Example for Commercial appraisal Club house in MVP colony Vishakapatnam Facilities Residential township Hotel Construction cost Net income Cost benefit ratio Internam rate of return Branding Demand and Supply analysis

1. PROJECT PLANNING AND MANAGMENT
COMMERCIAL APPRISAL
Submitted by:
Saleem – 2160400050
Dileep Kumar – 2160400057
Hari Hara Kumar - 2160400044
Joseph Kumar – 2160300049
Sathish Kumar – 2160400048
Srikanth Kumar - 2160400059
Submitted to :
Mr. Maqbool Ahmed sir

2. CLUB HOUSE IN MVP COLONY
• About city, population,
connectivity,
• economic key drivers
INTRODUCTION ABOUT
THE SITE
• Catchment zones, townships near
by, utilities
SITE ASSESSMENT
• Proposed facilities and site area
breakup
PROPOSED FACILITIES
• Cost of the construction and
benefits of the construction
ECONOMICAL ASPECTS
• NPV
• IRR
FINANCIAL ASPECTS
• Branding strategyBRANDING
• ResultCONCLUSION

3. NEED FOR THE PROJECT
 The main object is to attain general
improvement of the city, construction of houses
for removing slums and improvement of general
sanitary condition to safeguard public health.
 In order to attain these conditions VUDA framed
regulations, committed to provide recreational
and conventional facilities to its residents.
 For undertaking investments on this scale, VUDA
is seeking participation of private investors in this
venture who will contribute financially as well as
in the Operation and Management of its club
facilities.

4. INTRODUCTION
 Visakhapatnam (also known as Vizag) is
the largest city and "Financial Capital" of
the Indian state of Andhra Pradesh.
 The city is the administrative headquarters
of Visakhapatnam district and Eastern Naval
Command.
 Vizag also known as the “City of Destiny” or termed by many as the
“Goa of East Coast” in India is one of the oldest and richest in terms of
its being, culture and heritage.
 Renowned for its tourist spots, industrial growth, Sea trade, Vizag is
considered to be the commercial capital of coastal Andhra Pradesh.
 MVP Colony is an urban neighbourhood in the Indian city
of Visakhapatnam. It is one of the upper-income areas of the
city. The colony is divided into 12 sectors.

5. PROPOSED PROJECT & LOCATION
 Private organisation intends to
develop, maintain and run a
Club with Convention &
Recreation Facility at A.P.G.O
Colony in MVP Colony, situated
beside national highway, 5 KM
from Visakhapatnam central
place.
 The project place is located in the centre of sector 4, offering perfect location
which create and boost the demand for the recreational and conventional
destinations.
 The place where club is proposed is known as sector 4, access to the subject site
is considered favourable as it is close to city core as well Airport hence the location
of the site also makes it quite favourable for hotel, recreation and convention.
 Club will be vital asset for the MVP colony.

6. 16
Towards Chennai
Connectivity and catchment area for the proposed project
Towards srikakulam
Satya sai nagar
Seethamma
dhara
Dwaraka nagar
Akkayya palem
asilmetta
Andhra
pradesh
HB colony
Durga nagar
MVP colony
kailasagiri
Visalakshi
nagar
Lawson bay
colony
siripuram
Railway colony

7. Location Details
Site location Sector4, MVP colony
Total site area 0.8 acres
Land use pattern Recreational
Site morphology
Type of land Plain, non-clayish, non-rocky land
Surface elevation Level
Soil nature Non-clayish (red soil)
Water/sanitation
availability
Yes
Power availability Yes
Site neighbourhood
Immediate vicinity Residential Area
Approach road Road connecting from main road,
National High Way 16
Total Area ofMVP Colony 486.79 acres

8. Connectivity and Linkages
 Visakhapatnam city occupies a strategic position
on the national transport network, which
includes national highway, broad gauge rail
connectivity and air links with other important
cities of the country.
 National Highway 16 passes through the city of
Visakhapatnam, connecting the city Kolkata in West
Bengal and the city Chennai in Tamil Nadu.
 The Visakhapatnam railway station is a well networked link
and connects it to many railheads which fall on the Delhi-
Chennai route. (6km away from selected site)
 The Visakhapatnam airport is well-connected with many
major cities of the country like Delhi, Mumbai, Hyderabad
and Chennai.(15km away from selected site)

9. DEMOGRAPHIC PROFILE
 The urban population of Visakhapatnam
Municipal Limits was approximately
2.036 million in the year 2011.the
population of the MVP colony is 87211 in
the year of 2001 and then it is raised to
104866 in the year of 2011 at a growth
rate of 20%.
0
20000
40000
60000
80000
100000
120000
2001 2011
population,
104866
AxisTitle
population
Source: census of India
ECONOMIC CLASSIFICATION
SEC A
• 50% of the CWEs are in executive positions or
industrialists or businessmen.
• almost the members of the segment are either
graduates or post graduates
SEC B
• majority primarly employed at clercial and few as
businessmen or shoip owners.
SEC C
• majority of the people are employed at clercial or
petty traders or as shop owners.
SEC D & E • majority of the people are unskilled workers

10. Economic Activities and Key Drivers
 The city is fast becoming one of the most important
regional commercial and industrial centres for power,
steel, cement, aluminium and coal industries.
 The city is also home for the wholesale markets of
commodities like textiles, fruits, vegetables, grains,
pharmaceuticals, timber, cattle and electrical goods.
 Metallurgical, chemical, agro based, mechanical and
engineering industries are dominant in both large and
small-scale sectors.
 Cottage industries like handloom, jewellery and wooden products also provide
large scale employment opportunities and also because of the port there is a
huge scope for employment opportunities and attracting the people from rural
areas.

11. PRIMARY SITE ASSESSMENT
Catchment zones
Primary Catchment Zone
 Primary catchment zone will be MVP Colony, Vizag, Andhra Pradesh.
 This colony is developed by Greater Visakhapatnam Municipal Corporation in area
of about 1.97 sq.km.
 As it was located in the A.P.G.O Colony, M.V.P colony high income people’s flow
will be more to be expected.
Secondary Catchment Zone
 Residential and commercial area like Pithapuram colony, MMTC colony, TPT
Colony and other residential areas located neighbouring to this colony.
 Tourists flow will be considered as the Vishakhapatnam was well versed with
tourism spots and the location of the project (Club House) was located at 5Km
from the costal line.

12. Residential / Commercial Township
 There are lots of residential township are located from the distance of 5KM from
proposed place of project. Details of which and distance is as described below
Name of Residential
Area
Distance from Proposed
Project (Km)
Nature
Pithapuram colony 1 Residential
MMTC colony 3 Residential
Seethammadhara 4 Residential
Dwaraka nagar 3.5 Residential, commercial
Beach road 3 Recreational, commercial
R.K Beach 5.3 Recreational, commercial
Andhra university 2 Educational
Infrastructure
Road
 The proposed site has been situated on NH16 is sufficient to
ensure heavy traffic and connectivity with the other part of city
hence proposed project will attract large number of travellers
and users for lodging, restaurant and recreational purposes.

13. Utility Lines
 All utility lines (Electricity, telephone, Cable, Water supply,
sewerage drainage etc) are available at the site. The road
drainage system of the area is also in the planned manner.
The water requirement proposes to have 80lpcd (avg). For hotel
use which will be meet out from the own sources like tube well.
Water Supply norms
 The site area equipped with Fibre optic cables and will
have full access of communications. Extensive network of
cellular phones is also envisaged.
Telecommunication

14. RECOMMENDED FACILITY
Convention/ Banquet
 This facility will focus not only on conventions and the domestic corporate market
for their meeting and conference needs but will also cater to the multi-purpose
local demands for weddings, festivals and other celebrations.
 This convention centre will be used as multi-purpose Conference cum Banquet
hall, with high level of finishes, which would enable seating for 700 people in
theatre style.
 Provisions in facilities program also take into account adequate pre-function
space to support these events.
 Modern day convention facilities are designed and constructed in a manner that
allows multipurpose use.
 For this retractable seating, divisibility, the ability to combine spaces, wireless
systems. Vizag being a tourism, commercial and IT hub of Andhra Pradesh many
conferences and international meeting can be attract to this place. This has been
factored while arriving at the capacities.

15. Hotel
 Hotel with at least 10 rooms / keys be developed. In addition, the hotel should
contain one full-service Restaurants (Specialty / Multi-Cuisine) and a banquet
hall.
Recreation
 The proposed project is located in the centre of residential area hence
recreation activity specially Gym, Spa, Billiards and Swimming Pool etc will be
most suitable.
 This place is surrounding by many residential, commercial areas and tourism
places hence it will be attractive place for recreational activity.
 Reception/ Lobby
 Banquet Hall
 Restaurant
 Swimming Pool
 Party lawn along pool
 Basketball Court
 Commercial Place
 Conference Hall
 Gym, Spa, Billiards
 Party Hall
Proposed Project Components:

16. CONSTRUCTION COST
Category Area Rate Units
Construction
Cost
Furniture
cost
Land cost 34848 3000 Rs/Sq.ft 1045.44 0
Open Parking 3000 1400 Rs/Sq.ft. 42.00 3.00
Convention centre 15000 900 Rs/Sq.ft. 135.00 5.00
Swimming pool 1100 2,000 Rs/Sq.ft. 22.00 0
Basket Ball 1250 400 Rs/Sq.ft. 5.00 0.10
Hotel 1750 2200 Rs/Sq.ft. 38.50 3.00
Commercial building 1000 1,500 Rs/Sq.ft. 15.00 1.00
landscaping 3048 700 Rs/Sq.ft. 21.33 0
Party Lawn along pool 2200 400 Rs/Sq.ft. 8.80 0.05
Utility 6500 800 Rs/Sq.ft. 52.00 0
Boundary wall 200 800 Rs/m 1.60 0
Total cost 1386.68 12.15
Miscellaneous Cost 5% 69.33 0.61
Final cost 1456.00980 12.76 1468.77
*(values in lakhs)

17. EMPLOYMENT DETAILS
Convention
hall 1
Party
lawn
Sports
zone
Commercial
place Conference hall Billiards
Construction 150 100 30 15 50 50 20
O & M 10 60 7 3 2 2 3
Note: 1= Banquet Hall, Restaurant, Hotel, Gym, Spa
FINANCIAL FEASIBILITY
 First 2 years i.e., 2016-18 is taken as construction period
 We assume that yearly income has been increased by 1% for 30 years
*(Values INR in lakhs)

18. Net income
 We assume that in the total cost 50% is for operating and maintaining purpose &
20% is for savings & remaining 30% is taken as profit
operating and maintaining cost = 0.5*revenue
Total cost = revenue + operating and maintaining cost
Net income = revenue – total cost
Savings = 0.2* revenue
Profit = 0.3* revenue
*(Values INR in lakhs)

19. NPV
We assume that discounting factor is 10%.
NPV = discounting factor * net income
For the year of 2045-46 (30th year) NPV =12.5 lakhs
For 30 years the NPV value is positive i.e., 99.28 lakhs
*(Values INR in lakhs)
Ct = net cash inflow during
the period t
Co = total initial investment costs
r = discount rate, and
t = number of time periods
OR

20. *(Values INR in lakhs)

21.  As NPV of the project is positive, it shows the project is acceptable and viable at
that location to the estimated expenditure and revenue.
 The NPV of this project is 99.28 lakhs is the absolute value, internal rate of
return is not available.
COST-BENEFIT RATIO
𝐶𝐵𝑅 =
Present Value of Benefits
Present value of Cost
𝐶𝐵𝑅 =
3869.88
1468.77
= 2.63
The BCR of the project being more than one, means that the investment in the project is
worthwhile.
INTERNAL RATE OF RETURN
𝐼𝑅𝑅
= 𝑙𝑜𝑤𝑒𝑟 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒 + 𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑏𝑒𝑡𝑤𝑒𝑒𝑛 𝑡𝑤𝑜 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒𝑠
∗
𝑁𝑃𝑉 𝑎𝑡 𝑙𝑜𝑤𝑒𝑟 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡
𝑑𝑖𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒 𝑏𝑒𝑡𝑤𝑒𝑒𝑛 𝑁𝑃𝑉 𝑜𝑓 𝑡𝑤𝑜 𝑑𝑖𝑠𝑐𝑜𝑢𝑛𝑡 𝑟𝑎𝑡𝑒𝑠𝑓𝑓𝑒𝑟𝑒𝑛𝑐𝑒
𝐼𝑅𝑅 = 10 + 11 − 10 ∗
99.28
99.28 − −17.93
= 9.32%
for this project the NPV would become zero if the internal rate of return is 9.32%.
Thus It is evident that if the IRR or the discounting rate is less than 9.32s% , till then
the project is financially
*(Values INR in lacs)

22. Branding:
Why?
branding strategy helps establish a product within
the market and to build a brand that will grow and
mature.
Depends on?
Need of branding is depends on the availability and
need of the products and services in that area.
How you find?
Based on the demand and supply, desires and need
of the people.

23. How MVP is suitable?
• In MVP colony the hotels and function halls
are very small with low ratings and prices are
also high.
• There is no such recreational facilities.
• The majority of the residents are HIG.
• It is located nearer to the A.P.G.O colony.
• Well connected with road network easily
accessible.

24. Demand and supply analysis:
Hotel name room rate
ROYAL FORT HOTEL 3008
PALM BEACH 3760
Hotel Budhil Park 2381
SHERATON
VISAKHAPATNAM 5900
Function halls Rate/day
Padmasree Function Hall 80000
ushodaya function hall 125000
Vamsi Function Halls 90000
52000
54000
56000
58000
60000
62000
64000
66000
2013 2014
57476
65272
foreign tourists
6640000
6660000
6680000
6700000
6720000
6740000
6760000
6780000
6800000
2013 2014
67006
75
67827
84
domestic tourists
List of available function halls in the MVP colony
List of available hotels in the MVP colony
tourist inflow is very high in the vizag city because of its tourist attractions.
Many foreigners are also coming to the city and they are searching for a facility
where can feel free and enjoy the services.

25. Branding strategy
Strategies are
 Strong Online Presence (and a Great Search Ranking!)
 Solid Marketing
 Deal Sites
 Advertisements and hoardings

26. 1. Strong Online Presence (and a
Great Search Ranking!)
• In this technological world everyone is
depending on the smart phones for
everything.in order to get noticed by people
we have maintain good online presence.

27. Solid Marketing
• Social Media refers to
online based communities
through web sites like
Twitter, Facebook, Pinterest
and LinkedIn, as well as
other participatory online
communities. Online
reviews are a major part of
most restaurants digital
presence. Newsletters and
promotional emails.

28. Deal Sites
• Tie up with the online booking sites like
goibibo, Oyo, make my trip etc...

29. Advertisements and hoardings
• Putting attractive hoardings at major junctions
where people can see it.so that by mouth talk
only it’ll become popular.

30. Maintenance
• Once it gets the fame
we have to maintain
the standards and
quality then
automatically by word
of mouth only we can
brand our project.

31. Conclusion:
• Based on the cost benefit ratio (i.e. >1),NPV(is
positive), IRR(we can support that this project
is viable in MVP colony.

32. Any queries????