Business Plan

MARONI HILL RESORT
1
STUDY FOR THE DEVELOPMENT
OF
Maroni Hill Resort
‘The Project’
By
E. WILLIAM SIMPSON (ESTATES) LTD
“PROJECT OWNERS AND PROMOTERS”
CONTACT: - EVROS I. EVRIPIDOU
Advocates and Legal Consultants
mailto:[email protected]
http://www.cyprussolicitors.com
July 2014
MARONI HILL RESORT
2
INVESTMENT PROPOSAL
PART B
Investment Land: Maroni Hill, Larnaca South East Coast, Cyprus
Area Location:
On a hill
Overlooking Maroni Village
Views to Mediterranean Sea.
North of Zygi Yacht Marina
Holiday Housing Zone
Distances:
Sea: 6 Km
Coastal Road: 6 minutes
Zygi Marina: 6 minutes
Limassol: 20 minutes
Larnaca: 35 minutes
Nicosia: 30 minutes
Motorway: 6 minutes
MARONI HILL RESORT
3
Investment Land Market Value: € 3,000,000 Εuro
Land Area: 23,000 square meters
Description:
It consists of 17separate adjoining
Each plot with a separate title deed of
building plots in a privileged location on
ownership
a hill overlooking the sea.
All the plots are owned freehold by the
same owner
Each individual plot has right of passage
Each plot has an extent of about 1338 sq.m
The option is available for the immediate development of the land through the building
and sale of 10 luxury hilltop villas with swimming pools and large landscaped gardens i.e.
seven Mountain Villas with Royal Gardens and three Mountain Villas (standard )
Excellent return on the Investment:
The cost of Maroni Hill land and construction turn key will be Euro 5,3 million and the
expected profit over a two year period will be Euro 2.7 million i.e. 25,14% return on
the investment per year.
MARONI HILL RESORT
4
STUDY FOR DEVELOPMENT
A.
Essence of the Project
The present business plan refers to the development of a total of 17 adjoining building
plots (approx. 1340 M2 each) in a Holiday Housing Zone on a hill overlooking the
traditional Cyprus village of Maroni- Larnaca with panoramic sea views to the
Mediterranean Sea (south east tourist coast of Cyprus). The development will involve
the construction and sale of a total of 10 villas.
B.
Description of immovable properties (‘’The ESTATE’’)
For description, physical and legal characteristics of the land (building plots) which form
the site for the development of the project sea ADDENDUM ONE
C.
Main Competitive Advantages
The estate enjoys the following main advantages which distinguish it from most of the
other housing developments in Cyprus that is:A privileged and unique location. It is the only estate in the south east coastal region
situated on a hill with magnificent views to the surrounding countryside and the blue
Mediterranean Sea
The existence of 17 separate title deeds enabling if necessary the transfer of freehold
ownership for each building site as early as the signing of the contract of sale
This feature is almost unique for Cyprus developments. It provides absolute security of
title and security of investment and enabling mortgaging at the outset if necessary.
MARONI HILL RESORT
D.
5
Project Parameters /Assumptions
The parameters and assumptions on which the present business plan is based
are outlined and defined below that is:
a)
Mountain Villas (standard) i.e. 3 units of 240.00 M2 covered built
areas on plot of land area of 1400 M2 (including 40 sq.meters covered
verandas etc) Mountain Villas with Royal Gardens i.e. 7 units
/villas each of 240.00 M2 built areas but on plot of land extent of 2800
M2
b) Cost of construction will amount to € 1050 per square meter including
landscaping.
c) Swimming pools are extra (quotation at the request of the purchaser
depending on the size and specifications of the particular pool).
d) Architects and Consultant Engineer’s fees including supervision, 4% on the
cost of construction.
i. Sales of 3 Mountain Villas (standard) each of a size of 240.00
M2 covered built areas on plot of land extent of area 1400 M2 at
€ 2,850 per M2 = 684,000 total of € 2,052.000
ii. Sales of 7 Mountain Villas with Royal Gardens each of a
size of 240.00 M2 built areas but on plot of land of an area of
2800 M2 at € 3,583 per M2 = 860,000 total of € 6,020.000 Grant
total of income € 8.072.000
e) As per prices above the sale price or average per villa (each) will amount to
€ 684,000 ( for the three Mountain Villas (standard) )and €860,000
(for the seven Mountain Villas with Royal Gardens )
f) Estate Agents commission / promotional and sales expenses would be
added to the sale price. An estate agent can add to the sale price between
3% and 8% commission at his discretion depending on his ability to sell.
MARONI HILL RESORT
6
g) Estimated period for preparation of architectural plans and submission to
the Planning Department between one month.
h) Estimated period for obtaining the planning permit - 3 months period is
legally prescribed.
i) Estimated period for obtaining the building within the period needed for
the planning permit.
j) The total of 10 units will be constructed, delivered and sold within a period
of 24 months
k) Estimated period of construction from the time of obtaining relevant
permits six months to eight months.
l) The deposit on the signing of a contract of sale will amount to (35%).The
first installment will be paid within 3 months from the deposit and will
amount to (25%). The second installment amount to (25%) and will be
paid within 6 months from the date of the deposit. The third and final
installment in full settlement will amount to (15%) and will be payable on
delivery of the villa say within 12 months from the date of the deposit. In
the contract of sale there will be a provision for up to 6.5% interest per
annum payable by the buyer on the balance of the purchase price on a
reducing basis. For the purposes of this business plan the amount of the
interest due by the purchaser was not included in the relevant sales
income. The transfer and registration of the titles of ownership can be
affected upon the signing of each contract of sale any liabilities for VAT
transfer and registration fees and other charges referable to the land and
the property purchased e.g. taxes, insurance will be born by the purchaser.
m) The value of the land is € 176,000 per building plot. I.e. for 17 plots a total
of € 176,000 X 17 = € 3.000,000. As the developers will be using other
existing premises, infrastructure, resources and staff for the development,
construction and sale of the villas no overhead or other expenses were
calculated for the purposes of this business plan. No provision of Directors
fees or other salaries or expenses has been made. The directors will be
drawing against their expenses or otherwise (Directors Account) and upon
MARONI HILL RESORT
7
completion and sale of the project the profits will be distributed to the
shareholders. It is proposed that a limited liability company be
incorporated as the vehicle for the development of the project.
E.
METHOD OF DEVELOPMENT OF INVESTMENT LAND
Number of units / villas: 10
The applicable building density is 15% and building coverage 15%
Therefore:
Coverage (i.e. 15% of 23,000 of net area
3,450 M2
Plus covered verandas(i.e. 20% of 3.450)
690 M2
Total buildable area
4.140 M2
Number of units
10
Each unit:
Covered inside built area: 200 M2
Covered verandas: 40 M2
Total built area:
240 M2
Thee units to be built on an area of land of 1338 M2 (Mountain- Villas standard)
Seven units each to be built on an area of land of 2676 M2 (Mountain Villas with
Royal Gardens)
MARONI HILL RESORT
F.
8
FINANCIALS OF DEVELOPMENT:- COST, INCOME,PROFIT
a) Cost
Market value of investment land ( acquisition cost)
€3.000.000
Cost of construction of total covered areas 10 villas x €228,000 € 2.280.000
as per below breakdown i.e.
Cost of construction of inside covered areas €1050x200 M2 each
€ 210,000
Cost of construction of covered
verandas €450 x40 M2= €18,000
Architects, engineers 4% on the cost of construction € 3.311,600
€91,200
Total cost
€ 5,371.000
b) Sales income
i.
Sales of 3 Mountain Villas (standard) each of a size of 240.00 M2
built areas on plot of land extent of 1400 M2 at € 2,850 per M2 = 684,000 total of
€ 2,052.000
ii.
Sales of 7 Mountain Villas with Royal Gardens each of a size of
240.00 M2 built areas on plot of land extent of 2800 M2 at € 3,583 per M2 =
860,000 total of € 6,020.000
Total income € 8,072.000
c) Profit
Sales income from 10 villas
€ 8,072.000
Total cost
€ 5,371.000
Profit
€ 2,701,000
MARONI HILL RESORT
9
Proposed terms of payment:
(35%) as deposit on signing
(25%) First Installment within 3 months from deposit
(25%) Second installment within 6 months from
deposit
(15%) Final installment upon delivery of unit (say eight to 10 months from date of deposit
settlement
G. CONCLUSIONS
It is to be concluded that the present business plan and the figures contained herein,
based on the project’s parameters and assumptions as defined above all of which are
supported by market available data, confirm the viability and profitability of the project.
Further from the findings of the business plan it is clear that adequate inflow of funds
from the sales income will exist to cover the cost of land and the cost of construction
and other expenses. Nevertheless, (setting aside the high probability of the project being
self- financing through sales on the plans), based solely on the above assumptions the
total funds to be invested would amount to € 5.371,064 which over a period of
two years will fetch a profit of Euro € 2.701,000 i.e. 50, 28 % return on
the investment i.e. 25, 14% return on the investment per year
ADDENTUM ONE
DESCRIPTION OF IMMOVABLE PROPERTIES (The ‘’ESTATE’’)
MARONI HILL RESORT
10
Locality Kafkalia , Village Maroni, District Larnaka
Registration Sheet Plan
Plot
Number
number
15720
LV 14
402
15721
LV 14
403
15722
LV 14
404
15723
LV 14
405
15724
LV 14
406
15729
LV 14
411
15730
LV 14
412
15731
LV 14
413
15732
LV 14
414
15733
LV 14
415
15734
LV 14
416
15735
LV 14
417
15736
LV 14
418
15737
LV 14
419
15738
LV 14
420
15739
LV 14
421
15740
LV 14
422
Location and Description:
MARONI HILL RESORT
11
The property under survey (the ‘’Estate’’) comprises of 17 plots of land, situated within
Maroni village parish, in the Larnaca District.
The estate forms part of a locality, known as Kafkalla tou Teratsou and it occupies a
position approximately 2 km north of the village built up area. The estates have a public
access and the sites themselves comprise of a gentle hill slope, occupying a raised
location and offering excellent views towards the village and the coastal line. The sites
are the result of an “agrotemachia division’’ of a much larger plot. Each individual plot
has a right of way.
A plan for internal roads and installation of pipelines is attached (as deposited in the
Land Registry)
Extent:
Each plot has an extent of approximately 1340 sq.m. and is shown edged red on the
attached plan.
The Local Market:
The estate under survey comprises of 17 adjoining plots of land, situated within a
‘’holiday housing development zone ‘’ (.i.e. Π 1) of the parish. The locality has a most
attractive environment and the views that it offers, as well as its proximity to the
seaside are its main attractions. This estate is included in the holiday housing zone
whereas public water supply, electricity etc will be provided.
Holiday Housing Zone (π 1)

Building Coefficient: 15%

Ground Covered area 15%

Total Number of floors:2

MAX Building Height : 8.3 meters
MARONI HILL RESORT
12
The locality has become the subject of heavy interest and attractive for investors over
the last few years. Its much improved access, the relatively low cost of land and the
village’s expansion have provided an active market. Local property values are moving
upwards and this trend will continue but at a lower rate. The market for such one
donum plots in this area is active and the demand still high. For this reason the estate
remains a sound and valuable investment and it has been treated as such in this
assessment.
MARONI HILL RESORT
13
MARONI HILL RESORT
14
MARONI HILL RESORT
15
MARONI HILL RESORT
16