The Feasibility Study Report Of LY Company Zhongyuan Bazaar Renewal Project

In recent years, the trading volume of residential real estate is descending while that of the commercial real estate is ascending sharply because of the national macro-control policies on real estate industry. Many real estate developers moved from traditional residential real estate to commercial real estate. For those real estate enterprises, commercial real estate development was blind and lacked scientific and systematic feasibility research. LY enterprise, a local middle-sized real estate developer in Puyang, has11years experiences on residential real estate but has never set foot on commercial real estate development before. It is of great importance for this enterprise to conduct feasibility research on commercial real estate and find a set of scientific and feasible analytical methods, which can enhance the enterprise’s development capability and management level and ensure the implement of project construction successfully.This dissertation, as a feasibility study report, studies the feasibility of renovation project of Zhongyuan Bazaar in various aspects intensively and systematically encompassing land expropriation, resettlement, project orientation, organization and implementation, economic benefits, social benefits, etc. Firstly, it introduces the general situation of the project, illustrates the background and necessity of the project, analyses the investment environments of the city, market situation, competitors, and consumers’demand. Secondly, it finalizes the project orientation of urban complex and makes organization and implementation strategy. Finally, it analyzes the economic benefits and risks and puts forward risk control strategy and countermeasures by using static and dynamic analysis as well as qualitative and quantitative analysis.Research conclusions of this thesis are as follows. The investment environment is good. Project orientation is accurate. Planning and design is innovative. It is acknowledged by customers and market demand is huge. Project financing channels is unblocked and cash flow is abundant enough to pay expropriation compensation and construction cost. Total investment is1,053,137,700RMB and total revenue is1,376,883,200RMB. Net profit is242,809,100RMB. Return on investment ratio accounts for23.05%, which is quite considerable. Financial internal rate of return accounts for48.73%, which is much higher than the expected rate12%. The project construction period is3years. The static payback time is1.59year while the dynamic investment payback period is1.81year which is comparatively short. The project is more sensitive on fluctuations of sales. Breakeven point is74.4%, which in some degree can guard against risks of cost rising and income decline and promote anti-risk ability. Despite many risks in macro and micro levels, they are under control by making the strategy of risk management and control as well as countermeasures. Local government will increase more than130,000,OOORMB revenue. Tax income is190,000,000RMB and more than2000jobs will be supplied. In conclusion, this project is feasible.The implement of this project will bring huge economic and social benefits, have good prospects in development and market growth space, and provide a reference for other market renovation projects in Puyang.