Fs Mercu Maya

MERCU MAYA REALTY CONSULTANTS SDN BHD

A FEASIBILITY STUDY ON LOT NO 948, MUKIM OF SUNGAI KARANG, DISTRICT OF KUANTAN PAHANG DARUL MAKMUR FOR THE PROPOSED OF RESORT DEVELOPMENT

1.0

GENERAL 1.1

TERM OF REFERENCE

:

We have been instructed by Tuan Hj. Baharudin Hj. Mohd Hanipah to undertake a Feasibility Study of a proposed hotel and commercial development on Lot 948, Mukim Sungai Karang, Beserah, District of Kuantan, Pahang Darul Makmur. We have accordingly inspected the proposed site on 15th February 2007 herein be the valuation date and gathered other relevant information to arrive at our conclusion based on the project’s feasibility analysis of the proposed resort development. We are now pleased to submit herein our report.

1.2

PREFACE

:

Pursuant to our client’s instruction, the primary data in this Feasibility Study is derived from continuous consultations and dialogue sessions with the relevant government agencies particularly Majlis Perbandaran Kuantan, Jabatan Penilaian & Perkhidmatan Harta (JPPH) Pahang, Pahang Tourism, quasi government bodies, other local private

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MERCU MAYA REALTY CONSULTANTS SDN BHD

developers and selected hotels. The policies, proposals and views of the said agencies are duly incorporated in this Feasibility Study. It is pertinent to note that despite efforts taken to ensure the accuracy of the information collected, differing opinions of authorities have been carefully analyzed and redundant information eliminated in the course of our own interpretation of facts and findings. This feasibility report covers details of the site in terms of its title particulars, location, description, development contents, town planning, planning regulations and zoning. The report also embraces in brief the site analysis and its assessment in terms of road patterns and traffic access, public utilities and assessment on site potentiality for the proposed residential development.

The project costs brief and explanatory notes on the construction costs, preliminary, contingencies, and professional fees are duly covered. The sales values or selling prices as shown on the cash flow are based on the current market conditions. The study also covers out interpretations of the financial; calculations of project revenue and costs including risk analysis and risk minimization measures. The conclusion part of the study embraces our opinion, views and recommendations on the viability of the proposed project having regard to the present economic climate and the property market.

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1.3

OBJECTIVE OF STUDY

:

This Feasibility Study is an essential pre-requisite for successful undertaking of this proposed development based on our views and recommendations especially in economic and urbanization era. Premised on the purpose of this Feasibility Study, the objectives of the report is fold assessment of location advantage, suitability and potentiality of the site for the proposed development.

1.4

SCOPE OF STUDY

:

The study would be cover by Kuantan locality. The subject site is located within Beserah

whereby under Majlis Perbandaran Kuantan as local authority. It will also cover the surrounding areas between 10 to 20 kilometers radius from the subject development in general. This feasibility study consists of the following scope of work:1.4.1To analysis the accessibility of the site and to investigate the availability of the project.

1.4.2To overview the tourism sector in the Beserah surrounding area including others area and socio economic trend of Kuantan and neighborhoods areas.

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1.4.3Conduct surveys on the analysis of demand and supply of hotel accommodations within the study area. It will also cover the room rates for hotel, occupancy rates, rating, facilities provided and other relevant information of selected hotels in the study area and others if there is a necessity. 1.4.4To determine the shape and layout of the proposed project should take and how it should be implemented and marketed. 1.4.5Advice on the feasibility and viability on the proposed development based on cash flow analysis, assessment all relevant market condition and existing statutory provisions.

1.4.6This report have been covered on the concept and general areas included physical issues and restriction, the proposed concept and design philosophy, planning factors and criteria and lastly land use development.

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1.5

METHODOLOGY

:

We have been taken a systematically ways to gather overall data, information, figures and graph as a guideline to estimate the forecast figures. The steps that we carried out as below: 1.5.1Through the available data such as broacher, publication, pamphlet, references book, and relevant material. 1.5.2Searches and enquiries have been made at developers and agents office to check on major projects being undertaken in and around the study area to establish the matters such as types of development, take-up rates, prices achieved and other information pertinent of these presents.

1.5.3Physical investigation of proposed site, its surrounding (existing development), accessibility, facilities and utilities to determine the suitability of the project site for the purposed project.

1.5.4We were also doing interviews, searches and inquiries to relevant parties such as Kuantan Land Office, Planning Department of Majlis Perbandaran Kuantan, Jabatan Ukur & Pemetaan Malaysia (JUPEM) Kuantan, Institute of Surveyor Malaysia (ISM), Pahang Tourism Information Center and Jabatan Penilaian Dan Pengurusan Harta Tanah (JPPH). 1.5.5Additionally information’s gathered from numerous resources.

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1.6

LIMITING CONDITIONS

:

The following are the limitations of our study:1.1. This report is confidential to the Client to whom it is addressed. It may be disclosed to other professional consultant advising the Client in respect of that purpose, but the Client shall not be disclosed the report to any person. 1.2. All opinion of value expressed in this report applies are strictly upon the terms of and for the purpose of this Report only. The valuer is therefore not responsible for it quoted out of context. 1.3. Neither the whole nor any part of this report/certificates or any reference thereto may be included in any published document, circular or statement nor published in any way without the valuer’s written approval of the form and context in which it may appear. 1.4. Though the property was inspected, we are not able to state the crops are free of vermin, soil diseases. We have not carried out a chemical analysis of the soil nor other investigations to ascertain the soil suitability for the present or other cultivation. Therefore, we are not able to accept any responsibility with regard to latent infestation and defects of soil and diseases, which affect crops.

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1.5. While we have inspected the title of the property as recorded by the Land registry, we cannot accept any responsibility for its legal validity or any liabilities against the property which were unrecorded at the time of our inspection.

1.6. The instruction and the valuation assignment do not automatically bind the valuer to attendance in court or appear in enquiry before any government or statutory bodies in connection with the valuation. Prior arrangement and agreement shall be made between client and valuer if such attendance or appearance is required. 1.7. As is normal with studies of the nature, our findings and conclusions are based on information made available to us at the time of this study. Even though this report has been taken foresee future market trends, we shall not be liable of the recommendations given are not applicable due to prevailing market condition at any future date.

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2.0

SITE /LOCATIONAL FEASIBILITY 2.1 DATE OF INSPECTION

:

We have inspected the subject site and surrounding area on 22th February 2007.

:

The subject is under Majlis Perbandaran Kuantan and it is located approximately 2 km

2.2 LOCATIONAL FEASIBILITY

2.2.1

Location

north of Kuantan City, Airport as the regional transport hub. Beserah is connected via Kuantan-Kemaman Road and Lebuhraya Pantai Timur. The location is as on the Appendix of the location plan. 2.2.2

Subject Property

:

The subject property is as edged red in the site plan containing of approximately 4.7 acres which actually known as Lot PT 948.

We proposed to develop this land for

commercial development. It is noted that it lies within the zoning for business and services in Beserah and District of Kuantan

2.2.3

Surrounding

:

The surrounding area of the subject property is generally developed with a variety of

development is situated 1500 m from the subject property.

The neighborhood could be divided an as:

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Offices •

Wisma Persekutuan

•

High Court

•

Majlis Perbandaran Kuantan

•

Private Office

Commercials •

Megamall Shopping Complex

•

Shop Office

•

Hotels and Resort

•

Petrol Station

•

Terminal Makmur( Bus Terminal)

•

Komplek Teruntum

•

Kuantan Plaza

Institution •

Institut Kemajuan Ikhtisas Pahang (IKIP)

•

Universiti Malaysia Pahang

•

Universiti Islam Antarabangsa Malaysia

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Residential •

Apartment

•

Condominium

•

Terrace House

•

Semi-Detached House

•

Detached House

•

Cluster Town House

•

Terrace Dual Occupation/Shared Title

•

Elevated House

•

Shophouse

•

Headquarters/Hostels

Public Amenities

•

State Mosque

•

City Command Centre

•

Neighbourhood Centre

•

Multipurpose Hall

•

Public Libraries

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Health •

Hospital Tengku Ampuan Afzan

•

Health Clinic and Private Hospital (Kuantan Medical Centre)

Safety and Security •

Fire Station

•

Police Station

•

Police Marine

Industrial •

Gebeng Industrial

•

Jaya Gading

•

Gambang

Recreation Place •

Telok Cempedak Beach

•

Batu Hitam Beach

•

Balok Beach

•

Cherating

•

Sepat Beach

•

Tanjung Lumpur

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MERCU MAYA REALTY CONSULTANTS SDN BHD

2.3

DESCRIPTION OF SUBJECT PROPERTY 2.3.1

Site

:

The subject property is a parcel of an almost rectangular in shape land containing of

approximately 4.7 acres of Lot PT 948. The subject property is located within Pantai Balok, Beserah, Mukim of Sg Karang and District of Kuantan. It is generally flat in terrain and having some development around the subject site. As at the date of inspection, we noted that the subject property 2.3.2

Land

:

The development site is generally an irregular in shaped with the topography of the site

is generally flat and adjoining the catchment’s area. 2.3.3

Major Strengths

:

2.3.3.1

Strategic Location

The subject property closes proximity with a commercial/business heart pulsating area, mixed development area and residential area. It can be connected with KemamanKuantan Road and Pantai Timur Highway.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

1.1.1.2

Accessibilities

A good road network serving to the development site further enhances the location and advantages. This site is accessible from Kuantan and Kemaman using expressway also can access by sea. 2.3.3.2

Services

Main water, telecommunications, gas district cooling/chilled water, electricity supplies, drainage, waste water reticulation system, solid waste facilities and natural gas are connected to building in the adjoining development and are readily available for connecting to the subject property. 2.3.3.3

Public Transport Services

Kuantan is well served by a network of expressways. Kuantan can be connected with Pantai Timur Highways, Kuantan – Kemaman Road. The public transports that exist

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MERCU MAYA REALTY CONSULTANTS SDN BHD

there which cover intra-city buses such as Syarikat Mira’s Bus, Syarikat Sihat bus and taxi.

2.3

PARTICULAR OF TITLE

:

We have conducted a search at the Kuantan Registra Office on 22nd February 2007.

Confirming the detail of the title particulars the subject as follows: Title No

:

HS (D) 6943

Lot

:

PT 948

District

:

Kuantan

State

:

Pahang Darul Makmur

Tenure

:

Freehold

Category of Land Use

:

Building

Provision Land Area

:

4.7 acres

Registered Owner

:

TANCO HOLDING SDN BHD

Encumbrances

:

NIL

Express Condition

:

Tanah ini hendaklah digunakan semata-mata untuk Bangunan Perniagaan.

Restrictions In Interest

:

Tanah yang diberi milik ini tidak boleh dipindah milik, dipajak atau digadai melainkan dengan kebenaran Pihak Berkuasa Negeri.

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\

2.4

PLANNING PROVISION

:

2.5.1

Zoning The land is zoned as business and services use as checked at the Town and Regional Planning Department, Majilis Perbandaran Kuantan on 22nd February 2007

2.5.2

Future Development With the zoning of business and services use, we noted that the best development on the subject land is hotel and resort. In phase 1, the subject land was proposed for hotel and resort also.

2.5

CONCLUSION

:

Based on the analysis and research have been made on the project site, we

revealed that the project is very suitable to develop according to surrounding development. Strategic location support the development project together with existing development that cabs considered being as a project competitors. Relatively the project site have potential to develop.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

3.0

ECONOMIC FEASIBILITY A socio economic study has been carried out together information about potential of land development and condition. A set of relevant question has been design to highlight nature of environmental and land pattern. In economic feasibility is including the population trends, employment trends and household income at Local Authority area includes Kuantan

3.1 GENERAL INFORMATION ON STATE OF PAHANG 3.1.1

INITIAL ESTIMATION BY DISTRICT 3.1.1.1

Approach of Estimation It is rather difficult to estimate all the socio-Economic indicates by zone due the lack of basic data in Pahang. For instances, no governmental agencies have not managed the number of employees in working place by area. The company estimated marginally required indicates by using available statistical data currently published or collected in the course of the Study and by taking the most use of the results from the home Interview Survey, which were conducted by our company as well.

3.1.1.2

Population

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MERCU MAYA REALTY CONSULTANTS SDN BHD

The department of statistics estimated the future population by district. Based on the observation about the change in the number of housing units by enumeration block, each enumeration block consist of basic zone in which Approximately 100 household in average. Table 1: POPULATION ACCORDING TO DISTRICT IN PAHANG (1980-2015) DISTRICT NORTHERN REGION Cameron Highlands Jerantut Lipis Raub SUBTOTAL CENTRAL REGION Bentung Kuantan Maran Temerloh SUBTOTAL SOUTHERN REGION Pekan Rompin Bera SUBTOTAL TOTAL

1980 NO. %

1991 NO.

%

2000 NO.

%

2005 NO.

%

2010 NO.

%

2015 NO.

%

21,502 59,043 56,996 64,414 201,955

2.80 7.68 7.41 8.38 26.27

25,555 74,547 68,276 73,085 241,463

2.46 7.13 6.53 6.99 23.11

30,495 84,180 77,844 83,363 275,882

2.37 6.53 6.04 6.47 21.41

30,774 84,927 77,941 84,079 277,721

2.25 6.21 5.70 6.15 20.31

30,943 86,952 78,262 85,453 281,610

2.04 5.73 5.16 5.64 18.57

31,025 88,221 78,543 86,458 284,247

1.86 5.29 4.71 5.18 17.04

72,865 170,573 91,187 91,641 426,266

9.48 22.19 11.86 11.92 55.45

83,965 255,974 110,264 118,015 568,218

8.03 24.50 10.55 11.29 54.37

101,533 358,261 116,636 142,794 719,224

7.88 27.81 9.05 11.08 55.82

113,402 409,341 118,258 144,233 785,234

8.29 29.94 8.66 10.55 57.44

127,510 503,450 123,880 147,347 902,187

8.41 33.20 8.17 9.72 59.50

143,396 592,128 131,173 154,154 1,020,851

8.60 35.50 7.86 9.24 61.20

50,058 38,975 51,547 140,580 768,801

6.51 5.07 6.70 18.28 100

86,179 80,251 68,892 235,322 1,045,003

8.25 7.68 6.59 22.52 100

103,184 108,095 81,991 293,270 1,288,376

8.01 8.39 6.36 22.76 100

109,646 111,071 83,467 304,184 1,367,139

8.02 8.12 6.11 22.25 100

125,278 118,305 88,928 332,511 1,516,308

8.26 7.81 5.86 21.93 100

140,093 127,568 95,186 362,847 1,667,945

8.40 7.65 5.71 21.76 100

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MERCU MAYA REALTY CONSULTANTS SDN BHD

1980

1999

2000

2005

2010(Target Population)

No.

%

No.

%

No.

%

No.

%

No.

%

170,573

22.19

255,974

24.5

355,261

27.81

358,262

29.94

503,450

33.2

Table 2: Population at Kuantan (1980-2010)

3.1.2

POPULATION TRENDS Population is very important to determine the demand, supply and human behaviors. The density population will be base on this factor: I. Future population growth II. Development trend

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Table 3: Population and annual growth by District of Kuantan (1995-2005) DESTINATION Kuantan Area MUKIM PERCENTAGE (%) Kuala Kuantan OTHER AREA Sungai Karang Genting Highland Beserah Cameron Highland Penor PulauUlu Tioman Kuantan Rompin Ulu Lepar Fraser's Hill DISTRICT OF KUANTAN Taman Negara Bukit Tinggi Kuala Lipis TOTAL PERCENTAGE (%)

1999 614,463 1999 % 19.99 200,712 78.41

NUMBER OF TOURIST (YEAR) 2000 2001 2002 2003 GROWTH GROWTH RATE 785,486 821,356 889,691 2005 % (1999-2005) (1998-2005)538,343 23.50 24.01 16.87 15.07 280,642 78.33 79,930 3.80

20,051 7.83 9,593 1,888,1593.75 4,487 278,7991.75 5,952 185,9942.33 NA5.93 15,179 32,154 255,974 100 50,778 NA 23,755 2,459,619 80.01

32,906 1,918,678 12,220 305,995 6,001 200,527 8,776 17,717NA 47,963 358,262 55,675 NA 27,461 2,556,299 76.50

9.18 1,918,678 3.41 301,995 1.68 243,052 2.45 NA 4.95 47,910 100 58,770 NA 28,924 2,559,329 75.99

12,855 3,525,169 2,627 1,514364,930 2,824213,172 2,538 78,904 102,288 60,699 56,121 44,437 28,924 4,372,356 83.13

5.66 2,362,936 2.73 309,884 3.28 72,388 4.41 50,056 1.73 62,879 3.81 111,675 41,128 22,087 3,033,033 84.93

Table 4: Number of Tourists in Main Destination in Pahang (1999-2003)

Table 5: Number of Tourist in District of Kuantan (2000-2003)

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MERCU MAYA REALTY CONSULTANTS SDN BHD

3.1.3

EMPLOYMENT TRENDS Based on GDP, manufacturing sector is highest part contributed for job opportunities. In 2010, the expectation of job opportunities on this sector is about 241,031 with the average 40.1% from the total employment. 3.1.3.1

Number Of Students In terms of the number of students in the public schools and also students from IPTA (University Malaysia Pahang, Universiti Islam Antarabangsa Malaysia and Institut Kemajuan Ikhtisas Pahang). The Universiti Malasia Pahang are

YEAR 2000 2001 2002 2003 TOTAL %

DAY TRIPPERS 327,750 144,979 166,667 638,526 1,277,922

NUMBER OF TOURIST LOCAL OVERNIGHT TOURIST 785,486 738,517 821,356 712,431 889,691 806,216 622,214 996,638 3,118,747 3,253,802 100 75.64

PERCENTAGE OF TOURIST (%) FOREIGN TOURIST 279,719 253,904 250,142 264,102 1,047,867 24.36

TOTAL 2,131,472 1,932,670 2,112,716 2,521,480 8,698,338

LOCAL 72.53 73.73 76.32 79.05

FOREIGN 27.47 26.27 23.68 20.95

TOTAL 100 100 100 100

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consist 7,000 students, Universiti Islam Antarabangsa Malaysia is 4,000 students and Institut Kemajuan Ikhtisas Pahang is 4,500 students. 3.1.3.2

Employees There was no reliable data about the updated number of employees by work place by district. The last data about the employees of Kuantan is about 126,514 in year 2000.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Table 5: Employment Trends By Sector Year 2000 OCCUPATION SECTOR PRIMER Agriculture, Hunting and Forestry Fishery Mining SUBTOTAL SEKUNDER Manufacturing Electrical & Water Construction SUBTOTAL TERTIERY Trading & Retail Hotel & Restaurant Transportation & Communication Financial Real Estate, Rental & Business Defence & Public Administration Education Health & social activities Service Community activities Personal Household with Employee Organisation/bodies in Rural Territory SUBTOTAL Unclear Occupation Unavailable Occupation TOTAL PERCENTAGE (%)

Sg Karang

Beserah

Kuantan City

Jaya GadingGambang

Penor

Kuala Kuantan

Hulu Kuantan

Hulu Lepar

District of Kuantan

%

114 199 23

217 209 53

1,251 515 73

1,036 520 29

274 50 0

2,778 30 59

890 2 36

3,658 6 2

10,218 1,531 275 12,024

8.08 1.21 0.22 9.51

1,060 623 297

2,716 127 1,402

6,668 620 6,280

4,359 338 2,966

180 12 127

2,190 42 753

404 8 171

616 9 39

18,193 1,779 12,035 32,007

14.83 1.41 9.51 25.75

805 289

808 869

13,281 4,968

4,575 2,582

168 67

1,240 628

286 190

157 103

21,320 9,696

16.85 7.22

16 42

1,128 144

3,041 2,318

2,258 652

83 14

751 69

137 22

62 3

7,476 3,264

5.91 2.58

335

275

2,302

1,016

27

229

45

21

4,250

3.36

96 20 26

1,644 855 178

6,984 4,355 1,984

7,121 2,516 1,013

395 96 30

1,142 530 169

202 151 39

307 302 14

17,891 8,825 3,453

14.14 6.97 2.73

12

157

1,384

566

72

204

53

7

2,455

1.94

32

58

1,332

150

3

38

4

8

1,625

1.28

0

0

2

0

0

0

0

0

54 186 4,229 3.34

90 249 11,179 8.84

294 707 58,359 46.13

91 332 32,120 25.39

2 9 1,609 1.27

53 124 11,029 8.72

24 7 2,671 2.11

1 3 5,318 4.20

2 80,257 609 1,617 126,514 100

0.00 62.98 0.48 1.28 100

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MERCU MAYA REALTY CONSULTANTS SDN BHD

3.2.1

SOCIO-ECONOMIC FRAMEWORK The effect of currency devaluation is becoming tangible to Malaysian economy. The plan involves the following action: 

Stabilize the Ringgit



Restore market confidence



Maintain Financial Stability



Strengthen Economic Fundamentals



Continue the equity and socio-Economic Agenda and



Restore adversely affected sectors

Therefore, the study had to make effort to estimate future regional socio-economic indexes by utilizing obtainable information and the results of our own surveys for the purpose of the feasibility study. 3.2.2

TOURISM 3.2.2.1

Definition of Tourist A temporary visitor staying for at least one night no more than one year in a country visited and whose main purpose of visit could be classified as leisure, business, visiting friends/relatives or attending conference and meeting other than the exercise of an activity remunerated from within the country.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Table 8: AVERAGE OCCUPANCY RATES OF HOTELS BY IN KUANTAN

LOCALITY

2005

2004

Kuantan

66.4

58.2

Table 9: HOTEL GUESTS BY LOCALITY (JANUARY - DECEMBER 2002/2003)

LOCALITY Kuantan Cherating Cameron Highlands Genting Highlands

Malaysian 152,025 106,791 100,467 183,197

NUMBER OF TOURIST (YEAR) 2003 Foreigners TOTAL Malaysian 22,624 174,649 108,890 36,576 143,367 57,987 46,372 188,716

146,839 371,913

78,874 136,942

2004 Foreigners 17,590 50,975

TOTAL 126,480 108,962

31,935 220,956

110,809 357,898

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MERCU MAYA REALTY CONSULTANTS SDN BHD

However, according the current data, the occupancy of hotels by locality in District of

Kuantan is good

situation. In Year 2004, the rate is about 58.2 %. The rate was increasing to 66.4 % in Year 2005. The difference is 8.2 %. The increasing of rate caused the built of Pantai Timur Highway and improvement of Kuantan development . The increasing will give the good effect to growth of hotel industry in Kuantan

4.0

MARKET FEASIBILITY Market feasibility is most important section in feasibility study in the pre-planning stage and often forms the bulk of the report. This section demonstrates the potential market capacity and willingness to purchase or lease the proposed development. However, the study not only depends on this section. The other section is also important to get results of this study.

4.1

MARKET OVERVIEW IN PAHANG Generally, the hotel sub-sector was moderately active. The information data was collected until 2003, hotels that generally depended on foreign tourists registered substantial drops in occupancy. On the supply front, the hotel sub-sector has 11,049 rooms to offer through 21 hotels, with most hotels offering more than 100 rooms.

4.1.1

NUMBER OF ROOMS AND AVERAGE OCCUPANCY RATE FOR HOTELS IN PAHANG. Pahang has some of the most famous hotels in Malaysia. There are many hotels that can give a good facilities and services. Here are some of the most famous hotels in district of Pahang: (Refer next page).

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Table 10: Number of Room and Average Occupancy Rate for Hotel In Pahang LOCATION Bentong SUBTOTAL Cameron Highlands SUBTOTAL Genting Highlands SUBTOTAL Kuantan

SUBTOTAL Rompin SUBTOTAL Fraser's Hill Jerantut Lipis Mentakab Temerloh TOTAL

STAR RATING

NUMBER OF HOTELS

TOTAL NUMBER OF ROOMS

NUMBER OF ROOMS

TARIFF (RM/NIGHT)

5 4 1 10

1 1 1 3

354 33 47 434

STANDARD 243 33 43 319

SUITE 26 0 4 30

4 3 2 9

2 3 5 10

228 163 252 643

224 145 194 563

4 18 1 23

320-800 200-1,200 75-1,100

5 4 3 12 4 3 2 1 10 4 2 6 3 3 2 3 2 60

3 1 3 7 5 4 7 5 21 2 2 4 1 1 2 1 2 52

2,082 838 3,689 6,609 1,022 560 462 199 2,243 576 96 672 91 18 103 80 156 11,049

1,928 838 3,665 6,431 951 414 429 184 1,978 576 92 668 81 13 71 75 128 10,327

154 0 24 178 54 146 33 15 248 0 4 4 10 5 32 5 28 563

275-795 226-269 115-338

380-880 200-1,000 50-109

150-950 160-850 84-350 40-160 350-600 115-196 184-632 45-240 69-229 80-198 78-208

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04.2

EXISTING STOCKS IN KUANTAN SURROUNDING AREA. (COMPETITORS)

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4.3.1

EXISTING STOCKS IN KUANTAN

0

0(I)

Duta Village Resort

1 Duta Village Beach Resort also offers a unique service concept of Resort Hosts which warmly extends to each and every guest a truly personalized and caring service standard. We are passionately committed to making your stay here a most memorable one. The Duta Village 50 standard rooms(studio), 20 chalet and 15 long house Hotel Facilities 1. 24-hour room service 2. Café 3. Swimming pool 4. Car parking 5. Laundry service 6. Tour desk 7. Multipurpose Hall Room Facilities: 1. Private bath and shower

2. TV , IDD telephonE (II)

Duta Sand Beach Resort

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MERCU MAYA REALTY CONSULTANTS SDN BHD

The Duta Sand Beach Resort located at Balok Beach, Beserah. Guests of the hotel will enjoy the sea environment. The Duta Sand Beach Resort offers 30 standard rooms and 25 chalets. Hotel Facilities: 1. Restaurants 2. Lobby lounge 3. 24-hour room service 4. Sauna, spa and steam bath 5. Laundry and dry cleaning Room Facilities: 1. Air conditioning 2. Refrigerator 3. Coffee & tea making facilities 4. Telephones with data/fax port and voice mail 5. Iron and ironing board

1(III)

Hotel Grand Continental

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MERCU MAYA REALTY CONSULTANTS SDN BHD

2 A city hotel that links both east and west coast of Malaysia boasting of its central location within easy access to public transportation, shopping centres, medical centres, government offices and famous local restaurants. A panoramic view of the South China Sea can viewed from the hotel's upper floors. This hotel is also adjoined to a block of Service Apartment units, offering cosy and comfortable accommodation for long term guests as well as expatriates. Offer 80 Deluxe Single rooms, 20 Deluxe Triple rooms and 4 Executive rooms. List of Facilities: 1.

Air conditioning

2.

Business centre

3.

Fitness centre

4.

IDD

5.

Banquet facilities

6.

Coffee shop

7.

Foreign exchange

8.

Limousine

9.

Shopping arcade

10. Conference facilities 11. Swimming (outdoor) 12. Mini bar

3 (iv)

Mega View Hotel

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4 Let us invite you to stay, be it for business or for pleasure, in Megaview Hotel. Strategically located in the heart of Kuantan town, it is a place with magnificent view of the Kuantan river. With our dedicated, pleasant and friendly staff, let us take care of you at the Megaview Hotel! . The hotel offer 50 standard rooms,15 Deluxe rooms and 5 family rooms List of Facilities: 1 .Air conditioning 2. Business centre 3. Fitness centre 4. IDD 5. Banquet facilities 6. Coffee shop 7. Foreign exchange 8 .Limousine 9. Shopping arcade 10. Conference facilities 11.Swimming (outdoor) 12.Mini bar

5(v)

Seri Malaysia Hotel

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Hotel Seri Malaysia Kuantan offers a fantastic deal for travelers heading towards Teluk Cempedak beach.This 2-storey hotel building located along Jalan Telok Sisek, Kuantan is an ideal getaway for those keen on enjoying the pristine beaches of Kuantan at an affordable cost. Equipped with 150 rooms (standard and family room), Hotel Seri Malaysia Kuantan is situated a mere 20 km from the airport and 300 km from Kuala Lumpur. Visitors can enjoy both local and western cuisine at the scenic Cafe Seri Banir Coffee House which operates from 7am to 11 pm daily. The hotel also has multi-functional rooms ideal for conferences, meetings and other events

List of Facilities: 1 .Air conditioning 2. Business centre 3. Fitness centre 4. IDD 5. Multipurpose Hall 6. Swimming Pool 7. Color TV 8. Hot water heater 9. Mini fridge 10. Coffee House 11. Coffee and tea-making facility 12. Conference facilities 13. 24 hours reception / message services 14. Taxi service, car rental

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15. Laundry and dry-cleaning services

6(vi)

Tamukami

The name TAMUKAMI translated meaning 'Our Guest'. The beetle nut leaf in our logo holds significance as in the early days, guests are invited to sample the servings from the Tepak Sireh which symbolizes a great honor and traditional hospitality. A special treatment will be accorded to all our guests.The traditional architecture reflects the resort's commitment to a more gracious and extensive lifestyle. Business and pleasure is no strange feat in this resort.We have a total of 53 rooms and suites that have been specially designed with a combination of Malaysian charm fitted and supplied with the most modern amenities. Each room has a private balcony. List of Facilities: 1. Air-conditioning 2. accommodation 3. TV in all rooms / Astro (lobby) 4. Mini bar 5. Restaurant 6. Meeting and conference room 7. Special tours

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8. Swimming pool

(vii) Shahzan Inn Whether you stay is for pleasure or business, Shahzan Inn Kuantan refreshes you like no other. wish the ambience perfected to catch the cosy mood of the retreat away from it all but never away from the finest thing in life, Shahzan Inn Kuantan is the excellence choice. It is located in the heart of Kuantan which put you right on the center of activities where you can observe Malaysia at their natural friendliness.127 tastefully furnished rooms at Shahzan Inn, Kuantan comprise of 10 suites, 25 family and 92 deluxe rooms are made available for your preference. They come with standard features like the individually controlled air-conditioning, IDD telephone and colour televisions.

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List of Facilities: 1. Laundry Service 2. Souvenir and Gift Shop 3. Ample car-parking facilities 4. ASTRO TV Program 5. Baby Sitting service (by arrangements) 6. Private Limousine service (by arrangements) 7. Resort Tour (by arrangements) 8. Volleyball, Football, Netball 9. Telematches / Treasure Hunt 10. Video Games Room 11. Karaoke Facilities 12. Roller skating and children playground 13. Jungle tracking 14. Pony Rides

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4.3

DEMAND ANALYSIS Demand for resort is derived from several factors including our economic scenario and labor of population and government policy. It is important that our national economy must be stable in order to attract investments in hotel. The main potential demand for our proposed development would come from local tourist and outside tourist. We expected that development of hotel at Pantai Balok can be fulfill demand depends on the attraction. From our research, in Pantai Balok there are 2 hotels/resorts only in this area. So that, the tourist can occupant this hotel. The demand for hotels/resorts may be generated by the attractions of a locality, whether natural like situated within is being developed as a fully equipped, self-sustaining cosmopolitan city. It means Pantai Balok is one’s strategic. Here are some points that influenced demand for DE MAYA VILLAGE (I)

Higher institution graduation ceremony/ convocation

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Kuantan actually fills with many higher institution namely In terms of the number of students in the public schools and also students from IPTA (University Malaysia Pahang, Universiti Islam Antarabangsa Malaysia and Institut Kemajuan Ikhtisas Pahang). The Universiti Malasia Pahang are consist 7,000 students, Universiti Islam Antarabangsa Malaysia is 4,000 students and Institut Kemajuan Ikhtisas Pahang is 4,500 students. (II)

Companies and other bodies seminar Some seminar that conducted by the companies or bodies may last for days. So, we assume that demand for hotel rooms and other facilities are just around the corner. Most people have already associate Kuantan with high-tech companies and its fast growing IT community. Besides that, various activities and seminar was done in Kuantan

(III)

Infrastructure The site actually surrounded with integrated roads namely Kuantan - Kemaman Road and Lebuh Pantai Timur Highway. In other words, the subject property is actually strategically located. All city amenities will be built to cater for the needs of its cosmopolitan cities. The hotel should be located in a place where the customer can reach them easily.

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(IV)

Big player and interesting place Teluk Chempedak Beach - just 5 km from the town of Kuantan, this is an excellent beach for numerous water sports. Souvenir and handicraft shops are all within walking distance. Beyond the main beach, there are secluded bathing spots. A short jungle trek through the Teluk Cempedak Forest Reserve leads to the idyllic Pelindung Beach. An alternative route will lead you to the Teruntum Park, which has a mini zoo. Lake Chini - is Malaysia's second largest natural lake whose well-known myths have attracted visitors from far and wide. Legend has it that an ancient Khmer city once existed here and that mythical monsters live in and guard the lake. The Jakun people of Malaysia have lived around the lake's shore for long generations, and their oral traditions have enticed numerous archaeologists to conduct scientific expeditions to Chini. Pahang Royal Golf Course - 55-hectare property that offers many bunkers, water hazards, with the South China Sea wind providing the extra challenge. This area also has access to a sandy beach and swimming as well as the many sports facilities associated with a resort.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

14.4

MARKETING STRATEGY The hotel/resort industry has been seen to be sensitive to the world economy. During the recession in 1984-1987, 1997-1998, tragedy of September 11, tragedy of bomb explode in Bali, “Selsema burung”, SARS and tsunami, it was affected the occupancy rate fell in Malaysia. The number of tourist entering Malaysia also fell during this period. (I)

Location Pantai Balok is located 3km north of Kuantan and 13km north of the Kuantan Airport. Visitors can reach Pantai Balok using expressways, urban highways and rail. A strategic location at the seaside of east of peninsular opposing the South China Sea area which popular with its beautiful and bright beaches is a good destination for tourists and visitors. It is also suitable for visitors to visit Pantai Balok because it has a lot of interesting and beautiful places instead of the beaches itself. The purchasing power by the visitors is generally based on the currency rate and the adjustment of price.

(II)

Accommodation / Facilities

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As the economy recovered, the hotel industry began to pick up again. The aggressive promotion in the country as a tourist destination by the government also helped to further improve the hotel industry as demand for hotel rooms increased. It is interesting to note the trend of five, four and three star hotels has been quite similar in terms of occupancy rates. The higher occupancy rate recorded by four-star hotel is largely due to their lower tariffs. (III)

Launching Ceremony We will make a grand party for launching ceremony to attract many tourists to come and joint us.

(IV)

Media Advertising To boost the performance development, it is great to advertise the said development in the national newspapers, magazine and through television. Heavy promotional activities must also be done especially on signboard beside major highway and also near the development site itself.

(V)

Exhibition Make a special exhibition and those alternatives such as participating in a local authority organized regional exhibition or trade fair may be better. An exhibition can be held wherever suitable like shopping

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complex. It’s very important and valuable as a part of the promotional mix in isolation. The Photographs of hotel was prepared to explain visually and to invite request for information. (VI)

Multimedia System Communication Besides all item above, tourist can make a promotion through multimedia system communication, example by Internet. According that, tourist can know about the latest promotion tariff/night that have launched in market.

(VII)

Survey

To identify the potential of that product, surveyed by researcher should be taken which would give some consideration regarding the development.

The proposed hotel buildings should be projected as a special building for leisure and formal activities as a center where entrepreneurs meet and expand their business. The prospect of having hotel buildings would be an attraction for businessman and tourists as they can use as an avenue to expand their business and also to enjoy the environment and culture in Malaysia. In addition, by offering low tariff of room rate, we are confident that we can achieve the expected occupancy rate.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

04.5

DE MAYA RESORT CONCEPT The concept of our proposed hotel is “Beach Village”. Our target market are for all family, corporate and government bodies and for the students that nearest our proposed project. Besides, foreign and local tourists are also our target market. The rental rate is also applicable with the employment income growth at outside or inside this area. The hotel concept will described in more detailed in Chapter 5 (Design Feasibility).

04.6

ACCOMMODATION 4.7.1

ACCOMMODATIONS IN THIS HOTEL ARE: Type of Room Chalet Long House 1 Long House 2 Studio Total

No. Of Rooms 20 22 8 60 110

Room Rate (RM) 140-160 90-120 120-150 120-140

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MERCU MAYA REALTY CONSULTANTS SDN BHD

Tenancy:

(Assumption)

Rent review every 3 year. 10% increase from the existing rate. The building is not fully occupied. Occupancy rate considered economic situation (up and down inflation rate) and demand of the building use.

14.7

FACILITIES OF DE MAYA RESORT

TYPE OF FACILITIES Pub and Lounge Restaurant Swimming Pool Souvenir and gift shop Multi Purpose Hall Accommodations 24 hours rooms services Parking Bays Air-Conditioning Sport Facilities

TOTAL OF UNITS 1 1 1 2 1 110 110 110 All 4

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MERCU MAYA REALTY CONSULTANTS SDN BHD

4.8

OUTSIDE CAR PARKING The total of parking bays over 100 bays.

24.9

TOURISM DEVELOPMENT STRATEGY The objectives tourism development sector is to create an industry of tourism that will last by using culture and natural areas in Kuantan. Besides that, activities and attractions in Kuantan must be scheduled. The tourism department also should promote a township of Kuantan as a new and best township in Kuantan. The local authority also should increase basic infrastructure and logging facilities. Finally, create tourism products and recreational activities include of local in tourism activities such as preparation of food, culture, transport and also interpretive facilities. 4.10

TARGET MARKET We would recommend that the target market in this proposal are to the businessman, students, investors and tourists whether local tourist or foreign tourist and the others. The accessibility to this hotel is very easy whereby all the information

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MERCU MAYA REALTY CONSULTANTS SDN BHD

of our Hotel can be accessed from the pamphlet at the tourism centre, foreign also can get information from internet and also can make a booking by phone and e-mail.

Another target market is for other people who came to Kuantan for several reasons such as: •

Social activities for example visits relatives and friends

•

Labor is also our target market, especially outside and local labor.

•

Traveling as overnight and staging requirements along route. Especially journey from west to east Malaysia.

•

Parents coming for student’s convocation in Universiti Malaysia Pahang,Universiti Islam Antarabangsa Malaysia dan IKIP. The other people might be stay at our proposed hotel when they want to attend for conference, meeting and formal activities.

•

Others reason is also can attract the people to fulfill an occupancy rate of the hotel.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

4.11

SWOT ANALYSIS 4.13.1 STRENGTHS

1 The strengths of subject property can be identified as follows:

•

Good accessibility with direct access from Terengganu - Kuala Lumpur – Negeri Sembilan

•

Generally, Kuantan is main Administration centre of Pahang

•

Kuantan has many beautiful and interesting places.

•

The proposed hotel is near to the administrative centre i.e. government department.

4.13.2 WEAKNESS

•

The weaknesses of this project is there are 6 hotels competitor at the surrounding area

•

Besides, lack of tourism and high cost in term at upgrading the river and soil influence the weakness at this project.

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MERCU MAYA REALTY CONSULTANTS SDN BHD

4.13.3 •

OPPORTUNITIES

With improved road network to the subject property may able to attract tourist from other part of all over Malaysia and also out from other countries.

•

With a development area due to the surrounding township, the subject property would be able to capture the market demand.

•

It has a ready market from the expanding population from Kuantan and all of Pahang

4.13.4 •

THREATS

In addition, the economic slow down and the uncertainty of the world economic will also adversely affect the demand for this project.

•

Competition for the subject property can be expected from other projects planned by state goverment to save the market segments.

4.12

CONCLUSION

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MERCU MAYA REALTY CONSULTANTS SDN BHD

From the market feasibility, based on demand and supply analysis, we can conclude that the project will be profitable because the economic factor is good. De Maya Resort will become a good attraction to a lot of people especially to the students, family, tourist and many more. Besides that, there are a lot of interesting places at the surrounding such as fisherman’ village, Teluk Chempedak, Cherating beach, etc. It is also in the vicinity of mixed development such as ‘ Kampong House’, commercial lot, and for future have a housing development will be develop within the locality.

5.0

DESIGN FEASIBILITY In accordance to the proposed project, the type of the development that suitable for development is a resort which would be rated as a 3 star hotel. The resort would consist of 110 number of guest rooms classified into 3 types, a multipurpose room , a restaurant and karaoke. Also, it would be equipped with facilities like a swimming pool and tennis court.

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5.1

CONCEPT FORMULATION The concept design of the resort is ‘Beach Village’ which has been adopted to give the identity to the proposed development. The proposed development utilized this concept to adapt with the surrounding development besides to follow the development concept regulation by the Kuantan itself. Part of the building and chalets will be positioned to face the South Chinese Sea , so the people could feed their eyes with lake’s tranquil scenery. This would enhance the beauty of the development. Meanwhile the concept of the resort itself is a ‘Beach Village. The proposed resort is purposely to cater the needs of all generation. With the number of rooms and facilities provided, the resort would be comfortable enough for all generation to cater

their

accommodation and their business activity purposes. Besides that, the sport centre and restaurant could cater the customer leisure activities. Within the boundaries of the resort, there will be a garden with well designed landscape consists of many decorative sculpture mixes with the various types of tress and plants. This could make the development area soften with greenish scenery. 5.2

CONCEPT OBJECTIVE The proposed development is a resort which located at the beach cost, utilizing the ‘Beach Village” concept is a suitable since there has no other resort using such concept like this yet. The utilization of this concept is actually to achieve the objectives which stated as below:-

i.

To give an identity to the development as it is a new development in the beach area.

ii.

To boost a good prospect of income as its location is in the heart of Kuantan itself.

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The concept should be able to accept, since there have no any other resort utilizing the same concept in the area. Also, the location is situated in the middle of the Pahang prime area which there will be many business activities and government sector will operates there. The existence of the proposed resort would be able to cater the accommodation and the business activity for this type of peoples.

5.3

LANDSCAPE DESIGN The proposed development might be implementing a well design landscape architecture to give a special value to the resort development. The landscape might be consisted a combination of soft landscape and hard landscape and mote to village style. The identity for the landscape design will be influenced from Malaysian landscape identity. The implementation might emphasize the usage the local trees and plants. The landscape would be functioned as: 1.

Shade and control glare from the sun

2.

Control wind direction which comes directly from the lake

3.

Screening and visual control to certain area of the development

4.

To stabilize and control the erosion of the soil at the lake’s bank, if any.

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5.4

5.

To add the aesthetical value to the development.

6.

To show our socio-cultural through the landscape design

7.

For the matters of ecological aspect such as a preservation of the animal habitat

8.

Green lung and microclimate modifiers.

BUILDING SPECIFICATION ELEMENT 1 Substructure 1A Piling

SPECIFICATION Cast in-situ bored piles based on penetration depth of 55m

1B Work Below Lowest Floor Reinforced concrete pile cap, column stump, retaining wall, ground floor slab with Finish waterproofing membrane 2 Superstructure 2A Frame

Reinforced concrete column and beam construction. Reinforced concrete lift core wall Reinforced concrete slab

2B Upper Floors 2C Roof

Reinforced concrete flat roof with waterproofing membrane steel section roof trusses covering

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MERCU MAYA REALTY CONSULTANTS SDN BHD

with ‘Lysght’ colorbond roof metal decking including all necessary accessories. UPVC 2D Stairs 2E External Walls

rainwater down pipe including accessories Reinforced staircase with mild steel balustrade and handling 115mm clay brick wall, aluminium fixed glass panel

2F Windows & External Doors 2G Internal walls and Partitions

Aluminum top hung and fixed window, adjustable louver window, segmented fixed panel, automatic sliding door, fixed glass panel and tempered glass swing door

2H Internal Doors Generally 115mm cement sand brick wall Generally timber skeleton framed and solid flush door, Fire rated door to Authority’s requirements, aluminium swing glazed door. All complete with ironmongeries set. 3 Finishes 3A Internal Wall Finishes

Cement and sand plastering, homogeneous wall tiles, ceramic tiles, multi purpose granite tile and painting

3B Internal Floor Finishes

Cement rendering, floor hardener, homogeneous tiles, granite and carpet

3C Internal Ceiling Finishes

Cement and sand plastering, brefill premix plaster, asbestos free cement board, gypsum fibrous plastered and painting

3D External Finishes

Cement and sand plastering and acrylic paint

4 Fittings and Furnishing

Prime Cost Sum for fixed and loose

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5 Services 5A Sanitary Appliances

Pedestal and squatting water closet, vanity basin mixer, basin tap, kitchen sink tap, urinal, shower head liquid dispenser, hand dryer, soap dish and toilet roll holder, long bath.

5B Plumbing Installation

a) Mechanical & Electrical for sewerage equipment, sanitary plumbing services b) Cold water services

6 External Works

5.5

6A Site Work

Road, parking and pavior

6B Drainage

Surface water drainage

6C External Services

Water reticulation

6D Ancillary Buildings

Refuse chamber

6E Recreational Facilities

Landscaping works

UNIT SPECIFICATION

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Gross floor Item

Unit

Floor

Ceiling finishes

finishes 1.

No. of

Notes

unit

area (sq. ft)

Room a) Studio

Carpet

Plastered ceiling

60

A standard-sized room with twin bed

300

and an attached bathroom b) Long House 1

Wood

Ceiling Block

22

A standard-sized room with a double or

220

king size bed and attached bathroom c) Long House 2 Wood

Ceiling Block

8

Accommodation is quite the same with

d) Chalet

375

the above types but the different is the size and facilities provided Wood

2.

3.

Lobby

Granite tiles

Ceiling Block Plastered boards with

20

Accommodation with the above types 1

but larger in size Consist of main entrance to hotel,

concealed lighting and

reception, waiting area, information

air conditioning

counter

Restaurant a) Storage

300

2000 Cement

Fairfaced concrete

1

Available to cater 200 customer at one

b) Kitchen Area

rendered

Fairfaced concrete

1

time

c) Dine Area

Ceramic

Suspended plastered

1

tiles

ceiling

Granite tiles

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4.

Tennis court

Cement

5.

Administration

rendered Homogenou

Gypsum board

6.

Office Pub & Lounge

s tiles Homogenou

Gypsum board

2

Tennis Games

1

Administration office for management

1000

staff Available to cater 200 customer at one

2000

s tiles 7.

Parking Bay

Tar

8.

Multi Purpose

Homogenou

Hall

s

Standard

time

Gypsum board

100

Available to 100 vehicle at one time

1

Available to 500 at one time

128 32000

Tiles

5.6

DEVELOPMENT PHASES AND IMPLEMENTATION(tgk cash flow)

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The proposed development is expected to be fully completed over in a period of 24 months. The expected construction progress is spread by the quarter of year period within the years of the development. The stages will be as follows: Year 1

Quarter st

Description

Time Period

Percentage Constructions 10%

1 Qtr

Clearance, Preliminary

Investigation, Site preparation

3 months

2nd Qtr

Construction

Foundation, sewerage system

3 months

12.5%

3 Qtr

Construction

Superstructure ground floor

3 months

16.25%

4th Qtr

Construction

Superstructure 1st Floor

3 months

16.25%

1st Qtr

Construction

Superstructure 2th Floor

3 months

17%

2 Qtr

Construction

Services installation, swimming pool, courts

3 months

8%

3rd Qtr

Construction

Floor, wall and ceiling finishes

3 months

10%

3 months 24mths

10% 100%

rd

2

Type

nd

rd

4 Floor

5.7

final

Accommodation Equipment and Landscaping TOTAL

CONCLUSION The proposed development has been proposed the above concept, design and any suitable idea which can match to the resort requirement and also to fulfill the client’s requirement. By utilizing the design and the concept proposed in this report, the proposed development is believed can achieve the target set by the client. However, all the proposed

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idea

6.0

and

concept

is

not

a

final

decision.

FINANCIAL FEASIBILITY For the purpose of this study, we were instructed by the client to consider the viability of resort development project on the Lot 948, Beserah, Mukim of Sg Karang, District of Kuantan, Pahang Darul Makmur. The following financial studies are based on: a. The adopted concept and land used distribution as formulates in the concept plan b. The implementation programmed

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c. Preliminary estimate on cost and expected on cost and expected revenue d. Some planning assumption relating to the utilization of land and quantity of occupier It is stressed that all financial figure indicated in the following paragraph are preliminary cost and estimate and should be adjusted accordingly when detail information on the land and detail design and infrastructure are made available. An evaluation using Profit Method, investment method, Residual Method of valuation and Discounted Cash flow Approach are prepared based on the Gross Development Value (GDV) and Total Development Cost (TDC) during the development period of 2 years time for the development project.

6.1

PROJECT COST BRIEF A Feasibility Study and various cash flow plans were made for the development to determine the viability of the development

project. (Refer Cash flow) DEVELOPMENT APPRAISAL The development appraisal was made based on the following assumptions: SUMMARY OF ASSUMPTION

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GROSS DEVELOPMENT VALUE (GDV) In accordance to our recommendations, the estimated incomes used in determining potential revenues are: A. Resort

a) Resort rooms b) Restaurant c) Multi Purpose Hall

d) Pub and Lounge e) Shop Rental

6.2

ESTIMATED COST OF DEVELOPMENT (TDC) Based on inquiries with contractors and developers on the prevailing construction cost and similar infrastructure, we have estimated the total cost of the proposed development as follows: 6.2.1

LAND PURCHASED

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Cost of purchasing the development land based on open market price for the development land is between RM 7 per square feet to RM 10 per square feet. The site however has been purchased at RM 8 per sq ft. 6.2.2

CONTRIBUTION TO LOCAL AUTHORITY These are the estimation cost of contribution to the relevant authority. The contribution to the relevant authority is estimated at RM 50,000

6.2.3

PRELIMINARY COST The preliminary works are the initial works that need to be done upon site before any development or construction can be done. These costs are assumed at RM 10,000 per acre.

6.2.4

SITE PREPARATION The site preparation cost includes the cost of site inspection, soil investigation, site clearance and earthwork. These cost is estimated at RM211,500

6.2.5

INFRASTRUCTURE The infrastructure cost includes the cost of construction of roads and drainage, electrical supply, sewerage, water supply and telecommunication. The cost are estimated at RM 698,500

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6.2.6

BUILDING COST Cost of construction of the buildings. The building costs are based on the current cost analysis of construction material per unit. These cover the whole building and external facilities such as multipurpose hall, restaurant, tennis court and swimming pool. The total construction cost is estimated at RM 4,746,600

6.2.7

FURNITURE AND FACILITIES FOR RESORT Cost to cover the furniture and décor facilities of the resort. These costs are including the cost of purchasing the furniture such as chair, table, bedstead, blanket, refrigerator, cabinet, , vase, laundry, lights, TV, air-condition and others. These cost are estimated at RM 1,356,000.

6.2.8

PROFESSIONAL FEES The costs of professional development team including fees payable to Architects, Quantity Surveyors and Engineers. Based upon the scale of fee payable to these professional is about 7% from building cost and 5% of infrastructure works cost

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6.2.9

PROJECT MANAGEMENT FEES The cost of project management is estimated at RM12,000 per month for 24 months

6.2.10 FINANCING COST 1. Bridging Financing - Bridging financing is for the period of construction. The interest rate is 8% per annum. 6.2.11 CONTIGENCIES It is a sum set aside for unforeseen variation in development expenditure due to delay, cost inflation and other risk. Normally the contingency provision is calculated from the total cost incurred in construction period. For the proposed of the project development, we estimated about 5% allocated under this item. 6.2.12 LANDSCAPING The cost of landscaping which includes the soft and hard landscaping for the purpose of beautification are estimated at RM 20,000 per acre.

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6.3

DISCOUNTED CASH FLOW APPROACH In arriving the internal rate of return of the purpose development, we also adopted the Discounted Cash Flow Method where the assumptions made as follows: 1. The development period is assumed to be fully completed at period 2 years.

2. The construction period is assumed to be at 2 years.

6.3.1

ADVANTAGES OF CASH FLOWS APPROACH

6.3.1.1

Taxation and its implication could be built into the appraisal and the total debt outstanding at any point in the development process, total payback period and the date of peak cash outlay can also be shown easily and quite systematically

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6.3.1.2

In the cash flow appraisal, it has allowances for inflation, which involve prediction of the future; it is a controversial subject and does not find favor with some developers. Nevertheless, if a developer wants to examine the effect of the profitability on different approach enables this to be done more accurately.

6.4.1

ESTIMATED PROFIT

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DEVELOPMENT APPRAISAL Based upon development appraisal (refer to Appendix 4), the financial analysis indications are as follows: Gross Development Value (GDV)

RM16,262,591

Total Cost of Development

RM 11,256,452

Estimated Profit

RM 5,006,139

The percentage of profit over Gross Development Value (GDV) is 31% which is higher than the acceptable profit of 15% to 25%. The percentage of profit over Total development Cost (TDC) is 46% which is within the acceptable margin of 20% to 50% of TDC. Financial analysis based on development appraisal indicated the development is viable.

CASHFLOW ANALYSIS The cash flow plan indicates the development is viable. The payback period of capital recoupment is after 14 years (after disposal of property). The internal rate of return for the development is calculated at 14.1377% which is higher than the cost of borrowing.

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Casflow results: Estimated Profit (as at the end of investment period)

:

The cost of borrowing

8% per annum

Internal Rate of Return

6.4.2

:

:

RM 22,483,299 14.1377%

ALTERNATIVE (OPTION 2) As for alternative investment option on the subjected site, we also hereby provide another option for investment consideration. This option no. 2 is distinguished by option no.1 by its design, number of proposed rooms but the investment details framework and analysis are same as option no.2. layout design for this option is attached to appendices. Brief of investment option no 2 are as follows:

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Gross Development Value (GDV)

RM23, 548,122

Total Cost of Development

RM 17,344,525

Estimated Profit

RM 6,203,598

The percentage of profit over Gross Development Value (GDV) is 26% which is a slightly higher than the acceptable profit of 15% to 25%. The percentage of profit over Total development Cost (TDC) is 36% which is within the acceptable margin of 20% to 50% of TDC. Financial analysis based on development appraisal indicated the development is viable.

CASHFLOW ANALYSIS The cash flow plan indicates the development is viable. The payback period of capital recoupment is also after 14 years (after disposal of the property). The internal rate of return for the development is calculated at 13.6526% which is higher than the cost of borrowing. Casflow results: Estimated Profit (as at the end of investment Period)

:

The cost of borrowing

8% per annum

Internal Rate of Return

:

:

RM 30,094,124 13.6526%

Details of cashflow analysis on option no 2 is attached in appendices.

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7.0

CONCLUSION AND RECOMMENDATION Based on our analysis, we are of the opinion that the project is feasible to develop at this time. It is based on the current economic growth that reflected our projected cash flow. From analysis of both options, we can conclude both investments are feasible and viable. However we as the opinion of that option no.1 are a better investment option as compared to investment no.2. This is based on the following point:I. The purchaser (developer) will easily get the end finance and bridging finance from the financial institution.

II. Based on the economic situation at this moment, there is a positive growth and this situation will enhance the confident level among the local investor and even the foreigners to invest in Malaysia.

III. The high purchasing power among the Kuantan resident will ensure the success of our target market.

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IV. The developer’s profit from GDV is 31% and from TDC is 44%. (refer to cash flow) V. Higher Internal Rate of Return (14.1377%) as the borrowing rate just at 8% per annum. And due to the above statement we note that the purposed of the resort is viable and feasible. The development will bring good prospect to the developer in the future and profitable investment for a long term basis. It is advisable to proceed with the development project upon the site.

……………………………. Sr. Abdul Rahman bin Haji Abdul Karim. BEM (UiTM), MISM (M), APEPS Registered Valuer (V109)

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8.0

APPENDICES

Subject Property

Site Plan

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Certified Plan

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Map of Pahang

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25m 15m

Longhouse 2

11m

Longhouse 1 Interesting Place

20m

Lake 15m

Layout Plan for Option 1

Swimming pool

Restaurant

Multipurpose Hall

20m

Tennis Court

Admin office, lobby, Studio, Site of subject property

Chalet

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Deluxe 30m

Basket Ball 72m Ground Floor Lobby

66m Office

Restaurant

30mx100m

180m Tennis Court Chalet

Chalet Kids Pool 45m x 10m

28m Swimming Chalet 28m

Layout Plan for Option 2

10m

Multipurpose hall

First Floor

Pool

Chalet

10m x 25m

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Volley Ball

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