MID TERM PROJECT

Corporate Finance II

Abdul Munam Khan Maham Babar M. Hasan Rabbani

TABLE OF CONTENTS

Preface_______________________________________________________ Introduction___________________________________________________ List of schemes_________________________________________________ History or Background__________________________________________ Geography_____________________________________________________ Physical & Social infrastructure___________________________________ Amenities______________________________________________________ Questions asked________________________________________________ Cash flow characteristics_________________________________________ Prices of plots___________________________________________________ Ranking/credibility of real estate developers_________________________ Sukh chain Map_________________________________________________ Pictures________________________________________________________ Experience letters________________________________________________

3 4 5 7 8 9 10 11 12 13 16 17 18 23

age - 2 -

PREFACE

It is essential to learn about co-operative society for management students to know how to deal with the society when you are dealing in business with the people living in society to make our business success full we need to know about every area in which the business operate. Our thanks to respected Teacher Dr.Shahid A. Zia the lecturer of Corporate Finance II at Imperial College of Business Studies, who provided us an opportunity to study the depth of investment world and opportunities in cooperative society business by giving it for project work. We tried to cover all the areas of the subject by visiting to a co-operative housing society. Also we have taken care to condense the text with basics and essentialities in a simple and clear form to make the readers comfortable in grasping the fact and figures. We wish to profoundly thank our teacher Dr. Shahid A. Zia whose precious teachings made it possible to prepare such type of project.

age - 3 -

INTRODUCTION

Sukh Chayn Gardens Housing Estate is a Gated Community in the suburbs of Lahore, Pakistan. It is a joint venture between the governments of Pakistan and China. In December 2004, Pakistan and China signed a $110 million contract for the construction of a housing project on Multan Road in Lahore. The contract was signed following talks between then Prime Minister of Pakistan Shaukat Aziz and President of the China State Construction Engineering Corp Sun Wen Jie. Shujaat Azeem, President of the Sukh Chayn Gardens, signed the contract from the Pakistan side. In April 2005, the Prime Ministers of Pakistan and China officially laid the foundation stone of Sukh Chayn Gardens, Pakistan's first and only housing estate to be designed and developed in collaboration with China and the contract was awarded to China State Construction Engineering Corp to complete the project within one year.

age - 4 -

LIST OF APPROVED SCHEMES

WEST WOOD COLONY 1 2 GOVT SERVANTS H/S

GREEN FORTS I

GREEN FORTS II

IQBAL AVENUE PHASE III

IZMIR TOWN

P&D ECHS

EME COOP H/S

BAHARIA TOWN

10

SUKH CHAIN GARDENS

11

EDEN LANE VILLAS

12

EDEN RESIDENTIA

13

MOHAFIZ TOWN

14

MOHFAIZ TOWN PHASE II

15

JUBLIE TOWN

age - 5 -

16

RAIL TOWN

17

RAJPOOT TOWN

18

CANAL GARDENS

19

TRICON VILLAGE

20

TIP SOCITEY

21

PASCO TOWN

22

DOCTORS COLONY

23

DREAM GARDENS

24

ABPARA H/S

25

LDA AVENUE

26

PARK VIEW VILLAS

27

NESPAK PHASE III

28

GULBAHAR H/S

29

PUNJAB GOVT EMPLOYES PHASE I

30

PUNJAB GOVT EMPLOYES PHASE II

31

PUNJAB GOVT EMPLOYES PHASE III

age - 6 -

History or Background:

In September 2004, we came together to share a dream, to raise the bar on living standards in Pakistan, without raising the cost. To build a unique model community of Pakistani and to bring home the world's highest standards of living by bringing the world's finest civil engineering technology to the country. And to set an example in transparency and honest dealing. And above all to deliver on time. In November 2004, we paid for and acquired the land. Entire 2,132 Kanals in the suburbs of Lahore has been fully paid for and acquired as a top priority. This reflects our confidence and commitment towards Sukh Chayn Gardens Housing Estate. Sukh Chayn Gardens is the first housing estate in Pakistan to have a clear land title, before going public.

In December 2004, we signed an MOU for the development of housing infrastructure with China State Construction Engineering Corporation - amongst the top ten construction companies in the world and the largest in the Peoples Republic of China.

In April 2005, The Prime Ministers of China & Pakistan most graciously officiated at the unveiling of the foundation stone of Sukh Chayn Gardens Housing Estate, Pakistan's first and only housing estate to be designed and developed in Collaboration with China.

In April 2005, we awarded the contract to CSCEC for the complete development of infrastructure of Sukh Chayn Gardens, to be completed in record time of under one year. With the blessing of Allah, our dream has become a reality. We at Sukh Chayn Gardens invite you to a world class living.

age - 7 -

Geography

Sukh Chayn Gardens is located at

312341N 74937E. It has a total area of 2132.45

Kanals, out of which 1261.97 Kanals is for residential purposes, 52.65 Kanals for Commercial Area, 46.33 Kanals for public building area, 157.13 Kanals is left for green area and 42.60 Kanals for Graveyard.

It is divided into seven sectors:

Sector A Sector B Sector C Sector D Sector E Sector F Sector G

Each sector has its own park and a commercial area.

age - 8 -

Physical and Social Infrastructure

120 ft Wide Main Boulevard with Link roads, Footpaths and Pavements. Underground Electrification Independent Water Supply Water Filtration Plant Sewage & Garbage Disposal Storm Water Drainage Telecommunication with Multimedia Facility Fibre Optic and High Speed Internet Facility Landscaping

High speed wireless internet service has been launched at Sukh Chayn Gardens, and a French company has been assigned the task of installing Water Purification plant at the housing estate.

age - 9 -

Amenities

Musical Fountain Mini Zoo Central Mosque Secure and guarded walled compound Fully Trained Guard dogs Fresh Water Brook with a jogging track Parks and Playgrounds for Children Indoor Gymnasium Basketball courts Badminton courts Shopping Mall School Clubhouse Emergency ambulance service Medical clinic Swimming pool

age - 10 -

A school (primary to A Levels) is currently under designing stage at the housing estate which will be run by the management of Sukh Chayn Gardens.

The questions were asked from the concern person whom we met in the office;
Q-1. Ans Has Sukh Chayn Gardens acquired the land for the project? Sukh Chayn Gardens has acquired and totally paid for entire 2132 Kanals of land in April 2005, and has clear title to the land. Q-2. Ans Q-3. Do you have all the N.O.C.'s & clearances from the required authorities? All N.O.C.'s & clearances have been obtained. Do I have to pay any additional development charges or Membership / Registration fee? Ans None whatsoever. Total payments are according to the schedule provided.

Q-4. Ans

What are the security arrangements? Sukh Chayn Gardens is a totally walled & gated compound with 24 hrs security and armed petrol.

Q-5. Ans

What sort of Garbage & Waste Disposal system do you have? Each street has a Garbage Waste Bin and in addition daily garbage collection and disposal system is available.

Q-6 Ans

What sort of internet and cable facility is available? State of the Art Fiber Optics has been laid to cater for all multimedia needs. In addition Wifi Internet is also available.

age - 11 -

Cash Flow Characteristics

While when we the group members of (CFII) visited the Sukh Chyn Society what we observed that in this society they have all the facilities which one society should provide. They have latest equipments, that have 24/7 Ambulance, they providing you the best water filtration plant in the society, they have underground electricity and many more facilities which a customer needs while living in a good society.

The thing which was quite shocking was after providing all the facilities to the customer there are many few number of people who are living in this society. After meeting with the concerned person in the office we got to know that the major reason why people not living here is that people prefer Bharia Town rather Sukh Chyn.

The best thing was that in this society the basic structures were complete if you talk about the sewerage system its been working properly, they have ungrounded electricity which is functional, they have carpeted roads with the side footpaths and also the have cat eyes for the indication. Financially the society is strong and they all the things cleared from the LDA department. (LDA copy is Attached at the end for refrence).

age - 12 -

Prices of Plots
The price of each individual plot will be calculated at the time of allotment based on its actual area as defined in the master plan. The following prices are inclusive of Development Charges and are offered for purchase on "NO ESCALATION BASIS".

PLOT SIZE 10 MARLA / 250 SQ. YDS 1 KANAL / 500 SQ. YDS 2 KANAL / 1000 SQ. YDS 2x2 KANAL / 2000 SQ. YDS

PRICE OF LAND Rs. 2,595,000 Rs. 4,797,000 Rs. 8,699,000 Rs. 15,760,000

PRICE/SQ.YD. Rs. 1,0380 Rs. 9,594 Rs. 8,699 Rs. 7,880

Following choices are available and offered to our valued clients at an additional cost.

a. Corner- 10 % Extra

b. Main Boulevard- 10 % Extra

c. Double Corner + Main Boulevard - 15 % Extra

age - 13 -

SPECIAL OFFER 3X2 KANAL PLOTS

Our valued clients are invited to take advantage of our very special offer of adjoining 3x2 Kanal plots in sequence on the price mentioned below:

PLOT SIZE 3x2 Kanal / 3000 SQ. YDS

PRICE OF LAND Rs. 23,640,000

PRICE/ SQ. YD. Rs. 7,880

PAYMENT SCHEDULE (QUARTERLY INSTALLMENTS)

SCHEDULE OF PAYMENTS ON BOOKING AFTER 03 MONTHS AFTER 06 MONTHS AFTER 09 MONTHS TOTAL 100 % 20% 20% 20% 40% AMOUNT

10 MARLA

1 KANAL 2 KANAL

2x2 KANAL

2x3 KANAL 9,456,000

1,038,000 1,918,800 3,479,600 6,304,000

519,000

959,400

1,739,800 3,152,000

4,728,000

519,000

959,400

1,739,800 3,152,000

4,728,000

519,000

959,400

1,739,800 3,152,000

4,728,000

2,595,000 4,797,000 8,699,000 15,760,000 23,640,000

age - 14 -

CONSTRUCTED HOUSE PAYMENT SCHEDULE

SCHEDULE OF PAYMENT Mobilization Advance Foundation Completion Ground Floor Brickwork Completion Pouring of Ground floor roof slab First Floor Completion of brickwork Pouring of roof slab of first floor Completion of electric & plumbing Completion of floor finishes Finalization (fixing of elec. & sanitary) At the time of handing over TOTAL

AMOUNT 25% 05% 05% 10% 10% 10% 10% 10% 10% 05% 100%

age - 15 -

Ranking / Creditability of Real Estate Developers:

After meeting the real estate developers and asking them about the Sukh Chyn Socitey, all of them almost gave us the same answer that the society is overall good, they have good market repute but the bad luck for the society is that it is next to Bharia Town and more people prefer to buy the land in Bharia town because the land growth is more higher over there instead of Sukh Chyn.

When we asked them to rank the society so they were in silent mode for a while then the reply we got was the society is overall good and they gave 6 out of 10 for the society.

age - 16 -

Sukh Chayn Gardens Map

age - 17 -

A Few pictures of a model house and a general view at Sukh Chayn Gardens

1 kanal model house DESIGNED BY GAYYOOR OBAID SYED

4 bedrooms Lounge Kitchen Drawing & Dining Power room Servant quarter Ground Floor: 2,542 sq. ft. First Floor: 1,998 sq.ft. Total Area: 4,540 sq. ft.

age - 18 -

10 Marla House

DESIGNED BY GAYYOOR OBAID SYED

4 bedrooms Kitchen Drawing & Dining room Lounge Power room Ground Floor: 1,550 sq. ft. First Floor: 1,203 sq.ft. Total Area: 2,753 sq. ft.

age - 19 -

Sukh Chayn Mosque

age - 20 -

Sukh Chayn Landscape

age - 21 -

Sukh Chayn Mini Zoo

age - 22 -

EXPERIENCE LETTERS

age - 23 -

Working on a research project is always interesting, the hidden information you get and the working atmosphere and specially knowing different people of different psyche and work experiences are always helpful in our practical lifes.

On our research project of Investment Analysis and Corporate Finance II we had to get detailed information on the housing societies. This project for the sunject site is drawn by analyzing nearby areas with similar population and real estate characteristics or by simply drawing a length of 20 km around the site > Thokar Niaz baig- Bahria town- bubtian near Comsats-Khayban-e-Jinnah/

From the first day we had to be in contact with the real estate agents of this area and also with the society office people. I was given Jubilee Town in my investment course and Sukh Chayn Gardens on my CF2 course.

On the whole after this research project I am very much aware of the number of societies in this area as well as which society is better for investment, as in the main city the prices of plots are getting too expensive so the main investment now-a-days lies in this area as the plot prices are low as well as there are a lot opportunities in this area for food business, estate business, retail store business and specially construction business as many of the new houses are build avery day and by buying cheap plots of 10 marlas and one kanal, one can build state of art house and sell it in profit as people in the main cities who are owning 5 to 10 marlas are interested in buying 10 to 2 kanals houses in these societies as the nature and atmosphere wise this area is far better than main city.

Investment wise this area has a lot of opportunities.

I am very thankful to our course teacher and research head Dr. Shahid A. Zia for making us learn in an int resting way which would help us in our lifes and our work would stay along with our lifes forever.

Thanks & Regards M. Hasan Rabbani

age - 24 -

IMPERIAL COLLEGE OF BUSINESS STUDIES

Dear Dr. Shahid Zia,

I am writing to thank you very much for giving me an opportunity to do the research on the Real Estate.

I really enjoyed my time going to the Real Estate office for my project. I have learned so much about the property dealings, it has inspired me a lot the way people do the dealings. While doing this project I learned how to be confident and how to enjoy myself while taking responsibilities of my own actions. I really took in all the helpful information and facts you gave us to make.

There was never a dull moment while doing the work, each day when we went for the work we were pleased with our work. The lists gave us so much to do, and it was good that I was working with good group members, so it was easier to do work. The time before Mid Term was enjoyable and was easy to talk when we had problems, as you are very friendly and helping to us. I would really like to thank you for giving us this project, it was really nice and we three the group members enjoyed the project. Thank you

Regards Abdul Munam Khan

age - 25 -

Dr. Shahid Zia This is my experience letter signifying how much I enjoyed working on Real Estate, gaining knowledge and coming through different experiences. I really enjoyed working with corporative group members. I have learnt so much about property dealings and how to handle it. Its a beautiful society, with a lot of greenery and beautiful monuments. Sukh Chyn has the most beautiful mosque and parks. The people we interviewed were really corporative and fun to work with and provided us with all the information we were asked for. This opportunity has made me gain a lot of awareness and has been good practice I will never forget. I would like to thank you for providing us with such opportunity and making us work together. Maham Baber A09203)

age - 26 -

age - 27 -