We have prepared financial projections for a one-bedroom apartment with a purchase price of Stg£345,000 and a two-bedroom apartment with a purchase price of Stg£420,000. Our projection is based on the following assumptions:

• The monthly rental income for a one-bedroom apartment is Stg£350 per week and Stg£420 per week for a two-bedroom apartment.

• The letting fee is estimated to be 14.1% of the rental income (12% + Vat @17.5%).

• The service charge is assumed to be Stg£1,100 per annum for a onebedroom apartment and Stg£2,200 per annum for a two-bedroom apartment. Please note that these figures are indicative only.

• Rental income grows by 3% per annum.

• The interest-only loan equals 75% of the purchase price. The loan interest rate is 6.25%.

• Capital values grow by 3% per annum.

• Our projection consists of a cash flow statement for 10 years and an estimate of the net property value each year for 10 years for the apartments. Our projections are contained on two pages in Appendix III.

Please note the following:

Stamp Duty is not included in the purchase price.

* Furnishing the apartment is not included in the purchase price. Legal fees are not included in the price.

* (3% Stamp Duty)

Please also note our projection is based on current rental levels and interest rates. Rental levels and interest rates may be different upon the expected completion date in winter 2008. In addition, as is the norm with all new developments, investors should be aware that rental levels are generally soft during the first 12-15 months, and investors should be aware that their property may lie vacant for several months after completion.

<<<PREVIOUS NEXT>>>