labor costs and construction costs are on the rise, which guarantees capital appreciation in the future. 75% of the country's population resides in the GMA. The vast majority of existing jobs and the majority of new jobs are being generated in the same area. The Santa Ana area has benefitted tremendously from the arrival of a large number of multinational corporations employing thousands of people here. Recently, the following businesses have established their base here: Chiquita Brands, HP, Procter & Gamble, Western Union, Scotiabank, Brystol Myers Squibb Central America, Citigroup, Ernst & Young, Esso Standard Oil, IBM, KPMG, Kraft Foods, Oracle and Unisys. This is just a short list of some of the companies that have inaugurated their corporate headquarters in the Forum I and II business parks (130,000 sq m or 1.4 million sq ft of rentable space) in Santa Ana. Owing to this unprecedented boom in commercial development, residential developers are now catching up to meet the growing demand of buyers and renters for quality housing that meets North American and European standards and expectations. Santa Ana has become a preferred destination. While still in many ways maintaining its traditional feel of a typical Costa Rican town, along with its predominantly Costa Rican population, small stores, bars, restaurants offering local and international cuisine and Sunday fresh fruit and vegetable markets, Santa Ana has been recently experiencing real estate and commercial development unprecedented in the entire Central Valley. The Central Valley enjoys a moderate climate all year round. Imagine living comfortably in a house which does not have a heating or air conditioning system and where your doors and windows are open year round! We do not have bugs, hurricanes or tornadoes. Unlike the beach, Santa Ana has all the infrastructure, amenities and services that North American and European purchasers are looking for. It has become the place of choice with upscale grocery stores, gourmet restaurants, banks, gas stations, medical and dental clinics, beauty salons, coffee houses, hotels, business centers, private schools, malls and small commercial centers springing up everywhere. Located on the outskirts of the capital city of San Jose, Santa Ana nowadays combines all the advantages of a metropolitan lifestyle with the comforts of country living at a very low cost thus creating potential for very high quality of life. In addition to locally generated demand, we should not forget the 76 million baby boomers and soon-to-be retirees in North America and Europe seeking affordable sunshine as well as wealthy people in politically and economically unstable regions of the world seeking a refuge for themselves and a safe haven for their assets. Relatively expensive property markets in North America/Europe combined with disproportionately higher cost of living there than in developing countries and the increasing reluctance of banks to lend money due to the unprecedented number of foreclosures and the sub-prime fallout, real estate options in booming Costa Rica should appear as more than simply attractive and reasonable. Not only the prices are reasonable (Hacienda El Dorado prices move around $150 pr sq ft with 1 bedroom units starting at $144K, 2 bedroom units at $220K and 3 bedroom units at $230K), but the lending market is excellent and property ownership laws grant the same rights to foreigners as to Costa Ricans. Santa Ana real estate has appreciated on average 25% a year over the course of the past four years. This trend is expected to continue for at least a couple more years. While the developers of Hacienda El Dorado cannot guarantee a specific capital appreciation rate and return on investment to the purchasers, they can point to their first project, the Garden Residences Resort, which they completed in Santa Ana some two years ago. Purchasers who took advantage of pre-construction prices saw a capital appreciation of anywhere between 11.5% and 123% in less than a year. Additionally, investors who placed their units into the rental program are seeing a 6% to 9% return on investment annually. The Hacienda El Dorado development philosophy is centered on the concept of a lifestyle resort community, where luxury living in a safe and secure resort setting with quality homes and reliable technology goes hand in hand with peace, tranquility, nature and ample resort amenities and on-site services facilitating social interaction among the residents. The resort is being developed along the headwaters of Rio Oro in the foothills of the southern mountain range dividing the San Jose Central Valley area from the Pacific coast. With over 60% of the property being green areas, expansive tropical gardens, flowers and orchids everywhere along with the omnipresent sounds of running water, Hacienda El Dorado is like a refuge, a place to escape from the chaos and noise of the city. I am convinced that Hacienda El Dorado represents a unique opportunity with high potential to generate unprecedented ROI for our purchasers and would like to invite you to visit our website at www.eldoradocostarica.com or contact me directly at info@eldoradocostarica.com or by phone at 011 506 8393 4666. I will be more than happy to answer any questions you may have. Jan Kozak Marketing Manager Hacienda El Dorado |