Alternaty - Nha Trang hotels and resorts market view - December 2012
Alternaty Feasibility Study & Development Recommendations_Report Sample_EN
1. A boutique real estate firm, we partner
with hotel and resort developers to
deliver alternative real estate products.
Investment Feasibility Analysis and
Development Recommendations
2014
2. 2014
Table of Contents
Investment Feasibility Analysis and Development Recommendations Sample
• 1.0 Executive Summary
• 2.0 Property Description
• Overview
• Project Status
• Location
• Building Plan
• Components
• 3.0 Project Parameters
• 4.0 Development Stages
• 5.0 Construction Cost Estimates
• 6.0 Market Overview
• City Overview
• Population
• Geography
• Climate
• Foreign Direct Investment
• Visitor Arrival
• Serviced Apartment Market
• Hotel Market
• Residential Market
• Office Market
• Retail Market
• 7.0 Investment Parties and Interests
• Developer
• Partner
• Main Contractor
• Office Head Lease
• Senior Loan
• Pre-sale
• 8.0 Cash Flow Analysis
• Cash Flow Input
• Residential Cash Flow
• Commercial Cash Flow - Office
• Commercial Cash Flow - Retail
• Hotel Cash Flow
• Consolidated Cash Flow
• Considerations and
Recommendations
• 9.0 Conclusion
• Disclaimers
2
7. 5.0 Construction Cost Estimates
Investment Feasibility Analysis and Development Recommendations Sample
• The construction costs have been estimated by the main contractor, [confidential] Corporation, with total costs of
approximately $51,000,000 divided into hard costs (82%), soft costs (10%), pre-opening costs (4%) and contingency
costs (4%), excluding land and financing costs, as follows:
• Hard Costs
• Site works cost is $295,406 which is the equivalent of $97/sqm
• Basement cost is $5,125,344 which is the equivalent of $897/sqm
• The construction cost for the residential and commercial components is $13,531,608 and $8,831,222
respectively, which is equals to 53% of the total hard cost
• The construction cost for the hotel is $14,200,819, accounting for 34% of the total hard cost
• Soft Costs
• Consultancy costs are 2% of total soft cost while design, architect and project management cost equal 10% of
total soft cost. The subtotal of soft costs is $5,038,128, which accounts for of 10% total cost
• Pre-opening Costs
• This includes the working capital for the pre opening activities and is equal to $2,000,000
• Contingency Costs
• A total of $1,900,000 has been allocated to contingency costs, for an amount of approximately 4% of total
construction cost
• Construction costs have been independently verified by an international third party quantity surveyor. The summary
of the costs breakdown has been included in the hard copy of Appendix
2014 7
9. 6.1 Visitor Arrivals Vietnam
Investment Feasibility Analysis and Development Recommendations Sample
• International visitor arrivals reached a record 7.6
million in 2013, increasing by 10.6% from 2012
• The purpose of trip for 61.3% of visitors was
tourism, while 16.7% visited for business and 16.6%
visited family and friends
• 79.0% arrived to Vietnam by air while 18.5% arrived
by road and 2.6% arrived by sea
• The CAGR of international arrivals to Vietnam for
business purposes during the 5 year period of 2008
to 2013 has been 8.4%
• Average length of stay in Vietnam in 2012 was 9
days
61%
17%
17%
5%
By Purpose of Trip (2013)
Tourism Business
Visiting Relatives Other
0
2
4
6
8
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Visitors(Millions)
International Visitor Arrivals to Vietnam
By Purpose of Trip
Tourism Business Visiting Relatives Other
-30%
0%
30%
60%
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
AnnualGrowthRate
International Visitor Arrivals to Vietnam
Annual Growth Rate
International visitors Business
79%
3%
18%
By Means of Transport
(2013)
Air Sea Road
2014 9
10. 2014
6.2 Serviced Apartment
Average Daily Rate (ADR) and RevPAR
Investment Feasibility Analysis and Development Recommendations Sample
• Since ADR information is not available for Serviced Apartments, the weighted average Public Monthly Rates have
been used as a proxy in order to arrive at the estimated Serviced Apartment RevPAR
• Weighted average Monthly Public Rate of the first room category (cheapest available) = $1,649.50
• Discount factor applied to Public Rate (Entry Level Room Category) = 90%
• Weighted average Monthly Rate of (Entry Level Room Category)= $1,484.59
• Estimated ADR 2013 = $48.81 (1,484.59*12/365)
• Occupancy 2013 = 92.0%
• 2013 Estimated A & B Grade Serviced Apartment RevPAR = $44.90 (48.81 * 92%)
Name [confidential] [confidential] [confidential] [confidential] [confidential] [confidential] [confidential] [confidential]
Grade A B B B B B B B
Keys 78 180 30 29 15 20 124 6
Entry Level Room Category 1 Standard A Standard A 1 1 1 (H2) 1
Size (sm) 80 83.8 47 55 70 75 65 124
Quantity 54 72 6 6 11 4 18 3
Mnthly Rate 1,500 2,100 1,100 1,100 1,300 1,325 1,040 1,100
10
11. 6.3 Hotel Total Supply
Investment Feasibility Analysis and Development Recommendations Sample
• The total supply of 3 and 4 star hotels in [confidential]
currently stands at 1,175 keys across 17 properties
• The supply of 4 star hotels is 672 keys (7 hotels)
accounting for 57.2% of total supply, while 3 star hotel
rooms supply is 503 keys (10 hotels), accounting for the
remaining 42.8%
• There have been 2 main periods of supply growth in
[confidential] which coincide with peaks of the Vietnam
business and real estate cycle:
• 1997 – 2000: 225 keys to 587 keys (up 160.9%)
• 2006 – 2011: 718 keys to 1,175 keys (up 63.6%)
• Supply has remained stable since 2011
• The majority of supply is located in [confidential]
District, with 659 keys accounting for 56% of total
supply
• [confidential] District has 365 keys of
supply, representing 31%, while [confidential] District
and each have 1 property only
659, 5
6%
365, 3
1%
101, 9
%
50, 4
%
Location of 3 & 4 Star
Hotels
672, 5
7%
503, 4
3%
Hotel Supply in
[confidential]
4 star 3 star
0
500
1,000
1,500
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
Supply(Keys)
Hotel Supply in [confidential]
4 Star 3 Star
2014 11
12. 6.4 Hotel Supply Map
Investment Feasibility Analysis and Development Recommendations Sample
2014 12
• 3 Star Hotel
• 4 Star Hotel
• Serviced Apartment
• The Property Site
1km Radius
2km Radius
Cat Bi
International
Airport
Big C
Tam Bac Bus Station
International
Hospital
Sport and ulture Center
Lach Tray Stadium
Train Station
13. 2014
6.5 Hotel
4 Star Public Rates and Room Types
Investment Feasibility Analysis and Development Recommendations Sample
Name [Confidential] [Confidential] [Confidential] [Confidential [Confidential [Confidential [Confidentiall Min Max Avg.
Grade 4 4 4 4 4 4 4
Keys 122 101 80 129 78 80 82
Room Category 1 Superior Deluxe Deluxe Deluxe Superior Standard Superior
Size (sm) 30 35 28 26 30.5 30 28 26 35 29.6
Quantity 82 115
Rate
Public 125
Corporate 99
Best Avail 115
Adv Purch 105 80
Sngl Public 57
Sngl Corp 54
Dble Public 69
Dble Corp 64
Single 70
Double 80
85.7
Public 100
Corp 80 92.5 57.1 57 125 81.0
Room Category 2 Deluxe Executive Executive Suite Deluxe Superior Deluxe
Size (sm) 30 45 45 52.5 40.2 35 33 30 52.5 40.1
Quantity 8 8
Rate
Public 145
Corporate 115
Best Avail 135
Adv Purch 122 100
Sngl Public 86
Singl Corp 79
Dble Public 98
Dble Corp 89
Single 110
Double130
Spr Single 130
Spr Dbl 150 95.2 115.1 66.7 66.7 145 102.6
Room Category 3 Executive Junior Suite Junior Suite Villa Junior Suite Deluxe Executive
Size (sm) 30 50 60 70 57.2 45 38 30 70 50.0
Quantity 6 2
Rate
Public 170
Corporate 135
Best Avail 160
Adv Purch 145 120
Sngl Pub 133
Sngl Corp 129
Dble Publ145
Dble Corp 139 138.1 162.6 76.2 76.2 170 133.3
Room Category 4 Apart Suite Suite Flat Suite Suite Suite
Size (sm) 60 75 54 64.2 55 70 54 75 63.0
Quantity 5 4
Rate
Public 190
Corporate 155 160 185.7 212.6 119 119 212.6 173.5
13
15. 2014
8.0 Cash Flow Analysis
Investment Feasibility Analysis and Development Recommendations Sample
15
16. 2014
8.1 Market Penetration Analysis
Investment Feasibility Analysis and Development Recommendations Sample
• Due to several factors including the overall increase of tourist for Vietnam market, the increased number of Japanese
and Korean business visitors in [confidential] and the recovery of the Vietnamese economy. We have forecasted an
increase in demand of approximately 13% per year
• The limited new supply coming into the market and the increase in room demand should lead to progressive increase
in occupancies until the Subject Property will be opening and operating in 2017
Projected
Demand Growth 2014 2015 2016 2017 2018 2019 2020
Variance Var. Var. Var. Var. Var. Var. Var.
Leisure 5% 77,608 5% 81,489 5% 85,563 5% 89,841 10% 98,825 5% 103,766 5% 108,955
Mice 0% 36,956 10% 40,652 10% 44,717 15% 51,425 15% 59,138 10% 65,052 10% 71,557
Long Term 15% 14,167 5% 14,875 5% 15,619 10% 17,180 5% 18,040 5% 18,941 5% 19,889
Induced Demand 0% 0% 5% 7,295 0% 15% 26,400 3% 5,633 15% 30,060
Total Demand
(room/year) 128,731 6% 137,015 12% 153,194 8% 165,741 27% 209,698 8% 227,088 19% 269,789
Total Supply Base 215,350 215,350 215,350 215,350 215,350 215,350 215,350
New Supply
(Subject Ppty) 206 206 206 206 206
Property 1 100 100 100 100 100 100
Property 2 50 50 50
Property 3 200 200
Total Supply 215,350 251,850 327,040 327,040 345,290 418,290 418,290
Market Occupancy 60% 54% 47% 51% 61% 54% 64%
Penetration
Analysis 0% 0% -10% 5% 5% 10% 10%
Property
Occupancy 0% 0% 42% 53% 64% 60% 71%
16
21. Thank You
Disclaimer: This document has been prepared in good faith and for general informational purposes only. Nothing herein contains investment, legal, tax
and/or other advice and investors should seek independent professional advice before making any investment decision. While reasonable care has been
taken to ensure that the sources of information herein are reliable, no guarantee is provided to the accuracy or completeness of such information (and
the same may not be independently verified or audited) and no liability is accepted for any inaccuracy or omission.