Doan ngoc anh vu grand hotel expansion

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Doan ngoc anh vu grand hotel expansion

  1. 1. VIETNAMESE GERMAN UNIVERSITY URBAN PLANNING & REAL ESTATE MARKETSClass assignment:GRAND HOTEL EXPANSIONAddress: 08 Dong Khoi, Ben Nghe Ward, District 1, Ho Chi Minh City Advisor: Prof. Dr. Karl Kluegel Student: Doan Ngoc Anh Vu Class: UDP2010
  2. 2. CONTENTSI. INTRODUCTION ......................................................................................................................... 3II. METHODOLOGY .................................................................................................................... 3III. BUILDING OVERVIEW/DESCRIPTION............................................................................... 4IV. EVALUATION .......................................................................................................................... 6 1. Design and Image ....................................................................................................................... 6 2. Technical Feasibility .................................................................................................................. 7 3. Traffic......................................................................................................................................... 7 4. Market Analysis ......................................................................................................................... 7 5. Economic Analysis ..................................................................................................................... 8 6. Social impact .............................................................................................................................. 8 7. Environmental friendly.............................................................................................................. 8V. CONCLUSION .............................................................................................................................. 9REFERENCES ......................................................................................................................................10` Page 2
  3. 3. I. INTRODUCTIONNowadays, Vietnam is one of the development countries that have high speed of the real estate.However, the average number of tourist come to Ho Chi Minh City is more than 2 million peryear. To satisfy the demand of tourism, competition with the current real estate and increase theeffect of business, in 2010 the Sai Gon Tourist Company made a decision to expand the GrandHotel such as: install the restaurant at the top floor (equivalent the 20th floor) with the name ofproject is “Grand Hotel expansion”, the existing Grand Hotel was executing up to the 17th floor.To evaluate the effect of the project, the investor has to do more research about the criteria thataffect directly to their project because this is the big project has many elements impact to thesociety as well as the real estate such as: land use, budget, transportation, employment, etc. II. METHODOLOGYTo evaluation a real estate project exactly is required the knowledge of many fields of vision andrequest gather adequate information from many sources such as: Ho Chi Minh City Departmentof Architecture, Ho Chi Minh City Department of Construction and some concern institutionsespecially from the investor. To be able to finish research, all economic parameter such asvacancy rate, rental cost, etc. were retrieved from report of market overview Q1/2011 from CBRichard Ellis Vietnam Company. And every cost to construct building, project period is assumedas every building which is the same capacity was done.There are two main parts of assignment; the first one is individual analysis to chosen projectabout technical feasibility and economic feasibility, the second one is class analysis. Bycollecting fifteen estimating projects, macro economy impacts to Ho Chi Minh City and toVietnam are analyzed by creating criteria. The selected criteria to assess all projects are flexible.Literature reviews, current market reviews for critical comments is mostly used for all criteria.Field observation is also applied for criteria: Design, Traffic, and Social Impact. For criteriaParking capacity and economic analysis, the paper uses some technical calculation forassessment. And finally, each criteria will be ranked from Good to Bad which is representedfrom 1 to 5. Page 3
  4. 4. III. BUILDING OVERVIEW/DESCRIPTIONGrand Hotel is one of the oldest hotels in Ho Chi Minh City since 1930 and completely restoredin 1997, nestled in Saigons scene riverside area and within walking distance to majorcommercial and entertainment addresses, and still retained its French colonial style, provides aperfect base for conducting business or for having completely relaxed vacation.Grand Hotel Saigon will be a five-star hotel in 2011 with 233 rooms categories totally combinedbetween new and old style, Western and Asian restaurants, conference rooms with capacity of upto 700 persons, and the best diversified quality services so as to satisfy every single guest.The Sai Gon Tourist Company got the construction licenses from the Department ofConstruction in 2007 (No.59/GPXD issue 30, March, 2007); the Grand Hotel is located on No.08 Dong Khoi Street, Ben Nghe Ward, District 1, Ho Chi Minh City with 2780m2 and designedby Archetype Co., Ltd.The construction includes these items: • Parking: for 31 cars • Bed room: 133 rooms • High: 20 stories (include 1 mezzanine and 19 floors), 2 underground floors, 1 technical underground floor and 1 technical top floor, the high from ground floor to the peak is 74m. • Total area slab of floor is 17.764 m2 + Technical underground floor 376m2 + Underground floor 1, 2: technical and parking 2x1050m2 + 1st floor: reception and services 897m2 + Mezzanine: services 720m2 + 2nd floor: restaurant and services 867m2 Page 4
  5. 5. + 3rd floor: restaurant and services 856m2 + 4th floor: restaurant, services and office management 968m2 + 5th floor: office for lease, services and office management 646m2 + 6th floor: bedrooms 766m2 + 7th, 9th, 11th, 13th, to 19th floor: bedroom 682m2 + 8th, 10th, 12th, floor: bedroom 686m2 + Top floor: restaurant 968m2 • The construction density is 85% and follow to the standard of TCVNAccording to the forecast, Grand Hotel Saigon will be a five-star hotel in 2011 with 233 roomscategories totally combined between new and old style, Western and Asian restaurants,conference rooms with capacity of up to 700 persons, and the best diversified quality services soas to satisfy every single guest. Figure: Grand Hotel Expansion Page 5
  6. 6. Figure: Location of Grand Hotel IV. EVALUATION 1. Design and ImageThe table A below describes obviously detailed information of land area and design of building.B. Land use feasibilityGross building area m2 2,780.00Open space 897.00 m2Number of story (available for rent) 20.00 storiesTotal area of floor 17,764.00 m2 Page 6
  7. 7. Parking number 31.00 unitsBy observation from the outside, the building was built by brick wall with the colonialarchitecture. The structure and constructing material is modern tendency to attractive the foreignvisitors. Every room has adequate facilities so most of visitors are also satisfied (from thestatistic opinion of visitors in the internet). The Grand Hotel is located at the Sai Gon riverside sothe visitors can enjoy their sightseeing or walk along the pavement of the river to enjoy theatmosphere from the riverScore: 2 2. Technical FeasibilityFrom visual observation and drawings retrieved from the construction company, the building isdesigned with 2 technical floors, it definitely serve and supply mechanic and electricity for thewhole building. On the other hand, the elevation of the Grand Hotel stand directly in front of SaiGon river so that it is easy to use the wind for ventilation.On the contrary, the capacity of parking is only for 31 cars but the total room is 233 so the ownerhas to extra more parking in the future because it almost certainly lacks of the parking within thenext 5 year. Generally, most of hotel in Ho Chi Minh City are also lack of parkingScore: 3 3. TrafficThe building is placed on two way street in center of Ho Chi Minh City. The name of street isDong Khoi and there are high density of traffic and vehicle in this street. However, the wide ofstreet is only 7 meter with two ways so it is very difficult for car go out from the building tooutside.Score: 4 4. Market AnalysisAccording to the situation of current market in Vietnam, the price of gold increases rapidly up to49.000.000VND per tael in the middle of August so the price of construction materials is also Page 7
  8. 8. increase together and it is probably affect to the investors and employment. Moreover, theinterest rate of the banks has gone up to 24% per year so this is the main cause why the investorcan not invest to the real estate projects. In addition, the slow development of business is one ofthe main reasons why many companies stop operation and the investors will lose benefit fromthe office for lease. Furthermore, the situation is also effect to the tourists coming to Vietnamand the profit from room for rent at the Grand Hotel goes down.In generally, more and more construction site is now interruption by plenty of reasons. Theinvestors have to look around the previous project to learn experience from them before make adecision to invest this project. In addition, all most of building include hotel and office for leasehas just built only exploit more than 25% capacity so the stock market of real estate in Vietnamcontinue go down ( the VN Index is always about from 400 to 475)Score: 4 5. Economic AnalysisThe table B shows theoretically economic calculation about project profit.B. Economic FeasibilityConstruction cost for 1 m2 floor 550.00 USDConstruction cost for 1 m2 basement 800.00 USDTotal Construction Cost 10,389,200.00 USDPurchase Price for lot 7,000,000.00 USDProject cost 17,389,200.00 USDRental for room 65.00 USDGross Rental Revenue 5,452,200.00 USDat 100% Occupancy for one yearVacancy Rate 25.00 % 1,336,050.00Operating cost 40.00 % 2,180,880.00Net Operating Income 1,908,270.00Break Even ROR 0.109 Project is economically feasibility if investors require ROR =<0.109% Project is economically not feasibility at 0.12% since Page 8
  9. 9. Score: 3 6. Social impactWhen the Grand Hotel executes the work, it will create the large market for employee such asworkers, engineers, etc within 3 years. Furthermore, when the project finish, it will definitelycreate more than 200 permanent jobs in this building and a lot of employees work at the officesfor lease.On the contrary, the negative impact for society now is supplying too many office and hotel toreal estate market will make unbalance in economy. This is over supply while demand is stilllower than the line. This easily leads to rental price or real estate trading price goes downdramatically.Score: 3 7. Environmental friendlyAccording to the project, the designer only focus on the architectural, functional and technical ofthe building because most of stories is used for bedrooms and restaurants so the buildingprobably use more energy for air conditioners, lights, ect.Score: 4 V. CONCLUSIONThis paper is only analyzed some fields concern to the building by seven criteria. The tablebelow presents the summary results of the analysis. Mark No. Criteria 1 2 3 4 5 Score Good Bad 1 Design & Image X 2 2 Parking Capacity X 3 3 Traffic X 4 4 Market Analysis X 4 5 Economic Analysis X 3 6 Social Impact X 3 7 Environment friendly X 4 TOTAL SCORE 23 Page 9
  10. 10. In conclusion, The Grand Hotel is one of the oldest and famous hotels in Ho Chi Minh City andhas been known by foreign tourists around over the world. As a result, it has to rebuild tocontinue the operation of this famous hotel.From the period the investor invest to the project “The Grand Hotel Expansion” to finish; itcreates a lot of benefit for society and positive impact Ho Chi Minh City. According to thisproject, the investor has to subsidies from the local government and some concern institutionsbecause of the important range of the project.On the other hand, the building has to concentrate on the environment friendly by change thematerial and structure that was used in the other successful projects.REFERENCESDocument: - CBRE Ho Chi Minh City Market View in quarter 2/2011 - The Department of Architecture and Planning - Townsend, M. (2011) Vietnam Real Estate Update and Market Overview; Indigestion in the Property Market. April 4, 2011. - Karl Kluegel (2011), Real Estate Markets and Development handout Page 10

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