Paljakka Resort Hotel, Finland

The Paljakka area is situated in the Kainuu region of north east Finland where you will be amongst the purest nature Europe has to offer, Typical features of the landscape in Puolanka and Kainuu are steep hills, deep forests and clean waters. The snow cover in the winter is deeper than anywhere else in Finland.. Finland will be covered in snow approximately from the middle of November to the end of April. The long winter season ensures a great setting for downhill and cross-country skiing The location where you are investing in Paljakka is full of unique experiences in all possible sense and with the nature it is no exception. The entire climate changes in a few kilometre radius from the mild weathers of Central Finland to the dry climate of Central Lapland. If you are person who enjoy the true beauty of abundance of nature you need to be here in Paljakka which has some very rare flora in Finland.

Kainuu is a place of lakes, rivers and rolling hills with sprawling woodlands and forests. Summer days are long, thanks to the midnight sun, and winter snows are the deepest in Finland. Its most famous inhabitant in summer is the wild brown bear and in winter you may chance across Santa Claus in his northern house.
Paljakka resort hotel and Paljakka Apart hotel Accommodation in the heart of Kainuu are located at the base of the Paljakka ski centre. As an up and coming international resort Paljakka has had a great deal of investment. Our facilities compete with the best traditional resorts in Europe. The original Paljakka hotel has been fully refurbished to a high standard providing you with a perfect base for your Finland holiday. Newly built, well equipped Apart-hotel apartments snuggle together amidst the trees providing a perfect summer camp or a beautiful hideaway in the winter snow. The Paljakka ski centre has 17 slopes, 7 ski lifts and 140 kilometres of cross-country skiing trails. Nearby Ukkohalla is just a fast 15 minute transfer away, and it adds a further 16 stunning slopes and sauna world, the perfect place to relax after a days skiing.

Paljakka Hotel Resorts offers one of the secured forms of investment in the Finland region. With developmental funds lined up by the government to promote industry and growth here in this region. This will lead to the condensing of the tourist resort by 2015, when the main street is developed into a clear centre for the area with a wide range of activities, services and attractions. Aside from the water theme, to be built along the main street, new accommodation facilities and a parking area will be constructed with the emphasis that they blend in nicely with the surrounding landscape.

High occupancy equals high rental returns for the investor. We have negotiated with the local municipality, options to purchase plots of land around the hotel. These will allow for the building of up to, approximately 150 apartment lodges. These will operate in conjunction with the Apart-Hotel (eg concierge service, room service, telephone link to reception etc.) These will be built with a modern contemporary design and are set in various landscapes (eg forest or lake, all being c.300 yards or less to the ski slopes.)

Properties will be fully managed and automatically entered into the resort’s rental programme in year 3 to deliver an anticipated on average return of 10%+ a year

Return on Investment

- 18 Month Rent Guarantee at 8% per annum
- Cash flow positive from the start
- Predicted net yields in the region of 10% - 12% net

Mortgage Mortgages will be easier to obtain as the banks adopt more of a self-certificate approach and developer finance is available. Sensible checks on each applicant will be carried out but loans will be granted with minimal documentation required. The mortgage rate will be in the region of 2.5% - 3.5%. Financial Details: (To be discussed) ***

This project enjoys significant financial support from the Government and EU; it is these incentives that are allowing us to structure an attractive proposition on this early stage of the project. In addition to 35% of our construction costs, we will also receive incentives of 50% of our key personnel costs, we are VAT exempt and will receive 70% of our marketing costs
Most recently the joint investment authority has pleadged a further €1,000,000 of support for the project to assist with funding and the state bank Finvera are offering support to the lead financiers.
The financial structure of the offering. ***

The key benefits of this offering is how the finance package is structured. Considerable work has been carried out to ensure purchasers are able to complete on their purchase. To this end the funding for each prospective purchase has been structured into the development funding. Subsequently each purchaser will take on a pro rata share of the development debt in the form of a mortgage, thus avoiding the need to apply for an independent loan. I have listed below some interesting links and deal structure

The main points are as follows
Commitmemt Fee €6,000 To cover purchasing costs/legal fees
Gifted Deposit 10%
Top Up Loan 20% (repayable over the first 5 years from income)
Developer Finance 70%
3 Year Rent Guarantee at 4% per annum plus a 50% split of any excess revenue which would cover all running costs and be cash flow positive based on current levels of occupancy in the resort.(Please refer Schedule (1)) Personal usage if taking the Rent Guarantee 1 week Winter month 2 Weeks Summer months

Outline of Proposed Deal ***

New Build Mini Lodge/Apartments 37.5-43.75 SQM Fully Furnished
Contract Price €129,000
Mortgage €90,300
Commitment Fee €6.000
Gifted €12,900
Top Up Loan €25,800
Mortgage Circa 3.5%

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