Locations for investment in hotel structures in municipality of Loznica

Overview:

Near the Bosnian border, Loznica possesses strong tourism assets in diverse niches including health, sports and cultural tourism. Economy is rapidly recovering attracting investors' interests. One new hotel in town's vicinity is to be bulid in 2007 with 86 rooms but there are still no hotels in the town center

Higlighted Investment Opportunities:

Brownfield: hotel Podrinje

Description: The hotel is located within the Koviljača spa complex and has 160 bed. It has fallen from a 3* status to the current 2* due to poor mamagement. The hotel is being bundled with a nearby 216-bed hostel and four villas in an imminent privatization deal.

Rationale: The overall privatization sales price is expected to be considerably less than market valuation. An integrated state-owned Special Hospital (rehabilitation center), also to be privatizated soon, has been constantly full with a long waiting list. The National Investment Fund is revitalizing a large park within the Spa complex.

Recommendation: Conduct strategic due diligence to decide optimal bundle mix and start convesrsation with the municipality and Privatization Agency to unbundle properties if desirable.

Greenfield: Downtown Loznica

One parcel in an attractive location, close to downtown (800m from downtown district), on the edge of the industial zone is available as a hotel site (owned by the municipality).

Size: 0,45 ha

Price: 25 Eur/m2 listed price + 17 Eur/m2 for communale charges.

Greenfiled: Trsic village

One hotel to be constructed in the next period. The municipality has envisaged several more hotel locations at this site (hotels are privately-owned).

Greenfield: Parcels next to Koviljaca Spa

Two parcels right next to the Koviljaca Spa complex are available for 99-year lease / sale once bylaws to the next Serbian Constitution are adopted:

1. Parcel no. 550/9 and 163/1 KO (block 1A), Koviljača, 83/43 acres, purpose: tourist-hotel premise with 210 beds; number of floors that may be constructed: Ground floor+1+attick; listed price for 99 year lease is 22,526,100 dinars (33Eur/m2 or 44,76 $/m2 - property to be sold via public auction) + 27Eur/m2 for communal charges.

2. Parcel no.2 448/2 KO Koviljača Spa, 36,37 acres, purpose: tourist-hotel premise, max. size 1,500 m2, 2/3 floors (basement, ground floor and first floor). Listed price for 99 year lease is 12,438,540 dinars (42,34 Eur/m2 or 57,44 Eur/m2 - property to be sold via public auction) + 28 Eur/m2 (38 Eur/m2) for communal charges.

Contact:

Ljiljana Nikolić - director of LEDO

++381 15 882 921, 882 240

Email: opstinsko.vece@lo.sr.gov.yu

www.lo.sr.gov.yu