Daniel Armstrong, Luke Binns, Ernesto Correa,

David Hook, Jess Rawlings, Nicole Mang-Nduka

• Key Deliverables

• Putting Plans into Action

• Existing Site Conditions

• The Concept

• Build Costs / Time Scales

• The Bottom Line

• Investment Summary

• 18% > Internal Rate of return (IRR)

• 16% ROI on Gross Development Value (GDV)

• Strength of title

• Profitability an potential for growth

• Address site constraints

• Barriers to entry

The Master Plan envisages for Shanghai are stated below:

• a) To become a world economic centre in financial, trading and commercial terms, and a shipping centre by 2020.

• b) To incorporate the urban development of Shanghai with the development of the entire Yangtze River Delta and even Yangtze Economic Zone (from a regional perspective);

• c) To rationally restructure the allocation of resources, population distribution, and infrastructure development;

• d) To sustainably coordinate the development of the economy, society, population, resources and environment; and

• e) To produce a functional environment for living, working and recreation

Longwei Creek enlists 4 of the 8 requirements.

• Promote the regional development strategy

• Establish an industrial structure led by service economy

• Guarantee and improve livelihood

• improve social construction and management

• improve the urban environment

• promote reform and opening up

• Improve the soft power of urban culture

• Promote Government self-improvement

• Cost Assumptions:

• All costing information and values have been taken from

Langdon Seah Construction Cost Handbook for China and Hong

Kong 2015

• All of the construction costs have been created in RMB currency

• It is assumed that all sustainability measures to achieve a 3 star

Green Label Certificate have been included with the larger

percentile costing bracket

• Included with the larger bracket costing percentile covers for all

mechanical & Electrical services, hydraulic services where

required, fire services and lifts / escalators

Planningphase

Designphase

constructionphase

projectclose-out

First Timescale possibility 2 2 4 0.6

second ime scalepossibility

1.5 1 2 0.6

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

In y

ears

stages in the construction project with two alternative possibilities

0 1 2 3 4 5

Planning phase

Design phase

construction phase

project close-out

Time possibility 2

time possibility 1

0

1

2

3

4

5

6

THE

CLOSE-OUT

PHASE

0

1

2

3

4

5

6

THE IMPLEMENTATION PHASE

0

1

2

3

4

5

6

THE PRE-CONSTRUCTION STAGE

0

2

4

6

THE DESIGN PHASE

Series 1

THE PLANNING

STAGE

Series 1

THE INCEPTION

STAGE

Budget Analysis

Programming guidance

logistics

local planning authorityguidanceSite Analysis

utility requirements

valuation assessment

Market research

The potential uses looked into:

Office

Retail

Residential

Hotels

Retail and residential are the viable options for the location.

Finance

There is a limit of 30% maximum FDI imposed when doing business

in China

Cost of Borrowing is 6.5%

Unknown taxation system

Potential Investment vehicle

The school is moved from its existing location

Scenario 1: Residential block and achieving 3 Stars in the CBGS

Green Standard

Scenario 2: Residential/retail block achieving 3 Stars in the CBGL

Green Standard

Scenario 3: Residential/retail block and achieving 2 Stars in the

CBGS Green Standard.

The School remains in its existing location

Scenario 4: Residential block and achieving 3 Stars in the CBGS

Green Standard.

Scenario 5: Residential/retail block achieving 3 Stars in the CBGL

Green Standard

Scenario 6: Residential/retail block and achieving 2 Stars in the

CBGS Green Standard.

• Mixed use development of Residential and recreation keeping

the school in its existing location.

• Initial investment of RMB 2.3bn

• IRR: 18%

• Profit on Costs: 137%

• Profit on sale of land 10 years from now: RMB 13.2bn

Summary Appraisal 4

Currency in RMB

REVENUE

Investment Valuation

Redisdential (Plot 1)

Current Rent 520,353,792 YP @ 7.00% 14.2857 7,433,625,600

Residential (plot 2)

Current Rent 290,233,440 YP @ 5.00% 20 5,804,668,800

13,238,294,400

Income from Tenants

Redisdential (Plot 1) 3,252,211,200

Residential (plot 2) 1,813,959,000

5,066,170,200

NET REALISATION 18,304,464,600

OUTLAY

ACQUISITION COSTS

Residualised Price (0.97 Ha 1,234,346,378.24 pHect) 1,197,315,987

CONSTRUCTION COSTS

Construction m² Rate m² Cost

354,494,424

PROFESSIONAL FEES

265,870,818

MARKETING & LETTING

162,117,446

DISPOSAL FEES

463,340,304

FINANCE

Total Finance Cost 1,727,034,632

TOTAL COSTS 7,715,117,856

PROFIT

10,589,346,744

Performance Measures

Profit on Cost% 137.25%

Profit on GDV% 79.99%

Profit on NDV% 79.99%

Development Yield% (on Rent) 10.51%

Equivalent Yield% (Nominal) 6.12%

Equivalent Yield% (True) 6.36%

IRR 18.00%

• The site is a viable investment

• The next step is to contact the Local Government to discuss the

school

• We also need to contact an expert to discuss taxation issues

• The best value for the site is pure residential with mixed use

based on a sale 10 years from now.