Building a 4-Star Hotel in Dammam, Saudi Arabia; Feasibility Study


Building a 4-Star Hotel in Dammam, Saudi Arabia; Feasibility Study

 

To get your Assignment/Homework solutions;

Simply Click ORDER NOW and fill your paper details. Our support team will review the assignment(s) and assign the right expert whose specialization is same to yours to complete it within your deadline. Our Editor(s) will then review the completed paper (to ensure that it is answered accordingly) before we email you a complete paper

Here you find the feasibility done in-house for the upcoming project for our company. The Project is to build a four star hotel.

It will be a 21 floor building, at the entrance of the city in Dammam. With the presence of ARAMCO and of our strategic project location, So we are expecting good occupancy rate. But the feasibility is made on rather a conservative %age of occupancy. So that even in the worst case scenario, the company may have the endurance to survive the challenge of market dryness.

Our Target finance from Bank is 204 M, which is under negotiation. The building would be steel structure, so the construction will be very fast and cost effective. We are having a contract for the construction amounting 140 M. The bid for Loose and fixed furniture is 25M. We have introduced Smart Parking System which sums to 8M. The Cost to Complete is around 240MM, so apart from bank financing, rest will be equity participation. All other contingencies and cost heads are mentioned in the fact sheet. I hope you find each detail and information in the feasibility.

We are requesting quote for the feasibility report with your expert opinion covering the following, to be presented to our Financer Bank.

· IRR of the Project.

· Vetting of CTC

· Break even analysis.

Please note that ours and the bank’s requirement is the third party opinion on our calculations. So the feasibility must be very specific to the topic and may not require in depth market surveys and trends.

Following are the requested points to Bank against the Financing of 5D Business Park.
1- The Cost to Complete (CTC) of the Project is SAR 240M.      
So Bank is requested to finance 85% of CTC. i.e. SAR 204M    
2- The Grace Period for the financing is requested to be 3 years. Ending 30-June-2021
3- The repayment will start from 30-Sep-2021        
4- The Financing schedule is assumed to be 3+7 (Total 10 Years Project Financing)  
5- The Repayment Period will be for 27 Quarterly payments ending 31-Mar-2028  

 

To get your Assignment/Homework solutions;

Simply Click ORDER NOW and fill your paper details. Our support team will review the assignment(s) and assign the right expert whose specialization is same to yours to complete it within your deadline. Our Editor(s) will then review the completed paper (to ensure that it is answered accordingly) before we email you a complete paper

 

Following are the assumptions considered in this study.              
1- Expected Construction Cost is around SAR 160M. Other Cost to incur on the project are mentioned in the fact sheet.  
2- The Construction Period is supposed to be 2 years Six Months, comencement of which is expected 1-July-2018.  
     Where the offices must be ready within one year of commencement of construction.  
3- The Contractor will be paid SAR 15% of Contract Value as Mobilization Advance against Bank Guarantees (Advance &  
Performance) and progress invoices will be backed by approved Progress at site.  
     4- The Contractor is supposed to submit 65% of the Progress invoices till Year 2019 and those will be settled after retention  
during the course of the Financial Year. Rest of the contract money other than retentions will be released in Year 2020.  
5- 10% Retension money will be kept till one Sucessful Operation Year and will be released as per Hotel Management. Most likely in 2021.
5a- The Building life is 25 Years fully deprecated on straight line method.  
   5b- Furniture and fixtures are fully depreciated in 7 Years on straight line     method.  
6- The Scheduled handing over date is Dec 2020, So the operations of the Hotel will start from hereafter.  
        7- The Revenues for Half Year 2021 is taken at 25% Only.  

 

Operator Fee and Payments                    
a- The Operator is due for the Technical Fee of USD 200,000              
b- There is a pre-opening budget of USD 1,250,000                
c- The Operator is due for Hotel Operation Fee 1.5% of Operational Revenue up to first full operational year.    
d- 1.75% of Operational Revenue for Second Third and Forth Full Operational year.          
e- 2% for Fifth year onwards.                    
In addition to the above fees, the operator is entitled for the Management fee which is explained in the fact sheet of the study.
                         

 

To get your Assignment/Homework solutions;

Simply Click ORDER NOW and fill your paper details. Our support team will review the assignment(s) and assign the right expert whose specialization is same to yours to complete it within your deadline. Our Editor(s) will then review the completed paper (to ensure that it is answered accordingly) before we email you a complete paper

 

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: