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Gross development Appraisal YUNFEI MA

1. The proposal

1.1 Description of AOH hall AOH hall, located at Cocklehill, Blackrock, Dundalk, is detached period building. It is zoned residential, formerly utilized as a community hall and suitable for related uses. The total area of AOH hall is 335 square meter including ground floor, lower section, and upper section. There is parking areas to both front and side. 1.2 Introduction of convert plan We plan to convert AOH hall to a guesthouse. This guesthouse will be consisted by two bedrooms, a kitchen, a dinning room, staff room, storeroom and a hall in ground floor, and five bedrooms in first floor. All bedrooms are standards double room with bathroom, and breakfast is included in room rate.

2. Demands and Supply

2.1 Background of Dundalk Dundalk is one of the largest secondary urban areas/towns in Ireland and is designated as a Gateway under the National Spatial Strategy. It is within an hour drive from Dublin, and is near by excellent road infrastructure including the M1 from Dublin and one of the fastest rails. Dundalk is one of the largest provincial population centers

Gross development Appraisal YUNFEI MA

in Ireland, and is with high proportion of person under-25 age. Furthermore, it has very competitive cost including the low cost of housing, labor costs, waste charge and so on. Dundalk is located near to scenic coast, such as Cooley Peninsula and the Mourne Mountains National Park. In addition, lots of famous landmarks are located there. 2.2 The Tourism Sector in Louth area The following table shows that tourism revenue in Midland-East Region 2005. 24 million was generated in Louth from foreign visitors, and the date from Midlands, East Regional Tourism 2005 suggests that t the highest proportions of revenues in Louth were from visitors from Britain (45.8%), followed by visitors from North America (29.2%) and mainland Europe (20.8%). Table1. Tourism Revenues-2005- Million

Source: Midlands, East Regional Tourism, 2004

2.3 Accommodation Supply in Dundalk The table below outlines the main and typical hotel accommodation in Dundalk. These dates generally reflect the accommodation supply in Dundalk. Moreover, there

Gross development Appraisal YUNFEI MA

are a few B&B and Guesthouse that account for small proportion of the total supply.

Table 2. Main Hotel Accommodation in Dundalk by rating, Location and Number of Beds

2.4 Visitor attractions As been mentioned above, there are lots of attractions available for visitors involving scenic attractions, historic, cultural and heritage attractions, special interest and other activities, and arts/entertainment attractions. The famous landmarks involve St Nicholas Church (The Green Church), the Maid of Eireann monument, Pro Cathederal, The Courthouse, The Old Windmill, Seatown and a walk down the Navvy Bank. In addition, County Louth has nine golf courses, and there are many worldclass and high quality courses in the Dundalk area. Dundalk is also a good place for hiking and cycling.

Gross development Appraisal YUNFEI MA

3. Estimate Residual Value

In the report, Simple residual valuation method is selected to calculate the maximum money to buy the land. Total area of AOH Hall is 628 m2 including 7 bedrooms. The total development period is expected to be 12 months. This consists of a 6 months contract period; 3 months fro design estimation, and 3 months following practical completion. Finance can be arranged at 10% per annum and comparable schemes have recently yielded an investment return of 8%. Rent is 70euro per room per day. Furthermore, a developers profit of 15 per cent on capital value is required. Converting costs are estimated at 100/M2. A development valuation to assess the residual value of AOH Hall is showed as following. A Gross development value Anticipated rental income (7 70 7 52=178360 Say 30% Occupancy rate 178360 30%) Less Expense (Say 20000) Anticipated net income per year Yield 8% (Rental income yield in 12.5 20000 23508 53508

perpetuity) Estimated gross

Gross development Appraisal YUNFEI MA


development value B Development costs Building costs (628m2 at 100/m2) Building finance (Interest on building costs are at 10% for 9 months 1/2) (62800 7.41% 1/2) Professional fees (12.5% of building costs) Interest on fees (10% for 9 months 2/3) (7850 7.41% 2/3) Promotion Contingency on Building costs (5% on costs) Developers profit (at 15% of capital value) Total development costs Residual value C Residual Value Sun available for land Acquisition and interest X 9420 85923.53 207926.47 3140 7850 387.79 62800 2325.74

Gross development Appraisal YUNFEI MA

(Let the land

value=) Finance on land (At 10% for 12months=) Acquisition costs (At 0.03 at 10% for 12months) Therefore 0.033X 1.133X=207926.4 7 X=184005. 73 Residual Value 184005.73 0.1X

The above calculation shows that a maximum 184005.73 is available to buy AOH Hall.

4. Availability of funds
Through surveys, some potential funding options outlining as the following could be applied for this project. Firstly, Private sector PPP scheme to fund proposed development of market house project Secondly, Local authority and local business funding (via a BIDS framework) support improvements of town center infrastructure. Thirdly, directly applying fund from bank or other financial institute.

Gross development Appraisal YUNFEI MA

5. Conclusion

Based on series surveys, it can be found that there are large potential in Dundalks accommodation sector due to its demand and development of tourism sector, and its limited supply. Therefore, the project concerting AOH hall to Guesthouse is feasible based on the maximum purchase cost.