Limited Liability Company «MEZHREGIONPROEKT»

Business Plan of the Capital Investment Project

«Building of a residential complex with developed social infrastructure in №23 and №24 Microdistricts of the town Balashikha of the Moscow Region»

Balashikha

Moscow Region

2011

CONTENTS
1.	Executive Summary of the Project………………………………….	Page 3
2.	Participators (Initiators) of the Project………………………………	Page 4
3.	Project Features……………………………………………………...	Page 5
	Planned location of the retailed and office complex
	Classification of the premises and their structure
	Technical features of construction and architecture
	Planning concepts
4.	Analysis of the real estate market of Moscow vicinity and prospects for its development…………………………………………………..	Page 14
	Development trends of building of retail and office complexes and business centers
	Sales and rental prices for office premises in the Moscow Region
	Classification of retail and office complexes and business centers
	Analysis of the demand on premises of retail and office complexes and business centers
5.	Marketing Strategy…………………………………………………..	Page 15
	Potential clients
	Potential competitors
	Factors determining occupancy rate
	Marketing plan of the retail and office center
	Tactical marketing plan
	Advertisement
	Demand stimulation activities
	SWOT-matrix of the Project
6.	Investment commitments……………………………………………	Page 17
	Basic components of the Investment plan
	Volume of investments
7.	Economics of the Project…………………………………………….	Page 18
	Description of the financial-economic Model. Allowances and assumptions.
	Financial plan of the Project
	Performance characteristics of the Project
	Sensibility analysis and possible scenarios of course of events
	Forecasting balance sheet statement of the Company
8.	Conclusions…………………………………………………………..	Page 26

1. Executive Summary

The main idea of the Project is

creation of a modern residential

quarter with the extended social

infrastructure, which takes into

account interests of groups of

persons with limited abilities.

The Project presented in the business plan assumes building (reconstruction) of №23 and №24 residential microdistricts of City district of Balashikha of the Moscow Region with the developed social structure and the further operation of a multipurpose trading-office complex situated in the territory of the microdistricts along a highway Moscow – Nizhni Novgorod.

The main axis of building is already existing basic traffic arteries of the city - a highway «Volga М-7» (highway Moscow - N.Novogorod ») and Lenin's avenue.

Surrounding development of the site includes brick and panel houses 60th years of built. Apartment blocks are located along the basic highways which pass from west to east. Residential buildings are designed from the blocked sections of different number of storeys.

Significant buildings and facilities of the communal infrastructure are designed as separate and in-attached buildings. In addition, the facilities of social services are located on the ground floors of projected quarter`s residential buildings.

Residential development is presented by multisection houses. Apartment blocks are settled down in the form of complexes among which community facilities such as comprehensive schools and nurseriers are located.

Around all the buildings circular passages of hair`s-breadth 4,0 m for fire-engines are designed.

Along roads and passages foot walks of hair`s-breadth 1,2 m. are provided.

Along Lenin's avenue the service corridor for a lining of the utility systems, servicing buildings and other buildings of the projected quarter is provided.

All development of the quarter is designed in the same architectural style of building with provision of the modern comfort requirements and adaptability to manufacture of community facilities.

Residential buildings are presented by 17-25th floor blocked sections.

The structural scheme of residential multi-storey sections appears as a monolithic reinforced concrete structural framing.

The total area of the development is planned to be about 900,000 sq.m., the area of land allocation of the present Project is 31,1 Hectares.

At building stage the Project requires attraction of investments at the rate of about 350 000 000 (Three hundred fifty millions) Euro in the form of the credit line with general limit of financing. The sum of monthly needed credit funds will make no more than 10 million Euro depending on the kinds of works carried out. The full cycle from the beginning of financing to putting the complex into operation, according to the calendar time plan, will take 96 months.

Earnings from sales of accommodation spaces and retail and office complex premises and from granting of premises in rent to the commercial organizations will serve as repayment sources of extra means. In addition the basic part of premises of the trading complex located on the ground floors will be given to the well-known retail companies (such as Pjaterochka, Perekrestok, drugstores 36,6 and Rigla).

At present time all necessary within the frames of the Project title certificates and approvals to start designing and building of houses and trading-office complexes are prepared, received and registered. Local authorities, who are interested in creation of the areas with the developed social support of the population, are ready to support the Project. The total sum of investments made by the initiator of the Project now comes to 9 560 000 (Nine millions five hundred sixty thousand) Euro.

The given business plan is based on working out of a financial-economic model of building and operation of the residential and trading-office complexes.

Return of the loans, taken on each stage of the Project will make no more than 6 months from the moment of putting of the residential and trading-office complexes into operation. The total period of credit repayment taking into account construction activities makes 8 years and 10 months.

It is necessary to notice that right after acquisition of the first income (8th month of the Project) all free cash flow will go on credit repayment.

The initiator and organizer of the Project intends to work at realization of the Project with several general contractors defined by the results of tenders conducted. Building of both the first residential house, for residents from shabby lodging, and trading-office center for needs of residents of microdistricts and of the city district of Balashikha can become the first stage of realization of the Project. Construction term – 2 years, estimated cost– about 54 million Euro.

On the whole, taking into account social dimension of the Project, and also the marketing and economic results of the researches presented in the business plan, it is possible to draw a conclusion on its investment potential and attractiveness.