BUSINESS PLAN 'Construction of Cottage Village in Crimea' (including financial model)
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- Английский
- 12.06.2014
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Adaptation of this business plan is possible for similar project worldwide.
The financial model in separate file is attached to this business plan, which makes it easy to build a new financial plan by entering the appropriate data.
As a result of occurrence of the Crimea Republic to Russian Federation in 2014, Ministry of Regional Development has formed a special working group, which deals with project development of federal target program («Social and Economic Development of Crimea Republic and City of Federal Importance Sevastopol till 2020») of Republic territory development. So, according to the information of Ministry, the development of federal target program follows the path of formation activities and facilities: during the next four years a sum of 814 billion RUB will be directed for the Crimea Development. According to the calculations, financing of the Crimea will increase by more than 50% in 2014. In the current year Ministry of Regional Development is planning to allocate for program 130, 2 billion RUB over more. In 2015 the volume of funding will consist of 167, 6 billion RUB, in 2016 it will be increased to 176, 4 billion RUB, in 2017 – to 184, 8 billion RUB.
In general the program of the peninsula development will cost 659 billion RUB for four years; 155 billion RUB will be spent additionally for construction of the bridge through Kerch Strait.
Despite all economic and political nuances, after occurrence of peninsula to Russia the cost of land plots in Crimea increased by 50%, in some cases – by 80%.
Experts of real estate market consider that during 2014 the price rise should be about 15-20%, and after the construction of bridge through Kerch Strait the prices should increase by 30% over more.
Today it is relevant to invest in real estate construction more than whenever. That’s why specialists of the «VTSConsulting» company prepared for you a typical Business Plan of cottage village construction in Crimea.
Business Plan Description
Project Idea
Within the project the construction of cottage village is supposed on a plots of total area *** ha, which is located in the territory of the Crimea Republic, ***. The lot is situated within the protected zone 1 of the Black Sea, outside the secured and sanitary protected zones of enterprises.
According to the project *** of residential blocks will be constructed, existing block will be reconstructed, a café will be built. A medicine center, infrastructure facilities of the appropriate level, beach and walking areas, water park and hydro constructions will also be located on its territory.
Market Situation
The main factors and tendencies of real estate market of the Crimea and Southern coast of the Crimea (SCC):
- *** % of Russians are ready to consider buying of the house for non-permanent residence in modern secured settlements on the Black Sea coast.
- The demand for finished houses is ***%.
- ***% of potential buyers prefer the purchase of house in cottage village.
- The demand is shifting from the individual cottages and massifs of chaotic building to villages, which are implemented in a single architectural building concept. Such concept envisages the obligatory presence of the whole complex of communications, service sphere, security, rest zone, green areas.
- Luxury cottages, which are situated in the unique recreation zones of Southern coast of the Crimea, are demanded. They are characterized by an individual project, a large area and high quality finishing.
- 63% of Russians buy the real estate in Crimea for a rest and dividends. The clients are interested in real estate, situated in zones of elevated profitability. Such zones are situated in places with developed infrastructure near the sea.
- The average payback period of liquid real estate is about *** years.
Competitive Environmental of Project
In the district, which are chosen for location and construction of cottage village «***», the level of competition corresponds to general level on the south coast:
- on the required territory the facilities are represented by the following categories: * park-hotel, * recreational complex (town), boathouse– * units, hotel – * units, the total amount is * facilities;
- all complexes are characterized by development infrastructure, have a wile rooms fund, include such additional medicine services as SPA-centers, gyms, the presence of children’s playground and centers, swimming polls and restaurants are obligatory;
- the rooms fund of researching projects is different: from «standard» (economical variants) to «apartment» and «super lux» with higher comfort;
- all facilities are located at a distance of about 10 km from cottage village «***», what means that they make a direct competition in terms of geography;
- the main advantage of all projects is stepping accessibility of the sea (1st coastal line), maximum distance – 400-500 m and also characteristics of kinds of plots due to close location to the Black Sea.
Finance
Project Payback Period – 14 quarters.
Net Present Value (NPV): $ ***.
Quarterly Internal Rate of Revenue (IRR): 3,331%.
Offer for investors
Necessary investment: $ ***.
Net profit of the investor: $ ***.
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List of Figures, Tables and Diagrams |
3 |
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Executive Summary |
6 |
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1.0. Detailed Analysis of Plots |
8 |
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1.1. Description of Plots |
8 |
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1.2. Location of Project, Main Factors of It |
9 |
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1.3. Landscape characteristics of Project and Climate |
10 |
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1.4. Entrances to Plots |
12 |
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1.5. Analysis of Transport Flows in Close Proximity to Plots |
13 |
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1.6. Image of District and Region |
15 |
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1.7. Plans of Territory Development by Government and Local Authorities |
17 |
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2.0. Analysis of District Closing to Plots |
20 |
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2.1. District Short Characteristic |
20 |
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2.2. District Infrastructure Description |
21 |
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2.3. Description of Nearest Settlements (Towns, Villages, Cottage Villages) |
23 |
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3.0. Analysis of Market Situation |
26 |
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3.1. Analysis of Existing Competitive Environmental |
26 |
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3.2. Summary and Conclusions on Existing Competitive Environmental |
27 |
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3.3. Analysis of Similar Facilities. Strong and Week Sides |
28 |
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3.4. Analysis of Existing and Projected Demand by the Main Client Groups of Consumers |
40 |
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3.4.1. Forecast of Cost of Commercial and Resident Real Estate |
45 |
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4.0. Sales |
53 |
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4.1. Plane of Sales of Village Facilities |
53 |
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4.2. Positioning of Building Houses and Target Audience |
54 |
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4.3. Methods of Sales Promotion |
57 |
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4.4. Advertising Policy and Program of PR-Activities |
59 |
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4.5. Budget of Advertising Policy |
65 |
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5.0. Project Pricing |
67 |
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5.1. Analysis of Market Information |
67 |
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5.2. Definition of Typical Household Cost of Similar Projects |
67 |
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5.3. Definition of Initial Cost of Typical Household (Cottage) in Village «***» (Both Rent and Sale) |
69 |
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6.0. Architectural and Building Concept |
71 |
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6.1. Amount, Footage of Residential Blocks (Cottages) and Plots Area |
71 |
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6.1.1. Justification of Land Plots Area Considering the Marketing Concept |
71 |
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6.1.2. The optimal ratio of Areas of Development Spots to Plots Total Area |
73 |
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6.1.3. Justification of Nomenclature of Households and Their Areas |
74 |
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6.2. Architectural and Planning Solutions |
75 |
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6.2.1. Definition of Optimal Architectural Style of Village |
75 |
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6.2.2. Justification of Material and Technologies of Construction |
80 |
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6.2.3. Justification of Most Effective Planning Solutions |
88 |
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6.3. Infrastructure, Beautification, Security |
91 |
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6.3.1. External Infrastructure (Quantitative and Qualitative Assessment of Infrastructure) |
91 |
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6.3.2. Internal Infrastructure (Technical, Recreational, Social and Domestic) |
94 |
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6.3.3. Beautification Planning of Territory by Volumes and Terms |
111 |
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6.4. Preliminary Master Plan of Plots Development |
113 |
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6.4.1. Zoning of Plots in Accordance with Types and Stage of Development |
113 |
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6.4.3. Transportation and Pedestrian-Bicycle Scheme |
115 |
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7.0. Conclusion on the Best Plots Use |
116 |
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7.1. SWOT-Analysis of Project, Strong and Week Sides of Plots |
116 |
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7.2. Assessment of Plots for Compliance to Hypotheses and Market Conditions |
117 |
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7.3. Forecast of Project Costs |
118 |
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8.0. General Conclusion |
122 |
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8.1. Analysis of Project Risks |
122 |
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8.2. Project Financial Result |
124 |
Figures
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Figure 1. Location of Village *** on Map |
7 |
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Figure 2. View from Cottage Village |
8 |
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Figure 3. Route to Plots from Simferopol |
12 |
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Figure 4. Traffic Scheme of Trolleybus on Route Simferopol-Yalta |
14 |
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Figure 5. Example of One of the Parts of Planning Water Park |
73 |
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Figure 6. Variant of Composite Solutions of Water Park |
74 |
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Figure 7. Variations on the Theme of Illumination of Water Objects in the Territory of Cottage Village «***» |
74 |
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Figure 8. Variants of Objects of Water Park in the Territory of Cottage Village «***» |
75 |
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Figure 9. Variants of Color Illumination of Water Objects in the Territory of Village |
76 |
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Figure 11. *** Embankment, Arch |
87 |
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Figure 12. View on Coastal Zone |
88 |
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Figure 13. Plan of café and Hall in the Territory of Village |
90 |
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Figure 14. Variants of Water Objects of Village «***» Construction Project |
91 |
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Figure 15. Variants of Rooms Equipment for SPA-treatments in the Territory of Village «***» |
92 |
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Figure 16. Variants of Swimming-Pools for Project of Cottage Village «***» |
93 |
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Figure 17. Variants of Bathhouses for Project of Cottage Village «***» |
94 |
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Figure 18. Equipment of Beach Zone in the Territory of Village «***» |
95 |
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Figure 19. General Plan of Cottage Village Development |
108 |
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Tables |
29 |
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Table 1. Rooms of Hotel «***» |
29 |
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Table 2. Rooms of Apartment-Hotel «***» |
29 |
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Table 3. Rooms of Hotel «***» |
32 |
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Table 4. SPA-Center and Medicine Center Services of Hotel «***» |
33 |
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Table 5. Rooms of Hotel «***» |
37 |
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Table 6. Boathouses in the Territory of Development of Cottage Village «***» |
38 |
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Table 7. Strong and Week Sides of Similar Projects |
39 |
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Table 8. Comparative Table of Average Cost of 1 sq. m of Real Estate Objects |
48 |
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Table 9. Plane of Sales of Village Objects |
53 |
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Table 10. Advertising Budget of Cottage Village «***» |
65 |
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Table 11. Pricing of Park-Hotel «***» |
68 |
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Table 12. Pricing of Hotel «***» |
68 |
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Table 13. Pricing of Hotel «***» |
68 |
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Table 14. Constriction of Residential Blocks of Cottage Village «***» |
69 |
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Table 15. Pricing of Room Fund of Cottage Village «***» |
70 |
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Table 16. Areas of Territory Development of Plots in Village |
71 |
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Table 17. Percentage Ratio of Areas of Plots Development to the Total Area |
73 |
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Table 18. Differentiation of Plots Territory |
73 |
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Table 19. Detailed Description of Areas of Development under Building Residential Blocks |
74 |
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Table 20. Detailed Description of Area of Reconstructed Block on Development Area |
74 |
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Table 21. Comparative Table of Technologies of Modern Cottage Construction |
83 |
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Table 22. Descriptions of Materials, which are Used in Construction of Cottage Village «***» |
87 |
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Table 23. Engineering Support of Constructing Village «***» |
87 |
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Table 24. Technical Conditions for Communications of Village «***» |
94 |
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Table 25. Budget for Communications Construction of Cottage Village «***» |
94 |
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Table 26. Characteristics and Cost of Constructing Complex and Café |
95 |
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Table 27. Cost of hydro constructions |
100 |
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Table 28. Budget for Equipping of Beach Area |
101 |
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Table 29. Budget for Construction of Climate Treatment Medicine Block |
102 |
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Table 30. Budget for Beautification of Village Territory |
111 |
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Table 31. Plane of Project Construction and Commissioning of Village «***» |
112 |
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Table 32. Project Forecast Costs |
118 |
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Table 33. Analysis of Project Risks |
122 |
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Table 34. Project Basic Financial Indicators |
124 |
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Table 35. Chart of Project Investment |
124 |
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Diagrams |
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Diagram 1. Readiness of Russians to Buy a House (Cottage) by the Sea |
41 |
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Diagram 2. Acceptable Price for the House (Cottage) by the Sea |
41 |
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Diagram 3. Structure of Demand for Real Estate Objects by Categories |
42 |
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Diagram 4. Share of Ukrainian Population, which can Afford the Buying of Suburban Real Estate |
43 |
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Diagram 5. Motives of Buying by Russian Federation citizens the Real Estate Objects in Crimea |
50 |
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Diagram 6. Preferences Structure of Holidaymakers among Crimea Cities (for Recreation) |
57 |