Value for money

Over the past decade, Sun Peaks has enjoyed strong growth growing annual skier visits from 110,000 in 1993/94 to more than 340,000 in winter 2007/08. This 17% compound annual growth rate significantly exceeds industry averages, leading to an increasing interest in properties in around the Sun Peaks area. Data collected by Ecosign suggests that skier visits are increasing driven by:

• an increase in the number of new beds at the resort
• continued infrastructure spend (i.e. roads etc)

Continued investment in ski facilities (chairlifts etc)With these variables continuing to record sound growth, we expect capital values to enjoy a sustained growth profile in the medium term due to the following:

• an increase in the number of new beds at the resort
• continued infrastructure spend (i.e. roads etc)
• Sun Peaks Resort continues to invest in the mountain & infrastructure
• With Sun Peaks Resort’s master plan currently at stage 2 of 7 stages, we expect a continuation in expenditure in the following important areas
• Mountain recreation facilities which includes construction of ski lifts and trails, day lodges and base area infrastructure ($44.1m from 1993-2006), and
• Infrastructure investment which includes site services, independent recreation facilities, golf course, stables, sport centre and tennis courts ($50.9, since 1993/4)

We have noticed an important correlation between cumulative mountain infrastructure and increasing annual skier visits, which we expect will continue in the near term as Sun Peaks Corporation continues to make capital contributions.

It is also evident that skier visits are increasing as the number of new beds at the resort increases. We believe the significant infrastructure required to provide for new beds in the Sun Peaks Resort village will lead to a favourable demand/supply balance and have a positive impact on property prices.

Sun Peaks prices rising from a low base...

Our analysis suggests that Sun Peaks property prices are competitive relative sample projects from both Whistler and Big White in British Columbia. We have measured this premium in Whistler’s case at more than 80%, and believe this pricing condition will support a continued re-rating of Sun Peaks Resort property prices over the medium term.
Resort property across North America enjoying strong momentum…

Resort property sales continue to perform strongly, buoyed by a strong economy and accelerating regional and international growth. Intrawest’s 5 year historical average selling prices for predominantly North American resort property suggests an annual growth in prices of more than 10% per annum over the past five years. There is also strong statistical evidence to suggest that property in this area of British Columbia, and premium resort property is well insulated from any slowing of the US economy.

Aging population is still a key factor...

Over the past twenty years due to an aging baby-boomer population the number of adults between age 45 and 64 has increased by approximately 53%. We expect this trend to continue to provide support for interest levels in lifestyle and resort property in locations such as Sun Peaks.

Ski property pricing - Value comparison

The following tables provide indicative information on pricing for apartments in other ski resorts in Canada and Japan. The pricing comparison demonstrates that Kookaburra Lodge presents compelling value for money – and that is without due consideration for the high quality of design and construction.

Projected Sales Price/Square Foot Versus Comparable Projects
Development	Location	Approx Sale Price/Sq Ft
Kisetsukan Village Apartments	Hokkaido, Japan	$548.0
Blackcomb Lodge	Whistler	$736.2
Snowbird Lodge	Silver Star	Est. Over $650.0
The Residences (1/4 share)	Sun Peaks	Est. Over $600.0
Kookaburra Lodge	Sun Peaks	Approx $550.0
McGillivray Creek (Resale)	Sun Peaks	Advertised at $470.0

Big White, British Columbia: Snowbird Sales Prices
UNIT TYPE	Square Feet	Price	Price/Sqft
2 bdexec	1310	$898,900 - $964,900	$711.37
2 bd exec lckoff	1180	$584,900 - 699,900	$544.41
2 bd exec +	1064 - 1726	$645,900 - $849,900	$536.13
2 bd exec sgntre	1179	$948,900 - $998,900	$826.04
3 bd exec	1179	$849,900	$720.87
3 bd exec +	1179	$1,146,900	$972.77
AVERAGE	1237	$882,150	$718.60

Hokkaido, Japan: Kisetsukan Sales Prices
UNIT	Square Feet	Price	Price/Sqft
101	764	$389,500	$509.87
102	764	$389,500	$509.87
103	764	$389,500	$509.87
201	1047	$561,637	$536.26
202	1047	$561,637	$536.26
203	1047	$561,637	$536.26
301	1207	$720,432	$597.01
302	1207	$720,432	$597.01
303	1207	$720,432	$597.01
AVERAGE	1006.01	$557,198	$547.71