Sotogrande 14 NH Annual Report 2006 81

2006 has been fundamental for the consolidation of the tourist residential project of Sotogrande for several reasons: •  In November the approval of the Urban Development Agreement was given by the Municipality of San Roque (Cadiz – Spain), which regulates the organisation of all Sotogrande’s urban development, from which the company holds its name and includes the most substantial part of its assets to this day. The approval of this agreement has been a fundamental milestone for the company, since it consolidates the quality residential development model that defines Sotogrande. NH Annual Report 2006 82 La Marina de Sotogrande San Roque - Cadiz – Spain Area moved (m²) Building area (m²) Properties La Reserva 1,440,662 504,873 2,083 Sotogrande Beach 84,480 39,465 160 Almenara 342,144 136,444 762 TOTAL 1,867,286 680,782 3,005 URBAN DEVELOPMENT AGREEMENT

NH Annual Report 2006 83 Los Alcornoques Project Almenara Golf Course Sotogrande - San Roque - Cadiz – Spain

NH Annual Report 2006 84 •  A significant restructuring of assets was carried out, underscoring the tourist/residential focus of the company. Only hotel assets were transferred to the head organisation, specifically the two Marbella hotels and the Casino de Madrid. 75% of the Retamares golf course was sold and significant shares of two residential/tourist projects were incorporated into Cap Cana (Dominican Republic) and the Isla Blanca (Mexico). •  Ponte Gadea increased its collaboration by becoming a partner of Sotogrande in the development of Los Alcornoques, an ambitious residential project of 23 hectares, which will include the concepts of health promotion that are promoted by Sotogrande Health Experience. •  As far as the operations are concerned, the sales have resisted the toughening of the market conditions at Costa del Sol and Sotogrande has finally displaced Marbella as the leader of residential tourism in the area. In addition, the opening of the Airport of Gibraltar to national and international traffic, located 20 minutes from the urban development, has introduced a new dynamic element into the area. The 6 remaining units from the Ribera del Obispo project were sold, with an average-price of € 1.1 M and the sales of the plots at La Reserva, Ribera del Marlin and Los Cortijos de la Reserva did well, with sales of 80 units and with an average price-raise of 12% throughout the year. •  The organisation continued its growth until adapting its vocation as a provider of specialized services in residential/tourist projects at different locations and with partners. In this line and following the launching of Sotogrande Golf Services in 2005, as a unit specialising in engineering, construction and maintenance of golf courses, during 2006 Sotogrande Marketing Services was born, specialising in the design and execution of marketing concepts in the residential/tourist high-end segment. The idea of these divisions is to facilitate the transfer of knowledge and experience from Sotogrande in its areas of specialisation to the new projects developed with partners, and on occasions to prestigious projects of third parties. We must point out the success of the activities carried out by Sotogrande Golf Services during 2006, in the Almenara and Retamares golf courses. In Almenara it carried out an in-depth remodelling of the drainage system, which allowed the finals of the Peugeot Professional Spanish Circuit to be held successfully last November, despite the strong rains. At Retamares, a complete water management system was designed and executed, which will allow the European Circuit tournament to be held during May 2007. •  Finally, it is worth mentioning out the Takeover Bid that NH Hoteles made on the Sotogrande shares, which ended in December, and allowed NH Hoteles to increase its stake from 77% to 98%. Los Alcornoques Project Sotogrande - San Roque - Cadiz – Spain

NH Annual Report 2006 85 Cap Cana Dominican Republic

NH Annual Report 2006 86 PROJECTS: Cap Cana (Dominican Republic) The Cap Cana complex is the most important tourist real estate project in the Caribbean, located at Punta Cana, Dominican Republic, only 10 minutes from the International Airport. It has an exclusive beach club and will be completed with six 18-hole golf courses, with one currently in use, another under construction, and three of them designed by Jack Nicklaus. Cap Cana has already inaugurated the first phase of the marina, which in the near future will have capacity for more than 500 vessels, surrounded by luxury stores and high cuisine restaurants. The following will be built at this urban development: •  A luxury boutique hotel with 88 rooms and an exclusive restaurant. •  408 luxury beach front apartments, which will be put on sale during 2007, some of which will enjoy hotel services, through a "Rental Program" (the owners allowing the hotel to manage their apartments while they are not using them). Isla Blanca (Riviera Maya, Mexico) The project is located to the north of Cancun, 20 minutes from the International Airport. It is a peninsula with nearly 400 hectares, where there is an important natural area. Next to it, a low-density residential project will be developed with approximately 2,000 exclusive apartments and hotel spaces. The “island” counts with over 10 kilometres of Caribbean Sea beach front. Isla Blanca Project Riviera Maya – Mexico

NH Annual Report 2006 87 2007 (until April) 2006 22 20 18 16 14 12 SOTOGRANDE SOTOGRANDE SHARE PRICE EVOLUTION La Reserva de Sotogrande San Roque - Cadiz – Spain