INVESTMENT PROPOSAL 1
CONSTRUCTION AND SALE OF AN 8LEVEL BUILDING
Our first proposal regarding Amazon Tower XIV is that of the construction of an 8level building with 5 ultraluxurious apartments. Three scenarios are then considered, that of selling all the apartments on the first year which is the best case scenario; that of selling one apartment per year, and that of selling all properties within two years, and how that will affect the investor's potential for profit.
Equity Scenarios  

Scenarios  Full Acquisition  Joint Venture Scenario  
Shareholder's Status  Investor  Landowner (Amazon)  
Equity Contribution  €4,506,100  €1,846,100  €2,660,000 
Equity Shares  100%  41%  59% 
Apartments' Selling Price  

Apartments  Selling price per square meter (€ / sq. m.)  Area (sq. m.)  Cost (€) 
101 (2BD)  €8,325.00  150  €1,248,750 
201 (3BD)  €8,475.00  150  €1,271,250 
301 (2BD)  €8,325.00  150  €1,248,750 
401 (3BD)  €8,475.00  150  €1,271,250 
501 (3BD)  €11,017.50  150  €1,652,625 
Total  1655  €6,692,625 

Scenario 1.1
SELL ALL PROPERTIES ON THE FIRST YEAR
The first scenario is the best case scenario – that of all the apartments being sold on the first year, with an initial yield of 29.5%.
SCENARIO 1ST  SELL ALL PROPERTIES ON THE FIRST YEAR Selling Price €6,692,625 Marketing Expenses €669,263 Corporate Tax €189,658 Net Sales €5,833,705 ROI (First Year) 29.5% 
Scenario 1.2
SELL ONE APARTMENT PER YEAR
The second scenario is the worst realistic scenario, as we consider that the first apartment will only be sold on the second year after the construction of the building, the penthouse will be sold the year after and subsequently an apartment will be sold each year, with an IRR for the potential investor of 12.1% in case of full acquisition and 34.2% for a joint venture.
SCENARIO 2ND  NET CASH FLOWS AND IRR FOR THE INVESTOR Years Full Acquisition Joint Venture ROI FOR INVESTOR 1 (€3,121,525) (€461,525) 2 €609,754 €152,438 33% 3 €696,472 €174,118 38% 4 €1,047,254 €261,813 57% 5 €1,065,957 €266,489 58% 6 €1,065,957 €266,489 58% Total cash flows €1,363,869 €659,824 IRR 12.1% 34.2% SCENARIO 2ND  NET PRESENT VALUE FOR THE INVESTOR Years Full Acquisition Joint Venture 1 (€875,546) (€664,596) 2 €621,804 €254,746 3 €932,103 €381,872 4 €963,828 €394,870 5 €906,486 €371,377 6 €871,621 €357,094 NPV €3,420,297 €1,095,364 
Scenario 1.3
Sell all properties in two years
The third scenario is the most realistic one out of the three. We consider that no apartment will be sold on the first year of the building's construction. On the second year we consider that a twobedroom apartment and the penthouse will be sold, followed by the rest of the apartments which will be sold on the following year, with an IRR of 27% in case of full acquisition and 112% for the joint venture.
SCENARIO 3RD  NET CASH FLOWS AND IRR FOR THE INVESTOR Years Full Acquisition Joint Venture 1 (€3,435,546) (€664,596) 2 €2,089,649 €856,106 3 €2,855,123 €1,169,713 Total cash flows €1,509,226 €1,361,223 IRR 27% 112% SCENARIO 3RD  NET PRESENT VALUE FOR THE INVESTOR Years Full Acquisition Joint Venture 1 (€3,435,546) (€664,596) 2 €2,009,278 €823,179 3 €2,639,722 €1,081,465 NPV €1,213,454 €1,240,049
Investment Proposal 2
CONSTRUCTION AND SALE OF AN 8LEVEL BUILDING
Our first proposal regarding Amazon Tower XIV is that of the construction of an 8level building with 5 ultraluxurious apartments. Three scenarios are then considered, that of selling all the apartments on the first year which is the best case scenario; that of selling one apartment per year, and that of selling all properties within two years, and how that will affect the investor's potential for profit.
Equity Scenarios  

Scenarios  Full Acquisition  Joint Venture Scenario  
Shareholders' Status  Investor  Landowner  
Equity Contribution  €6,416,850  €3,756,850  €2,660,000 
Equity Shares  40%  60% 

Scenario 2.1
SELL ALL PROPERTIES ON THE FIRST YEAR
According to this scenario, all the apartments are sold on the first year of the building's construction, with an initial yield of 104.8%.
SCENARIO 1ST  SELL ALL PROPERTIES ON THE FIRST YEAR Selling Price €9,324,000 Agents Commission (10%) €932,400 Corporate Tax €697,666 Net Sales €7,693,934 ROI 104.8% 
Scenario 2.2
SELL ALL APARTMENTS IN TWO YEARS
2ND SCENARIO  NET CASH FLOWS AND IRR IN THE CASE OF FULL ACQUISITION AND JOINT VENTURE Net Cash Flows Full Acquisition Joint Venture 2019 (€4,162,740) (€1,502,740) 2020 €3,046,494 €1,218.598 2021 €2,819,235 €1,127,694 Total cash flows €1,702,989 €843,552 IRR 27% 36% 
Scenario 2.3
SELL ALL APARTMENTS IN FIVE YEARS
3RD SCENARIO  NET CASH FLOWS AND IRR IN THE CASE OF FULL ACQUISITION AND JOINT VENTURE Years Full Acquisition Joint Venture 1 (€4,162,740) (€1,502,740) 2 €951,744 €380,698 3 €291,570 €116,628 4 €1,480,290 €592,116 5 €1,571,063 €628,425 6 €1,571,063 €628,425 Total cash flows €1,702,989 €843,552 IRR 10.8% 14.5% 3RD SCENARIO  NET PRESENT VALUES (BEFORE TAXES) FOR THE INVESTOR Years Full Acquisition Joint Venture 1 (€4,162,740) (€1,502,740) 2 €915,139 €366,055 3 €269,573 €107,829 4 €1,315,972 €526,389 5 €1,342,951 €537,180 6 €1,291,299 €516,520 NPV €972,193 €551,233
Investment Proposal 3
RENTAL BUSINESS OF AN 8STORY BUILDING WITH 5 ULTRALUXURY APARTMENTS
Our investment proposal in this case concerns the construction of an 8level building containing just 5 ultraluxurious apartments, which will be consequently rented.
BUILDING'S AREA (sq.m.)  

AREAS IN EACH FLOOR  Covered Area  Covered Veranda  Uncovered Veranda  Total 
1. Underground Parking 1  265  0  0  265 
2. Underground Parking 2  265  0  0  265 
3. Ground Floor  165  0  0  175 
4. First Floor  110  40  7  175 
5. Second Floor  130  20  7  175 
6. Third Floor  114  36  7  175 
7. Fourth Floor  138  12  7  175 
8. Fifth Floor  145  5  7  175 
9. Roof Garden  175  0  0  175 
TOTAL AREA  1332  113  35  1755 
APARTMENTS' AREA (sq.m.)  

Apartments  Covered Area  Covered Veranda  Uncovered Veranda  Total Area 
101 (2BD)  110  40  7  157 
201 (3BD)  130  20  7  157 
301 (2BD)  114  36  7  157 
401 (3BD)  138  12  7  157 
501 (3BD)  145  5  7  157 
TOTAL AREA  727  113  35  875 
The total revenues from rentals are presented in the table below. As can be seen, there are two sources of revenue. The first is from rentals. The second is from the operation of the small roof garden café. The estimated net revenues (excluding the labour cost) from the café are particularly reserved, since we have estimated them at around just 75,000 euro per year.
TOTAL REVENUE (RENTAL BUSINESS) €  

Year  1  4  7  10 
Total Revenue from Rentals  280742  396978  433788  474012 
Net Additional Revenue from Roof Garden  75000  81955  89554  97858 
Total Revenue  355742  478932  523342  571870 
We have considered three scenarios regarding total revenue (the first scenario is our main analysis). In the second scenario we consider that a macroeconomic shock in the economy leads to a decrease of total revenues by 10%. The third scenario is more extreme, since we consider a shrinkage of total revenue by 21%. The scenario is related to unpredicted and violent political risk.
In the tables below we present how the two scenarios affect the total revenues.
TOTAL REVENUES (SCENARIOS) €  

Period  1  4  7  10 
Scenario 1st (TR)    426441  508099  555213 
Scenario 2nd (TR 10%)    383797  457289  499692 
Scenario 3rd (TR 21%)    338364  403156  440540 
In addition, we have calculated the unleveraged NPV for the three total revenue scenarios and for a discounting rate in the range of 5%  10%. The results are shown in the table below. The discount rate of the Amazon Building XIV project is defined as the rate of return (RoR) that could be earned by investing in an average complex of luxury apartments.
NPV / UNLEVERAGED (MIL €)  EARNINGS BEFORE TAXES (EBT)  EARNINGS AFTER TAXES (EAT)  

Interest Rate / Scenarios  1st  2nd  3rd  1st  2nd  3rd 
5%  2,54  2,24  1,93  2,37  2,11  1,84 
6%  1,99  1,72  1,42  1,84  1,59  1,34 
7%  1,5  1,25  0,97  1,36  1,13  0,89 
8%  1,07  0,82  0,56  0,93  0,72  0,49 
9%  0,68  0,45  0,21  0,55  0,35  0,13 
10%  0,33  0,11  0,11  0,21  0,23  0,18 
IRR  11%  10%  10%  11%  10%  9% 
As can be observed in the table below, the IRR ranges between 9.42  11.08%. This rate reveals an excellent investment opportunity since the majority of luxury properties for sale fail to outreach the margin of 8%.
Both the high NPV and IRR are results of the stable and high cash flows from rents.
IRR  EBT  EAT 

Scenario 1st  11,08%  10,69% 
Scenario 2nd  10,38%  10,07% 
Scenario 3rd  9,63%  9,42% 
INVESTMENT PROPOSAL 4
10STORY HOTEL WITH 26 ULTRA LUXURY APARTMENTS
This scenario concerns the construction of a tenlevel boutiquestyle hotel with 26 luxurious apartments. The project will include a gym, spa facilities and two swimming pools, one on the ground floor and another one in the roof garden found on the top floor.
We have taken three scenarios into consideration regarding the revenue and profit of the hotel for the first ten years of its operation. The first scenario is our main analysis, while in the second scenario we consider that a shock in the economy leads to a decrease of total revenues by 10%. The third scenario is more extreme and far less likely, since we consider a shrinkage of total revenue by 21%.
In the tables below we present how our main scenario and two alternative scenarios affect the total revenues and the net profit.
TOTAL REVENUES (SCENARIOS) €  

Year  1  4  7  10 
Scenario 1st (TR)    2243622  2597273  3006668 
Scenario 2nd (TR 10%)    2019260  2337546  2706002 
Scenario 3rd (TR 21%)    1794898  2077819  2405335 
NET PRESENT VALUE (NPV) ANALYSIS ON SENSITIVITY SCENARIOS
EARNINGS BEFORE TAX €  

Year  1  4  7  10 
Scenario 1st (TR)  7438950  1124910  1387507  1694685 
Scenario 2nd (TR 10%)  7438950  954239  1188501  1462804 
Scenario 3rd (TR 21%)  7438950  773568  979494  1220924 
EARNINGS AFTER TAX €  

Year  1  4  7  10 
Scenario 1st (TR)  7438950  1017714  1245203  1510352 
Scenario 2nd (TR 10%)  7438950  868377  1071072  1307457 
Scenario 3rd (TR 21%)  7438950  710291  888192  1095812 
We have calculated the unleveraged NPV for the three total revenue scenarios and for a discounting rate in the range of 5%  10%. The results are shown in the table below. The discount rate of the project is defined as the rate of return (RoR) that could be earned on a hotel with luxury apartments.
NPV / UNLEVERAGED (MIL €)  EARNINGS BEFORE TAXES (EBT)  EARNINGS AFTER TAXES (EAT)  

Interest Rate / Scenarios  1st  2nd  3rd  1st  2nd  3rd 
5%  8,55  7,14  5,65  7,58  6,35  5,05 
6%  7,44  6,11  4,71  6,53  5,37  4,14 
7%  6,43  5,18  3,86  5,58  4,48  3,33 
8%  5,52  4,34  3,10  4,72  3,69  2,60 
9%  4,70  3,59  2,42  3,95  2,98  1,95 
10%  3,96  2,91  1,80  3,25  2,33  1,36 
IRR  18%  16%  14%  17%  15%  13% 
As can be observed in the table below, the IRR ranges between 12.82 – 18.12%. Both the high NPV and IRR are results of the stable and high cash flows from the rented hotel apartments.
IRR  EBT  EAT 

Scenario 1st  18,12%  16,70% 
Scenario 2nd  15,98%  14,81% 
Scenario 3rd  13,71%  12,82% 