financial analysis - savico shopping centre

SAVICO SHOPPING CENTRE

LONG BIEN DISTRICT, HANOI, VIETNAM

FINANCIAL ANALYSIS

cbre


DEVELOPMENT AREA & COST

Total Land Area 46,400 m2

Site Coverage: 26%

Plot ratio 0.52

Type of Use

Total Built-up Area

Efficiency

Retail/shopping centre 12,000 2 24,000 15,600 65% 371 8,892,538

Level 1 12,000 6,600 55%

Level 2 12,000 9,000 75%

Parking & Common area 34,400 63 2,181,393

Total 58,400 15,600 11,073,932

Total Construction Cost 11,073,932 USD

Pre-construction expenses 200,000 USD

Pre-operating expenses 200,000 USD

Total 11,473,932 USD

Land Rental 146,226 USD/yearLand rental per sqm (US$/sqm/year) 3.2 USD/sqm/yearLand lease term: 50 years(Starting from 2007)

Other land related cost 591,981 USDInfastructure cost: 591,981 USD

NOTE: ALL LAND COSTS ARE ESTIMATED

No. of room, units, parking Spaces

Floor area (sq.m)

Number of floors

Cost per sq.m. (US$)

Total Construction Cost (US$) Gross

Area(sq.m.)

Lettable/sellable

Area(sq.m.)


COSTRUCTION SCHEDULE

Item 2007 2008 2009 2010 2011 2012 2013

PREPARATION & DESIGN …

CONSTRUCTION

Retail/shopping centre

Common area & Parking


RETAIL RENTAL REVENUE

Revenue and Cost Assumptions

(Values in US$)

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

RENTAL REVENUES

Retail

Estimated Occupancy Rate 75% 90% 90% 90% 90% 90% 90% 90% 90% 90%

Rental Area (sq.m.) 15,600 11,700 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040 14,040

Incremental rental area (sq.m.) 11,700 2,340 - - - - - - - -

Rental Rate 27 US$ per sq.m. 27 27 27 30 30 30 33 33 33 36

Escalation Rate 10% 0 1 2 0 1 2 0 1 2 0

Escalation Term every 3 years

Total Rent Per Month 315,900 379,080 379,080 416,988 416,988 416,988 458,687 458,687 458,687 504,555

Total Retail Rent 12 months 3,790,800 4,548,960 4,548,960 5,003,856 5,003,856 5,003,856 5,504,242 5,504,242 5,504,242 6,054,666

OPERATING EXPENSES

Retail

Management Fee 4 US$/sq.m./month 4.0 4.0 4.0 4.4 4.4 4.4 4.8 4.8 4.8 5.3

Escalation 10% 0 1 2 0 1 2 0 1 2 0

Escalation Term every 3 years

Total Management Fee 748,800 748,800 748,800 823,680 823,680 823,680 906,048 906,048 906,048 996,653

Commission Fee* 1 month 315,900 63,180 0 0 0 - - - - -

Marketing Expense 113,724 136,469 45,490 50,039 50,039 50,039 55,042 55,042 55,042 60,547

Rate % of rental income 3% 3% 1% 1% 1% 1% 1% 1% 1% 1%

5% of rental income 189,540 227,448 227,448 250,193 250,193 250,193 275,212 275,212 275,212 302,733

Total Retail Operating Expenses 1,367,964 1,175,897 1,021,738 1,123,911 1,123,911 1,123,911 1,236,302 1,236,302 1,236,302 1,359,933

Other General and Administrative Expens 3% of total rental income 113,724 136,469 136,469 150,116 150,116 150,116 165,127 165,127 165,127 181,640

Total Expenses 1,481,688 1,312,366 1,158,206 1,274,027 1,274,027 1,274,027 1,401,430 1,401,430 1,401,430 1,541,573

Net Operating Income $2,309,112 $3,236,594 $3,390,754 $3,729,829 $3,729,829 $3,729,829 $4,102,812 $4,102,812 $4,102,812 $4,513,093

* Assumes lease term of 3 years.

Fixed Expense (Maintenance, repairs, Insurance, Reserve etc.)

2020

90%

14,040

-

36

1

504,555

6,054,666

5.3

1

996,653

-

60,547

1%

302,733

1,359,933

181,640

1,541,573

$4,513,093

cbreSAVICO SHOPPING CENTRE

Depreciation Assumptions

Total Construction Cost

Construction cost for Retail: 8,892,538 USD

Construction cost for Common area & parkin2,181,393 USD

Infrastructure cost paid to the Government: 591,981 USD

Pre-construction expenses: 200,000 USD

Pre-operating expenses: 200,000 USD

Building Depreciation 2.13%ver 47 years

Amortization of pre-operating & pre-construction expenses 20%over 5 years

Depreciation 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

Retail 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203

Common area & parking 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413

Amortization of preop. expenses 198,396 198,396 198,396 198,396 198,396

Total Depr. + Amort. 434,012 434,012 434,012 434,012 434,012 235,616 235,616 235,616 235,616 235,616 235,616




Construction cost for Retail:

Construction cost for Common area & parkin

Infrastructure cost paid to the Government:

Pre-construction expenses:

Pre-operating expenses:

Building Depreciation

Amortization of pre-operating & pre-construction expenses

Depreciation

Retail

Common area & parking

Amortization of preop. expenses

Total Depr. + Amort.

2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031

189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203

46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413

235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616











Depreciation

Retail




2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042

189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203

46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413

235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616











Depreciation

Retail




2043 2044 2045 2046 2047 2048 2049 2050 2051 2052 2053

189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203 189,203

46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413 46,413

235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616 235,616











Depreciation

Retail




2054 2055 2056

189,203 189,203 189,203

46,413 46,413 46,413

235,616 235,616 235,616


Income Statement

Year2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Operating Revenue

RevenueRetail/shopping centre 3,790,800 4,548,960 4,548,960 5,003,856 5,003,856 5,003,856 5,504,242 5,504,242 5,504,242 6,054,666

Car parking

Total Operating Revenue 3,790,800 4,548,960 4,548,960 5,003,856 5,003,856 5,003,856 5,504,242 5,504,242 5,504,242 6,054,666

Operating Expense

Retail/shopping centre 1,481,688 1,312,366 1,158,206 1,274,027 1,274,027 1,274,027 1,401,430 1,401,430 1,401,430 1,541,573

Car parking

Other general and admin expenses

Land rental 146,226 168,160 168,160 168,160 168,160 168,160 193,385 193,385 193,385 193,385

Total Operating Expense 1,627,914 1,480,526 1,326,367 1,442,188 1,442,188 1,442,188 1,594,814 1,594,814 1,594,814 1,734,957

EBITDA 2,162,886 3,068,434 3,222,593 3,561,668 3,561,668 3,561,668 3,909,427 3,909,427 3,909,427 4,319,709

Depreciation +Amortization 434,012 434,012 434,012 434,012 434,012 235,616 235,616 235,616 235,616 235,616

EBIT 1,728,874 2,634,422 2,788,581 3,127,657 3,127,657 3,326,053 3,673,812 3,673,812 3,673,812 4,084,093

Interest Expense

EBT 1,728,874 2,634,422 2,788,581 3,127,657 3,127,657 3,326,053 3,673,812 3,673,812 3,673,812 4,084,093

Corporate Tax 484,085 737,638 780,803 875,744 875,744 931,295 1,028,667 1,028,667 1,028,667 1,143,546

Earnings After Tax 1,244,789 1,896,784 2,007,779 2,251,913 2,251,913 2,394,758 2,645,144 2,645,144 2,645,144 2,940,547

Income Tax:28%


Income Statement

Year

Operating Revenue

RevenueRetail/shopping centre

Car parking

Total Operating Revenue

Operating Expense

Retail/shopping centre

Car parking

Other general and admin expenses

Land rental

Total Operating Expense

EBITDA

Depreciation +Amortization

EBIT

Interest Expense

EBT

Corporate Tax

Earnings After Tax

Income Tax:28%

2020

31,983,527

31,983,527

8,717,776

5,724,182

14,441,958

17,541,568

17,541,568

17,541,568

4,911,639

12,629,929


PROJECTED CASHFLOWS

Year 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Cash inflows

Bank loan

Net operating revenue

Retail 2,309,112 3,236,594 3,390,754 3,729,829 3,729,829 3,729,829 4,102,812 4,102,812

Car park

Total 0 0 0 2,309,112 3,236,594 3,390,754 3,729,829 3,729,829 3,729,829 4,102,812 4,102,812

Cash outflows

Infastructure cost paid to the Government 591,981

Land rental 146,226 146,226 146,226 146,226 168,160 168,160 168,160 168,160 168,160 193,385 193,385

Development Cost

Pre-construction cost 200,000

Parking 0 0 2,181,393

Retail 0 3,557,015 5,335,523

Pre-operating cost 200,000

Interest

Debt payment obligation

Income tax 484,085 737,638 780,803 875,744 875,744 931,295 1,028,667 1,028,667

Total 938,208 3,703,242 7,863,143 630,311 905,799 948,963 1,043,904 1,043,904 1,099,455 1,222,052 1,222,052

Net Cashflow (938,208) (3,703,242) (7,863,143) 1,678,801 2,330,796 2,441,790 2,685,925 2,685,925 2,630,374 2,880,760 2,880,760

All Equity IRR: 19.24%

NPV, discounted @ 15% 2,426,631 USD


PROJECTED CASHFLOWS

Year

Cash inflows

Bank loan

Net operating revenue

Retail

Car park

Total

Cash outflows

Infastructure cost paid to the Government

Land rental

Development Cost

Pre-construction cost

Parking

Retail

Pre-operating cost

Interest

Debt payment obligation

Income tax

Total

Net Cashflow

All Equity IRR:

NPV, discounted @ 15%

2018 2019 2020

4,102,812 4,513,093 31,983,527

4,102,812 4,513,093 31,983,527

193,385 193,385 5,724,182

1,028,667 1,143,546 4,911,639

1,222,052 1,336,931 10,635,821

2,880,760 3,176,162 21,347,705

financial analysis - savico shopping centre

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