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Table of Contents
1. Executive Summary 1
. Situation Analysis 1
.1 Market Summary 1
.1.1¡@Market Demographics 1
.1.¡@Market Supply
.1.¡@Market Demand 4
. Product Analysis 5
..1¡@Situation and Locality 5
..¡@Description 7
..¡@The Site 7
..4¡@The Development Scheme 7
..5¡@Accommodation 7
. Product Offering
.4 Competitive Analysis
.5 Environmental Analysis 10
.5.1¡@Economic Analysis 10
.5.¡@Legal Analysis 10
.5.¡@Political Analysis 11
.5.4¡@Social Analysis 1
.5.5¡@Technology Analysis 1
.6 SWOT Analysis 1
.6.1¡@Strengths 1
.6.¡@Weaknesses 14
.6.¡@Opportunities 14
.6.4¡@Threats 14
. Marketing Strategy 15
.1 Marketing Objectives 15
. Financial Objectives 15
. Target Markets 15
..1¡@Demographic 15
..¡@Behavior 15
..¡@Psychographics 16
.4 Positioning 16
.5 Strategies 16
.6 Marketing Mix 18
.6.1 Product 18
.6. Pricing 1
.6. Placing 1
.6.4 Promotion 1
4. Financials 0
4.1 Break-even Analysis 0
4. Revenue Forecast 0
4. Cost Forecast
4.4 Project Overview 4
5. Controls 4
5.1 Implementation 4
5. Marketing Organization 6
6. Appendix 7
6.1 External View of the Building 7
6. Elevation Plan of the Building 8
6. Weekly Sales and Receivable Summary
7. References 5
1. Executive Summary
Due to the completion of two highly successful property projects in Beijing, namely Investment Plaza in Finance Street and Palace Apartment in Chaoyang District, Chun Sing Group Company Limited commences its development of International E-Trade Tower ¡]¥_¨Ê¸U¨¹¬ì¶T¤j·H¡^in Yabao Road of Chaoyang District.
The market research indicates a specific and growing need in the area of commercial and office units in the area. In view of the unique market situation in this region, the office units of have been well received by the market, even though the building is scheduled to be completed by end of 00. As at the end of 15th November 001, about 60% of the office units have been pre-sold to the local traders and state-owned import/export companies with official pre-sale contract signed and prepayment paid.
The marketing objective is to increase awareness and image, actively support steady sales and profitability through effective implementation of the strategy.
. Situation Analysis
.1 Market Summary
We possess good information about our market and know a great deal about the common attributes of out target customers. We will leverage this information to better understand whom we serve, their specific needs and how we can better meet the market need.
.1.1¡@Market Demographics
Beijing Municipality includes ten districts and eight counties. The central urban area is located within the Third Ring Road and includes the Dongcheng, Xicheng, Chongwen and Xuanwu districts, which the outer districts consist of Chaoyang, Fengtai, Haldian and Shijingshan districts. The central urban area of Beijing city encircled by the Third Ring Road has a total area of approximately 0 square kilometers.
According to the result of 5th population survey of Beijing, conducted by Beijing Statistics Bureau in October 000, the total population in Beijing is 1.8 million. The total Beijing population grew by 7.7% over the decade (July, 10 to October, 000), which is .4% on average per year.
1 000
Total Beijing 1,4. 1,81.
Urban Beijing 65.4 11.5
Dongcheng 71.0 5.6
Xicheng 85. 70.7
Chongwen 46. 4.6
Xuenwu 6. 5.6
Inner Suburb 514.6 68.8
Chaoyang 181.5 .0
Fengtai 106. 16.
Shijinshan 40.4 48.
Haidian 186.4 4.0
Outer Suburb 7.7 00.7
Source Report of the 5th Population Survey and Beijing Statistics Year Book 000, Beijing Statistics Bureau.
The annual disposable income per capita of urban households reached RMB10,50, up 1.7% over 1, a real increase of 8. % if eliminating the price factor, with the annual average growth rate standing at 7.1% in the period of the th Five - Year Plan.
The annual per capita living expenses of urban residents in Beijing reached RMB8,44, up 1.5% over the previous year, a real increase of .5% if eliminating the price factor and the actual annual growth rate averaged 6.% in the five years.
.1.¡@Market Supply
Due to the severe over-supply in 18 after the release of a large amount of high-quality large-scaled properties including Phase of China Trade Center (°ê¶T¤¤¤ß¤G�Á), China Resources Building (µØ¼í¤j·H), Kerry Center (¹Å¨½¤¤¤ß)and Oriental Plaza (ªF¤è¼s³õ), most of the developers had postponed their developments in Beijing. As a result, the amount of new office space available now is relatively limited.
This situation is very severe in the Grade-B office market in Chaoyang area especially after the plan of establishing a Central Business District in Beijing has been announced.
As per the recent research of Debenham Tie Leung (DTZ), the planning of Central Business District (¡§CBD¡¨) in Beijing forms an integral part of the tenth Five-Year Plan for Economic and Social Development (covering 001 to 005). The planned Chaoyang CBD will cover an area of 4 sq.m. between Second Ring Road and Third Ring Road, from Chaoyangmen (�¶§ªù) to Jianguomen (�Ø°êªù). The design of CBD has yet to be finished and many developers have been asked to temporarily halt their projects, limiting the supply of the office area in the coming few years. The 4 sq.km. CBD area currently houses the offices of Global-500 enterprises and half of the star-rated hotels in Beijing. Government factories built in the 150s occupy almost two thirds of the zone area and will be demolished to release valuable land and for redevelopment. As per the general guidelines, 50% of the zone will be planned for office buildings, 5% for residential apartments and 5% for commercial services.
According to FPD Savills research report, there were no new Grade B office space coming onto the market in the first quarter 001 and the total stock remained unchanged at 1.6 million sq.m. as of April 001. In the CBD area, there are Grade B office properties for sale and pre-sale, including International E-Trade Tower and IT Building.
.1.¡@Market Demand
Since 1, the IT boom, the recovery from the Asian Financial Crisis and China¡¦s accession to the WTO have boosted the office demand in Beijing. Besides, the commercialization of many Chinese state-owned enterprises have aroused the need of corporate image improvement, leading to a demand for office space of better quality.
According to various research reports conducted by international property consultants such as DTZ and FPDSavills, high-tech companies still demonstrated strong demand for office space, in particular the non-internet-related companies from the end of 000 through to early 001. Such traditional hi-tech companies as telecommunication companies, software developers and computer manufacturers achieved a particularly remarkable performance. Financial institutions followed high-tech companies as the second largest industry that took up office space in Q4, 000. Apart from banks, insurance companies and securities firms, strong demand also stemmed from investment companies. Another source of demand, which should not be ignored, is real estate companies, in particular real estate development companies. In addition, China¡¦s accession to WTO and successful bid for 008 Olympic in Beijing will keep the Beijing office price at a reasonably high level.
According to the research of Cushman & Wakefield, Beijing¡¦s project rental growth for Grade A office for the coming one year is the highest among various metropolitans in Asia.
Projected Growth For the Period from June 001 to June 00
Cities Projected Rental Growth
Beijing +10%
Seoul +5%
Shanghai +5%
Kuala Lumpur 0%
Manila -5%
Taipei -5%
Singapore -10%
Hongkong -1%
. Product Analysis
..1¡@Situation and Locality
International E-Trade Tower is situated to the east of Chaowai Toutiao Street and west of Xiushui Lane, to the south Palace Apartment and north of Yabao Road in Chaoyang District in Beijing.
The property is also located in the Chaowai commercial area, close to high quality office properties including Full link Plaza, China Lift Tower, Prime Tower, Union Plaza and China Resources Building. However, the immediate locality comprises a mixture of middle class residential and office blocks intermingled with street stores clustered along Yabao Road.
The property will be more influenced by the community in the immediate neighborhood which is full of business dealing with wholesales and export (to East European Countries) of light industrial products including all sorts of garment, children¡¦s clothes, shoes, leather products, watches and electronic appliances. The community has started to take its form since early 10¡¦s. After 10 year¡¦s development, many service companies emerged, including translation, parcel handling, transportation agents, banking, ticketing and visa agents.
Various modes of public transportation (subways and buses) are conveniently available to the property. East Second Ring Road passed the west side to the site. Further improvement of the accessibility to the area is under planning. Furthermore, Capital International Airport is located within 0 minute¡¦s drive away from the property under normal traffic conditions.
Location Map of International E-Trade Tower
..¡@Description
Pursuant to the master layout plan, International E-Trade Tower will, upon full completion, comprises 1 block of quality office tower of total gross floor area of 8,0 square meter. The details of this office development are described in .4 below. The local urban planning administration bureau has approved the master layout plan.
..¡@The Site
The property occupies a parcel of rectangle-shaped site with a site are of approximately 5,06.85 square meters.
The property is situated in Chaoyang District in Beijing. The site has its western boundary abutting onto Chaowai Toutiao Street, its northern boundary abuts onto Palace Apartment and its eastern and southern boundaries abut onto Xiushuihe Lane and No. 7 Yabao Road.
..4¡@The Development Scheme
International E-Trade Tower will be a 0-storey office tower above basement levels with one level for car-parking uses. The Building is expected for completion by the end of December 00.
The Building is constructed of reinforced concrete and the external façade will be finished with reflective glass curtain walling with cladding panel. The main entrance lobby of the Building will be situated on Yabao Road. The ingress and egress leading down to the car-parking basement will be provided on the 1st level at the southern boundary of the site.
..5¡@Accommodation
According to the Technological Report for Building and Land Survey, the saleable gross floor areas of the constituent levels of the Building are as follows
Level Sq. meter.
1st 1,60.5
nd 1,40.7
rd ¡V 11th ( levels @ 1,46.4 sq. m.) 1,.46
1th ¡V 1th (8 levels @ 1,08.88 sq. m.) 8,71.04
0th 5.4
Total 6,576.45
According to the development proposal, the Building, upon full completion will be equipped with modern office facilities including inter alia
„P Electrical Services
„P Air-conditioning system
„P Fire Service System
„P Fiber optic electric cable linked to the ISDN
„P Computerized automatic supervision Security system.
Building Floor Plan ¡V Floor 15-
. Product Offering
International E-Trade Tower¡¦s is a commercial complex situated in Yabao Road. It is two types of layout and design to suit different customer need
„P Floor 1st ¡V7th - Commercial
„Q Target for the wholesalers of all sorts of garment;
„Q East European Traders of light industrial products; or
„Q Parcel handling, transportation agents, banking, ticketing agent and visa agents.
„P 8th Floor thereof - Office
„Q Each flat have their own water supply and toilets;
„Q I.T. company;
„Q Translation business; or
„Q Other services company might require 4 hours services.
.4 Competitive Analysis
Currently, most of the offices available around Yabao Road tend to be small-sized of 0-100 sq .m. Moreover, they are characterized by poor renovation, lack of professional property management, and unreasonably high rentals of about USD 40 - 6/sq.m. per month.
Name of Building
Total Area
(sq.m.) Average
Area of Office Unit (sq.m.)
Facilities Rental
(USD/sq.m./mth.)
China Resources
Building 70,000 7-1560 Restaurants, club house 40
International Bldg. 60,000 50 or multiples N/A 6
Kai Wei Building 0,000 -700 Restaurant, business center
Ya Bao Building 0,000 0-40 N/A 80
Guo Xing Building 5,000 10-60 N/A 67
Ji Li Building 1,000 14-60 Escalators 6
Centralized Air-conditioning and elevators are standard features of all of these buildings.
N/A = Not Available
.5 Environmental Analysis
.5.1¡@Economic Analysis
Beijing is China¡¦s capital city and is the second largest industrial center after Shanghai. With a successful bid for the 008 Olympic games, Beijing will make substantial investment in environmental protection, infrastructure and transportation networks, stimulating its economic growth up to 008 and laying a strong foundation for long-term economic development.
Beijing Economic Data End of 000
Amount
(in HKD ¡¥bil.) % Change
compared with 1
GDP .08 + 11.0%
Retail Sales 15.85 + .%
Industrial Output 16.04 + 1.0%
Fixed Asset Investment 1.64 + 11.0%
Foreign Trade (Export & Import) .6 + 8.0%
Contracted Foreign Investment .45 + 17.0%
USD 1 = HKD 7.78
HKD 1 = RMB 1.06
Source FPDSavills Research, Beijing Statistical Year 000
While Chinas accession to membership in the WTO by the end of 001 acted to improve investment sentiment in Beijing, an increasing number of Chinese and foreign enterprises such as IT, high-tech, finance, insurance and consultancy sectors are now gearing up to establish or expand their presence in Beijing.
The Beijing property market would benefit from rising demand on the back of accelerated economic growth, while consumption spending would increase in the stronger economy.
.5.¡@Legal Analysis
All land in China belongs to the state or the collectives. Foreign investors may only obtain a land use right, rather than land ownership. Whilst in practice a particular site may exist in possession of a specific land occupier, the primary market of real estate, where a land use right is acquired by foreign investors to develop and use the land, is ultimately monopolized by the state.
Under article 8 of the 10 Interim Rules, developer may finance construction cost by the following ways
„P Raise mortgages on an acquired land use right from the local or overseas financial institution to which they have mortgaged the land use certificate for the loan required;
„P Sold the property in advance before its actual development is fully completed and end-user mortgage are very popular among customers nowadays.
Property development could achieve good results in China due to a large potential demand. However, there are problems on several fronts in the arena of real estate investment in China. Firstly, a lot of uncertainties in relation to property matters are not clear. There has been little real estate law developed so far, making foreign investors unsure of how to weigh up China¡¦s long-term market, thus greatly hindering property development from a solid industry there. To maintain a healthy real estate business, a comprehensive body of legislation becomes compulsory.
.5.¡@Political Analysis
Earlier 001, the Beijing government gave the go-ahead for the plan to turn an area of four square kilometers in east Beijing Chaoyang District into a CBD. CBD is a 4 square kilometer section of Chaoyang district with its heart at the intersection of Jianguomen Avenue and the rd Ring Road. To the south it is bounded by the Tonghui River.
Wide ranges of supporting amenities are available in the CBD, it is anticipated that future office developments will largely be concentrated in CBD. The occupancy rates of quality buildings in prime CBD areas will likely remain at a relatively high level.
Location map of CBD
.5.4¡@Social Analysis
Office market is very unique in Yabao Road. This area is characterized by the concentration of businesses dealing with wholesales of light industrial products, watches and electronic appliances, and export of these goods to Eastern European countries. The community has started to take its current form since early 10s. After 10 year¡¦s development, many service companies have emerged, including translation services, parcel handling, transportation agents, banking, ticketing and visa agents. The region can easily be distinguished from others as the signs and logos posted outside by companies located there very often are in Eastern European languages. Requirements from the trading companies and service firms are not of high quality, Grade B or Grade C. Unit sizes range from 0 to 100 square meters on net area basis. Rents are up to US$40 on net area basis, almost double rent level in office project of the same grade located elsewhere in the city.
.5.5¡@Technology Analysis
As there is no new commercial building of Grade A and E-trade concept located in Yababo Road for years. Hence, the design of the International E-Trade Tower should be in such a way that effectively graphs the opportunity
„P The external will use glass and high quality aluminum in order to gain the feel of cyber look;
„P Facade of the building is constructed from imported stones to give the building an elegant feel;
„P Double class windows reach the floor make the office environment modern, quiet and brighter;
„P Employ a consolidated nuclear system to provide comprehensive information services with a computer intelligence data web;
„P To support the need of high tech companies, the building will be able to accommodate 10,000M of fiber option lines inside and 100M for each desk.
.6 SWOT Analysis
The following SWOT analysis captures they key strengths and weaknesses of the International E-Trade Tower, and describes the opportunities and threats facing the Beijing office market.
.6.1¡@Strengths
„P Located at the Ambassador Region of Chaoyang District which is surrounded by numerous well known commercial complex;
„P Unique market situation which is well received by wholesalers and Eastern European traders;
„P With various modes of public transportation including subways and buses are conveniently available in the district.
„P Capital International Airport is located within 0 minutes of driving time under normal traffic condition;
„P Developer with financial strength and strong relationship with relevant municipal government department such as State Land Administration Bureau, Construction Ministry and various utilities departments;
„P Up to 70% mortgaged loans provide by 4 local banks;
„P Attractive return of investment ¡V yield upto 0% p.a.;
„P Energy-saving design, modern and high-tech outlook;
„P Efficiency rate of the building up to 70%;
„P Advanced telecommunication backbone;
„P Great flexibility and adaptability for suit the ever-changing office automation environments and various space layouts;
„P levels of indoor car parks.
.6.¡@Weaknesses
„P Potential buyer usually take a very conservative attitude towards pre-development sale;
„P The property is at the very early development stage, can¡¦t met the customers¡¦ immediate need.
.6.¡@Opportunities
„P China¡¦s accession to WTO and successful bid for 008 Olympic in Beijing will keep the Beijing office at a large potential demand;
„P Old buildings in Yabao Road will be demolished by 00, trading and service companies in the zone become potential buyer of the property;
„P Most developers preferred to hold properties for lease as a result of high yields, thus sales continued to maintain the momentum;
„P De-monopolized telecom sector result the rising levels of office acquisitions for their own self-use;
„P The occupancy rates of quality building in prime CBD areas will likely remain at a relatively high level;
„P The supply of land is monopolized by the state so as to maintain the market stability
.6.4¡@Threats
„P The weakening of US and Japan¡¦s economy dampened the world economic growth and had a rippled effect on Beijing office market;
„P Some office space was released back to the market by ¡§dotcoms¡¨ and other high-technology companies. This space, with that carried over, dampened the market further in terms of asking rents;
. Marketing Strategy
.1 Marketing Objectives
1. Increased awareness and image;
. Arousing potential buyers¡¦ interest and desire to purchase;
. To achieve accumulated sales of 80% of saleable area before completion;
4. Increasing the average dollar amount per transaction.
. Financial Objectives
1. Generate total sales of RMB7,168,000,000 or above;
. Maintain average selling price of USD 1,800 per sq.m. ;
. Realize profit before tax of RMB117,744,000
. Target Markets
..1¡@Demographic
„P Investor-buyer
„Q Sex male
„Q Age Above 0
„Q Annual income HK$600,000 or above
„Q Merchant, Director, Executives, or Professionals who is familiar or show interest on Beijing Property;
„P End-user
„Q Tenants in Chaoyang District, especially Ya Bo Building, Ji Li Building, Guo Xing Building;
„Q Old building owners in Yabao Road;
„Q Carrying business in the district;
„Q Trading companies and service firms in the zone;
„Q Potential tenants still on the waiting list of buildings in Chaoyang District;
„Q As they are carrying on business, they do not have extra money, so end-user financing is necessary;
„Q I.T., telecom, transportation agents, ticketing and visa agents
..¡@Behavior
„P Investor-buyer
„Q Tight working schedule;
„P End-user
„Q Depth understanding the supply and demand of the market; and local government policy.
..¡@Psychographics
„P Investor-buyer
„Q Emphasis on the high yield investment, preferable guarantee return for a fixed period;
„Q Prefer developer offer supports, such as end-user financing, rental handling services etc.
„P End-user
„Q Prefer developer offer greater discount and end-user financing from financial institutions;
„Q Flexibility on adjusting internal layout plan to meet their need.
.4 Positioning
For the unique market situation and heavy traffic of Yabao Road, the design of International E-Trade Tower is a commercial complex. The first seventh floors is commercial flat and eighth floor or above being office unit. Its design emphasis on flexibility, well-equipped and modern office facilities
„P Sufficient lifts and escalators to facilitate the heavy traffic;
„P 4 hours air-condition;
„P Each units have the flexibility to split the layout into units of 0M each;
„P Accommodate 10,000M of fiber option lines inside and 100M for each unit
.5 Strategies
The single objective is to position International E-Trade Tower as the best choice of commercial complex for the Trader and Investors in Chaoyang District. The marketing strategy will seek to first create customer awareness regarding the products and services offered. Develop that customer base; establish connections with targeted markets and work toward building customer loyalty and referrals.
The company¡¦s four main marketing strategies are
1. Increased awareness and image;
. Arousing potential buyers¡¦ interest and desire to purchase;
. Leveraging existing customer base;
4. Cross selling
Strategy #1
INCREASED AWARNESS AND IMAGE ¡V Informing those not yet aware of the International E-Trade Tower.
„P Adverting
„Q Signboard on the site
„Q Newspaper
„Q Magazine (e.g. Air China, Silk Road, CAAC Inflight Magazine, Beijing Property etc)
„Q Television
„Q Web site on property section (e.g. www.tom.com)
„Q Press release
„P Show Flat
Strategy #
AROUSING POTENTIAL BUYERS INTEREST AND DESIRE TO PURCHASE ¡V Emphasis the high yield and supply in the zone
„P ¡§Burst Pattern¡¨ advertising before the Exhibition held
„Q Emphasis the high yield on investment;
„Q Emphasis the unique and limited supply in the zone;
„Q Emphasis the financial strength of the developer
„P Exhibitions
„Q Attract all the potential buyers to the Exhibition;
„Q Exhibition held on Friday, Saturday and Sunday, small exhibition hall, so as to develop a ¡¥Shopping rush¡¦ atmosphere;
„P Guarantee return
„Q Developer to guarantee first years¡¦ rental income of not less than 0% to the investors
Strategy #
LEVERAGING EXISTING CUSTOMER BASE ¡V Our best sales in the future will come from our current customer base.
„P Newsletter
„Q As it is the third Beijing project of the group, and all the projects are with different nature. Company can make use for existing customer base;
„Q Additional discount offer to existing customers;
„Q Sales promotions Events;
„Q Direct mail
„P Customer Service and Relationships
„Q Personal buyer support (e.g. arrange end-user financing)
„Q Follow up contact
„P Additional Experiences
„Q Tailor made internal layout plan to need individual user need during the pre-development stage
Strategy #4
CROSS SELLING ¡V Increasing the average dollar amount per transaction.
„P Internal
„Q Design and Decoration company of group offers free design and special discount for buyer
„P Property agency Services
„Q Marketing department of the company can source potential tenant for those investor-buyers
.6 Marketing Mix
.6.1 Product
International E-Trade Tower¡¦s is a commercial complex situated in Yabao Road. It is two types of layout and design to suit different customer need
„P Floor 1st ¡V7th - Commercial
V Size in the range from 45M to 160M, to meet different customers¡¦ need;
V In view of the heavy traffic, each floor should have larger lobby;
V Target for the wholesalers of all sorts of garment;
V East European Traders of light industrial products; or
V Parcel handling, transportation agents, banking, ticketing agent and visa agents.
„P 8th Floor thereof - Office
V Size in the range from 100M to 160M, to meet customers¡¦ need;
V Each flat have their own water supply and toilets;
V Translation business; or
V Other services company might require 4 hours services.
.6. Pricing
Overall price is 5% to 10% lower than the market-selling price. In view of the limited supply and high yield for the commercial units.
„P Floor 1st ¡V7th - Commercial
V 1st Floor averaging USD ,400/M
V nd Floor averaging USD ,00/M
V rd Floor averaging USD ,00/M
V 4th Floor averaging USD ,100/M
V 5th Floor averaging USD ,000/M
V 6th to 7th averaging USD 1,500/M
„P 8th Floor thereof - Office
V Averaging USD 1,8500/M
.6. Placing
According the our findings, the most effective location of promoting the International E-Trade Tower will the showroom in the site and regular hiring the exhibition hall.
.6.4 Promotion
The most successful advertising and promotion has been through the following
„P Signboard
„P Television Advertisement
„P Web sites
„P Newspaper
„P Magazines
„P Exhibitions
4. Financials
This section will offer a financial overview of the project as it relates to our marketing activities. We will address break-even information; revenue forecast and cost forecast, and how those link to our marketing strategy.
4.1 Break-even Analysis
The break-even Analysis below illustrates the sq.m. that we must realize to break-even. In construction business, construction cost becomes a fixed cost, regardless the sales meet, and developer has to guarantee completion. While turnover tax and marketing cost will be the variable cost on the project.
RMB000¡¦s
Construction Cost 1,600
Variable cost (Turnover tax & Marketing exp) 17,568
Break-even Revenue 7,168
Break-even selling price and corresponding sq.m. to be sold
Price(USD/ sq.m.) 1,600 1,700 1,800 1,850 1,880 1,00
Sq. m. sold 17,85 16,80 15,875 15,446 15,1 15,0
4. Revenue Forecast
Scheduled to be completed at the end of 00, International E-Trade Tower has been for sale since the last quarter of 000 and the asking sales price ranges from USD1,800 to USD,00 per sq.m., which is more reasonable than IT Building of USD,800 per sq.m.
The revenue projection shown below highlighted that there will be two types of revenue, namely the revenue from selling property interest and the rental income. For the sales, it is anticipated that 0% of the property interest of commercial flats will be sold during the three years ending 00 which will generate a sum of RMB66 millions while 50% car parking spaces will be sold to generate a sum of RMB 8.7 millions. The remaining property interest will be held for long-term investment purpose to earn rental income.
001
00
00 004 &
after
Total
Property Sales
Commercial Flat
No. Flat Sold 115 40 0 175
Average Area per Flat 11.68 14.60 14.60 1.
Area Sold 1,76 5,84 , ,7
% total salable area 54% 4% 1% 0%
Price (USD)/m 1,885. 1,880.00 1,50.00 1,00.00
Revenue (RMB000¡¦s) 15,4 ,74 48,45 57,
Car Parking Space
No. Spaces sold 58 58
Unit Price (RMB) 150,000 150,000
Revenue (RMB000¡¦s) 8,700 8,700
Total Sales Income 15,4 ,74 57,15 65,
Rental Income
001
00
00 004 &
after
Total
Commercial Flat
No. Flat Rented 1
Area Rented 14.6
Rent (USD)/ m/month 60.00
% Occupancy 100%
Annual Rental Income (RMB000¡¦s) 16,86
Car Parking Spaces
No. Spaces Rented 58
Rent RMB/Space/month 800
% Occupancy 100%
Annual Rental Income (RMB000¡¦s) 55
Total Annual Rental Income (RMB000¡¦s) ,576
The above revenue forecast is based on the following assumptions
„P Revenue shown in 001 is in fact the actual record based on the preliminary sales and purchase agreements entered into by the buyers (i.e. averaging at USD1,885./m);
„P Average price from 00 is USD1,880/m for all the flats sold regardless the location factors such as the orientation, size, shape and the floor level throughout the year;
„P Budget sales during 00 will be evenly spread over the period at the rate of 5 flats per month, a pretty conservative sales target;
„P Selling price for 00 will be averaging USD1,50/m. The increase is due to the property may have reached the topped-up stage which is ready for out-right sales, a traditional price adjustment stage;
„P No pre-sale for car parking spaces until 00 that is only after reaching the topped-up stage;
„P Selling price of car parking space is set at RMB150,000 per unit;
„P 58 out of 116 or 58% of car parking spaces will be sold in 00. The selling will be spread over the period at the average turnover rate of 15 units each month commencing immediately at the beginning of Spring, that is February 00 and ending in May, 00 with only 1 units sold;
„P Payment Terms for Sale as follows
Type of Property
One-off payment
Mortgage
Weight % of total sales round
up above decimal point 8% of total sales round up above decimal point
Commercial Flat and Office Units Upon singing preliminary S&P, Buyer pays USD5,000 as deposit Upon singing preliminary S&P, the Buyer pays USD5,000 as deposits
Balance settled spread over four months 0% deposits after deducting USD5,000 shall be spread over five months
Balance settled at the fifth months
Car Parking Spaces Upon singing preliminary S&P, Buyer pays the whole amount
Not Applicable
„P Only 80% of the saleable area can be disposed of, and the remaining units will be held as long term investment of the company;
„P The renting activities of the remaining units will commence in June 00 and will be projected as revenue at the beginning of 004;
„P In view of the shortage supply in the market, the occupancy for both commercial block and car parking spaces will be expected to reach 100%.
4. Cost Forecast
RMB000 RMB000
Land Cost (Note a) 85,000
Construction Cost
1 Foundation 10,50
Main Contractor 4,10
Foundation and Structure 1,400
4 Curtain Wall 18,600
5 Drainage System 6,00
6 Air-conditioning & Ventilation 4,650
7 Heating System 1,860
8 Electricity System 6,00
Fire System 1,500
10 Lift and Escalator ,500
11 Intelligent Building System 700
1 Professional Fee 5,000 114,080
Administration and Management Fee 5,000
Interest (Note b) 7,50
Contingency 8,000
Total Cost 1,600
Construction cost per sq.m. RMB 7,76
@8. USD 5
Note
a. This includes the cost of relocating those residents originally lived at the site.
b. HIBOR + .1% = 8.1% is used in the calculation of finance. HKD 1 = RMB 1.07 is assumed.
4.4 Project Overview
sq.m. RMB000
Sales Income
Commercial Flat ,7 57,
Car parking spaces 8,700
65,
Less Construction Cost 8,0 (1,600)
Turnover Tax (5%) (17,861)
Marketing and Promotion (%) (10,717)
Profit before Tax 117,744
Note
5,551 sq.m. of unsold becomes long term investment of the company, and the rental income from 004 thereafter does not accounted for in the above calculation.
5. Controls
The following will enable us to keep on track. If we fail in any of these areas, we will need to revaluate our business model
„P Construction cost maintain or keep below RMB1,6000,000 and no cost overrun;
„P Completion of the property by the end of December 00 and no extension of construction period is required, otherwise penalty for late completion should be provided for;
„P At least 18,000 sq.m. sold at the average rate of USD1,600/sq.m. or 15,000 sq.m. sold at the average rate of USD1,00/sq.m;
„P Keep track the weekly sales receivable statues, make sure the amount receive is sufficient to cover the construction cost payment schedule and other capital commitments, else construction loan from financial institutions to be applied for.
5.1 Implementation
The following identifies the key activities that we are critical in our marketing plan. It is important to accomplish each one on time and on budget
Milestones
Event ¡@
Signboard on the Site ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Prepare & update Web site ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Newsletter ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Newspaper & Press release ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Magazine ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Television ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Showroom ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Event - Exhibition ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Event ¡V top-up ceremony ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
Deliver vacant procession
¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@ ¡@
001 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Event Start date End date Budget
RMB000
Signboard 80
Web site 0-Nov-01 08-Dec-01 00
Newsletter (quarterly) 18-Mar-0 1-Mar-0 0
18-Jun-0 0-Jun-0 0
18-Sep-0 0-Sep-0 0
18-Dec-0 1-Dec-0 0
Newspaper & Press release 6-Feb-0 0-Mar-0 400
8-May-0 01-Jun-0 400
-Sep-0 0-Sep-0 400
0-Dec-0 6-Dec-0 400
Magazine 01-Mar-0 1-Mar-0 00
01-Jun-0 0-Jun-0 00
01-Sep-0 0-Sep-0 00
01-Dec-0 1-Dec-0 00
Television 6-Feb-0 0-Mar-0 550
8-May-0 01-Jun-0 550
-Sep-0 0-Sep-0 550
Showroom 07-Jan-0 18-Feb-0 1,60
Event - Exhibition -Mar-0 1-Mar-0 60
1-Jun-0 -Jun-0 60
1-Sep-0 15-Sep-0 60
Event - top up ceremony 8-Apr-0 8-Apr-0 180
Total 6,40
5. Marketing Organization
Mr. Tong, marketing director of the group, is one of the primarily responsible for the marketing activities. As he has a team of marketing staff, only the design, artwork and printing process will depends on outside resources. In view of no other project to be release during 00, thus no additional staff is to be employed even a number of special events throughout the year.
6. Appendix
6.1 External View of the Building
6. Elevation Plan of the Building
7. References
Philip Kotler, (000) ¡§Marketing Management¡¨ (The Millennium edition)
Report of the 5th population survey and Beijing Statistics Year Book 000, Beijing Statistics Bureau
FPDSavills Research, Beijing Statistical Year 000
http//house.cn.tom.com/wanbang/index.html
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