This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 1/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
247925/01/AA - 22 May 2008/ D:\Emerald Park.doc/Z.K
Radhe Infrastructure & Projects (India) Ltd.
Chunibhai Chambers
Behind City Gold Cinema,
Ashram Road
Ahmedabad 380 006
Techno Commercial Feasibility
For Residential Township
Project - Emerald Park
May 2008
Mott MacDonald India501, Sakar - II, Near Ellisbridge
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
3247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
Techno Commercial Feasibility
For Residential Township
Project - Emerald Park
This document has been prepared for the titled project or named part thereof and should not be relied upon or used for any
other project without an independent check being carried out as to its suitability and prior written authority of Mott
MacDonald being obtained. Mott MacDonald accepts no responsibility or liability for the consequence of this document
being used for a purpose other than the purposes for which it was commissioned. Any person using or relying on thedocument for such other purpose agrees, and will by such use or reliance be taken to confirm his agreement to indemnify
Mott MacDonald for all loss or damage resulting therefrom. Mott MacDonald accepts no responsibility or liability for this
document to any party other than the person by whom it was commissioned.
To the extent that this report is based on information supplied by other parties, Mott MacDonald accepts no liability for any
loss or damage suffered by the client, whether contractual or tortious, stemming from any conclusions based on data
supplied by parties other than Mott MacDonald and used by Mott MacDonald in preparing this report.
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 4/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
4247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
List of Contents Page
Chapters and Appendices
1 Introduction 6 1.1 The Project 6
1.2 Scope of Work 7
1.3 Approach & Methodology 9
2 Brief Profile 11
2.1 About the Client 11
2.1.1 Projects 11
2.2 About the Consultant 16
3 Industry Analysis 19
3.1 Indian Real Estate Market Overview 19
3.1.1 Growth Drivers 20
3.2 Indian Housing Sector Overview 21
3.2.1 Growth Drivers 22
3.2.2 Demand Supply Analysis 26
3.3 Government Initiatives 30
4 Ahmedabad Market Assessment 31
4.1 City Overview 31
4.2 Residential Realty in Ahmedabad 32 4.2.1 Major Growth Drivers 33
4.3 Major Players in Ahmedabad 34
4.4 Luxury Homes 47
5 Emerald Park 49
6 Financial Aspects 51
6.1 Introduction 51
6.2 Basis and Assumptions 51
6.2.1 Sales Distribution Pattern 51
6.3 Project Cost 51
6.3.1 Land and Land Development 52
6.3.2 Utilities 52
6.3.3 Preliminary and Pre – Operative Expenses 53
6.3.4 Provisions for Contingences 53
6.3.5 Summary of Fixed Capital Cost 54
6.4 Sources of Finance 54
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 5/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
5247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
Figure 2.3: Tirthbhumi 13 Figure 2.4: Tulsi 14 Figure 2.5: Ganesh Plaza 14 Figure 2.6: Abhinav Arcade 15 Figure 3.1: Population Growth Comparison 22 Figure 3.2: Major Contributors in World GDP 23 Figure 3.3: Rising Urbanization in India 25 Figure 3.4: Increasing shortage of housing in India 26 Figure 3.5: Housing Finance Growth Rates for past 5 years 27 Figure 3.6: Demand Drivers and Constraints 29 Figure 5.1: Emerald Park Location 49
List of Tables
Table 2.1: Radhe’s Prominent Projects 12 Table 4.1: On going major residential projects in Ahmedabad 45 Table 6.1: Sales distribution Pattern of Units 51 Table 6.2: Sales Distribution Pattern of Plots 51 Table 6.3: Land and Land Development Cost Estimates 52 Table 6.4: Utilities 53 Table 6.5: Preliminary & Pre-operative Expenses 53 Table 6.6: Provisions for Contingencies 53
Table 6.7: Summary of Fixed Cost Estimates 54 Table 6.8: Means of Finance 54
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 6/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
6247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
1 Introduction
Radhe Infrastructure and Projects (India) Ltd., hereafter referred to as RIPL or the Client,
is an Ahmedabad based construction and development company established by Mr.
Chunibhai C. Patel, an industry veteran of over 50 years. RIPL aimed at providing
impeccable services in the field of construction and development of both residential
properties and commercial complexes.
In keeping with its objectives and business goals, RIPL is coming up a residential township
in Ahmedabad and has approached Mott MacDonald to conduct the techno-commercial
feasibility for the same. The report will not only serve as a bankable document for the
purpose of procuring loan, but it will also enable RIPL to attain a better understanding of
the current national and local real estate scenario.
1.1 The Project
Emerald Park is the latest offering from Radhe in the residential segment. It is a new age
residential township on the outskirts of Ahmedabad. Since the client has already acquired
land for the project and also begun preliminary construction on the site, it is apparent
they are quite confident about the feasibility of the project. They however, would like to
have a well articulated and more concrete assessment of the market as well as the
financials of the project. With regards to this they have approached Mott Macdonald to
carry out a detailed techno-economic and market assessment of the township project to
validate their views on it.
Emerald Park – as the name suggests is designed to be a lush green township with
designer landscaping in each plot surrounded by trees to give the residents the feel of
living in the lap of nature. It also offers all modern amenities and luxuries that one can
desire. In all it will be an enrich experience to live in such this township.
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 7/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
7247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
Figure 1.1: Emerald Park Layout
1.2 Scope of Work
The basic objective of this study is to validate and if possible to strengthen / consolidate
the various premises, assumptions and basis considered in the proposed Township Project.
The study would encompass a macro view of the housing market and its key components
like the raw materials market, housing demand and the competitive scenario. It will be
followed by a detailed analysis of the micro market and supported by strategic analysissuch as the Five Force Model. Study would also attempt to look broadly at various techno-
commercial aspects of the proposed venture like appropriateness of technology
machineries and various facilities considered for the project, appropriateness of project
cost and financial projections.
Based on the brief discussions with client, consultants have devised following scope of
work:
(i) Assessment of proposed Township from the Market Angle
The assessment of housing market, various markets related factors and assumptions / basis
considered for market projections would be carried out primarily through desk research
and limited field research. Information collated through secondary research would be
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 8/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
8247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
reviewed and analyzed to assess the overall market attractiveness (i.e. Potential Market
and Competition Analysis). Information will be accumulated from diverse sources, such as
books, newspapers, trade journals, white papers, industry portals, government agencies,
real estate brokers, industry news and developments. Subsequently consultants would
carry out a SWOT analysis with a view to conclude overall prospects for the proposed
Township projects.
(ii) Assessment of Appropriateness of facilities proposed to be acquired / built
Consultants shall evaluate the appropriateness of the project from technical angle, i.e.
contemporariness of the technology to be used for construction & facilities proposed to be
built, credentials of the suppliers / contractors, appropriateness in terms of operating &maintenance ease, appropriateness in terms of capital cost and operating costs.
(iii) Assessment of Risk-Return profile
The assessment of risk-return profile of the proposed township project basically involves
assessment of overall financial viability of the project followed by assessment of sensitivity
/ vulnerability / sustainability of the project under adverse circumstance, i.e. Decline in
Housing demand, Construction cost escalation, Competition, etc.
The financial viability exercise by consultants would include: Assessment of
appropriateness of Project Cost, Occupancy Levels, Revenue estimates, Financial Analysis.
Consultants would assess / appraise the all projections considering:
Realistic Occupancy Pattern
Realistic price realization estimated on the basis of current housing scenario and
realty prices.
The financial analysis carried out by consultants would include following analysis /
statement as desired by most of the financial Institutions:
Detailed Project Cost
8/6/2019 Emerald Park
http://slidepdf.com/reader/full/emerald-park 9/60
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
9247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
Means of Finance
Estimated Revenue
Profitability analysis
Projected cash flow and balance sheet
Suggested means of finance
Estimates of base indicators for: ROI, ROE, BEP, IRR, DSCR Etc.
1.3 Approach & Methodology
The consultants have adopted a research based approach during the course of the
assignment. The IMM team undertook extensive secondary research to collect
information. The sources used in the secondary research were primarily:
Information available with the Company
Published information from Government Agencies
Sector Reports
Trade Information from Associations
In house database of Consultants
Interaction with technology suppliers
Interaction with end users
Along with the secondary research a local level primary survey was also undertaken,
wherein the major builders and developers of Ahmedabad were contacted. The findings of
the primary survey were used as indicative of the Ahmedabad market.
A team from IMM also interacted with the key Management, Manufacturing & Project
personnel. The following report is based on the information collected from various
sources indicated above and Client meetings. The approach followed by IMM in preparing
the following report is as depicted in the following figure.
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
11247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
2 Brief Profile
2.1 About the Client
The journey for RIPL began in 1974 when M/s Jash Development Corporation wasfounded in partnership with Mr. Praful C. Patel who has 37 years of industry experience
behind him. This was followed by the formation of a string of other establishments; M/s
Radhe Construction in 1990, M/s Radhe Organizers, M/s Radhe Real Estate Developers,
M/s Radhe Associates, M/s Radhe Consultancy and M/s Radhe Developers India Ltd.,
culminating in the formation of RIPL.
RIPL has since its inception strived to provide innovative and elegant residential
properties and urbane yet utilitarian commercial buildings. Leading and guiding RIPL in
its endeavour is Mr. Praful Patel, the founder and chairman of the group and the dynamic
Managing Director of the company, Mr. Ashish Patel. With more than 17 years of
construction experience and his vision, Mr Ashish Patel plans to take RIPL to greater
heights.
Mr. Alok Vaidya, Mr. Nirav Desai and Mr. Prakash Shah are the other competent
members of the Board of Directors of RIPL and have made substantial contributions in the
success of RIPL. The group also boasts of a pool of young and self-driven professionals
who uphold the ideals of RIPL and ensure that RIPL is synonymous with quality
craftsmanship and expertise.
2.1.1 Projects
Radhe has completed a variety of residential and commercial projects in Ahmedabad.
Each project has been a thoughtfully conceived venture providing the best of amenities
and facilities. The execution of each project has been meticulous with a constant
endeavour to ensure that the edifice fulfils every possible requirement and goes beyond it.
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
18247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
(iv) Infrastructure
One of the key strengths of IMM lies in large-scale integrated urban infrastructure
development, encompassing water supply, drainage, solid waste, roads, sanitation and
community buildings etc. Here our services range from planning and advisory assistance
to detailed engineering and construction management.
(v) Industry
IMM skills and experience have earned it a leading reputation – especially in chemicals,
textiles, oil and gas, food processing and life sciences, as well as bulk drugs,
pharmaceuticals and biotechnology. IMM is known particularly for its expertise in process
engineering and licensing for specialty chemical production based on laboratory/pilot
plant know-how developed by R&D centres.
(vi) Buildings
IMM’s business covers all sectors from commercial and leisure to industry, education and
healthcare. IMM provides the full range of architectural, structural, mechanical and
electrical design skills, along with planning and project management expertise. Buildingservices are a special capability, notably building management systems, vertical
transportation, telecommunications and security.
(vii) HVAC
Providing turnkey packages in heating, ventilation, air-conditioning and refrigeration is
also IMM’s’ forte – IMM’s’ track record includes systems for auditoriums, public buildings,
industrial facilities, hospitals and research laboratories.
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
31247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
4 Ahmedabad Market Assessment
4.1 City Overview
Ahmedabad is the largest city and the commercial capital of the state of Gujarat, which is
the western most state of India. It is also one of the most prosperous states in the country
whose residents are well known for the entrepreneurial skills and purchasing power. It is
also home to the largest investor base in the country contributing 14 % of the total stock
exchanges of India. It is one of the leading industrialized and urbanized states of the
country and has the highest number of SEZs setting up operations there.
Ahmedabad has a population of roughly 5.6 million and is expected to reach 10 million by
2025. In a state which ranks third in the country, around 37%, in terms of urbanization,
Ahmedabad accounts for 80% of the urban population of the state. It has a strong
expatriate connection, with many NRIs hailing from the city, popularly referred to as
NRGs – Non Residential Gujaratis. Ahmedabad is also the only 'AA' graded city of Gujarat
having 30.97 per cent share of total MPV (Market Potential Value) of the state of Gujarat
and ranked seventh highest among 784 cities in India. The total market potential value of
the city is 220.63 with Greater Mumbai, the city with maximum market potential,indexed at 1000. Ahmedabad enjoys an uninterrupted power supply that is a unique
experience among Indian cities including those in tier I
The major industries driving the growth of the city are textiles, chemicals, Pharma,
engineering ancillaries and recently IT/ITES. The big industries based out of Ahmedabad
include Pharma firms such as Zydus Cadila, Torrent Pharma, Core Healthcare; Chemical
firms such as the Nirma Group; the Adani Group, a leading trading and infrastructure
development; textile companies such as Arvind Mills, Reliance Textiles and Ashima
Industries. Ahmedabad is widely known as the denim capital of the country and produces
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
36247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
construction, earth-quake proof design and offering the best in contemporary
living.
Amrashirish (2006) is also a luxury residential project having 378 sq yd of
construction, having all the modern amenities and constructed with a basement,
ground floor and first floor.
(ii) Sterling Greenwoods Ltd.:
Sterling Greenwoods is one of Ahmedabad’s leading real estate developers. Established in
1965, group is credited with 100% delivery record in it’s over 40 years of operation. It has
established numerous projects for diversified customer groups – apartments, commercial
complexes, bungalows, row-houses, tenaments, residential plots, clubs & resorts, etc.
Some of its successful projects include bungalow plot schemes like Sterling Park, Sunrise
Park, and Vishrut, Greenwoods residential plots, Greenwoods farm plots, Greenwoods
Sarovar I and Greenwoods Farms, Thol.
Projects:
Greenwoods, Thol is a scheme of plots nearby the famous Thol Lake, which is
famous for its scenic beauty and a calm atmosphere away from the hustle bustle of the city. It is just 15 minutes drive from S.G. highway, 10 minutes from 200’ wide
Sardar Patel Ring Road and only 3 Kms from Khatraj Chokdi (Arvind mills) which
makes this heavenly place a well connected site to the city. Plots of around 1200
sq. yds are being offered on first come first basis at a very reasonable price near this
famous bird sanctuary.
(iii) Shivalik Projects:
Shivalik Projects is a prominent player and among the top five in the city in terms of
development of residential townships as well as commercial buildings and complexes. It
has around 19 projects under its name currently in the city. It has been certified as an ISO
9001:2000 company by Bureau Veritas. It envisages expansion in the cities of state and
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
38247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
(v) Agarwal Group of Companies:
Agarwal group of companies was established three decades back and today is among the
reputed Building and Developer Company in Mumbai. Agarwal group is a professionally
managed company with its operations and group companies in Hyderabad, Mumbai andAhmedabad. The company uses high quality construction materials, ensures timely
completion of projects, bears clear titles, and follows transparent documentation. This
makes it a professionally driven company.
Projects:
Kadambari – 1 at Rancharda near Saumya 2 and Tulip, has a farm house concept
and is providing a guest house for the customers, which is fully furnished and
having all the facilities. The location of the residential project is such that there is a
school, a hospital and a dental college nearby. It offers the facilities like club house,
road side and inside plantations, common overhead tank and water supply facility
till the plot. The project is approved by two banks namely ICICI bank and IDBI
bank for providing loans to the customers.
Kanakdhara Villas near the AUDA ring road, Nandol, is a residential villas project.
It is quite near to S.G.Highway (2.5 km) and there are many facilities in the
vicinity like school, shopping centres, bank, temple etc. Common facilities
provided include RCC Road, Street Light, 24 Hours Water, 24 Hours Electricity,
Drainage, Children Park, Senior Citizen Corner, Lush Green Garden with Fountain
& Landscaping and Multifunction Club House. Kanakdhara Villas is also approved
by the above said two banks for providing loans to the customers.
(vi) N G Group (N G Developers Pvt Ltd)
N G Group’s Gallops mall was the first mall in Ahmedabad, which caught great attention.
Others joined the rally and the city is now witnessing more and more malls coming up. N
G Group’s projects include Gallops mall, Ashwavilla, Ashwaraj – II and Hi City.
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
39247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
(vii) Safal Group
Safal Group was established in 1995, focussing on innovations, quality, and closeness to
nature. It has constructed commercial, residential, plotted lands, homes on over 16.28
million sq feet of land in and around Ahmedabad. Its commercial projects total to 14 with1.9 million sq feet, residential projects total up to 13 with 2.16 million sq feet, plotted
development total 6 with 4.60 million sq ft, and the upcoming projects are 4 in number
adding up 7.6 million sq feet.
Their first project was launched in 1995, which was a residential project name
“Sakanksh”. Later they started estate maintenance services for creating industry
differentiation. First of its kind for children centric design residential project was
launched by Safal by the name of Safal Parivesh. Safal group is diverse in executing the
types of projects. Safal has also built a school for the TATA group in Kutch during the
earth quake. It has also constructed a business park for the corporate.
Projects:
The current project of Safal Group is the Safal Vihaan near Eklavya School,
Sanathal, constructed over 1,00,000 sq yds and comprising 91 units. All internal
RCC roads, power back-up for common amenities, Mangalore ties on slopping
roofs, 3 phase power supply, etc.
(viii) Ganesh Housing Corporation Ltd.:
Ganesh Housing Corporation was established four decades back and since then it has been
in the development of residential property only. The group has constructed over 16
million sq feet of residential space till now. The company is an ISO 9001:2000 certified by
Intertek, USA. The total assets owned by the group are about Rs. 33000 million.
Projects:
Ganesh Housing has built several projects namely Ratnam – an apartment of 216
flats with super built-up area of over 1, 96,000 sq feet.
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
42247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
(xi) Navratna Group:
Gulmohar bungalows, Aniket building, Ankur and Arjun farm houses, Amaltas
bungalows, akashneem bungalows and Upvan apartments are the ones that are built by
the Navratna Group via initially undertaking contracts and by which the group startedoperations in Ahmedabad. Thereafter it ventured into developing its own residential
schemes by launching Kaivalya comprising 16 luxurious flats. This was followed by
Kadamb, Kanishka, Kaushambi, Karma, and Kaivanna.
Projects:
Kalhaar is the recent project of Navratna Group which is a scheme of 181
bungalows near Thaltej area. It spreads over 250,000 sq yards and the work is
already in progress. 50 bungalows of it have already been booked and this gives an
approximation of the worth of project to be 4500 lakh rupees.
(xii) Shaligram Buildcon Pvt. Ltd.:
Shaligram Buildcon Pvt. Ltd has completed years of operation in constructing luxurious
residential bungalows and other residential properties. It has almost 10000 satisfied
customers in the market. Shaligram too has pursued the policy of no media publicity and
promotes each project by invitation only. Shaligram has been selective about the clienteleas they prohibit bringing and eating of non-vegetarian items inside the premises of all
their schemes. They are developing residential schemes of independent luxurious and
twin bungalows in the areas of Thaltej and New Bopal. Shaligram-I and Shaligram-II in
Thaltej and Shyam Villa-I and Shyam Villa-II in Bopal are the examples of fastest booking
record. Currently there are no ongoing projects of Shaligram Buildcon.
(xiii)
Shree Ami Infrastructure:Shree Ami Infrastructure was established in the early 1960s. Its name is taken amongst the
first organised builders of modern Ahmedabad like first high rise building – Royal
Apartments (Khanpur), introduction of first twin bungalow concept in the city by
Techno Commercial Feasibility Mott MacDonald India
For Residential Township Radhe Infrastructure & Projects (India) Ltd.
Project - Emerald Park
45247925/01/AA - 22 May 2008/of 59D:\Emerald Park.doc/Z.K
(xvii) Shree Parshwanath Corporation:
Shree Parshwanath Corporation has been in the realty business since past 40 years and has
completed 120 projects, with 1, 07, 00,000 sq ft of built up spaces and 2,60,00,000 sq ft of
land development. Its projects include integrated townships, utilitarian homes, and giantinfrastructure. Parshwanath has completed residential projects like New Amar Park and
Parshwanath Raj Villas.
Projects:
Parshwanath Metrocity, located near New C.G. Road in Chandkheda is in the
vicinity of the international cricket stadium and engineering college.
Their upcoming projects are Parshwanath Mega City, Parshwanath Homes, and
Parshwanath Smruti.
Table 4.1: On going major residential projects in Ahmedabad
Builder Current Project Project typeScheme
typesArea
Saumya
Construction Pvt
Ltd
Sterling
Greenwoods Ltd
Greenwoods,
Thol
Residential
Property
Plot Schemeapprox 1200
sq yardsShivalik Projects
Shrinand Nagar
V, Vejalpur
Residential
complex 2-3 BHK
980-1150 sq
ft
Shukan Villas,
Makarba Road
Luxurious
residencyVillas
Bakeri Engineering
& Infrastructure
Ltd. Sulay Row
houses, Makarba
Road
Luxurious
residencyRow houses
Kadambari - 1 Residential Units Farm HouseAgarwal Group of