kryvyi rih territory development
TRANSCRIPT
Investment
proposal
Complex development of the land on the territory of
Kryvyi Rih non-functioning budgetary buildings
* Presentation materials serve as a general introductory of investment opportunities in the city of Kryvyi Rih
for potential investors .
Some information needs more broad additional research and justification in order to be used for a
comprehensive business plan.
** Access mode for pictures: http://media-cdn.tripadvisor.com/media/photo-s/03/35/df/c0/lotte-hotel-moscow.jpg
Zhovtnevyi district of Kryvyi Rih city – is one of the largest districts in the city with a population of around 132 500 people,
the area of the district is – 5 953 га (**).
High paying capacity of the population in the district.
Economic potential of the district is represented by 12 big industrial enterprises, including: JSC Central mining and
concentration complex, PJSC Kryvyi Rih iron ore complex, PJSC Sukha Balka, oduction enterprise, etc. (**).
Employed at big industrial enterprises of the district – 17 000 people *.
Employed at SMEs of the district – 2 534 people (***).
The total area of buildings for business rent – 15 201,7 sq. m. (***).
The project suggests complex development of the land on the territory of the non-functioning child care complex, maternity
house and adjacent in the area of Kryvyi Rih city residential blocks of “44th Kvartal” (in Dnipropetrovska oblast)/ The total
area available is around 6 ha. The project suggests the building up of a new multi-functional complex with business center
and diversified trade-entertaining infrastructure on the total area of 2500 sq. m. of the described territory under beneficial
conditions for investor * (in case of recreational development of the adjacent area of around 2000 sq. m.).
The project requires design estimates for construction and building works.
The cost of the project (in the initial period) 159 363 943 UAH. Project implementation resources – investors own funds.
Description of
the project
Structural
advantages of
the location
Status of the
project
Budget
Indicator Unit Value
Discounted Payback Period, DPP year 14,9
Net Present Value, NPV thousand UAH 53 433, 588
Internal Rate of Return, IRR % 14,98
Profitability Index, PI 1,34
Budget (own capital), in the initial period thousand UAH 159 363, 943 грн.
** Source: official web-site of Zhovtnevyi district Administration of Kryvyi Rih City Counci
*** Source: Zhovtnevyi district Administration of Kryvyi Rih City Council
Key project indicators
Zhovtnevyi district – is one of the largest in the city.
The population of the district (132 500 people) owns high paying capacity.
The list of functioning trade-entertaining establishments:
– trade-entertaining complex «Тerra»;
– children entertaining complex «Fidget»;
– children entertaining complex «Jumanji».
The city does not have an establishment of the type: «multi-functional
trade-business center of A/B class».
* Source – Zhovtnevyi district Administration of Kryvyi Rih City Council. Access mode – http://www.zhrrkrog.dp.ua/node/13
** 280 UAH per 1 sq. m.
*** 130 UAH per 1 sq.m.
The building up of the modern multi-functional complex with business center (A/B type) and diversified infrastructure on the territory
of “44 kvartal” in the Zhovtnevyi district of Kryvyi Rih city (Dnipropetrovsk oblast) with the following features:
Suggested solution
Effect from
implementation
Economic effect (for investor) Social effect (for the city)
Profit from business operational activity (lease/selling of the areas to subjects of
economic activity)
Expansion of business-contacts and opportunities
Synergic effect from interaction with companies, operating in the business center
Possibility to conduct business in personally-owned premises
Business infrastructure development in the city
Creation of new jobsites
Increase of municipal budget receipts as a result of
business operational activity
Recreational development of the adjacent area of around
2000 sq. m.
Description of the
contemporary situation*
– trade- entertating area (mall), 1 – 4 stories, area of around 10 000 sq. m. Accounting for the average market rent cost per sq. m. (**), possible annual
revenue from operational activity of the owner might be around 33,6 mln. UAH;
– offices, conference halls for lease, stories 5 – 9, area of around 6 500 sq. m. Accounting for the average market rent cost per sq. m. (***), possible
annual revenue from operational activity of the owner might be around 10,14 mln. UAH;
– hotel of 3 – 5 stars, possible annual revenue from operational activity of the owner might be around 3,36 mln. UAH;
– premium class restaurant with a panoramic view at the 12th story) - possible annual revenue from lease – 2,5 mln. UAH.
Transfer of the land to the investor on beneficial conditions (1 UAH per year), in case of recreation development of the adjacent territory
of an area of 2000 sq. m. (approximate volume of initial investments – 4 mln. UAH).Special Condition
The average monthly salary in the city of Kryvyi Rih is 3 796,00 UAH. (as for the І
quarter of 2013)
Foreign direct investment exceeded 5180,3 million USD as for 01.01.2013.
Well-developed transport infrastructure of the city, which allows to serve the
territory with a population of 1 167, 2 million people.
A big number of kids in the district make it expedient to locate the kinder garden /
academy for early children development, etc., as well as to locate entertaining complex
in the building;
A big part of the city population – is youth, which might be a target group for the
complex to attract them and start business in the offices provided.
Кіровоград
Potential volume of the market (population in the radius of 135 km)*
City/town Population of the city
(town), thousand people
1. Kryvyi Rih 659,2
2. Kirovograd (114 km) 244,4
3. Nikopol (105 km) 121,5
4. Marganets (131 km) 49,7
5. Zhovti Vody (56 km) 48,8
6. Ordzhonikidze (97 km) 43,6
Total: 1 167,2
Age structure of the
population of the
Kryvyi Rih city
Zhovtnevyi district **
0 - 17
18 - 39
40 - 59
60 +
* Dnipropetrovsk investment agency
** Official information from Zhovtnevyi district Administration of Kryvyi Rih City Council.
Analysis of social-entertaining infrastructure of Zhovtnevyi district of the
Kryvyi Rih city **
Theatres, culture centers, art schools – 6 units.
Libraries – 11 units.
Sport schools - 5 units.
Extracurricular establishments (PU) – 6 units.
Competitive advantages of the Kryvyi Rih city for
the implementation of this projectThe density of areas available for business rent per 1000 persons in
Zhovtnevyi district of Kryvyi Rih city – 114 sq. m. per 1000 persons*.
Zhovtnevyi district, Kryvyi Rih city
2012 was marked by the highest ratings in the respect of new foreign
brands entering the Ukrainian market.
New brands entering the market are mostly from medium and premium
price market segments.
The development of network operators in Ukraine is mostly
concentrated in Kyiv and cities with a population of around million
people.
Big brand retailers are becoming more and more scrupulous in assessing
the quality of premises – the concept of the project, lease conditions,
management of the complex.
It is expected that the leaders of the world retail will keep entering the
market in 2014 - 2015.
General tendencies
The density of available rent areas in big malls per 1000 persons
in different cities
594
537
325
256
279
230
199
0 200 400 600 800
The biggest building projects of multifunctional complexes,
planned to be launched in 2014 - 2015*
№ Name of the complex CompanyArea, thnd.
sq. m.
Planned
opening
1 “Respublika” «К.А.N. Development» 135 2014
2 “Yappi Mall” «Liko-Holding» 42 2014
3 “Lavina Mall” Private investor 115 2014
4 “Prospect”«Arricano
Development»40,5 2014
5 “Blockbuster Mall” Local developer 66,37 2014 / 2015
6 “Hartz” «Budhaus group» 68 2015
7 “Manhatan Mall”«Forum Evolution»
69,22015
8 “Kvadrat Vyrlitsa” «XXI century» 702015
9 “River Mall” Local developer 552015
10 “Victoria” «Victoria» 54,32015
11 “Kyiv Mall” «Dilais» 75,42015
The development market is prevailed by investors with own capital not
credit capital.
The threshold into the sector has increased from 10 million USD before
crisis to around 30 – 50 million USD after the crisis.
It is expected that the malls will tend to become more spacious with a
more diversified infrastructure.
It is expected by experts that minor shopping centers will become
extinct.**
* Source: http://korrespondent.net/business/realestate/1590422-korrespondent-stolica-shopinga-kiev-zhdet-nashestvie-torgovyh-centrov, August 2013.
** Source: http://korrespondent.net/business/realestate/1590422-korrespondent-stolica-shopinga-kiev-zhdet-nashestvie-torgovyh-centrov, August 2013.
Khmelnitsky
Kherson
Mykolayiv
Simferopol
Kyiv
Budapest
Warsaw
Location Residential area of “44 kvartal”,
Zhovtnevyi district of Kryvyi Rih
city
The minimum total area of the land
plot, required for the building:
• commercial-business center
• parking
min 2,5 thousand sq. m.
1 thousand sq. m.
The area of adjacent territory, which
will be maintained by an investor:
2 thousand. sq. m.
Technical communications: The plot has access to electricity,
water and heat supply (others to
be determined)
The total area of the complex,
including:
Area reserved for placing a mall,
social and cultural infrastructure
(stories 1-4);
Area reserved for offices (5-9
stories);
Area reserved for hotel (10-11
stories);
Area reserved for premium-class
restaurant (12 story)
21 700 000 sq. m.;
10 000 sq. m. ;
6 500 sq. m. ;
2 600 sq. m. ;
1 300 sq. m. ;
The project suggests the building up of a multifunctional business complex (A/B class) with a diversified commercial-
entertaining and social infrastructure by an investor in the heart of Zhovtnevyi destrict.
Residential area
Technical features of the plot
Non-functioning buildings
Territory available for
building
Possible content:
• Key leaser (food big-box store);
• Boutiques ;
• Beauty shops, massage rooms;
• Cinema, food-zones;
• Fitness-center;
• Spa/medical centers;
• Child care / early development academy for kinds / private
garden for late pick-ups.
ІІ set of construction – (5th - 12th stories), total area is around
11 700 sq.m., 2016 – 2017 yy.
5th – 9th stories (area 6 500 sq.m. ) – office premises.
The offices of the following economic sectors:
Information technologies;
Financial services;
Legal service and consultancy, etc.;
Conference-halls;
Training center.
10th – 11th stories (total area 2 600 sq. m. ) – hotel 3 – 5
stars
12th story (total area 1 300 sq. m. ) – premium-class
restaurant.
І set of construction (1st – 4th stories), total area 10 000 sq.
m., 2015 year – mall with an entertaining complex
Time-table of project implementation
ActionBudget,
thousand UAH2014 2015 2016 2017
Preparation of the design estimates
and passing the official licensing
procedures
6000,00
Communications supply (gas,
electricity, water)18 392,9
892,6Preparation of the plot
Expenses for building up of the 1st – 4th
floors (10 000 sq. m.)39 334, 9
Expenses for building up of the 5th – 9th
floors (11 700 тис sq. m.)37 892,4
Виконання внутрішніх
оздоблювальних робіт52 224,5
The recreation development of the
adjacent area* (2000 sq. m.*2000
UAH) and land rent*
2 847,1
Investments into the hotel1 779,5
Commissioning of the object
Total of the project budget,
thousand UAH11 000, 001 53 620,536 45 560,707 49 182,7 159 363,9
* In case of the recreation development of 2000 sq. m. of the adjacent area by the investor, the land will be given on the privileged basis (1 UAH per year).
Million UAH
-200,00 UAH
-100,00 UAH
- UAH
100,00 UAH
200,00 UAH
300,00 UAH
400,00 UAH
500,00 UAH
600,00 UAH
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034
– Cash flow of real money (NCF)
–Cumulative cash flow
– Discounted cumulative cash flow (DCF)
Payback period
1. Shopping center with entertaining area*
Around 10 000 sq. m.
The expected revenue for investor will come from lease of the owned areas to
thoroughly chosen lessees, which are capable of securing diversified attractions for
potential customers.
Potential annual revenue for the investor from operational activity (EBIDTA) –
33, 6 million UAH.
Socially-cultural component of the multifunctional complex infrastructure might be
presented by:
• Key leaser (food big-box store) as well as shopping center with fashion boutiques;
• Exposition gallery;
• Cinema, food-zones;
• Entertaining zone with extreme attractions;
• Beauty shops, massage rooms;
• Fitness-center/ wellness center / spa;
• Spa/medical centers;
• Early development academy for kinds
• Child care / private garden for late pick-ups.
The amount of pre-school establishments (kinder gardens) in Zhovtnevyi
district is 27.
The capacity of these establishments is – 3826 children.
The factual occupancy of the kinder gardens in Zhovtnevyi district – 4938
persons.
The amount of pre-school age children – around 5 516 children.
Expediency of locating the early development academy for kids
(twenty-four hour children garden) in the newly-built complex
* Project needs additional research
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 кв.м. – 130 грн.
2. Office center*
Around 6 500 sq. m. (5 – 9 floors).
The expected revenue for investor will come from granting fully-
prepared premises for the lease.
Estimated expenses for construction – 37,89 million UAH. Estimated
expenses for final preparation of office premises (repairs, decoration,
etc. ) – 26,68 milliion UAH
Potential annual revenue for the investor from
operational activity (EBIDTA) – 10, 14 million UAH.
Infrastructure advantages for business
Ergonomic and convenient design of the office premises
(ergonommic and energy-efficient);
Modern systems of communication and security;
Modern system of heating, ventilation, climate-control;
System of fire-alarm;
Centralized security;
100% readiness of general use spaces (toilets, halls, etc.);
Developed adjacent territory;
Convenient parking.
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 номеру – 350 грн.
*** Режим доступу до фото: https://www.google.com.ua/search?q=spa+%D0%BE%D1%82%D0%B5%D0%BB%D1%8C&safe=off&client=firefox-
a&hs=gS8&rls=org.mozilla:ru:official&source=lnms&tbm=isch&sa=X&ei=SapkUvH8C46r0AXh1IDICA&ved=0CAkQ_AUoAQ&biw=1366&bih=639&dpr=1#facrc=_&imgdii=_&imgrc=vnqhB
3. Hotel*
Around 2 600 sq. m. (10 – 11 floors).
The expected revenue for investor will come from running the hotel.
Estimated cost of initial investments for equipping the hotel -– 1,779
million UAH.
Potential annual revenue for the investor from
operational activity (EBIDTA) – 3, 36 million UAH(**)
Internal rate of return – 16 %
* Проект потребує додаткових розрахунків
** За умови вартості оренди 1 кв.м. – 160 грн.
*** Режим доступу до фото: http://europeluxuryhotelfinder.com/prague-rooftop-restaurants/
4. Premium-class restaurant
Around 1 300 sq. m. (12th floor).
The revenue of the investor is expected to come from leasing the
approximate area of 1300 sq. m. to a lessee for locating a restaurant
on the top floor of the complex with a possibility of entering the
terrace.
Potential annual revenue for the investor from
operational activity (EBIDTA) – 2, 5 million UAH (**)
Kryvyi Rih City Deputy Mayor
Kryvyi Rih, Radyanskya Sq. 1, room. 305
tel. +38 0564 74-69-47
e-mail: [email protected]
Director, Kryvyi Rih City Development
Institution
Kryvyi Rih, Metalurgiv Avenue 28
tel: +38 0564 92 98 48
tel: +38 097 738 44 50
e-mail: [email protected]
Head of the International Activity
Program, Kryvyi Rih City
Development Institution
Kryvyi Rih, Metalurgiv Avenue 28
tel: +38 0564 92 98 28
tel: +38 096 479 96 25
e-mail: [email protected]