Beruflich Dokumente
Kultur Dokumente
Residential Project
Located in Visakhapatnam, Andhra Pradesh
Prepared on behalf of
Indiabulls Real Estate Limited
August 2014
Contact Details:
Indiabulls Real Estate Limited
Indiabulls Finance Center, Tower 1, 14th Floor,
Senapati Bapat Marg, Elphinestone (West), Mumbai 400013
Executive Summary
The executive summary below is to be used in conjunction with the valuation report
of which it forms a part and is subject to the assumptions, caveats and bases of
valuation stated herein and should not be read in isolation.
Client Name
Subject
property
Indiabulls
Sierra:
Underconstruction
Residential
Address
Purpose of Valuation
Areas
Valuation
Valuation Date
Market Value
` 827 mn / US $ 14 Mn
Valuers Details
Sampuran Das
Consultant Research & Advisory Services
In preparing our Valuation reports, no allowances are made for any liability which
may arise for payment of Corporation Tax or Capital Gains Tax, or any other property
related tax, whether existing or which may arise on development or disposal,
deemed or otherwise. No allowances are made in our valuations for any expenses of
realization, or to reflect the balance of any outstanding mortgages, either in respect
of capital or interest accrued thereon. All Valuations are given without any
adjustment for capital based Government grants received or potentially receivable on
the date of the valuation.
BFSI
BPCL
CBD
CBD
CRR
FDI
FY
GDP
`
IT/ITeS
Information Technology /
Information Technology
Enabled Services
Maharashtra State Road
Development Corporation
Maharashtra Industrial
Development Corporation
Not Applicable
Peripheral Business District
Pune Municipal Transport
Quarter Two
Quarter Four
Royal Institute of Chartered
Services
Socio-Economic Classification
FSI
GS
GNP
`/sq.
ft.
MSL
MSRD
C
MIDC
NA
PBD
PMT
Q2
Q4
RICS
SEC
Sq. ft.
Sq.
mt.
Square Feet
Square Metre
CPI
DIPP
MOSPI
Mn
Nos.
Q1
PMC
Q3
RBI
SBD
Numbers
Quarter One
Pune Municipal Corporation
Quarter Three
Reserve Bank of India
Suburban Business District
Sq.
km.
SLR
USD
Square Kilometre
Statutory Liquidity Ratio
United States Dollar
Measurements
1 acre
43,560 sq. ft.
1 mn
10 Lakh
1 sq. km.
100 Ha
1 sq. mt.
1 hectare
2.47 Acre
Table of Contents
Executive Summary.................................................................................................... 2
Abbreviations & Measurements..................................................................................3
Table of Contents.................................................................................................... 4
1.0
Instructions....................................................................................6
1.1
1.1.1 Instructions....................................................................................6
1.1.2 Valuation Standard.........................................................................6
1.1.3 Purpose of Valuation.......................................................................6
1.1.4 Conflict of Interest..........................................................................6
1.1.5 Currency and Measurement.............................................................6
1.1.6 Responsibility to Third Parties.........................................................6
1.1.7 Disclosure and Publication..............................................................6
1.1.8 Limitations on Liability....................................................................7
1.1.9 Vetting........................................................................................... 7
1.2
1.2.1 Inspection......................................................................................7
1.2.2 Enquiries........................................................................................7
1.2.3 Legal Parameters of Property..........................................................7
1.2.4 Environmental Aspects....................................................................8
1.2.5 Information Provided......................................................................8
1.3
Basis of Valuation...........................................................................8
2.1
2.2
3.0
3.1
3.2
3.3
3.4
Economic Overview.......................................................................13
3.5
SEZ.............................................................................................. 14
3.6
Infrastructure...............................................................................14
3.7
4.0
5.0
The Property.................................................................................20
5.1
Location.......................................................................................20
5.2
Property Description.....................................................................20
5.3
5.4
5.5
6.0
Valuation Analysis.........................................................................24
6.1
Methodology.................................................................................24
6.2
Valuation Bases............................................................................25
6.3
Valuation Assumptions..................................................................25
6.4
Valuation Analysis.........................................................................25
7.0
Summary......................................................................................28
Disclaimer..............................................................................................29
Annexure I: General Principles and Limiting Conditions............................30
Annexure II: General Assumptions...........................................................34
Annexure III: Photographs......................................................................36
1.0 Instructions
1.1
Instructions
On the instructions received from Indiabulls Real Estate Limited (The Client), our
subsequent engagement letter dated 4 th August 2014 and our subsequent
discussions thereon, Knight Frank (India) Pvt. Ltd. has been appointed to carry out
the pre-tax valuation of an under-construction Residentialproject known as Indiabulls
Mega Mall, located in Visakhapatnam, Rajasthan.
1.1.2
Valuation Standard
The exercise has been carried out in accordance with the International Valuation
Standards vide Red Book as published by Royal Institute of Chartered Surveyors
(RICS).
1.1.3
Purpose of Valuation
The client has confirmed that the valuation report is required for the purpose of fund
raising through listing of bonds.
1.1.4
Conflict of Interest
We confirm that we have no conflict of interest in providing this report to the client,
and that we are acting as external valuers for the exercise.
1.1.5
The currency used in the report for the analysis of the subject property is Indian
Rupees (`). This is the currency normally used for property transactions in India. All
measurements are in sq. ft. (1 sq.mt. = 10.764 sq.ft.) as this is the prevailing market
practice in India.
1.1.6
Our valuation report is only for the use of our client and no responsibility is accepted
to any third party for the whole or any part of its contents.
1.1.7
Neither the whole nor any part of this valuation nor any reference thereto may be
included in any published document, circular or statement, nor published in anyway,
without our prior written approval of the form or context in which it may appear. If
our opinion of values is disclosed to persons other than the addressee of this report,
the basis of the valuation should be stated.
1.1.8
Limitations on Liability
No claim arising out of or in connection with this valuation report may be brought
against any member, employee, partner, or consultant of Knight Frank India Pvt. Ltd.
Knight Frank India Pvt. Ltd.s total liability to any direct loss or damage caused by the
negligence or breach of contract in relation to this instruction and valuation report is
limited to the amount specified in the terms of the engagement letter (if any). We do
not accept any liability for any indirect or consequential loss (such as loss of profit).
1.1.9
Vetting
The report has been vetted as per Knight Frank India Pvt. Ltd. quality assurance
procedures.
1.2
Inspection
We were instructed to carry out an internal inspection of the property. Our inspection
of the property was undertaken on 25th August 2014 by valuer - Ms. Binita Patel.
1.2.2
Enquiries
In carrying out these instructions we have undertaken verbal / web based enquiries
referred to in relevant sections of the report. We have relied upon this information as
being accurate and complete.
1.2.3
We have been provided with area details and location plan of the subject property.
We have relied on the area details provided by the client for the purpose of this
valuation exercise. It is recommended that the documents are subjected to formal
legal inspection in order to ensure that there are no elements, restriction or charges
contained which are likely to have detrimental effect upon the valuation provided.
1.2.4
Environmental Aspects
For the purpose of this report we have assumed that the property is not subject to
environmental contamination. However, it is recommended that an appropriate
consultant may be engaged to confirm our assumptions. If the subsequent
investigation identifies any environmental contamination on the site our report may
require revision.
1.2.5
Information Provided
In this report we have been provided with information by the client, its advisors and
other third parties. We have relied upon this information being materially correct in
all respects and have not physically measured or verified the same from any legal
documents or government authorities. All valuation calculations have been based on
the following details provided by the client:
Project Details
Project: Indiabulls Sierra
Land Area
Saleable Area (Sq.ft.)
Sold Area (Sq.ft.)
Sale Value (INR Mn.)
Amount Collected (INR Mn.)
Const. Cost incurred (INR Mn.) (as on 31st March 2014)
Const. Cost to be incurred (INR Mn.) (as on 31st March 2014)
1.3
Visakhapatnam
5 acres
786,137
1623
600
0
20
1340
Basis of Valuation
In accordance with your instructions, we have provided opinions on valuation of the
project on the following basis:
1.3.1
Market Value
The Market Value of the freehold interest in the property in its current physical
condition is the basis of valuation.
Valuation has been made on the assumption that the property is sold in the open
market without the benefit of a deferred term contract, leaseback, joint venture,
management agreement or any similar arrangement which would serve to alter the
cash flow from the Property.
No allowance has been made in our analysis for any charges, mortgages or amounts
owing on the Property or for any expenses or taxation, which may be incurred in
effecting a sale. Unless otherwise stated, it is assumed that the Property is free from
encumbrances, restrictions and outgoings of an onerous nature, which could affect
the analysis.
For the purpose of the valuation exercise, as per the terms of engagement, we have
considered the residential units as completed and vacant.
1.3.2
Date of Valuation
Value
4.70%
` 74,920
7.96%
4.00% and 22.00%
Repo Rate
8.00%
Bank Rate
9.00%
Base Rate
10.00%10.25%
`/$1
Risk Free Rate on Government Securities: 6.90 GS
2019
Risk Free Rate on 364 day Government T Bill
60.4745
8.0907%
8.6840%
Source: MOSPI, RBI
2.2
Value (`mn)
16,760
2014)
FDI Inflow in Construction Development: Townships,
Housing, Built-up Infrastructure (April 2013 March
75,080
2014)
FDI Inflow in Construction Development: Townships,
Housing, Built-up Infrastructure (April 2012 March
72,480
2013)
FDI Inflow in Construction Development: Townships,
Housing, Built-up Infrastructure (April 2011 March
152,360
2012)
Source: http://dipp.nic.in
10
3.2
Visakhapatnam city stretches between 26.00 N & 27.037 N latitude and 72.55 E &
73.52 E longitude. It lies at 250-300 m above mean sea level and forms a part of
district Visakhapatnam. The average annual rainfall in the district is 450 mm. The
maximum and minimum temperatures are about 42C and 9.5C respectively.
11
Visakhapatnam district comes under arid zone of the Rajasthan state. It covers
11.60% of total area of arid zone of the state. Some of the area of Great Indian
Desert Thar also lies in the district. The climate in Visakhapatnam is extremely hot
and semi-arid, with a rainy season from June to September. Despite its arid climate,
Visakhapatnam is blessed with a variety of flora and fauna. A survey conducted by
district administration with the help of forest officials shows 162 flora and 144 fauna.
Soil of the district is classified mainly as sandy and loamy.
3.3
17.30 Lakh
44%
Literacy Rate
82.66% (2011)
1,749,845
20.24%
Household industry
4.04%
Manufacturing
13.38%
1.11%
Construction
5.88%
12.73%
Banking insurance
0.20%
12.94%
Services
29.48%
Sex Ratio
977
12
3.4
Economic Overview
Visakhapatnam has 73 large & medium industries in the field of mining, explosives,
power, cement & agro based industries such as sugar, rice & jute mills. Prominent
companies
include
Vizag
Steel,
Hindustan
Shipyard,
Hindustan
Petroleum
Vizag Port: Vizag port is a deep water natural harbor strategically located midway of
Kolkatta and Chennai facing the Bay of Bengal coast. It provides excellent marine
access to the existing hinterlands through good connectivity from road and rail. The
port provides cost effective transit to major destination located in the East
(Bangladesh, Nepal, China, Japan etc). Further the port serves the requirements of
major steel plants located in and around Visakhapanam (Bilai, Bokaro, Rourkela,
Durgapur and TISCO)
Iron and Steel: Vizag steel plant is the oldest and the most prominent industrial
establishment in the city. The plant has registered a turnover of 14,457 Crore in 2011
12. Further the plant had recently expanded its production capacity from 3.1 to 6.3
MT.
Shipyard: Hindustan Shipyard Ltd. is a premier ship building company located in
vizag. It is spread over 46.2 hectares of land. The company has built around 150
ships and has repaired almost 1,800
13
Hindustan Zinc Smelter, Hindustan Zinc Limited, Rain Calcines Limited, Coromandel
Fertilizers, Bharat Heavy Plate and Vessels Limited (B.H.P.V.). The construction of the
outer harbor and Steel Plant has given the city a distinct makeover.
These industries provide employment to a significant number of people. Besides,
these industries have strengthened the state's economy. Apart from these industries,
the Indian Navy established has established its Naval Dockyard in the East. Apart
from the above industries Information Technology, Information Technology Enabled
Services, Pharmaceuticals & Biotechnology and Tourism are emerging as a prominent
industries in the city.
A slew of new projects across various areas, both in the public and private sector, are
coming up in in Visakhapatnam. AP government is planning to set up a ceramic
specific industrial estate, called ceramic city, in Visakhapatnam on the lines of
Ceramic Clusters in Gujarat. The city will utilize existing industrial infrastructure
facilities and make use of available raw materials like clay, bauxite, quartz, feldspar,
calcite, beach sand and zirconium
Visakhapatnam Steel Plant The city also has a good exposure to steel plants. The
area approaching the steel plant to Elamanchili will be the hub of industrial activity.
The Jawaharlal Nehru Pharma City at Visakhapatnam spread over an area of 2,200
acres of land, will be developed by Ramky Pharmacity Ltd. Pharma City will have
facilities like effluent plant and hazardous waste disposal.
Visakhapatnam Special Economic zone (VSEZ) is a multi-product SEZ that offers state
of the art infrastructure and support services for hassle free business environment.
The infrastructure facilities available are in manifold and state government is
extending their support in all respect to finance and aid small scale industries and
facilitate realtors to develop the city.
Vizag is also known as the port city with a very good coast line across the place
which is ideal for harboring cargo ships and hence a very busy port is in place
handling large tonnage of cargos every day. Visakhapatnam Port Trust has
established an EXIM Park in 750 acres of land for the allotment of Port based
industries with an objective to promote industrialization of the hinterland and to
facilitate handling of export / import cargoes of various industries at this Port, and to
attract more cargo. The port activities also opened up new vitas of opportunities like
ship building industry, cement industry and a slew of major steel industries which
14
sprawled across the port city creating endless job openings. Similarly heavy
engineering services also cropped up to aid the big manufacturing units.
From the ancient port city with a modest population to a rapidly industrialized hub,
the city of Visakhapatnam has truly emerged as one of the fastest growing city of our
country. IT and software parks have found a new destination in this city, adding
another feather in its cap.
3.5
Infrastructure
Key Stats
Water
Availability
Source of water
supply
Water coverage
Wastewater
Disposal
Solid waste
Storm
water
Drainage
Roads and Road
Transport
Education
Visakhapatnam is an emerging education hub; institutions catering to disciplines like
engineering, medicine, law, design, management are present in the city.
15
The GITAM University (the first private university in Andhra Pradesh) and the
Gayatri Vidya Parishad College of Engineering are other technical-education
institutions in the city.
16
state highways passing through have also been taken up for development in addition
to this network, nine new roads have been opened and nine master plan roads have
been taken up for widening.
Railways
The city is well connected with major Indian cities like Kolkata, Hyderabad and
Chennai.
Air
Visakhapatnam airport is one of the prominent airports of Andhra Pradesh. It is also
air force base given the city acts as the Eastern Naval Command. Domestic flights
connect the city with Delhi, Kolkata, Chennai and Mumbai.
17
North
Emerging residential and IT/ ITeS hub
SUBJECT SITE -2
SUBJECT SITE -1
CBD
South
Characterized by presence of heavy industries
The old central zone consists of port area, regions near old post office and localities
around Town Main Road, Raja Ram Mohan Rai Road, AVN college road, etc. The
population here comprises mainly of workers and fishermen and these localities do
not offer any scope for good quality real estate development.
Established Residential Corridors
Beach road - R.K Beach road, Pandurangapuram, East Point Colony, and MVP
Colony.
The prime suburb localities along NH-5 are Seetamadhara, Maddilapalem, TPT
Colony, H.B colony, Doctors Colony, Akireddipalam, and Madhavdhara.
Due to non-availability of large land parcel in the core city area, real estate
developers have preferred to launch projects in the city outskirts. At present,
peripheral
areas
like
Gajuwaka,
Pendurthy,
Tagarapuvalasa,
Simhachalam,
Madhurawada, Muralinagar, Madhavadhara and Bheemili are some of the real estate
hotspots around the city where large residential developments are being constructed.
18
While flats are available for about Rs 2,000-Rs 3,000 per sft in these areas, the prices
of flats in the core city ranges between Rs 3,500 and Rs 6,000 per sft. The cost of
plots is around Rs 6000-Rs 10,000 per sq yard in the core city and about Rs 2000-Rs
6500 per sq yard in the outskirts. The prices have remained stable for the past one
year.
VUDA (Visakhapatnam Urban Development Authority), extended its jurisdiction from
Tuni on NH5 to Amudalavalasa in Srikakulam. Its the biggest Urban Development
Authority in India in terms of area with three districts viz., Visakhapatnam,
Vizianagaram and Srikakulam. Visakhapatnam Urban Development Authority (VUDA)
initiated
allocation
of
fresh
layouts;
and
many
residential
layouts
(plotted
developments) are being developed up to 5km even after Yalamanchili (75km from
Maddilapalem bus stand) on Chennai highway (NH-5) and up to 5km after Denkada
Junction(80km from Maddilapalem bus stand) on NH-5 towards Srikakulam and up to
5km after S.kota (55km from Maddilapalem bus stand) on Araku highway. Major
corridors
witnessing
significant
growth
include
micro-markets
along
NH-
is
being
developed
as
knowledge
corridor.
In
Anakapalli-
19
4.1
Primary demand drivers include end users working the industrial sector, employees
in the IT/ ITeS sector and NRIs looking for investments in the city. Small scale
apartment developments within 50 units are dominant in the market. Some of the
prominent residential developments contributing to the supply in the micro-market
include Shirram Panorama Hills, Reign Forest and India Bulls Sierra. Further NCC
Urban has planned to launch large scale project near Madhurwada IT/ ITeS SEZ.The
micro-market has witnessed a healthy absorption with 67% of the supply in the
micro-market. In between 2012_14 major quantum of the supply has been
contributed by Reign Forest, India Bulls Sierra and Sunray villas. Total completed
supply is estimated to be 3,016 units by the end of 2014. The micro-market has
witnessed a healthy absorption with about 70% of the total supply.
Project Name
Maruti Paradise
NRK Legacy
Tirumala Estate
Jayaprabha
Residency
Rao & Murti
Residency
V Fortune
Sri Ganesh
castle
PRS Rama
Towers
Location
Madhurdawa to Palam ( Cricket
Stadium) on NH-5
Madhurdawa to Palam ( Cricket
Stadium) on NH-5
Madhurdawa to Palam ( Cricket
Stadium) on NH-5
Madhurdawa towards Subject
Property
Madhurdawa towards Subject
Property
Madhurdawa towards Subject
Property
Madhurdawa towards Subject
Property
Madhurdawa towards Subject
Property
No of
Units
Rate in
INR/sq.ft
Sold till
data
50
2850-3000
80%
10
2750-3000
70%
25
2700-2800
100%
25
2500
100%
2200
100%
50
2400
100%
20
2200
100%
25
2500
100%
Given below is the price trend the micro-market; it has witnessed about 8% YoY
increase in prices:
Capital Values of Residential Appartments in Madhurwada
3500
3000
2500
2000
Price INR/sq.ft
1500
1000
500
0
FY 2011
FY 2012
FY 2013
FY 2014
20
Location
The subject property is an under residential project called as Indiabulls Sierra. The
subject property is being constructed on the Plot no. 11; survey. no. 355/7c p, 355/8b
p 130/1a p & 130/2a p at Madhurwada, Chinnagadilli Mandal, Visakhapatnam, Andhra
Pradesh. The location is upcoming residential corridor, and is close to GITAM
University. Prominent ongoing developments include Shriram Panaroma Hills, Reign
Forest, India Bulls Sierra.
Location Map of the Subject Property
5.2
Property Description
21
the clock security, multi level parking and water harvesting as well as modern day
amenities like club house, swimming pool, community hall, indoor & outdoor games
facility and childrens play areas among others. Surrounded by green landscapes
each home enjoys beautiful views, abundant natural light and ventilation and with
beach being just 4 kms away from the project.
Amenities & Specifications:
Club house
Swimming Pool
Community Hall
Childrens Play area
Cycling & Jogging tracks
Indoor & Outdoor games facility
Integrated, round-the-clock security
Water harvesting
Multi-level parking
Landscaping of the garden areas
Underground drainage
Storage sump and water supply lines
Electrical (3 phase electricity) and sewage system
Master Plan
22
Floor Plans
23
5.3
Legal Title
We have not been provided by any land registry entries, title documents or
reports on title.
In our report, we have assumed a clear and marketable title and that all
documentation is satisfactorily drawn.
We have assumed that the property is not subject to any unusual or onerous
covenants, restrictions, encumbrances or outgoings.
5.4
During our limited site inspection, we did not inspect any inaccessible areas.
We have not been provided with a copy of the ground condition report for the
site. We have assumed that there are no adverse ground or soil conditions and
that the load bearing capacity of the site is sufficient for the buildings
constructed / being constructed / proposed to be constructed.
Our site observation did not bring out any significant flood risk to the site and
hence for the purpose of the valuation we have considered the site to be
under low flood risk.
24
Subject to above, while carrying out our valuation inspection, we have not
been made aware of any uses conducted at the subject property that would
give cause for concern as to possible environmental contamination. Our
valuation based on an assumption that the subject property is unaffected.
5.5
Visakhapatnam Junction 18 Km
Visakhapatnam Airport 25 Km
Bus Depot 1 to 2 km
13 km
1 Km
4 Km
20 Km
Source: Google Maps
25
Methodology
Considering the characteristics of the property and the market dynamics, we have
used the following method for this valuation exercise:
DCF
is
financial
modelling
technique
based
on
explicit
6.2
Valuation Bases
The valuation base for the report is Market Value. Market Value is defined within RICS
Valuation Standards as:
26
"The estimated amount for which an asset or liability should exchange on the date of
valuation between a willing buyer and a willing seller in an arm's length transaction
after proper marketing wherein parties had each acted knowledgeably, prudently and
without compulsion."
6.3
Valuation Assumptions
Our valuation is based on a number of assumptions which have been drawn to your
attention in general principals and limited conditions (Annexure I), General
assumptions (Annexure II), and within this report.
6.4
Valuation Analysis
Area Statement
We have used the following area details received from the client:
Area Statement
Saleable Area
sq.mt.
73,061
sq.ft.
786,137
Cost Assumptions
The construction costs of a project depend on a variety of factors like grade of
proposed
development,
positioning
in
the
market,
target
buyers,
pricing,
architectural elevation, premium finishing & furnishing and superior interior decor
and amenities offered. Moreover, factors like labour cost, material cost and nature &
location of the property also affect the construction cost.
The cost estimate as provided by the client ` 1340 Mn. or about ` 1730 per sq.ft on
saleable area. As instructed by the client, the construction contract is a fixed sum
contract; hence we have considered a constant cost in our assumption. Cost for
approvals and contingencies, consultants fees, corporate expenses, marketing costs
and overheads have been considered in the total construction cost mentioned above.
The client had spent ` 20 Mn. till date, towards constructions.
Revenue Assumptions
We have arrived at the capital value for the proposed development by adopting the
market approach. Considering the market dynamics, capital values in the commercial
projects, location and characteristics of the subject property, we have considered a
capital value of ` 3,300 per sq.ft.
27
Discount rate is a risk weighted factor used to calculate the net present value of the
future cash flows to the firm from the project till the time of exit. It is a measure of
the risk involved in the project and it is determined by the market. The discounting
rate is determined by factors like security and regularity of income, security of
capital, ease of liquidity of the asset, ease of management and transfer with a
minimum cost, divisibility of holding, etc.
Considering various factors like location, project development and asset class, project
marketability, demand-supply dynamics in the micro-market, ease of liquidation of
the product in the market and legal aspects the discount rate has been thus
considered as 20%.
Valuation Workings
Area Statement
sq.ft.
Saleable Area
786,137
1623
INR 0 Mn.
ASSUMPTIONS
Construction Cost (INR / sq.ft.)
(1,730)
Additional Cost
Marketing & Publicity, Administration Cost,
Contingency expenses, etc. (% of Cost of Construction)
0%
0%
Escalation in Revenue
Yearly
5.0%
Brokerage - Sale
1%
50%
3,300
20.0%
Cost Structure
Y0
Aug-14
1%
Y1
Aug15
Y2
Aug16
Y3
Aug17
Y4
Aug18
30%
30%
30%
9%
28
Residential
11,561
235,84
1
235,84
1
235,84
1
67,053
(1,730)
(1,730
)
(1,730
)
(1,730
)
(1,730
)
(20)
(408)
(408)
(408)
(116)
(0)
(20)
0
(3)
(411)
0
(4)
(412)
0
(5)
(413)
0
(2)
(118)
Revenue Structure
Y0
Aug-14
Y1
Aug-15
Y2
Aug-16
Y3
Aug-17
Y4
Aug-18
0%
20%
30%
35%
15%
1,623
157,227
235,841
275,148
116,298
3,300
3,465
3,638
3,820
4,011
Sales (%)
Residential
5
0
5
545
858
1,051
466
0%
0
Y1
Y2
Y3
Y4
Y5
Y6
Y7
Y8
Y9
Y10
Y11
Y12
Y13
Total Revenue (INR Mn)
31%
1
171
30%
1
163
527
30%
1
163
257
961
9%
0
46
73
90
466
173
692
1,384
676
29
NPV Calculation
Total Revenue (INR mn)
Cost (INR mn)
Net Cash Flow (INR mn)
Discount Rate (%)
NPV (INR mn)
Y0
Y1
Y2
Y3
Y4
Aug-14
Aug-15
Aug-16
Aug-17
Aug-18
173
692
1,384
676
(20)
(411)
(412)
(413)
(118)
(238)
280
970
558
20.0%
827
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7.0 Summary
On the basis of assumptions, methodology of valuation and on the belief that there
are no onerous restrictions, covenants or unusual outgoings, we are of the opinion
that the achievable market value of the subject property (on as-is-where-is basis is )
as ` 827 mn (Indian Rupees Eight Hundred & Twenty Seven Million Only) /*
US $ 14 Mn. (United States Dollar Fourteen Million only)
is fair and
reasonable.
*US $ : INR = 60.4745 (source: www.rbi.org.in)
Note:
Our analysis is only for use of the party to whom it is addressed and no responsibility
is accepted to any third party for the whole or any part of its content
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Disclaimer
The statements, information and opinions expressed or provided in this publication
are intended only as a guide to some of the important considerations that relate to
property investment. Although we believe they are correct and not misleading, with
every effort having been made to ensure that they are free from error, they should
not be taken to represent, nor are they intended to represent, investment advice or
specific proposals, which must always be reviewed in isolation due to the degree of
uniqueness that will attach thereto.
Neither Knight Frank nor any persons involved in the preparations of this publication
give any warranties as to the contents nor accept any contractual, tortuous or other
form of liability for any consequences, loss or damage which may arise as a result of
any person acting upon or using the statements, information or opinions in the
publication. This publication is confidential to the addressee and is not to be the
subject of communication or reproduction wholly or in part.
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No responsibility is
accepted to any other party and neither the whole, nor any part, nor reference
thereto may be included in any published document, statement or circular, or
published in any way, nor in any communication with third parties, without our
prior written approval of the form and context in which it will appear.
2) Use of Report
The opinion on estimated cash flows expressed in this Report shall be used for the
purpose stated in this Report only. We are not responsible for any consequences
arising from the estimated cash flows being quoted out of context.
3) Source of Information
Where it is stated in the Report that information has been supplied by the sources
listed, this information is believed to be reliable and no responsibility is accepted
should it prove not to be so. All other information stated without being attributed
directly to another party is obtained from our searches of records, examination of
documents or enquiries with the relevant authorities.
prepared on the basis that full disclosure of all information and facts which may
affect the cash flow have been made known to ourselves and we cannot accept
any liability or responsibility in any event, unless such full disclosure has been
made.
4) Legal Title
Whilst we may have inspected the title of the property as recorded in the Register
Document of Title, we cannot accept any responsibility for its legal validity.
5) Town Planning and other Statutory Regulations
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valued with the benefit of lettings, it is therefore assumed that the lessees or
tenants are capable of meeting their obligations under the lease or tenancy and
that there are no arrears of rent or undisclosed breaches of covenant.
7) Development Agreements
Unless otherwise stated, no allowances are made in our analysis for any joint
venture agreement, development right agreement or other similar contracts.
8) Site Surveys
We have not conducted any boundary checks; however, we assume that the
dimensions correspond with those shown in the title document, certified plan or
any relevant agreement.
9) Structural Surveys
We have neither carried out a building survey nor any testing of services, nor
have we inspected those parts of the property which are inaccessible. We cannot
express an opinion about or advice upon the condition of uninspected parts and
this Report should not be taken as making any implied representation or
statement about such parts. Whilst any defects or items of disrepair are noted
during the course of inspection, we are not able to give any assurance in respect
of rot, termite or pest infestation or other hidden defects.
10)
Site Conditions
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informed, our analysis is on the basis that these aspects are satisfactory and that,
where development is proposed, no extraordinary expenses or delays will be
incurred during the construction period.
11)
Whilst due care is taken to note the presence of any disease or infestation, we
have not carried out any test to ascertain possible latent infestations or diseases
affecting crops or stock.
Report.
13)
Outstanding Debts
In the case of buildings where works are in hand or have recently been
completed, we do not normally make allowance for any liability already incurred,
but not yet discharged, in respect of completed works, or obligations in favour of
contractors, sub-contractors or any members of the professional or design team.
14)
Unless otherwise stated, no allowances are made in our analysis for any expense
of realization or for taxation which might arise in the event of a disposal, deemed
or otherwise. We have considered the property as if free and clear of all charges,
lien and all other encumbrances which may be secured thereon.
We also
15)
Attendance
The instruction and the estimation of cash flow assignment does not automatically
bind us to attendance in court or to appear in any enquiry before any government or
statutory bodies in connection with the analysis unless agreed when the instruction
is given.
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We have not gone through the legal aspects like documents of title deed,
lease deed, revenue records, court matters (if any), and documentation like
joint development with other companies. We also assume for this analysis that
the title and development rights of all the properties lies with the Company
and is clear, marketable and free of all encumbrances, restrictions, easements
or charges which may have detrimental effect upon the cash flows of the
property. It is also assumed that company has paid all property related taxes.
We have neither carried out any soil testing nor structural surveys nor are we
experts in the field of structural survey. Therefore, we do not give any
assurance that properties are free from structural defect. If any investigation
identifies any structural defect in the property our report may require revision.
Neither are we the experts in the town planning to factor the town planning
aspects in the project. Sewers, main services and the roads giving access to
the property have been provided.
We have assumed that demand; supply, pricing, fiscal and monetary policies
of Government, taste of public will remain same as on date of analysis over
the period of time of development. All of these factors are in strong relation
with the cash flow estimation of property. Any radical change in any of the
factor may affect estimation at large.
For the purpose of this report we have assumed that the property is not
subject to environmental contamination. However, as we are not experts in
this field, we recommend that an appropriate consultant may be engaged to
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