chief michael adekunle ajasin amusement park feasibility

8/13/2019 Chief Michael Adekunle Ajasin Amusement Park Feasibility

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Feasibility & Viability Research

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CHIEF MICHAEL ADEKUNLE AJASIN AMUSEMENT PARK

FEASIBILITY/VIABILITY RESEARCH REPORT

INTRODUCTION

This feasibility and viability report of the propose chief Michael Adekunle Ajasin

Amusement park was researched and reported by the entire Estate management class 2011/2012

graduating set. The market survey was carried out in December 2012, with the aim of evaluating

the existing market for recreational facilities in the surrounding states. The state in focus is Ondo

state where the proposed amusement park will be sited but based on professional judgment of the

research groups, it was decided that the market demand will not only be expected from ondo

state and thus 3 other states were randomly selected based on their proximity to Ondo state and

these states are Oyo, Osun and Ekiti state.

AIM OF THE PROJECT

The aim of the Project is the preparation of feasibility research concerning the siting of a

memorial amusement park named after Chief Michael Adekunle Ajasin in Ondo state. The

feasibility report or study should evaluate the forecast of cost and revenue. The cashflow analysis

should give an estimate of how long it will take for the project to pay-back the cost incurred in

its installment.


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SCOPE OF THE ASSIGNMENT

International cultural exchange Limited (INTERCEL) provides herein a report for the

Ondo state government of an estimate the potential market feasibility of the development of

Chief Michael Adekunle Ajasin Amusement Park, a proposed development which is not only to

serve as a center for recreation but as a memorial to retain the heritage of the Late sage. We

made a number of independent investigations and analyses in performing this study. We made

judgemental estimates concerning the subject site and its relationship to potential users as well as

its attributes relative to the amusement park and other recreational facility comparables. We

administered market survey questionnaires in 4 major states which are Ekiti, Oyo, Osun and

Ondo and the samples were taken randomly. We examined reports of various amusement park

developments including the major ones existing in these states which we could lay our hands

upon.

We researched information concerning the performance of each of the major components

of the project from the respondents perceptions. We interviewed representatives of area

attractions to determine usage and new supply additions. In conducting our investigation and

analysis, we relied on data retained in our office, which is updated regularly for use in all

assignments. Various agencies and databases, including the internet (Wikipedia.com) database,

were contacted for demographic data, land use policies and trends, growth estimates, and

employment data. Neighborhood data was supplemented by a physical inspection of the subject

property and the area. Cost estimates were based on professional quantity surveyors opinion of

cost as at 1996 and these values were appropriately adjusted considering the price change over

time. In addition to the subject's specific information, we have considered relevant market data in

determining the projections used in our cash flow analysis. The financial analysis was based


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primarily upon the probable operating experience of the property relative to gross operating

revenues, typical expense levels, and resultant net cash flow. Estimates of operating revenues

were based upon market data relative to industry standards and comparable properties in the

subject area. Expense levels were estimated based upon industry standards and operating

histories of similar properties.

Demographic factors

The survey was completed by 666 people. The study population was assumed to exclude minors

hence the figures from the market survey are targeted to include only age and income qualified

population which is assumed to start from age 18 and above. As seen in the table below, the

highest percentage of respondents was between 24-30 years (36.2% of the market survey). The

highest percentage of the respondents was single 52% in all and 24.8% of the respondents had

family sizes of 4 and 5 each.

Table 1: Age

Frequency Percent

18-23 162 24.324-30 241 36.2

31-40 144 21.6

41 above 117 17.6

Total 664 99.7

Table 2: Marital status

Frequency Percent

single 346 52.0

married 296 44.4widow 11 1.7

divorced 2 0.3

others 1 0.2

Total 658 98.80


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Figure 1: Market Capture description

Main Market areas

Competing Markets

The delineation of market zones above has not been done to any scale, its only descriptive

estimate to show the proximity of the other states understudied to ondo state. The Markets

understudied are the Recreation market In Ondo state, Ekiti state, Osun state and Oyo state. The


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main market is the proposed Chief Michael Adekunle Ajasin Amusement park which will be

located in ondo state as seen above.

Market Population Analysis

Consultants have adopted a three stage methodology for market demand assessment for the

proposed recreational facility at Ondo state. Demand for any activity is a resultant of several

factors, which are sources of generation of demand. Understanding of those factors is critical for

estimation of actual demand or demand generators. Firstly the indicators and factors are

described and illustrated. In the study, the catchment area for the proposed recreational facility is

delineated. The report presents a detailed analysis of the indicators and factors affecting the

demand for the proposed recreational hub with respect to the catchment area, with an objective

of estimation of the demand generating potential of these factors.

The Population:

First and most importantly is the population resident in an area, this is a major indicator of

market demand. The greater the population of an area, the greater the likelihood that demand will

be generated in the area. This however, is still subject to varying constraints which the analysis

of the market survey has been able to put into consideration in determining total expected market

demand.

2006, Nigeria Census figures show:

Ekiti = 2,398,357 people

Ondo = 3,346,087 people

Osun = 3,416,959 people

Oyo = 5,580,894 people

Others = an Estimate of 4,000,000 average


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The process for population analysis is in three steps which are described as follows:

1. Cross-tabulations, describing, the various percentages of each state or group of regions

who expressed willingness to visit the park were applied to the population from each

state. Assumption being that the market survey is evidence enough to serve as a basis of

generalization.

2. Weighted average of frequency of visits in a year: The total percentage of the respondents

who said they would visit always, sometimes, occasionally and never were weighted by a

probability of 0.4, 0.3, 0.2 and 0.1 respectively.

3. Market pull: In this step, the respondents where divided into 5 market areas, Ondo, Ekiti,

Osun, Oyo and Others. The percentage of the population who were attracted to the

competing recreational facilities were evaluated


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Table1: Population willing to visit the park

TotalTotal

yes&no Percentages

yes no12 2

1 0

1 0

1 028 4

4 0

1 00 1

1 0 7 12.28 no

Others 1 0 50 57 87.72 yes

65 923 1 10 9.71 no

Ondo 5 0 93 103 90.29 yes

1 01 3

1 0

1 0

1 01 1

91 2

9 0 6 5.31 no

Ekiti 1 0 107 113 94.69 yes2 0

4 01 0

1 0

65 9

8 27 0

1 0 11 10.89 no

Osun 1 0 90 101 89.11 yes1 0

1 01 0

28 3

1 0

1 089 4 7 5.30 no

Oyo 3 0 125 132 94.70 yes

466 41 522


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replies unaccounted

506 15

Table 2: Evaluation of respondents frequency of visits

Frequency of visits

TotalAlways% Sometimes% Occasionally% Never%

0 2 14 7

0gun 0 0 1 0

abuja 0 0 1 0

Anambra 0 0 0 1

benin 0 0 0 1

enugu 0 0 1 0

Kaduna 0 0 1 0

lagos 1 3 24 12Lagos 0 1 4 5

Lagos st 0 0 1 0

Minna 0 0 1 0

Niger 0 0 0 1

ogun 0 0 0 1

Ogun 0 0 0 1

Others Totals 1 6 48 29 84

Percentage 1.190 7.143 57.143 34.524

ado 0 3 1 0

ado ekit 0 0 1 0

Ado Ekit 0 0 1 0Ado-Ekit 0 2 0 0

Ikere 0 0 1 0

ekiti 4 30 55 20

Ekiti 0 1 7 2

Ekiti st 0 1 1 2

Oworo ek 0 0 1 0

Ekiti Total 4 37 68 24 133

Percentage 3.008 27.820 51.128 18.045

iabdan 0 0 1 0

ibadan 1 9 19 9

iibadan 0 0 0 1ikire 0 1 5 1

0y0 0 0 1 0

1badan 0 0 1 0

kwara 0 0 0 1

Kwara 0 0 0 1

owo 0 1 0 0

oyo 3 29 52 17


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Oyo 1 0 3 1

Oyo Total

Percentage

5

3.165

40

25.316

82

51.899

31

19.620

158

ife 0 0 2 0

Ejigbo 1 0 0 00sun 0 0 1 0ilesa 0 0 0 1

Iresi 0 0 0 1osun 7 14 50 22

Osun 0 3 7 0

osogbo 0 0 4 1Osun Total

Percentage

8

7.018

17

14.912

64

56.140

25

21.930

114

akure 0 2 5 1

ondo 3 16 48 44

Ondo 0 5 16 7Ondo Total 3 23 69 52 147

2.04021

15.646123

46.939331

35.374161 638

Source: Market Survey, 2013.

Competing

Facilities

Market population

attracted Percent of market pulled(%)Akure 12 1.802

Abuja 9

Delta 4

Lagos 64

North 1418

Others 109 16.366

Ibadan 108 16.216

Ekiti 36 5.405

None 391 58.709

Osun 10 1.502

Captured market(%) Uncaptured Market(%)

41.291 58.709

*Formula: Market Assessed e.g. (Oyo + Uncaptured Market ) (Other markets)

Ekiti:

Total population = 2,398,357

Step 1: 94.69% of 2,398,357

= 2,271,004


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Step 2: (3.008% * 0.4) + (27.82%*0.3) + (51.128*0.2) + (18.045*0.1)

= 1.203+8.35+10.23+1.805

= 21.59% of 2,271,004

= 490,310

Step 3: 28.228% of 490,310

= 138,405 visits from Ekiti

Ondo:


Step 1: 90.291% of 3,346,087

= 3,124,835

Step 2: (2.04% * 0.4) + (15.646%*0.3) + (46.939*0.2) + (35.374*0.1)

= 0.816+4.694+9.388+3.537

= 18.435% of 3,124,835

= 576,063

Step 3: 21.022% of 576,063

= 121,100 visits from Ondo

Osun:


Step 1: 89.109% of 3,416,959

= 3,044,818

Step 2: (7.018% * 0.4) + (14.912%*0.3) + (56.140*0.2) + (21.930*0.1)

= 2.807+4.474+11.230+2.193

= 20.704% of 3,044,818

= 630,399

Step 3: 20.422% of 630,399


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Table 3: Cost estimate table

Cost Items

1996 QS

Estimate(#)

11.9% inflation Adjusted

values (#)

Monument, Fountain and otherFacilities 39,000,000.00 43,641,000.00

Art Gallery 90,000,000.00 100,710,000.00

Museum 100,500,000.00 112,459,500.00

V.I.P Lodge 87,000,000.00 97,353,000.00

Accomodation Suite 183,300,000.00 205,112,700.00

Administrative Block (A storey

Building) 130,200,000.00 145,693,800.00Shopping Complex (A Storey

Building) 276,000,000.00 308,844,000.00

Multipurpose/conference Hall 83,100,000.00 92,988,900.00

Park's Clinic 42,000,000.00 46,998,000.00

Hotel 72,000,000.00 80,568,000.00

Restaurant 30,000,000.00 33,570,000.00

Sport's Block 107,700,000.00 120,516,300.00

Mechanical workshop 35,100,000.00 39,276,900.00

Fence 219,000,000.00 245,061,000.00

Sports Arena 990,000,000.00 1,107,810,000.00

Animal Garden 1,680,000,000.00 1,879,920,000.00

Saro Wiwa Parking lots 75,000,000.00 83,925,000.00

Sculptural Garden 721,200,000.00 807,022,800.00

Children Amusement Park 924,000,000.00 1,033,956,000.00

Adults Amusement Park 702,000,000.00 785,538,000.00

Swimming Pools 72,000,000.00 80,568,000.00

Artificial Lake 1,050,000.00 1,174,950.00

All Roads with Drainage 6,000,000.00 6,714,000.00

Power house 15,000,000.00 16,785,000.00Electricity/ Generator/

Beautification Lights 1,200,000.00 1,342,800.00

Water Supply/ Boreholes/ Pipesetc 9,000,000,000.00 10,071,000,000.00

Landscaping 210,000,000.00 234,990,000.00

Others 240,000,000.00 268,560,000.00

Total 16,132,350,000.00 18,052,099,650.00

Land Cost Per plot 400,000.00

100 Acres (6 plots per acre) 600.00

Land Cost 240,000,000.00

Agency& Legal @ 10% 24,000,000.00


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Stamp duty @ 2% 4,800,000.00

Total Land Cost 268,800,000.00

Construction&Land Cost 18,320,899,650.00

Average Feeper visit(#)

Total Returns (1,254,784visits)

Percentage

Visit per

specific Facility Real Return(#)(%)

Gate Fee 100 125,478,400.00 100 125,478,400.00

Monument, Fountain and

other Facilities 100.00 125,478,400.00 67.9 85,199,833.60

Art Square 250.00 313,696,000.00 64.3 201,706,528.00

Museum 200.00 250,956,800.00 79.3 199,008,742.40V.I.P Lodge 10,000.00 12,547,840,000.00 5.1 639,939,840.00

Accomodation Suite 500.00 627,392,000.00 8.2 51,446,144.00

Multipurpose/conference Hall 500,000.00 627,392,000,000.00 3.4 21,331,328,000.00

Hotel 2,000.00 2,509,568,000.00 5.1 127,987,968.00

Sport's Block 200.00 250,956,800.00 64.3 161,365,222.40

Animal Garden 200.00 250,956,800.00 72.8 182,696,550.40

Saro Wiwa Parking lots 50.00 62,739,200.00 100 62,739,200.00

Sculptural Garden 150.00 188,217,600.00 100 188,217,600.00

Children Amusement Park 100.00 125,478,400.00 67.3 84,446,963.20

Adults Amusement Park 200.00 250,956,800.00 100 250,956,800.00

Swimming Pools 250.00 313,696,000.00 64.3 201,706,528.00

Artificial Lake 200.00 250,956,800.00 65.9 165,380,531.20

Games 150.00 188,217,600.00 72.1 135,704,889.60

fountain 100.00 125,478,400.00 67.1 84,196,006.40

645,774,585,600.00 24,279,505,747.20


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Gross Return = # 24,279,505,747.20

Less: Running Cost @ say 40%

Tax @ 30%

Allowance for

Depreciation @ 5%

Annual Maintenance 5%

Total 80% #19,423,604,590.00

Net Return #4,855,901,150

Approx. #4,900,000,000.


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Repayments

Year Capital Borrowed

Income (3%

growth in 2years) Capital Interest(21%) Total Interest (21

0

-

18,700,000,000.00 - - 3,927,000,000.00 3,927,000,000.00 3,927,000,00

1 -22,627,000,000.00 4,900,000,000.00 148,330,000.00 4,751,670,000.00 4,900,000,000.00 4,751,670,00

2

-

22,478,670,000.00 4,900,000,000.00 179,479,300.00 4,720,520,700.00 4,900,000,000.00 4,720,520,70

3

-

22,299,190,700.00 5,047,000,000.00 364,169,953.00 4,682,830,047.00 5,047,000,000.00 4,682,830,04

4

-

21,935,020,747.00 5,047,000,000.00 440,645,643.00 4,606,354,357.00 5,047,000,000.00 4,606,354,35

5

-

21,494,375,104.00 5,198,410,000.00 684,591,228.00 4,513,818,772.00 5,198,410,000.00 4,513,818,77

6

-

20,809,783,876.00 5,198,410,000.00 828,355,386.00 4,370,054,614.00 5,198,410,000.00 4,370,054,61

7

-

19,981,428,489.00 5,354,362,300.00 1,158,262,317.00 4,196,099,983.00 5,354,362,300.00 4,196,099,98

8

-

18,823,166,172.00 5,354,362,300.00 1,401,497,404.00 3,952,864,896.00 5,354,362,300.00 3,952,864,89

9

-

17,421,668,768.00 5,514,993,169.00 1,856,442,728.00 3,658,550,441.00 5,514,993,169.00 3,658,550,44

10

-

15,565,226,040.00 5,514,993,169.00 2,246,295,701.00 3,268,697,468.00 5,514,993,169.00 3,268,697,46

11

-

13,318,930,339.00 5,680,442,964.00 2,883,467,593.00 2,796,975,371.00 5,680,442,964.00 2,796,975,37

12

-

10,435,462,746.00 5,680,442,964.00 3,488,995,787.00 2,191,447,177.00 5,680,442,964.00 2,191,447,17

13 -6,946,466,959.00 5,850,856,253.00 4,392,098,192.00 1,458,758,061.00 5,850,856,253.00 1,458,758,06

14 -2,554,368,767.00 5,850,856,253.00 5,314,438,812.00 536,417,441.00 5,850,856,253.00 536,417,44

15 2,760,070,045.00 - - - - -


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Conclusion

From the market survey report and analysis, It has been derived that subject to the assumptions

made in this report, the project should reasonably payback within the first 15years of its life. The

project derived an estimated 1,254,784 visits per year from the markets identified, and the cost of

establishing the project was estimated at #18,320,899,650.00. The Net annual return was

approximately summed up to #4,900,000,000 and based on this estimate of cost and revenue, the

pay-back period was derived to be 15 years.

chief michael adekunle ajasin amusement park feasibility

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