Snow Lodge 2

THE COMPLEX

Five-star SNOW LODGE II GOLF & SKI RESIDENCE is designed to be a complex and a holiday place – an extension of SNOW LODGE I HOUSING ESTATE. It is situated near ski resort Bansko and the balneology center in the village of Banya, on the international golf playground with 18 holes. The luxury apartment building is designed in the typical architectural style of Bansko and will be built by natural materials such as stone and wood. The Old Bulgarian architectural traditions will be reproduced therein combined with the modern requirements for privacy, easy access and services.
The complex is situated in accordance with the closeness of the mounted and is located next to the entrance of the golf playground. Each apartment has magnificent panoramic view to the awesome peaks, the ski tracks and the golf playground.

THE INVESTMENT AND THE RETURN

What is the size of the investment – 1 038 400 Euro. It is calculated by multiplying the price of 200 Euro/sq. m. from the total built area (200 x 5192).

For this money the investor buys:
· The land plot – 2992 sq. m.
· the architectural plans
· all the documentation for the project including the construction permit

Is the project cheap or expensive – to receive an answer of this question an attention should be paid on the following information:
· The average price of 1 sq. m. of regulated land which is right next to the golf field is approximately 120 – 160 Euro depending on the communications and the technical indicators. This means that if we take an average price of 140 Euro/ sq. m., only the land plot of Snow Lodge II is 140 x 2992 = 418 880 Euro.
· The average price in Bulgaria for an architect fee to prepare an architectural plan is 15 Euro/sq. m. which means that the architectural projects of Snow Lodge II cost 15 x 5192 = 77 880 Euro
· The preparation of all the documents and the time, spent for it, is very hard to be evaluated. Anyway it costs a lot of money.
· All of these things show that at least 496 760 Euro have been spent until now. Without calculating the value of the preparation and time.
· Taking into account the above mentioned, the size of the real investment should be something like 500 000 Euro.
The investment return – here we have two aspects

· HOW FAST – the company has another project, called Snow Lodge I, which is located on the other side of the golf playfield. The parameters of Snow Lodge I and II are very similar, so we can make a practical comparison. The first project has been started before a little bit more then one year and at this moment the finishing touches are executed. This means that similar project could be completed fore one and a half year. In the case of Snow Lodge II the situation is better because the availability of all the documentation which straightly decreases the completion period. An additional and very important information is that all the apartments in Snow Lodge I have been sold for two and a half months!

· HOW MUCH – after a research among the similar properties, the following result has been found – the average price of similar property, along with the furniture is about 1100 – 1400 Euro/sq. m. The price depends on the property location, the exposure, the property’s purpose (apartment or shop), etc. That means, if we take an average price of 1250 Euro/sq. m. and multiply it by the minimum total built area of 5192, we shall calculate the gross profit of 6 490 000 Euro.

The expenses are:
- the initial investment of 1 038 400 Euro;
- the construction costs – in Bulgaria the average price for constructing and furnishing 1 sq. m. of similar property is approximately 550 Euro. This price includes everything. This means that the investor will need the sum of about 550 x 5192 = 2 855 600 Euro to complete the construction.
The net profit calculation:
- gross profit – 6 490 000 Euro;
- initial investment – 1 038 400 Euro
- construction costs – 2 855 600 Euro
- corporate tax – this tax in Bulgaria is 10% (one of the lowest in the world). It is calculated over the sum which is the result of the gross profit minus the expenses (6 490 000 – 1 038 400 – 2 855 600). As seen, the result is 2 596 000. Then we apply the 10% tax which gave us the final size of 259 600 Euro;

The final result is 2 336 400 Euro approximate net profit

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