SPEEDWELL REAL ESTATE DEVELOPMENT

Didier Balcaen Jan Demeyere

OFFICES
MIXED – RETAIL / RESIDENTIAL
MIXED – OFFICES / RESIDENTIAL
RESIDENTIAL
TRIAMA - RESIDENTIAL
17.000 m2 / 15 MIO € / 210 APARTMENTS / BUCHAREST / ROMANIA
What is real estate development?
A financial product = bonds, shares/stockmarket

with direct impact upon its environment!

 TRIAMA - BUSINESS PLAN
10-Feb-17
# Description m², €, % €/m², % Phase 1 Phase 2 Phase 3 Total

Feasibility Land surface

Built surface
5,687

16,811 2.96
5,687 5,687

16,811
Apartments m2 16,811 5,648 5,482 5,681 16,811
Apartments # 214 69 76 69 214
Aboveground parking 10 4% 10 10
Underground parking 238 96% 94 72 72 238
Share in built surface (excl. parking) 33.60% 32.61% 33.79% 100.00%

Land Cost 2,863,405 2,863,405

1 Purchase price 5,687 475.0 2,701,325 2,701,325
2 Purchase costs (legal, notary, DD) 3.00% 81,040 81,040
3 Purchase fee 3.00% 81,040 81,040

 ROI: 20%
Utilities and Public Road connection Costs 290,000 290,000
4 Power connection, relocation cost 200,000 1.0 200,000 200,000
5 Gas connection, relocation cost 25,000 1.0 25,000 25,000
6 Water connection, relocation cost 25,000 1.0 25,000 25,000
7 Sewage and Drainage connection 35,000 1.0 35,000 35,000
8 Datacommunication connection 5,000 1.0 5,000 5,000

On-site exterior works Costs 61,839 79,906 141,745

9 Demolition 30,000 1.0 15,000 15,000 30,000

 ROE (leverage): 57%

10 Roads and Parking infrastructure (aboveground)
1,571.0 55.0 29,030 57,375 86,405
11 Greenery/landscaping 1,134 10.0 3,810 7,530 11,340
12 Fencing 400 35.0 14,000 14,000

Main Building Costs 2,684,411 3,035,274 2,100,865 7,820,550

13 Underground Parking -1 6,415 250.0 595,750 1,008,000 1,603,750
14 Shell&core 16,811 250.0 1,412,000 1,370,500 1,420,250 4,202,750
15 Finishing apartment 13,427 150.0 676,661 656,774 680,615 2,014,050

16 Contingency 5% 151,813 155,759 105,043 412,615

 IRR
Total Construction 645 3,188,063 3,270,938 2,205,908 8,664,910

Financial Costs 93,438 86,250 57,500 237,188

17 Upfront fee bank loan 0.50% 16,250 15,000 10,000 41,250
18 Interests during construction 3.75% 60,938 56,250 37,500 154,688

• 3 years: 19% pa
19 Bank supervision 0.50% 16,250 15,000 10,000 41,250

Soft Costs 1,096,319 538,484 530,556 2,165,360

20 Conceptual architect 8,664,910 4.00% 207,958 69,319 69,319 346,596

5 years: 11% pa
21 Local architect & engineers 8,664,910 2.00% 103,979 34,660 34,660 173,298

• 22
23
24
Technical Inspector, studies, expertises,
Development Management
8,664,910
verifiers
9,705,285
Approvals and Taxes, ISC, Order of8,664,910
Architects, BP tax,
1.50%
1.00%
6.00%
land tax
29,112
349,390
47,821
28,256
116,463
49,064
29,282
116,463
33,089
86,649
582,317
129,974
25 Marketing + sales office + plan review by sales team
130,000 100,000 15,000 15,000 130,000
26 Brokerage fees residential 3.00% 179,392 168,338 173,821 521,552
27 Operational costs (courrier, printing,
8,664,910
accountancy, SPV
0.75%
costs) 21,834 21,192 21,961 64,987
28 Building Consultancy 65,000 35,000 15,000 15,000 65,000
29 Legal Fees 8,664,910 0.75% 21,834 21,192 21,961 64,987

Total Financial and Soft Costs 1,189,756 624,734 588,056 2,402,547

TOTAL INVESTMENT 824 4,377,820 3,895,672 2,793,965 11,067,457

TOTAL INVESTMENT, LAND incl. 1,038 7,241,224 3,895,672 2,793,965 13,930,861
Feasibility – COST SIDE

LAND (key variable)

 Feasibility – COST SIDE

LAND (key variable)

• Triama: 6.000m2 of land, asking price 3 MIO EUR

• Assumed cost 1.000 EUR/m2
• Assumed sales price 1.200 EUR/m2
• Acceptable land cost share: 20%

• CUT of 2 = 12.000m2 x 1.000 EUR = 12 MIO EUR. Land cost = 25% - NO GO

• CUT of 3 = 18.000m2 x 1.000 EUR = 18 MIO EUR. Land cost = 17% - GO
• Actual possible CUT (parking, building restrictions, etc): 2.5
15.000m2 x 1.000 EUR = 15 MIO EUR. Land cost = 20% - GO
Feasibility – COST SIDE

CONSTRUCTION cost
Feasibility – COST SIDE

DESIGN & SOFT cost

Feasibility – INCOME SIDE
WE SELL M2!

EFFICIENCY : BUILT vs NET SURFACE

Example residential:

• Assumed Built area versus Carpet area = 75%

• Total cost 1.000 euro/m2, sales price, 1.200 euro/m2 = 20% ROI
• Assume by reducing shafts, corridors or walls, efficiency increases 1% to 76%
• Total cost remains 1.000 euro/m2, equivalent sales price raises to 1.212 euro/m2
and ROI to 21.2% or a 6% increase in profit margin!
Feasibility – INCOME SIDE

Example commercial (offices/retail):

• Offices on ground floor leased at 10 euro/m2/month GLA

• Cost of 1.200 euro/m2
• Assumed 700m2 GLA
• Assumed yield of 7,5%
• Estimated sales value: 700 x 10 x 12 months / 7.5% = 1.120.000 EUR
• Cost of 840.000 euro, sales value of 1.120.000 euro = ROI of 33%

• Smaller shafts increasing GLA with 1% = 707m2

• Estimated sales value: 707 x 10 x 12 / 7.5% = 1.131.200 EUR
• Cost of 840.000 euro, sales value of 1.131.000 euro = ROI of 34.6%
• For exactly the same cost, an additional 11.000 EUR profit or 1.571 EUR/m2 or 5%
increase in profit margin!
 BE PROUD, YOU’VE CREATED…
• A place for people to live or work

• Create a new urban environment for the long term

• Something to show your kids

• Financial contribution to the state

 0.5% / 1% building permit tax / ISC / Order of Architects
 16% profit tax
 5 to 19% VAT
 On a 15MIO EUR investment = +/- 1.7MIO EUR (would the
permitting authorities know…)
THANK YOU
FOR YOUR ATTENTION

DIDIER BALCAEN +40 747 299 699 DIDIER@SPEEDWELL.BE