grp8 sec a session 8

8/12/2019 Grp8 Sec a Session 8

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PROPERTY DEVELOPMENT PROCESS

Market Research: Determining Demand & SupplyOrganize Development Team: Real Estate Engineers and attorneys, get toknow themProperty Assessment & Due Diligence: Evaluation based on a set of factorslike

Location of Competitive PropertiesRegulatory & legal issuesCurrent & Future Market ExpansionEconomic Growth within the Market

Attractive Site CharacteristicsSpecial Local Condition(if any)Trend and Cultural Aspects(if any)Work Force and Unionization Rate.

Concept Design PlanSite Capacity Estimation & Financial Feasibility AnalysisMake First Go/No Go Decision


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PROPERTY DEVELOPMENT PROCESSEnter Property Negotiations/ Sign LOI/MoABegin Financing ProcessHire Development Team interviewed in step 2Conduct Further Due Diligence and Meet with Agencies:

Preliminary application meetings with team of experts & agencies toanalyse any possible issues

Redo Feasibility Study & make another go/no go decision

Meet Contract Requirements & Move Toward ClosingBegin Permitting Acquire FinancingComplete Permit ProcessGet Construction BidsConfirm Market Assumptions(Need/Demand)

Complete Final Feasibility StudyStart ConstructionComplete Construction & Get certificate of OccupancyRestructure Financing

This presentation discusses the process till First Go/No Go Decision


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MARKET RESEARCH

Flurry ofCommercial

activities

ResidentialDevelopments

Educational &Mall

Developments

Market ofSocio-

EconomicSegment

willing to payfor Premium

Facilities

High Demandfor Residential

Accommodation

DecentConnectivity

Govt Backing Presence ofCompanies

Mushroomingof SEZs


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SITE ASSESMENT & OPPORTUNITYIDENTIFICATION

Though other residential complexes present butDemand will exceed Supply in futureLocation ofCompetitive Properties

Hassle free area with no Red-TapismRegulatory and Legal Aspects

Establishment of SEZs & presence of otherCommercial activitiesCurrent & FutureMarket Expansion

Surge of activities in the area will lead tonorthward growth

Economic Growthwithin the Market

Good connectivity with wide approach road Various establishments already in the vicinity

Attractive SiteCharacteristics

Governments special patronage of the localitylends credibility

Special LocalCondition

Favorable as whole locality witnessing rapid

construction

Work Force and

Unionization Rate


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STRUCTURING AMENITIES

Multi-purpose Banquet Hall


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Independent Bungalow


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FINANCIAL FEASIBILITY ANALYSIS

Reference: Property Prices in outskirts of MumbaiCost per sq ft: Rs. 2600(includes moving costs, legal fees, land transfer taxes,

Deed Registration taxes, Labor costs,Material costs,Land Costs )Selling Price

Flats: Rs.4000/sq.ftBungalows: Rs.5000/sq.ft

Construction Horizon: 30 months(assuming continuous availability of cash)Occupancy Rate: 80%(conservative prediction of demand)Net Operating Margin of the Company: 14% for calculating opportunity cost &present values of future cash flows


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Total area 1089000 435600 152460 609840 3 years time forconstruction

Total constructioncost

283140 PV

Sq.ft. No. of flats Rate/Sq.ft. Sq feet Revenue/flat Total Revenue Assuming 80%occupancy 14%

Buildings 609840

1 BHK flats building(600 sq ft) 409840 300 4000 600 2400000 720000000 576000000 388783593.3 272148515

2 BHK flats building (1000 sq ft) 200000 200 4000 1000 4000000 800000000 640000000 431981770.4 302387239

Independent Bunglows : 3000 sq.ft. 150000 50 5000 3000 15000000 750000000 600000000 404982909.7 283488037

Medical Center 5000 14000000

Restaurants 15000 8000 120000000 96000000 64797265.56 22679042.9

Sports complex 0 0 61600000

Gymnasium 5000 0 0 37500000

Badminton court 5000 0 0 14000000

lawn tennis 5000 0 0 14000000 able tennis 3500 0 0 9800000

swimming pool 3500 0 0 35000000

Parking Area 15000 0 0 24000000

Shopping complex 35000 8000 280000000 224000000 151193619.6 52917766.9

multiplex for 1500 seats 35000 8000 280000000 224000000 151193619.6 52917766.9

banquet: 100 sq feetfor a table of 10 guest 15000 8000 120000000 96000000 64797265.56 22679042.9

10 sq feet per person 292000

SUM REVENUE 901840 1657730044 1219117411

acres 10

fsi 2.5

Profit(%) 35.98

Assuming whole property sale after 3 years(on an average)

Under the assumptions, profit is nearly 36%. First decision is Go ahead withthe project.


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REAL ESTATEDEVELOPMENT PLAN BY:Amitesh Negi(2013PGP035)Lalji Chandra(2013PGP458)

Navendra Shandilya(2013PGP241)Sanket Malpure(2013PGP207 )

grp8 sec a session 8

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