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39 homes to be built west of Hua Hin on 17 rai of land (27,200 sq m) |
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| Description: |
INVESTMENT PROPOSAL – MONGKHOL HUA HIN
Location
Hua Hin is Thailands oldest seaside resort dating back to before the turn of last century. The railway stopped here bringing the first tourists from Bangkok to stay at the Railway hotel (now Sofitel). Its charm was quickly noticed by the Thai Royal family and their connection with the area also dates back over 100 years. The King now resides here permanently enjoying its peace and charms.
The area has seen a recent massive increase in foreign interest in the area. Holidaymakers flood in every year in ever increasing numbers and people wishing to relocate have had their demands met by massive development of housing in and around the area.
The Mongkhol resort is located 4 kms due west from Hua Hin town centre.
The resort is a popular destination for holidaying Thai and foreigner guests alike. The location is far enough from town to be quiet and near enough be within easy access. The area has seen an increase in housing developments over the past 18 months, both high end and budget and is booming The land is located very near to the Mongkhol resort. The land is in a superb location and enjoys spectacular views of the surroundings and has the enormous advantage of being on a gentle slope. We consider this to be a very highly suited plot for development. The land is at present undeveloped and in a natural state.
Investor
We are delighted to be able to offer a 50% participation in the purchase of the land and construction of a housing development on the land.
Land
17 rai (27,200 sqm) 1 rai =1600 sqm
Total land cost
24,000,000 baht. This will include all incidentals and legal costs and expenses relating to the land purchase. The initial investment to acquire the land will be staged. Payment of 10% of the total cost at the outset and remainder within 90 days.
Infrastructure
The land at present has no infrastructure, drainage, roads or services. Provision of full infrastructure is necessary to develop the land. This will include surveying and splitting, electricity and city water, telephone and internet services , roads, drainage and all necessary piping, wiring and street lighting. The cost to provide full infrastructure is calculated at 750,000 baht per rai, a total cost of 12,750,000 baht.
The area of land that will be lost to infrastructure is 25% of the total land purchased or 4.25 rai (6,800 sqm). This leaves 12.75 rai (20,400 sq m) sellable land.
Land plots
After infrastructure the remaining land are that can be devoted to project development will be 12.75 rai (20,400 sqm). It is proposed that land plots are created with a minimum size of 400 sq m and a maximum size of 750 sqm the average plot being 550 sq m. The total number of plots that will be created are as follows :
20 plots of 400 sq m = 8000 sq m
10 plots of 750 sq m = 7500 sqm
9 plots of 550 sq m = 4,950 sq m
Land plots will be sold at 5000 baht per sq m producing 102,000,000 baht. The cost of sale of each plot is 25% of the selling price to include all our marketing, legal and other costs and amounts to 25,500,000 baht.
Land summary
Total acquisition costs 36,750,000 baht
Plot sales revenue (39 plots) 102,000,000 baht
Sales and Marketing 25,500,000 baht
Net revenue on land 39,750,000 baht
Properties
We will construct 39 properties on the available plots. The sales period to conclude all sales will be 2 years.
We do not know what size or design of house a buyer will build on a particular plot or the time scale for construction. Therefore it becomes difficult to provide specific information and figures.
The impact on the overall building cost of a house alters with time. If a buyer decides to purchase a plot now and build now we can estimate a net profit of between 170,000 baht and 450,000 baht on the build dependant on property size. However if the buyer buys now and builds later (perhaps in a years time) the construction costs will have risen by 10%, the consulting costs on the property also will have risen together reducing profit accordingly.
As a crude example the cost to a client for an average size and price house is 2,900,0000 baht. Marketing costs are 25% and the actual build cost is 1,800,000 baht. Should however the client build later then the build cost will rise by 10% to 1,980,000 baht. We would also add an error margin to each property built of 25,000 baht per house. In this example net profit would be 350,000 baht if built immediately or 170,000 baht if built a year later.
Profit on additions to the building will go to the builder on the project.
The estimated net profit on properties on the entire development will be between 6,630,000 baht (1) and 13,650,000 baht (2).
Land and house summary
Net revenue on land 39,750,000 baht
Minimum net revenue on house (1) 6,630,000 baht
Total net revenue 40,380,000 baht
Net revenue on land 39,750,000 baht
Maximum net revenue on house (2) 13,650,000 baht
Total net revenue 53,400,000 baht
ROI (return on investment)
It is proposed that capital invested will be returned to the investor in stages and in two ways :
1. As land plots are sold, and
2. As properties are sold.
Payment to investor can be directed to the investors nominated accounts anywhere Worldwide and paid in any currency.
Land plot (55 total) sales :
a) When 10 plots are sold – 10% of revenue (profit) on land sales paid to investor
b) When 50% plots are sold – 25% of revenue (profit) on land sales paid to investor
c) When 75% plots are sold – 50% of revenue (profit) on land sales paid to investor
d) When all plots sold – 75% of revenue (profit) on land sales paid to investor
Property sales :
When 25% sold and completed – 10% of revenue (profit) on house sales paid to investor
When 50% sold and completed – 25% of revenue (profit) in house sales paid to investor
When 75% sold and completed – 50% of revenue (profit) on house sales paid to investor
When all sold and completed – full 100% revenue (profit) on house and land sales paid to investor.
Conclusion
We have vast experience of project development in Thailand. We have experience in the acquisition of prime land highly suited for development and a proven formula for house building and consulting, the legalities of land splitting and provision of infrastructure.
The main thrust of our strategy is a strong marketing force. This is to ensure that sales of land take place quickly from where it can be seen in this proposal the main net profit emerges.
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| Reference: |
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IP0003 |
| Price: |
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24,000,000 |
| Type: |
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Investment Proposals |
| Status: |
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Available |
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