Development of the Railway Station Area in Sopot Financing of the Undertaking

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1 Development of the Railway Station Area in Sopot Financing of the Undertaking Investment Support 2 February

2 Contents of the presentation Results of a questionnaire survey of Sopot residents and tourists needs and expectations concerning the project; Planned scope of functions of the project; Financial aspects of the undertaking; Planned involvement by the City and PKP S.A. company; Expectations towards potential investors. 2

3 Results of questionnaire surveys among Sopot residents and tourists Respondents preferences for the facilities around the PKP train station in Sopot Sopot residents Tourists Source: Investment Support 3

4 Planned scope of functions of the project approved functions Grounds planned for investment Planned underground passage Planned rebuilding of the streets Source: Sopot Town Council 4

5 Planned scope of functions of the project level 0 Building A hotel (KT U01) Building Bk building under conservation order (KT U03) Building Bd train station (KT U03) Buildings B1, B2, B3 and B4 - retail, eateries, offices, hotels, train station-related functions, other light commercial services (KT U03) Building Bł single-floor connecting building (KT U03) Building C - Retail, eating places, offices, other light commercial services (KT U04) Source: BBS Design 5

6 Planned scope of functions of the project level -1 Source: BBS Design 6

7 Planned scope of functions of the project level -2 Source: BBS Design 7

8 Financial aspects of the undertaking project budget Total budget of the Undertaking is approx. 260 m zł, of which: Preparation costs 9.9 m zł; Project site 21.7 m zł (total cost); Net investment outlays m zł, of which e.g. - retail facilities, train station building and underground car park m zł; - two- or three-star hotel with basement car park 24 m zł; - facility equipment and fittings 15.4 m zł; - new road layout 8.4 m zł; Contract Engineer 3.4 m zł; Financing costs 12.3 m zł; VAT 41.9 m zł; Reserve 8.4 m zł; Other costs (administration and office costs, fees and taxes) m zł. 8

9 Financial aspects of the Undertaking revenues and operating costs (excl. depreciation) Total estimated operating revenue in the 1st year of operation approx. 22 m zł, of which: Commercial facilities 10.8 m zł; Hotel 6.0 m zł; Car parks 5.2 m zł. Total estimated operating revenue in the 1st year of operation approx. 11,8 m zł, of which: and Commercial facilities 0.8 m zł; Hotel 3.2 m zł; Car parks 0.7 m zł Real property tax 1 m zł; Perpetual usufruct charge 0.3 m zł. 9

10 Financial aspects of the Undertaking revenues and operating costs (incl. depreciation) Estimation of operating income [000 s zł] Estimated operating revenues Estimated operating costs (incl. depreciation) Estimated operating income Source: Investment Support 10

11 Results of multi-version analyses Estimation of net cash flows [000 s] Private Investor s IRR: Option I 11,56% Net profit Estimated cash flows from operations Estimated net cash flows Source: Investment Support 11

12 Planned involvement by the City and PKP S.A. company Contribution by the City of Sopot freehold title to real property Total area of the project size 10,469 sqm, of which approx. 4,728 sqm for new road system (Town's ownership assumed) Option I - sale Option II contribution to a company set up with investor Contribution by PKP S.A. company - right of perpetual usufruct to state-owned grounds Total area of the project 6,708 sqm, of which approx. Option I - sale Option II contribution to a company set up with investor 12

13 Expectations towards potential investors - ownership of the infrastructure PKP train station with part of the grounds Constructed commercial infrastructure + grounds New Road System PKP Private Partner City of Sopot Source: Investment Support 13

14 Option I PPP model Source: Investment Support 14

15 Expectations towards potential investors Option I financing of investment outlays to build the facilities making up the Undertaking; payment in cash for the grounds (part of the price); construction of infrastructure in the form of new road system on the grounds of the Town of Sopot; payment of the planning fee to the local authority; handover to the PKP S.A. company assets in the form of a modern railway station facility/building, with fractional ownership title to the land. 15

16 Option II commercial law company (model concept a) Source: Investment Support 16

17 Option II commercial law company (model concept b) Source: Investment Support 17

18 Expectations towards potential investors Option II cash contribution to the commercial law company, which will be used, among other things, to prepare design documentation, secure applicable administrative decisions and pay the planning fee by the company to the local authority; the commercial law company shall construct the road infrastructure on the grounds of the City of Sopot; the commercial law company shall hand over to the PKP S.A. company assets in the form of a modern rail station facility/building, with fractional ownership title to the land; payment for shares bought back. 18

19 Thank you for your attention Sylwia Siemińska Financial Analyst INVESTMENT SUPPORT 6 Szpitalna Street Warsaw Tel Fax sieminska@inves.pl Website of the Project: 19

Development of the Railway Station Area in Sopot. 2 February 2010

Development of the Railway Station Area in Sopot 2 February 2010 Contents of the presentation Objectives of the project and its scope; Location of the project; Local Zoning Plan; Possible functional specification