GREEN EAST

INDUSTRIAL
CORPORATION

REYNALDO C. SEDEÑO III

Project Proponent

GREEN EAST INDUSTRIAL PARK

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Table of Contents
PART 1

 Executive Summary...................................................................4
 Company Description.................................................................8
 About our Services.....................................................................10
 Project Image Preview………………………………………………………………17
 Description of Management and Organization..............................18

PART 2

 Land Property Google Map.........................................................23

 Land Project Outline..................................................................24
 Strategic Location......................................................................25

PART 3

 Market Analysis.........................................................................28
 Market Competition Analysis.......................................................29
 Direct Competitors.....................................................................30
 Indirect Competitors..................................................................30
 Leasing Process Strategy............................................................34

PART 4

 GEIC Estimated Monthly Rental Income.......................................38

 Upfront Costs and Capital Expenditures.......................................39

PART 5

 Marketing Plan...........................................................................41
 Request for Funding...................................................................42
 Timeline for other Industrial Projects (Gantt Chart).......................43
 Financial Projections...................................................................44
References................................................................................47

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Part 1

3
Executive Summary

“None of us is as smart as all of us”—Ken Blanchard said. In the business industry,

this tells minor and major businesses who want to overcome change need the technical

capability, and must not only rely upon self capacity. Businesses as a whole, need

affiliation and partnership to grow and become expansive. The latter business will

eventually learn to be cognizant and smart as the first business through strategic

partnership. This means a lot to our project. We are a business that aims to learn from

our competitors and partners.

Nowadays, procurement of storage facilities or warehouse buildings is a vital

part of supply chain management. Supply chains are comprised of suppliers, retailers,

distributors, and other product-related enterprises. Various competitors in the warehouse

leasing industry use the same construction type and materials in building a warehouse,

however, access to renewable energy, efficient and sufficient power supply, matters most

concerning the chosen industrial location in certain areas in the Philippines.

Warehousing and distribution strategies have large implications for the supply

chain management. From his book, Ross wrote; “The choice of a warehouse (or channel

of warehouses) will affect every aspect of a firm’s financial well-being: fixed assets, cost of

labor, materials and services, size of marketplace available, customer service and pricing,

transportation requirements, supply chain efficiencies, and customer perception of the

company.” (Ross, 2004, pp578).

With the help of advanced technologies such as renewable energy equipment

and online platform or application for warehouses and distribution systems, it can prevent

repetitive expenses in the distribution network and suppliers can cut unnecessary costs in

the process.

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 In particular, the number of warehouses and geographical location are factors

that greatly affect land developers’ decision. This has something to think with what

Ronald Ballou (2004) has said, “products and services have no value unless they are in the

possession of the customer when (time) and where (place) they which to consume them.

Several factors have to be considered in locating a warehouse, such as proximity

to consumers, technical capability, order frequency, adaptability to change in basic

marketing principles such as product or service, price, place, promotion, and people.

Management has to understand prospective warehouse occupants consider these aspects

in choosing their desired storage facility.

GEIC (Green East Industrial Corporation) aims to be a pioneer

industrialize zone that caters warehouse lease service to supply chain businesses including

suppliers or manufacturers, retailers, and distributors. We endow premeditated locations

that would enable their consumers easily reach their service. We give prolific services by

suggesting our warehouse management system and affordable warehouse spaces. Part of

our unparalleled support to our client is to ensure our environmental commitment through

the use of renewable energy equipment for our buildings reflecting our corporate-

environmental responsibility. We have started this game plan for our company business

since there is soaring demand for electricity in the Philippines and high-priced power

generation charges for consumers. The country has only limited hydroelectric and

geothermal power plants to generate power and there hasn’t been nuclear power plant to

undertake electricity production. Solar, Wind, and Hydro energies as three-way solutions

and alternative renewable sources of electricity that will help the company and tenants

reduce energy costs within the daily operation. It will also help our environment in the

long run, and the project will eventually benefit from the country’s rainy and dry seasons

which can be a high yield source of efficient electricity.

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 There is thriving demand in the warehouse leasing business given that

manufacturers or distributors in NCR and certain areas of Bulacan still don’t have enough

storage units for their products or materials. Concurrently, we have observed the industrial

park's capacity to provide accurate warehouse locations for their logistic operation while

considering sufficient access to electricity and water. As a result, land developers often

choose highway locations with nearby high voltage transformers or 3-phase aligned

electricity lines. The corporation deemed it not necessary to choose a location that is

based in proximity to power providers such as Meralco transformers or power grid lines.

The company selected the location for this project since it is near recognized

towns and cities in the province. Furthermore, the industrial park will benefit from

government infrastructure developments that surround the area. The project location is

situated next to Pulilan Exit along NLEX where possible business owners normally ply in

and out to the northern portion of the province for business operation. Supply chains’

target markets were also found in Baliuag and nearby places. While clients mostly lease in

warehouse units, other manufacturers and property investors are looking to buy built-in

units. However, if they don’t have the financial capability to purchase the whole unit, they

will end up renting or leasing it.

We have experienced a similar case of selling available warehouse units in

Balagtas, Bulacan. However, the buyer does not have the financial capacity to buy out

warehouse property that would suit his type of manufacturing business. What he could

afford is to rent or lease several units in the warehouse compound.

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Company Description

Green East Industrial Corporation is a corporation formed to provide

warehouse rental services for logistic use. The core purpose of our corporation is to be

among the pioneering environmental-committed industrial corporation that functions to

provide warehouse units for businesses in various parts of Bulacan as well as to other

major locations in the Philippines. Our key project is the procurement of 222,892 m2 of

land property situated along Pulilan-Baliuag Bypass Road which has an

approximate frontage width of 100 meters facing the bypass road. We value

convenience and environmental responsibility, symmetrical to the value of our clients. The

company project portfolio includes the lease of approximately 1000 m2 to 2000 m2 of

warehouse floor areas. The target industry includes suppliers, resellers, distributors, and

manufacturers such as Lazada & Shopee online selling platform, technology and appliance

firms, courier & cargo shipping companies, and other manufacturing businesses that plan

to add distribution centers and storage buildings.

Green East Industrial Park is recognized as being an industrial

development whose primary business is to build spacious, solar, wind, and hydro energy

capable warehouse buildings. The corporation sets ideal project locations which are

consumer bound and are locations that might affect trailer trucks’ ease of access and

distribution optimization. The strategic location was among the significant strength of our

land developments. We target places close to B2B (business-to-business) and B2C

(business-to-consumer) fields, these must be along highway exits or bypass road

infrastructure developments adjacent to cities or municipalities. Our site location is

approximately an hour away from Metro Manila and 5-10 minutes away from Baliuag City.

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 We plan to collaborate with freight forwarders to maximize our fullest

services for our partners in commercial trading. In marketing promotion, our plan has

been aligned with using an online platform from our partner in multichannel selling. GEIC

doesn’t set aside its integration into digital marketing such as direct promotion on property

sites such as Lamudi, Property 24, and other online platforms.

Accredited brokers and agents can also offer our storage facilities. As a result

of our venerated affiliation, we would be able to give clients end-to-end services from

proposing product transportation to storage capability compromising environmentally-

friendly equipment and road accessibility.

Green East Industrial Corporation is an industrial corporation hoping to be listed to

PEZA (Philippine Economic Zone Authority) since the company is aiming to the affiliation of

investors to our business. This is a big opportunity for GEIC and our clients or tenants

because the government agency will entice other foreign investments to promote our

project location and it will help our clients engage in a commercial partnership. It can also

boost our lease revenue. Part of our plan is to expand our 222,892 m2 land area by

investing in land properties beside the proposed project as newly industrialized land.

GEIC Board of Directors is still vacant and will need at least 2 to 8 board

members after SEC (Security and Exchange Commission) and BOI registration.

As part of our prolonged commitment to sustainable land use in the country, we

adhere to laws of government such as its regulating body, HLURB / Housing, and Land

Use Regulatory Board wherein agricultural land shall be economically approved to be

converted into an industrial zone.

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About our Services

Online Platform & Warehouse Management System

GEIC in planned association with an online platform will offer solutions to

different businesses through leasing in support of their warehouse management system.

This platform has access to numerous retailers and distributors globally such as Lazada

and Shoppee. They have an application program wherein it could be used to support

multi-channel trading and online logistics. GEIC has already contacted the firm’s COO and

they are interested to be part of this mutual affiliation, however, it will need further

contracts such as a partnership agreement. The future affiliation is expected to be

beneficial for both parties.

Solar, Wind, and Hydro Energies

We plan to have a contract with a solar, wind technology firm, and hydro

panel manufacturer that specializes installation of technologies such as panels and wind

turbines in every building project. The two companies manufacture solar and hydro

equipment across Europe and Asia while the wind technology firm is still selling it out in

the US market. The contract is related to solar and hydro maintenance, service costs, and

equipment such as panels, inverters, batteries, wiring, and switches. However, the cost of

installation is not yet clear since the technology provider would estimate how many panels

should be used to accommodate each building since it has different sizes and natural

phenomena relative to sunlight, wind, and rain direction must also consider.

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RENEWABLE ENERGY CONCEPT

SOLAR-WIND-HYDRO

Other factors to consider

Our project will start with land acquisition, unit construction, project

promotion, warehouse selection feasible for occupants’ business, building turnover,

effective warehouse management operation, and freight transportation offer. Before the

turnover, the company will give a set of regulations and guidelines to our clients included

in the lease agreement relative to electricity, water, fire safety, freight agreement

( inclusive for business that requires freight service). As part of accountability to our

client's business activities inside the site project, we prioritize good physical warehouse

construction such as checking for proper elevation, natural lighting, provision for

ventilation, fire exits, and keeping security for the entire place.

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Security Enhancement

With regards to security enhancement, the management ensures gated vicinity.

In this way, we could be able to monitor and safeguard warehouse buildings from possible

non-authorized intrusion, vandalism, or property destruction. HR and Admin department

assign security guards that shall monitor the place 24 hours every day. Aside from hiring

security personnel, CCTV cameras are required at every building corner. This equipment

shall be used to support surveillance within the area.

Water Supply

The management will interact with local municipality in ensuring the industrial

park’s access to sustainable water. The management also has planned to build water

tanks that could supply water at every warehouse buildings of the compound.

Disaster Preparedness

As to fire and safety standards, the park will impose strict compliance to fire

safety protocols supported by training and seminars intended to keep risk-mitigation

exercises to industrial park’ tenants. These training will be held annually to ensure fire

prevention, to exercise readiness and resilience before and after a fire catastrophe.

In preparation for certain natural disasters like earthquakes and typhoons, we will

use quality construction materials for our buildings. In addition, the corporation looks

forward to initiating earthquake resiliency programs as part of a recovery plan and to uplift

preparation from our contingency plan.

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Structural and Technical Requirements

The project team plans to add warehouse features similar to other

industrial estates such as high beams that support the ceiling, a small office for each unit,

a door or gate to the side of the warehouse unit, waterproof walls, an insulated ceiling,

pipes for waterways and most importantly, solar panels, hydro panels, and bladeless wind

turbine, that can generate electric power for the whole site.

Our Site and Project Development Office will consult tenants if it's

necessary for their business to use high voltage capacity of electricity. If it is required, the

department would highly advise them to use a Meralco power supply for machines that

primarily intend to use or process this type of electrical current but if not, the department

will suggest using a renewable energy-generated power supply. On the other hand, the

electricity fee to our customers varies according to their electricity consumption from using

a battery-operated wind turbine, hydro and solar panels. The projected result from using

these three renewable supplies is that it will be more affordable compared to using

Meralco power since the maintenance fee is not much costly and power generation from

these three concepts will become more likely efficient. GEIC would require hiring our own

highly experienced solar and hydro cell technicians that will maintain the productivity of

the entire electrical system.

Lease / Rent Duration

Short-term rent has intervals of 2-6 months, 2 -7 months, longest is 2-11

months. The lessee shall issue a two-month advance deposit as a form of earnest

payment. A long-term lease includes 1 year up to 5 years of the contract. During this

period, long-term lease payment has accrued since assessed land zonal value appreciates

each year.

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Causative Influence

Moreover, government multi-infrastructure projects that are now under

construction in the province affect lease prices each year. After completion, these projects

are said to attract more foreign investment and would bring or persuade investors to

create business opportunities nearby given projects.

Table 1.0

Infrastructure Projects Concession Party Location

New Manila San Miguel Corporation Bulakan, Bulacan

International Airport /
Bulacan International
Airport (Aerocity)

North win Global City Megaworld Corporation Marilao, Bulacan

NSCR (North-South DOTR Tutuban,Manila-Clark

Railway Project Pampanga

Root Infrastructure DPWH- JICA (Japan Along Plaridel Bypass Road

Developments (C6 International Cooperation Agency)
Bypass Road, Phase 1 to
4 Bypass Roads)

Clark Green City/ New BCDA Clark, Pampanga

Clark City

Perhaps, it is the main cause wherefore there is existing demand in the

warehouse leasing industry, particularly in the province of Bulacan. Business enterprises

are encouraged to move into their customers in certain parts of the province. The

government initialized housing projects in Pandi as well as in other locations in the

province to minimize housing congestion and infrastructure development in NCR while

obtaining a decentralized form of building economic infrastructure developments in other

areas like projects that would create business opportunities and employment in the

province as an economic extension of NCR.

NHA (National Housing Authority) relocated almost one-fourth of NCR‘s

population including homeless families. Commercial enterprise crafted business

opportunities for the public and the public were those consumers who patronize

manufactured products from them. Citizens also contribute to the workforce of the

provincial economy.

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 We are still looking for a potential funder for this project. We’re also open to a

non-recourse loan with a corresponding payment term of at least 10 years with principal

interest. The estimated initial costs of our project are discussed in upfront costs.

Sale

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Based on the pie chart given, the management expects an increase in revenue

during the 3rd and 4th quarter periods. As an example, monthly marketing promotion of

Lazada and Shoppee like 9.9, 10.10, 11.11, 12.12 would affect their need for a storage

facility from monthly business operations and distribution. Their marketing campaign

begins in the month of September-December when customers are usually ordering items

online. Shoppee or Lazada would need an additional warehouse facility or sortation area

near their customers for these products to be properly distributed. The supplier or

distributor often avoids delays in transporting goods since it would incur additional costs

and complexity in their distribution process. Furthermore, warehouses are beneficial

during the holiday season.

Overseas Filipino Workers were expecting their package to be delivered

considering the expected time of arrival. Courier services like LBC will be forced to lease

or invest in additional storage facilities or distribution centers that will require central

locations in shaping supply chain operations.

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 Based on chart data, 20% are expected to rent during 1st quarter,

50% during 2nd quarter, 80% at 3rd quarter and 100% at 4th quarter. The reader can

notice the table that shows generated revenue during the quarter of the year. The table is

based on the percentage of tenants per warehouse area.

Table 1.1

Warehouse Number of Rental 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
Area Warehouse Price (20%) (50%) (80%) (100%)
Building Per
month
1000 m2 35 120,000 840,000 2,160,000 3,360,000 4,200,000

1100 m2 30 130,000 780,000 1,950,000 3,120,000 3,900,000

1200 m2 25 140,000 700,000 1,820,000 2,800,000 3,500,000

1500 m2 20 170,000 680,000 1,700,000 2,720,000 3,400,000

1800 m2 15 190,000 570,000 1,425,000 2,280,000 2,850,000

2000 m2 10 220,000 440,000 1,100,000 1,760,000 2,200,000

Total 135 4,010,000 10,155,000 16,040,000 20,050,000

Formula: (No.of warehouse unit x occupant percentage %) x rental price per month

Note that the data provided in this table are anticipated results. Perhaps, the

percentages of occupants may vary each quarter. The management can decide whether

to sell selected warehouse units after 5 years because it aims to acquire another capital

expenditure allocated for project expansion and it will need the budget from warehouse

units that have been sold. Afterward, GEIC can as well propose to property owners to sell

their acquired storage units from GEIC if they have decided to, GEIC can resell those units

at their agreed total contract price. The warehouse owners will pay GEIC at the agreed

commission percentage. Management has a target quota of at least 50 to 100% occupants

per year to get accumulated income and to pay off return on investment after 9 to 10

years.

In making this possible, we will need extensive marketing strategy, SWOT

analysis, marketing mix strategies, affiliated marketing similar to being associated with an

online platform. We will register our company name, logo, and name extension to (SEC)

Securities and Exchange Commission.

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 Project Image Preview

Solar Panels 2 Solar Panels 1

Hydro Panels 1

Bladeless Wind Turbines 1

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Description of Management and Organization

GEIC's organizational structure includes the Director as the main founder. He will be

called as the supervising manager inside the firm. He’s responsible to administer all

business activities of three departments, ensuring all contracts and requirements are met

especially for solar, wind, hydro and online platform transactions, to go across

negotiations with both local and international manufacturers and distributors. He is

designated at GEIC Property Management Office.

GEIC Property Management Office, on the other hand, acts as the finance

department of the corporation and is the central core of the entire business. The

supervising manager will have to evaluate financial documents including income

statements, cash flows, and balance sheets. The department has three subordinates

namely S & PD Office (Site Acquisition and Project Development), Leasing Department,

and HR & Administrative Office.

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The Site Acquisition and Development Office is tasked to communicate with the

leasing broker for new site acquisitions. The department requires submitting necessary

reports on expenses that have been issued before and after construction and other

expenses related to business operation. S & PD office is also responsible to submit reports

on generated income and the current financial condition of the firm. They will mostly

communicate with accredited accounting firms regarding the GEIC financial development

and the GEIC supervising manager with regards to the evaluation of financial documents.

The department is also tasked to monitor the power supply coming from this 3 renewable

equipment. The manager must coordinate with the maintenance technician in running the

whole electrical system effectively.

Lease Department is headed by a leasing officer that must be a qualified real estate

broker. This department is solely responsible for promoting our project location,

identifying prospective clients, and assisting their clients in site visits as well as in the

turnover of the warehouse. Their duty includes execution of contract such as leasing

agreement, explication of terms and conditions inclusive to that agreement. The leasing

officer must often communicate with S& PD Manager about site development and updated

warehouse units inventory. He must meet the target quota in closing clients and must be

dedicated to inviting distributors and manufacturers to lease on the industrial parks’

warehouse units. The leasing officer requires registering all of his clients or potential

clients to industrial park property management office before conducting a site visit.

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HR & Administration Office has the responsibility to ensure safety measures inside the

project area such as fire safety. This department will also handle logistics, utilities,

maintenance, and most importantly labor. Their duty and responsibility are to hire

employees such as security personnel that will ensure surveillance on the site 24 hours

every day. The department is required to submit report to director regarding tenants'

concerns and apply possible solutions. HR and admin must coordinate in each department

regarding the company’s internal control and must maintain employee engagement.

We will hire only 1 real estate broker or leasing officer for GEIC. Other

brokers are welcome to be accredited but they will get no percentage commission from

the company. They can decide to put mark-up price from our existing rental prices. To

hire a leasing officer, we shall work together with online job posting sites like job street,

linked in, Jora, or indeed for a qualified applicant. The director will ask certain questions

from the applicant after the final interview. The HR and admin will screen the applicant’s

information, including his skills and credentials. After he submits it all and passed the final

interview, he will sign the job contract, and the department will bring him on board.

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Part 2

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Land Property Google Map

ACTUAL SITE PHOTOS

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Land Project Map Outline

Rental Price per Warehouse Area

Portion F 1000 m2 P 120,000 per month

Portion E 1100 m2 P 130,000 per month

Portion D 1200 m2 P 140,000 per month

Portion C 1500 m2 P 170,000 per month

Portion B 1800 m2 P 190,000 per month

Portion A 2000 m2 P 220, 000 per month

Table 1.2 The table shows allotted warehouse sizes in each portion. Approximately, 3.71 hectares in

each portion. The company plans to install energy equipment for an estimated 135 warehouse buildings.

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 Strategic Location

Location is a vital factor for our business. The exact location of Green East

Industrial Park will be along Pulilan-Baliuag Bypass Road which is a strategic area

since it offers different market segments and it is the main gateway from Manila to other

parts of Bulacan.

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 The land property can be access through North Luzon Expressway and Pulilan-

Baliuag Bypass Road. Going straight to the right of the property is the city of Baliuag while

going straight to the left is Pulilan Exit. It is an alternative route to avoid traffic and road

congestion at certain exits in Bulacan particularly Bocaue Exit, Sta. Rita Exit and

Tambubong Exit. Roads and highways surrounding the project area are highlighted blue in

the image below.

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Part 3

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Market Analysis

Warehouse location is significant in every business needing product distribution

and expansion which aims is to provide products near their customers. This is an

important factor in every commercial enterprise. The image shown below is industrial

estates situated near North Luzon Expressway exits. Accessibility has a profound impact

on the lead time, a key consideration in any business.

According to the provincial development and physical framework plan of Bulacan,

it hosts (16) industrial estates and 2 (IT) park buildings. These projects host more

than 356 businesses engrossed in rice milling, warehousing, trading, hauling, trucking,

forwarding services, manufacturing, and business process outsourcing.

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Market Competition Analysis

Green East Industrial Park has several competitors in the warehouse leasing

business. However, the industrial park is expecting shallow competition in terms of our

energy infrastructure project in the province and the online platform that the project will

use in its dynamic process.

Direct competitors are industrial estates located within or near the project area

that offer the same type of service and infrastructure while indirect competitors are

businesses with large storage buildings, sortation centers, and other industrial warehouses

that offer the same type of business beyond 5 km distance from the site.

Demand for warehouse leases has dramatically increased especially in some areas

in Bulacan. In fact, according to Lamudi and other online property selling sites, warehouse

rental prices have accrued from Php 100,000 to Php 1 Million per month depending on

warehouse area and location. Forecast demand affects rental prices to gain despite

industrial estates’ warehouse zonal value and location. Everybody knows indeed that land

value never decreases despite stagnant development and perhaps it increases in just a

matter of time. However, if the corporation invests in land improvement, both the market

value of the building and land would simultaneously appreciate.

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 Table 1.3

INDIRECT COMPETITORS (Other Locations)

Industrial Estate Warehouse Area Location Rental Price per month Using Environment
(Floor Area) -Energy Source

Green East 1000 m2 Pulilan-Baliuag P 120,000 Yes

Industrial Park Bypass Road

BOS Industrial Park 1000 m2 Guiginto Bulacan P 120,000 None

T12 Polo Land 1000 m2 Guiginto Bulacan P 140,400 None

Industrial Estate

First Balagtas 1700 m2 Balagtas Bulacan P 229,000 None

Industrial Park

Sterling 1800 m2 Meycauayan Bulacan P234,000 None

Industrial Park

Table 1.4

DIRECT COMPETITORS (Pulilan-Baliuag)

Industrial Estate Warehouse Area Location Rental Price per Using Environment
(Floor Area) month Energy Source

GREENEAST INDUSTRIA 1000 m2 Pulilan-Baliuag Bypass P 120,000 Yes

L PARK Road
ROYAL CARGO Plaridel Bypass Road Yes
2
Pulilan Industrial Park 1200 m Balatong A, Pulilan, B P 144,000 None
(Location A) ulacan
Baliuag Industrial Park 1281 m2 Makinabang Baliuag P 140,900 None
Bulacan
Pulilan Industrial Park 1300 m2 Dampol II-B Bulacan P 156,000 None
(Location B)
Baliuag Industrial Park 1409 m2 Makinabang Baliuag P154,990 None
Bulacan

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 GEIC industrial park has an annual plan of setting price accrual on long-term

tenants since land value increments each year. The industrial park will begin to lease out

warehouse units far from the compound’s main entrance since buildings near the entrance

have a large storage capacity. Based on the table, direct competitors who have warehouse

sizes of approximately 1200m2 have rental prices between 120k up to 140k per month and

warehouse sizes of 1300 m2 up to 1400 m2 have rental prices between 150k up to 160k

per month.

Trends in warehousing can easily be observed from some suppliers and

distributors. It may not be cost-effective for them to deliver small quantities of product,

thus large quantities or batches are needed for orders. The warehouse management

system can be a big help to their network distribution system since the WMS platform will

let distributors manage their business in the most organized and systematic way.

Aside from this trend, KMC Industrial and Logistics Services noted that there is

a trend in cold storage facilities since these facilities or warehouses can be used for

cooling, freezing, and storage of perishable food products, items that are sensitive to

temperature. Because of this, refrigerated warehouses are common even before this

pandemic period when manufacturers and pharmaceuticals usually store bulks of materials

such as vaccines and other food items. Moreover, many warehouses for lease offer the

same avenue for innovation to the warehousing industry. Cold chain facilities usually have

compressor and condenser rooms for their refrigerating system.

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 First Bulacan Business Park is one of recognized industrial estates in

Bulacan. It is situated at Tabang, Guiginto Bulacan which is near at Tabang Exit, NLEX. Its

potential strength is its accessibility and strategic location which is near the proposed

Bulacan International Airport and NSCR railway project, however, its weakness is

to accommodate and ponder to be a pharmaceutical eco-zone and serve other drug

manufacturers. Since this is a COVID 19-era, it has an advantage as a cooling facility.

However other manufacturing companies consider making food items or

imperishable goods that will require additional storage facility since pandemic response

teaches the community to stay at home. And nevertheless there is existing demand for

online delivery for repacked food items stored in distribution centers. Government or

politicians need at this period, of warehouse facility for food donations such as rice grains,

food packs during general community quarantine or enhanced community quarantine.

Royal Cargo Logistics Services located at Plaridel, Bulacan offers warehouse lease

and freight services and uses solar panels as their main source of electricity, which can

cause efficient electricity consumption.

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33
Leasing Process Strategy Diagram

The management will start promoting the project prior completion of its

warehouse buildings. After warehouse buildings have been fully constructed and energy

equipments have been installed, the management will proceed to integration of our

associate’s online platform. Using their online service, tenants can manage their daily

business operation through structured warehouse management system.

After the firm secured proper warehouse management, it will propose the online

system to its tenants while conducting site inspection. During ocular inspection, the site

management shall be able to address tenant’s inquiry such as concerns related to

electricity, parking space, water facility, fire safety, etc.

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 If the business owner has decided to agree leasing industrial park’s

warehouse units, they will be required to submit an intent letter stating their interest to

lease the building. After letter submission, the management will issue a draft leasing

contract for the prospect lessee. The prospect lessee has to review the contract being

submitted to him. As soon as the prospect lessee agrees to terms and conditions

stipulated in the agreement, he shall proceed with advance payment of two months. The

earnest payment is non-refundable and the contract signed will be automatically voidable

if the tenant has decided to voluntarily pull out his business operation. He has the choice

whether to consume the duration stated in the contract or withdraw early.

Subsequently, warehouse occupants are required to submit documents

pertaining to legality and legitimacy of their business operation. They have to submit

copies and present original documents such as business permits, licenses or even tax

receipts to industrial park’s property management office.

After business documents have been submitted or complied, both parties have

to undergo in contract signing. The signing must be done in actual presence of the

business owner and the industrial park director. Once the contracts have been executed,

industrial park management will issue occupant’s permit to operate. The purpose of permit

to operate is to safeguard tenant’s right in conducting business operation with limitations

from guidelines imposed and implemented by the park’s management office within the

vicinity.

Warehouse turnover involves placing of materials or products inside the

warehouse. The park management will be strict to monitor minimum numbers of cargo

trucks per warehouse occupant allowed in the parking lot. Excessive trucks that illegally

parks at vacant parking space will incur corresponding penalty payment since it will

consume space readily available for other occupants.

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 Approximately, the ratio is one warehouse occupant has only one parking space

they can use to place their cargo truck. Tenants can request of additional parking space

for their trucks. However, the management will charge them monthly payment between

Php 30,000 to Php 50,000 per space depending on the lot size available.

The industrial park has to monitor its occupant’s entire flow of operation

including every products and raw materials being transferred into every warehouse

buildings. Concurrently, the management sets it goal of maintaining target number of

warehouse occupants per month. GEIC ensures of monthly inventory of both tenanted and

non tenanted units to observe if the management have attained target number of

occupants monthly, quarterly and yearly.

36
Part 4

37
 GEIC ESTIMATED MONTHLY RENTAL INCOME

The end goal of our business is to earn exponential income by minimizing direct costs and

contractual costs. The estimated monthly income is stated below.

Table 1.5

GEIC Estimated Monthly Rental Income Per Warehouse Area

Allotted Land Portion in Warehouse Estimated No. Of Consumed Space Rental Estimated
each Warehouse Floor Area Warehouse Unit Area for Price Monthly
Floor Area / Tenanted Units Warehouse per month Income
Buildings in each
Portion
37,100 m2 1000 m2 35 Units 35,000 m2 P 120,000 P4,200,000

37,100 m2 1100 m2 30 Units 33,000 m2 P 130,000 P 3,900,000

37,100 m2 1200 m2 25 Units 30,000 m2 P 140,000 P3,500,000

37,100 m2 1500 m2 20 Units 30,000 m2 P 170,000 P 3,400,000

37,100 m2 1800 m2 15 Units 27,000 m2 P 190,000 P 2,850,000

37,100 m2 2000 m2 10 Units 20,000 m2 P 220,000 P 2,200,000

Total : 22.1 Hectares Total: 135 17.5 Hectares Total Estimated

Warehouse Units Income per
month:
Php 20,050,000

Note: This table represents the anticipated numbers of warehouse units and occupants. Excesses in the lot
area may be assigned for right of way access, parking, and other infrastructure developments inside the site.
Geodetic engineers may further study the outline of land property.

38
Estimated Upfront Costs
1. Company Registration Expenses- Domestic Corporation with more than
40% foreign equity (Source: SEC)
 Paid-Up Capital (Domestic Market Enterprise) : Php 11,440,000
(220,000 $)
 Other Miscellaneous Expense in BIR Taxation and Business Permits:

 Office Supplies Set-up Cost:

2. Land Property Acquisition

2 2 2
 Price per m : Php 3500 per m x 222,892 m
 Total Contract Price: Php 780,122,000

Transfer Fees:

Table 1.6
Taxes % Payee

Capital Gains Tax 6% Seller

Real Property Tax 2% Seller

Documentary 1.50 % Buyer

Stamp Tax
Title Registration 0.25-0.75% Buyer

Transfer Tax 0.50% Buyer

Notary Fee 1-2% Buyer

Total Buyer

 Geodetic Survey Fixed Cost: Approximately P 440,000 (20k per hectare)

 Water Supplies estimated Cost: To evaluate
 3-phase Electricity: To evaluate

3. Materials and Equipment for Construction Project

 Soil and Rock Haul out: 600 dump trucks * 7000 per load:
P 4,200,000
 Construction Materials:
135 warehouse units x P 4,000,000
(Anticipated cost for 1 warehouse building)
 Contractor Expense: To evaluate

4. Materials for Solar-Electricity Conversion ( Subject for Purchasing Agreement)

5. Materials for Hydro-Electricity Conversion (Subject for Purchasing Agreement)
6. Materials for Bladeless Wind Turbines ( Subject for Purchasing Agreement)

39
Part 5

40
Marketing Plan and Promotion

The marketing campaign will launch prior the construction of warehouse buildings.

The company’s partner in online platform offers non-direct promotion upon recommending

our buildings to their local and international partners. Such partners consist of distribution

firms and courier services that will mainly target to acquire storage buildings for their

business.

Promotion materials include posters and banners displayed along bypass road with

the main purpose of influencing potential clients in warehousing leasing. Budgets for outdoor

advertisement and other miscellaneous supplies are stated below.

Budget for Promotion

Table 1.7

Specifics Budget
Online Marketing / Digital Marketing P 20,000 - 50,000
Facebook & Social Media Platforms Advertisement

Company Website

Banners/ Posters Tarpaulin P 5,000

Mobile Load / Telephone Installation P 10,000 -15,000

Mobility Expense / Transportation P 10,000-15,000 per month

Printer/s P 5000 - P10,000

41
Request for Funding

The amount of capital intended for the project will be around Php 1.2 Billion.

The project will be possible if the company has this sort of budget. The initial priority for

the use of the fund is the acquisition of land since land is a fixed asset and it is the most

solid indestructible form of security even without buildings built in it. The second priority

for the use of the fund is the registration of the company to SEC, BIR, and other

government agencies, since management cannot build or operate without the existence of

GEIC. The ownership of land will belong to the corporation. The third priority is the

construction of around 100 to 135 warehouse storage buildings where construction costs

will be roughly P 4M to P 5M each including the construction materials.

Setting up a corporation and its project requires potential investors. Investors are

entitled to shares in the corporation. The founder will be open as well to a non-recourse

loan with a corresponding payment term of at least 10 years with principal interest.

Green East Industrial Corporation believes that they will not only be made for a

single project. This means that the firm are also set to help other businesses in Visayas,

Mindanao, and various parts of the Philippines where similar industry are booming. This is

why proponent has created a timeline for additional funding since it will be required to

complete other project.

42
 Project Gantt Chart Year

2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034

Luzon:
Bulacan (Pulilan Bypass Road )
Land Procurement and Building of Industrial Project 22.
3 Has
Marketing Promotion
Building Construction
Installation of Solar, Wind, and Hydro Equipments
Construction Completion and Leasing Period
(WMS Operability)
Bulacan (Pulilan Bypass Road )
Selling Period of Warehouse Units
Bulacan (Pulilan Bypass Road )
Industrial Project 22.3 Has (Land Property Expansion )
From 22.3 to 40 Hectares (Tentative Area)
Extension Plan Visayas:
Land Procurement Cebu City- Near Mactan-Cordova Link
Expressway
Marketing Promotion
Building Construction
Installation of Solar, Wind, and Hydro Equipments
Construction Completion and Leasing Period
(WMS Operability)
Selling Period of Warehouse Units
Land Expansion Plan
Table 1.8 TIMELINE FOR OTHER INDUSTRIAL PROJECTS

43
Financial Projections

According to the news article of KMC Industrial Logistics and Services, they

have said that there is existing demand for storage facilities such as the cold facility in the

country, and it is expected to continue for both local and international businesses that

need to store covid-19 vaccines and imported foods.

This was supported by the article from Commercial Property Executive entitled

“What to Expect from Industrial Sector in 2022” by Evelyn Jozsa. She emphasized that

there is a massive race for space. She also said that this was seen since the pandemic

took place. Throughout 2021, extensive growth in E-commerce, manufacturing combined

with supply chain fueled demand for space in the industry sector, especially warehouse

and distribution centers.

Port calls underscored that logistics and warehousing will be a major catalyst

for the real estate sector’s growth in the long term. Additionally, future supply expansion

will be in South and North Luzon where most manufacturing companies are located and

there is available land for development. Available warehouse supply in South Luzon (69%

supply against a demand of 17%) and North Luzon, where supply is at currently 14%

against the demand of 11%). There remains sufficient industrial land, except in the NCR,

and construction costs are still stable.

Philippine Cold Chain Industry Road Map 2021-2023, said there is a target to

increase cold storage facilities in the country by 10% to 15% yearly.

44
 There is a narrow percentage gap (around 3%) between the number of storage

buildings against the demand or procurement mainly in North Luzon. This means that

prospect lessees are expected to gain while property developers are trying to seal scarcity

of digits in warehousing industry. The numbers of warehouses available for rent may

affect the rental price per month which reflects the increment value in the financial

condition of the corporation that is stated below.

Table 1.9

Annual 1000 m2 1100 m2 1200 m2 1500 m2 1800 m2 2000 m2

Increase
in storage
Facilities

10% 1,056,000 975,000 882,000 850,000 712,500 550,000

11% 1,161,600 1,072,500 970,200 935,000 783,750 605,000

12% 1,267,200 1,170,000 1,058,400 1,020,000 855,000 660,000

13% 1,372,800 1,267,500 1,146,600 1,105,000 926,250 715,000

14% 1,478,400 1,365,000 1,234,800 1,190,000 997,500 770,000

15% 1,584,000 1,462,500 1,323,000 1,275,000 1,068,750 825,000

45
 The chart above shows the potential financial projection of a 10% to 15%

annual increase in storage facilities. The digits are based on table 1.7 which shows the

sum of rental fees per warehouse area annually multiplied by the annual increase in

storage facilities. Results may vary according to the warehouse area and rental price per

month.

46
References:

Online Sites

https://business.inquirer.net/335580/towering-expectations-in-2022/amp

https://kmcmaggroup.com/research-insights/2022/3-biggest-benefits-of-locating-in-an-ind
ustrial-park-in-the-philippines/

https://kmcmaggroup.com/research-insights/2022/industrial-real-estate-what-are-cold-stor
age-facilities-in-the-philippines/

https://www.therealestategroupphilippines.com/2021/05/taxes-and-title-transfer-process-o
f-real-estate-properties-this-2021/#:~:text=Average%20Title%20transfer%20service%20f
ee,the%20person%20doing%20the%20transferring.

Books and Articles

Ballou, R.H. (2004). Business Logistics / Supply Chain Management (5th ed.)
Upper Saddle River, NJ: Pearson Education.

Ross, D.F. (2004). Distribution Planning and Control: Managing in the era of supply
chain management. New York City: Springer Science + Business Media, LLC.

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