Premier Residences (Venus Rock Golf Resort), Paphos

Inspired by Mediterranean living and elegance, an innovative hamlet of five distinct detached villas with plot areas ranging from 540 to 850 m² each, set against the backdrop of mountains and spectacular views of the sea. The villas are part of the ambitious Venus Rock project, which offers residents anything they could possibly desire – from a children’s club and playground to a 2×18-hole competition golf course. The investor is expected to receive an IRR of 6%.

PROJECT DESCRIPTION

Project Description

• According to the master plan and information provided by the owners, on completion, the development in question will be comprised of 5 luxurious self-contained villas, ranging from approximately 540 sq. m to 853 sq. m set in an amphitheatric landscape with unobstructed sea and mountain views.
• The villas will be detached and will be of a very high standard of specification and finishes, each having their own private swimming pool and a sizeable garden.
• The development will consist of four types of villas, each constructed with quality materials and finishes.
• Specifications include high-quality ceramic tiles, a choice of laminated parquet in bedrooms, double-glazed high-quality aluminum windows with sliding patio doors, spacious bedrooms with walk-in closets, expensive kitchen fittings, worktops of granite and design made by top quality brands, expensive choice of bathroom fittings, provisions for A/C, heating and wireless alarm systems, reinforced membrane fitting in the swimming pool and many other finishes.
• As part of the Venus Rock Golf Resort, the development will also include a state-of-the-art Clubhouse, offering the owners and their guests the privacy of their own bars and the best in local and international cooking from the Club restaurant.
• The services offered to go beyond the ordinary, as per the information provided to us by the owners, the management company will also offer amongst others assistance with renting the villas, and providing babysitters, chauffeurs, personal concierges, maintenance, house cleaning, and gardening services.

 Value-Added Features

The project has been carefully designed to provide its buyer with the ultimate product. The villas offer the best of both worlds because while they are located in a quiet peaceful area with a spectacular view of the sea, at the same time they are part of the large-scale Venus Rock project including everything one could possibly ask for – from a children’s club and playground to over 18,000 meters of seafront commercial space with more than 50 different shops. The project will also include a golf course, community sports centers with a variety of sports facilities and a yacht/fishing boat shelter. While the retail and leisure complex will provide residents with everything they need, the buzzing touristic and commercial center of Paphos is still only a 15-minute drive away. Paphos International Airport, which connects the island with a multitude of European and international destinations, is approximately 10 minutes away. The International School of Paphos, a school registered with the Cyprus Ministry of Education and Culture and whose student body includes pupils from over 20 countries, is located a mere 20-minute drive away. The undoubtedly premium location of the villas and the exclusive vibrant community they will be a part of therefore constitute a major incentive to incite interest in the buyer. It is consequently an excellent cost-value investment, through which the buyer will be given the opportunity to obtain Cypriot citizenship.

PROJECT STUDY

In this section of the feasibility study, we will study and address data that are directly and indirectly linked with the project, such as the company’s objectives, project size, current market conditions, client needs, business model and value-added features.

 Project Aim

The Premier Residences project aims to offer its ultimate users a unique experience of luxurious residential living. It also constitutes an excellent investment opportunity for any buyer who will buy the five villas and then lease them in order to earn passive income, an investment that will make him simultaneously eligible for Cypriot citizenship.

 Project Objectives

The company’s objectives are the following:

• Selling the project to a foreign investor interested in a high yielding investment which will also provide him with the opportunity to acquire Cypriot citizenship.
• Attracting HNWI as tenants, since the villas are a luxury project.
• Achieving IRR 6%.

Project Type

The project identifies itself as a luxurious residential development of high standards. Cluster 27 of the Premier Residences project consists of five luxury detached villas of 4 different types, in plot areas ranging between 540.44 sq. m. and 853.87 sq. m each.

All the villas are set in a breathtaking location with unobstructed sea views, and they will be of a very high standard of specification and finishes, each having their own private swimming pool and a sizeable garden.

Further characteristics of the project and value-added points will be discussed in the following sections of this study in-depth, after first having an extended look at a macroeconomic analysis discussing factors that can affect property purchase in Cyprus. Finally, it is worth mentioning that Venus Rock is a privately funded development, with the owners funding and borrowing from save & loan associations, international funds, and private investors.

SITE LOCATION

General Description

• The Premier Residences (Cluster 27) project is being developed on a plot with a total area of approximately 3367 sq. m. within the administrative boundaries of Kouklia, Paphos.
• The project is approximately 4.8 km from the center of Kouklia village, circa 7.5 km from the Petra tou Romiou beach and about 28 km from the Kato Paphos “Limanaki” port area.
• The Kouklia village center is about a 9-minute drive from the project. The driving distance from the Paphos city center area is approximately 20 minutes, while the ‘Petra Tou Romiou’ beach is only 10 minutes away by car. Not only is the ‘Petra Tou Romiou’ area one of the most beautiful coastlines in Cyprus, offering some of the most spectacular sunsets on the island, but because of its mythological status as the birthplace of the goddess Aphrodite, it is a highly popular destination for locals and tourists alike.
• The area of the Venus Rock project will also be widely developed with many public facilities and amenities, such as restaurants with various types of cuisines, bars, kids’ entertainment areas, hotels, pharmacies, and many more.
• The project is circa 10mins driving distance from Paphos International Airport, the second biggest airport in Cyprus, welcoming hundreds of thousands of visitors every year.
• Due to the area’s unique and tranquil location, it attracts high profile tourism.
• The project is being developed in a quiet and private setting. While part of a luxury residential community with all the amenities, each property will enjoy privacy and abundant amounts of outdoor space.
• It should also be noted that only 20 minutes away from the project is the International School of Paphos, which is fully licensed by the Ministry of Education and Culture for the provision of inclusive education to children from around the age of three leading to GCSE, IGCSE, and A level qualifications.

Zoning and Planning Regulations

The project consists of one plot of land falling under the T2β (Tourist Zone) regulations which allow residential development as follows:

The total size of the plot: 3367 sq. m.

Levels: One-Two

Further planning regulations must be taken into consideration:

• Each property boundary must be at least three meters away from the nearest property.
• The underground building does not count at the cover density.
• The green area of the total plot must meet 15%.

FEASIBILITY STUDY

Methodology

The purpose of this financial analysis is to assess the investment characteristics of the Premier Residences project through the estimation of the two main measurements of the capital budgeting process (the IRR and the NPV). Initially, we will calculate the Earnings Before Tax (EBT) and the Earnings after Tax (EAT) for the different scenarios and consequently the Net Cash Flows (NCF), on which the estimation of the capital budgeting metrics will consequently be based.

Sensitivity Analysis

As part of our sensitivity analysis, we have considered three scenarios regarding total revenue. In the first scenario, we consider that a shock in the economy leads to a decrease of total revenues by 10%. This shock is related to macroeconomic factors such as a downgrade of the rating agencies, an unforeseen surge of the public debt, macroeconomic instability of main trade partners (e.g. Greece, UK, and Russia). The second scenario is more extreme since we consider the shrinkage of total revenue by 20%. The scenario is related to unpredicted and violent political risk (e.g. escalation of military action due to the Cypriot problem, terroristic attack, economic sanctions against Russia, etc.).

In the tables below we present how the two scenarios affect the total revenues and the net profit.