| Target Clientele and Background Analysis |
| Prospective clients with a housing budget of USD6,000 to USD16,000 per month are typically middle to upper management of multinational companies who move to Beijing with their families. They are often in the automotive, oil, financial, and telecommunications industries. As China’s economy further develops, innovative businesses will continue to enter the country. The influx of expatriates would most certainly be positive for Beijing’s high-end leasing market. CVD offers a convenient and relaxing environment where they can feel most at home. Cathay View anticipates our future clientele to be of the following demography: |
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| Characteristics |
Details |
| Origin of Tenants |
Primarily Europe/North America, as well as Asia-Pacific region and nationals returning from overseas |
| Level of Employment |
CEO, and other mid to upper level management; diplomats |
| Budget Range |
USD6,000 to USD20,000 per month |
| Family Structure |
Two or more children attending international schools |
| House Requirements |
At least four bedrooms |
·data is based on official statistics from 2004 (for reference only)
·official statistics reveal approximately 300,000 to 400,000 expatriates living and working in Beijing
· target clientele for villa properties are mid to upper level management
· Beijing’s expatriate population is increasing at a rate of 10% per year (primarily from the energy, automotive, telecommunications sectors) |
| Premium Investment Property |
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Upper level expatriate employees are usually based in China with their families for a period of 2 to 5 years. Due to the proximity of international schools, optimal living conditions, as well as company policy restricting the purchase of local property, most clients tend to lease in the CVD neighborhood. Furthermore, the well-developed area of CVD and multicultural atmosphere provides the necessary services and amenities to satisfy the clients’ unique housing requirements.
Return on investment for properties in this area is very stable. The leasing market is extremely mature and leasing/purchasing transactions have been very active. Approximately 30% to 50% of the villas in this area are for lease. Currently, the rate of return for villa investments is approximately 8% to 10%. Such stable earning capacity, as well as the ongoing demand for leasing, is very attractive to investors.
The rental rates and vacancy levels for properties in CVD have become established over the past five years, and shall remain quite reliable for the foreseeable future. As the Beijing Olympics approaches and due to recent restrictions on development of new villa projects, vacancy levels are sure to drop, while demand continues to rise. |
| Great Investment Potential |
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Cathay View is located on the outskirts of Chaoyang district. As one of only a handful of villa projects who can claim to be part of downtown Beijing and, by proximity relatively close to the Central Business District and Embassy Districts, the potential for appreciation in value is considerably high. CVD’s active second-hand and rental markets, investors can be confident that their assets shall remain stable and secure in the long run.
Cathay View’s distinguishing Chinese architecture based on the glorious traditions of the Han and Tang dynasties, combined with contemporary designs based on convenience and functionality, all contribute to the project’s individuality and distinctiveness, making it an obvious choice for investors and residents alike.
Proximity to amenities such as world-renowned international schools (WAB, Montessori, International School of Beijing), international standard facilities such as hospitals and shopping, as well as premium estate management services, all contribute to make Cathay View a top choice for foreign expatriate families and thus, an excellent choice for investment.
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| Cathay View – Anticipated Rental and Income |
| Expected Rental |
Rental shall equal and exceed similar properties and is expected to remain stable due to ideal location and unique traditional Chinese architectural style; however, because some of Cathay View’s facilities are currently under progress, this may reflect on the rental until final completion of the project. Upon final completion, average rental is forecasted to reach USD20-25/month/m2 (inclusive of management fee, clubhouse membership fee, furniture and appliances, etc.) |
| Investment Returns |
观唐S-730户型投资回报计算-地上面积280m2 |
| Total Investment Cost (RMB) |
5,868,135 |
5,868,135 |
| House |
5,298,000 |
5,298,000 |
| Renovations, furniture, appliances (i.e. RMB1,500/ m2) |
570,135 |
570,135 |
| Rental Income |
High Rental |
Low Rental |
| Gross Monthly Rental |
56,000 |
52,000 |
| Rental Costs (details as below) |
10,986 |
10,453 |
Property Management Fee
(per unit per month) |
2520 |
2520 |
Clubhouse Usage Fee
(per unit per month) |
1000 |
1000 |
Monthly Rental Service Charge
(per unit per month) |
4666 |
4333 |
| Rental Tax (per unit per month) |
2800 |
2600 |
| Net Rental Income |
45,014 |
41,547 |
| Investment Return Rate and Period for Returns |
| Gross Return Rate |
10.5% |
9.7% |
| Net Return Rate |
8.4% |
7.7% |
| Anticipated Period for Return on Investment |
9.5years |
10.2years |
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