Project Itahari Mall

Rano Itahari Complex Pvt. Ltd.
1 Pa Project Snapshot
1.1Executive Summary
This study aims at determining the Feasibility Study for the establishment of a
Commercial Shopping Center (Mall) in Sangeet Chowk of Itahari. The mall will
provide all the services needed by the customers while shopping, to meet their family
and personal needs in one safe and clean place, and a one that ensures the existence of
car parking away from the overcrowded places within the business area within the
periphery of main city. The mall includes a clothes stores, footwear stores, gifts stores
and accessories stores. In addition, the mall includes banks, jims, restaurants,
recreational area for children and adults, cafes and others. The reason behind
establishing the Mall is due to the current over crowdedness of the business Areas and
the difficulty of finding suitable parking for shoppers, and the lack of a
comprehensive recreational center that is suitable for families in the Area of
Maharjgunj.
1.2 Initial Indicators of the Project: e Mixed - use Shopping Mall.

(Service /Recreational / Commercial)–Sangeet Chowk Itahari
The project is unique in these differences of other running malls
- Covered Area 0-2-8.5 Bigha
- Total Built up Area-28580 Sq. ft (100%)
- Total Rentable Area-22320 Sq. Ft(85%)
- Total Public Area-4923Sq.ft (15%)
- Rate of Construction Per sq ft Rs.4184.25
- At main road Itahari
- Only 5 stories of built up
- Enough natural light in every corners
- Enough natural air
- Specific business zoning Retailing, Bank, Restaurant, jim
- Enough parking on ground and underground
- Environment friendly
- Differently able friendly
- Water harvesting utilization
- Fire safety
- High alert security
1.3The project could include the provision of at least the following services:
 Restaurants (franchise / local).
CITY of DREAMS PROJECT

 Clothing, footwear, accessories, gifts, perfumes stores

(International and local).
 Electronics shops.
 Banking services.
 Services shops such as a Jim, training work shop
jewelry, etc.
 Bags and gift shops of leather products.
 Famous and reputable cafes.
 Recreational Center for children and adults.
 Jim
 Children Games and entertainment zone
 Parking spaces for shoppers and visitors of the mall, which can
accommodate more than 10 cars inside the mall underground and beside
the mall and about 50 bikes in and around the mall.Other services
(kiosks that often used to sell candies, ice cream, chips potatoes and
mobile phones and their accessories, etc ...).
Project Description
The project is based on developing a multi-purpose property in the land covering
34.3547 Ropanies , to provide leasing services for tenants to invest in any of venture
for 37 year. The project land is leased by Family of JibanKunj.
The investment cost of the project is about NRs1,826.415 million.
The average return on investment during in first year is about 16.02 %.The internal
rate of return of the project is about 16.14%.
The average added value of the project in ten years is about 3.64 million. Assess
The Sensitivity Analysis indicates a low risk in case of 10% increase in investment
cost, or 10% increase in operating costs, or 10% decrease in revenues, which is quite
satisfactory. The major strong point of the project are:
1. The absence of an integrated and similar project - large area covering and low
rental rate mall in the City inner Ring Road.
2. The desire of the local elites’ people to have such mall,
3. Local elites residence
4. Parking Accessibility
2. Introduction
2.1 With increasing urbanization, our country is facing a new challenge of how
well the urban environment and living standards of people can be improved?
Rapid Growth in the population of urban area is likely to continue and there is no
sign of retardation of this process. People are lot busier and source of income is
also high. The people in urban area are seeking proper and suitable office and

shopping complexes to promote their business and it has become tough to find
proper business complexes in key places. Because of this reason people choose
such complex in busy and main areas of city which suits their living standards
without wasting time. For this reason, finding suitable office complex in right
place for business, recreational and restaurants other business belongs to their
number one choice.
2.11 OBJECTIVE OF COMPLEX

For the betterment of the city well-planned multipurpose shopping complexes are
inevitable. The main objective of our project is the planning and development of
business complexes facilities, recreational activities, restaurants and business
show rooms as per the need of the market. We have a well-experienced and
qualified team of professionals to see that all the technical aspects are fulfilled
during the project duration.
 Because of rapid growing people in the location there are lots of middle and
higher level people which are seeking easily available office complex within
the market of Sub rubs road and surroundings. The complex can fulfill their
desires and needs within short time. This shows that the future of the proposed
complex projects seems to be bright and prosperous.
 Presently there are only few business complexes that are running the business.
Thus, the proposed complex seems feasible from the marketing aspect.
For the said purpose we have already fulfilled all technical requirements
prescribed by the Government authorities and they will have granted permission
for the planning and construction of office complexes.
2.2 Project Description
The project is the establishment of a Commercial Shopping Mall in Jibankunj
Maharajgunj Kathmandu, to provide leasing services for the hypermarkets,
restaurants, shops to demonstrate and sell clothing, footwear. Leather products,
electronics, banking services and recreational center for children and adults, ladies
and gents ...etc. These services will be provided in a safe and clean environment
within a two-storey building as follows:
 Basement floor is for parking, with an area of 14,316.069 sq.ft. mostly
use for 458 cars and 432 bikes parking and a shop of Hypermarket
covering 6950.96 sq. ft.
 Ground floor covers 8,7631 sq. ft. including mezzanine which will be
plan to set retrial shops covering 20,946.17sq.ft., Restaurant and
gaming zone 8345.34 sq.ft. , and Ice rink of 2,939.74 sq.ft., excluding
these things car and bike parking space is provided in the side of the
mall area.
 First floor covers 63,293 sq.ft. dedicated to leasing hyper market and
retrial shops, and restaurant and gaming zone. The project can establish

hypermarket covering the space of 43,384.31Sq.ft.by itself. This will

be a destination place for all household needs and grocery
requirements starting from morning to bed and will target end-
consumers. This concept is based around self-service where consumers
can pick from the shelf to buy as per their requirements. The project is
in the elite’s colonies. The store will cater the needs of all types of
consumers as it will have a varied mix of merchandise. Retail store
will have area of 55,713.24Sqft as per availability of space and will
have good equipment and fixtures.
 Second Floor covers 86,090.76 sq.ft including mezzanine which
includes the recreational nightclub, restaurants of different type and
movie hall. The restaurants of the project will be different types. Asian,
European, Chinese, Nepalese special, continental, restaurants will be
leased. The food court will be full of vegetable, non-vegetables,
alcoholic and non-alcoholic, buffet, self service; pay first counter will
be started.
 The total circulation area of the mall will be 61,210.20 and total built
up area of the whole mall is projected403,096.50sq.ft. which is
equivalent to 37462.5 Sqm. The built up area coverage including
carpet area with uses specific purpose per floor detailed is the
financial anxtures-1.
 First floor, which includes major hyper market, commercial shops, as it
preferably to rent one Restaurant of the same classification, in addition
to other shops.
 The second floor includes a recreational games center and a height that
exceed 10 meters in some parts to include games that suit all members
of the family. The floor also includes famous restaurants, cafe, juice
and sweet shops, with an attempt to lease one shop of the same
classification. The night club will be the additional attraction of mall.
 All floors contain small kiosks placed in strategic places inside the
mall, and thus Increase the percentage of space exploitation and
increase the rented area. These kiosks are often used for fast-rotating
goods such as candies, ice cream Potato chips, mobile accessories and
gifts ... etc.
 Guarding, cleaning and lighting services for all entrances and corridors
of the mall, to ensure a permanent safe and clean environment.
• Elevators to all floors Common space at the top floor Luxury finish
including sufficient bathrooms
• Backup Electricity
• Sufficient water supply for 24 hours with planned sewerage facility

• Type of building is solid with earthquake resistive structure, concrete

(floor) slabs and external walls, with guaranteed quality of the
materials in accordance with the International Standard.
2.3About the Promoters
The project will be set up by Mr. Pukar Narsimha Rana who is owner of City Dreams
Hotel and making new Company established as, “City Dreams Pvt. Ltd” (CDP)
umbrella under the Group. He is owner of the hotel city dreams and other good
running company. The promoter has long experience in setting up new businesses and
nurturing the businesses in fast growth mode. Established in Lazimpat, the Group is
now one of the fastest growing business house in the country. Its main corporate
office situated at the heart of Kathmandu city, Lajimpat, it is run by the professionals
and experts with profound knowledge and extensive experience in diverse fields of
businesses. Mr. Sameep Narsimha Rana is son is also in the director of the company
and Mr. Kabir Jung Thapa is The Chief Executive Officer of the company. CEO Mr.
Thapa is qualified and experience in the travel and tourism sector.
2.4Conceptual framework
The project aims at creating an efficient supply chain and market food stuff and daily
needs to consumers in residential areas. This will be achieved by addressing the
constraints of the current system while taking advantage of the changing scenario of
consumer preferences for high quality products and convenience. The current status of
food market in Nepal can be articulated as per the following postulates:
 Nepal is passing through a phase of transformation

 Untapped potential, which need to be explored
 Markets bulging in both size and volume
 Radical change in buying attitude, awareness and affluence
 Readiness of consumers to spend extra money to get better products and services
2.5Means of Finance
Total cost of project is NPR 1825.696Mn of which promoters will contribute around
NPR 547.706Mn i.e. 30% of the project cost including land value. Remaining 70% of
the cost i.e. NPR 1277.98Mn will be financed by bank as term loan.
Table 1: Means of Finance (In Mn NPR)

Means of Percenta Total

Finance ge
Equity 30% 547.70
6
Term Loan 70% 1277.9
8
Total 100% 1825.6
96
2.51Key Financial Indicators
Financial feasibility has been assessed through feasibility indicators and ratios, IRR,
Payback Period, Break Even Point, and PAT. Financial feasibility indicators and ratio
are as below:
Table 2: Key Financial Indicators

Envisaged (in NPR
KEY INDICATORS
Mn)
As per first year
Net Profit After Tax (Mn NPR)
184.293
Internal Rate of Return
16.14%
Debt Service Coverage Ratio
1.78
Break Even Point in First Year of operation
81%
PAY BACK PERIOD (YEARS)
7.01
3Project Background
3.1Introduction
The global food landscape is rapidly evolving as consumer needs shift with changing
lifestyles. Food habits and tastes are amalgamating in the global melting pot.
Consumers are increasingly becoming aware of internationally established brands and
standards. They are more open to experimenting with processed and convenience food
than their predecessors. With these changes, manufacturers, retailers and suppliers of
food and consumer items are reorienting their businesses strategies to meet these
demands. The globalization and liberalization of Nepal’s economy has also opened

doors of world to natives of Nepal who are scouting career and business opportunities
overseas.
According to the International Labor Organization, 68% of Nepal's population is

employed in the agriculture and forestry sector, accounting for 34% of the GDP. The
agriculture sector contributes around 33% of the GDP of Nepal. Nepal produces wide
varieties of fruits and vegetables and it produced about 37 lakhs MT of vegetables and
10.96 Lakhs MT of fruits in 2015-16. The production of fruits and vegetables, during
2005-06 to 2015-16, has grown at a CAGR of 7% and 5% respectively. Nevertheless,
Nepal struggles to produce an adequate supply of food for its citizens and imports
large food supplies from its neighboring countries such as India and China
A strong and dynamic food supply chain is important for diversification and
commercialization of Nepalese agriculture. However, food supply chain is marred by
various problems viz. lack of post-harvest and marketing infrastructures, seasonality,
high capital investment for setting up captive infrastructure, high cost of packaging
material etc. The situation is further aggravated due to lack of R&D, quality testing
facilities, poor logistics and lack of awareness amongst farmers on Good Agricultural
Practices. As it is evident from the above that the problem plaguing food supply chain
are not limited to one specific area and the gaps are prominent across the sector in
entire value chains right from raw material to storage, production, marketing and
logistics. Hence it is imperative to have a comprehensive and integrated approach
towards development of integrated food supply chain to ensure delivery of high
quality food to end consumers in Nepal and reduce dependence of Nepal on imported
food products especially in grains, fruits and vegetables.
3.2Socio Economic Profile of Nepal
Nepal is a landlocked central Himalayan country in South Asia. Nepal is divided into
7 states and 77 districts and 744 local units including 4 metropolises, 13 sub-
metropolises, 246 municipal councils and 481 villages. Having population of 26.4
million Nepal is the 93rd largest country by area. Bordering China in the north and
India in the south, east, and west, it is the largest sovereign Himalayan state. Nepal
has a diverse geography, including fertile plains subalpine forested hills, and eight of
the world's ten tallest mountains, including Mount Everest, the highest point on Earth.

Kathmandu is the nation's capital and largest city. Nepal is a multi-ethnic nation with
Nepali as the official language.
Rice is the staple diet in Nepal and around three million tons are produced annually.
Other major crops are maize, wheat, millet and barley. Besides food grains, Cash
crops like sugarcane, oil seeds, tobacco, jute and tea are also cultivated in large
quantities. The agriculture sector occupies almost one-third of Gross Domestic
Product (GDP) with about two-third of country’s population are dependent in this
sector. Contribution of this sector to GDP was 32.12% in fiscal year 2014-15, which
dropped down to 31.69 percent in fiscal year 2015-16. In fiscal year 2015/16, the
annual growth rate of agriculture sector was expected to be 1.14% at constant prices
of 2000-01.
As per United Nations Department of Economic and Social Affairs report 2014,
Nepal was among the top ten fastest urbanizing countries of the world during year
1990-2014 at rate of 3 percent. It is projected that in the coming years during 2014-
2050 Nepal will remain among the top ten fastest urbanizing countries in the world at
the increasing rate of 1.9 %. Bringing food to the doorsteps of ever increasing urban
consumers will be a challenge in terms of creation of efficient food supply chain.
3.3Demography
The important demographic features about Nepal are given in the table below:
Table 3: Demography of Nepal
Particulars Value
1. Total Area of the Nation (Sq. Km.) 1,47,181
2. Mountain 51,817
3. Hill 61,345
4. Terai 34,019
Land Use Statistics (‘000 Ha.)
5. - Agricultural Land Cultivated 3,091
6. - Agricultural Land Uncultivated 1,030
7. - Forest (including shrub 1560) 5,828
8. - Grass Land and Pasture 1,766

Particulars Value
9. - Water 383
10. - Others 2,620
11. Population, 2015 2,88,50,717
12. Urban population: 18.5% of total population
(2015)
13. Rate of urbanization 3.18% annual rate of change
(2010-15 est.)
14. Population growth rate per annum 1.24% (2016 est.
15. Households Number (Census 2011) 54,27,302
16. Population Density per sq. km., 199
(Census, 2011)
17. Population engaged in Agriculture 65.6
2011 (%)
18. Total Agricultural Holdings No., 38,31,093
(2011/12)
19. Irrigated Area up to 2014/2015(Ha.) 13,74,869
Source: CBS, Nepal in Figures -2015
The age and sex wise breakup of metropolitan population of Kathmandu is presented
in figure 1. It may be observed from the figure below that metropolitan population of
Kathmandu comparatively young and nearly 3/4th of the population of city falls under
35 years or less age group.
Figure 1 Age wise Population of Kathmandu Metropolitan City

(Source:http://kathmandupost.ekantipur.com/news/2016-05-28/42-percent-
population-lives-in-urban-centres-economic-survey.html)
It is also worth noted that there are large number of Nepali citizens living and
working in other countries. The list of NRNs is provided below (data available is for
different years but presented here to show that a large population is living abroad):
Table 4 Non-Residential Nepalis

Country # of People with Nepali Origin Census Year
India 1,09,25,000 2008
Malaysia 7,00,000 2011
Burma 7,00,000 2010
Qatar 4,00,000 2010
United Arab Emirates 3,25,000 2010
Saudi Arabia 3,15,000 2010
United Kingdom 1,31,000 2009
Australia 1,24,636 2011
USA 59,490 2010
Japan 57,525 2011
South Korea 50,908 2009
Canada 30,780 2006
Thailand 20,000 2010
Total (Approximate) 13,800,000
Source: https://en.wikipedia.org/wiki/Non_Resident_Nepali
Many of these Non-Residential Nepalese (NRNs) have witnessed retail store boom in
other countries and have experienced the shopping experience in large retail stores.
When they return to Nepal, they look for similar experience. However, due to lack of
many players in organized retail, they visit the local kirana shops or limited
alternatives. This segment also demands safe and healthy food especially pesticide
and chemical free. The proposed project will also cater to the need of large number of
NRNs who are nearly 47.48% of the total population of Nepal.
3.4Economy
Nepal is a developing country with an agricultural economy. In recent years, the

country's efforts to expand into manufacturing industries and other technological

sectors have achieved much progress. Farming is the main economic activity followed
by manufacturing, trade and tourism. The chief sources of foreign currency earnings
are merchandise export, services, tourism and Gurkha remittances. The GDP
(constant price-2015-16) was around NRs. 2,248,690.0 million. The GDP of Nepal is
mainly categorized in Agricultural and Non-agricultural GDP and the agricultural
GDP stood at NRs. 651,469.0 million whereas Non-agricultural GDP was NRs.
1,597,222.0 million.
Table 5: GDP of Nepal (in BillionNPR) for 2015-16

1. GDP at current price 2,248.69
- Agricultural 651.47
- Non-agriculture 1,597.22
2. GDP at constant (2000/2001 prices) 695.19
- Agricultural 245.66
- Non-agriculture 479.89
3. Per Capita GDP at current prices (in NPRs.), 79,370.0
4. Per Capita GDP at constant prices (NPRs.), 26,972.0
Source: CBS, Economic survey-2015-16
Agriculture and Forestry sector is the leading sector in terms of contribution to

National GDP with share of 29%, followed by the Wholesale and retail trade with
13% share. The contribution in the GDP of Nepal by the different sectors in 2015-16
is shown in the figure.

Other Community, Social and Others; 7.12%

Personal Service Activities;
4.00%
Agriculture and Forestry;
28.97%
Health and Social work; 1.65%
Education; 6.28%
Public Administration and De-

fence; 2.42%
Real Estate, Renting and

Business Activities; 8.51% Fishing; 0.47%
Mining and Quarrying; 0.55%

Financial Intermediation; 4.61% Manufacturing; 5.14%
Transport, Storage and Com- Electricty Gas and Water; 0.94%
munications
8%
Construction; 6.39%
Hotels and Restaurants; 1.93% Wholesale and Retail Trade; 13.21%
Figure 2: Percentage Contribution to GDP by different Sectors (2015-16)
Kathmandu valley is most important industrial and commercial center in Nepal. The
Nepal Stock Exchange, the head office of the national bank, the chamber of
commerce, as well as head offices of national and international banks,
telecommunication companies, the electricity authority, and various other national
and international organizations are in Kathmandu. The major economic hubs are the
New Road, Durbar Marg, Ason and Putalisadak.
As per the economic survey1 conducted by government of Nepal, the economic output
of the metropolitan area alone is worth more than one third of national GDP around
$6.5billion in terms of nominal GDP NPR 550 billion approximately per year $2200
per capita income approx. three times national average. On the other hand, average
per capita income in Nepal has risen at 9.4% Compounded Annual Growth Rate and
has improved from NPR 51,598 in 2010-11 to NPR 80,921 in 2015-16. It is expected
that per capita income in Nepal will grow at the same CAGR for next four years and
the per capita income will be more than double i.e. NPR 115,985.56 in ten years
ending 2019-20. Hence the projection is shown below in figure 3.
1
http://www.newbusinessage.com/Articles/view/3611

Figure 3 Per Capita Income in Nepal
Actual Projected
Source: Economic survey, Nepal (New Business Age Newspaper Article,

2016)
Though average per capita income in Nepal is approx. $ 800 however, there is great
variation between urban and rural consumption. The averages household consumption
of urban and rural households in 2015-16 was NR 4,31,337 and NR 2,48,893
respectively. This shows urban households consume about 1.7 times higher than the
rural households. Food is the major expenditure item in both urban and rural areas in
2015-16 having a proportion of 59.8% in rural and 44.9% in urban area.
3.5Export Import of Food Products in Nepal
There has been significant effect on export import of food items due to urbanization
and changing patterns of food consumption. Demand for food items has increased in
the recent years. As per import export data shown in table below, the export
percentage of food items has significantly decreased whereas import for food items
such as fruits, vegetables, cereals, grains has increased.
Table 6: Import and export statistics of Food Items in Nepal

(Figures in ‘000 NPR)

2014-15 2015-16 Chang Chang
e e
S. Import Expor Import
Description Exports Expor Impor
N. s ts s
ts ts
1606.6 17958. 3% 18%
1553.92 15206.
Edible vegetables
1 31 1 16
and certain roots
and tubers.
Edible fruit and nut 2841.44 -93% 1%
10675. 185.39 10819.
2
03 23
Cereals crops -3% 9%
16.80 35670. 16.30 39025.
3
12 91
Oil seeds and -45% 24%
1276.21 9065.7 707.51 11284.
oleaginous fruits; 6 55
miscellaneous
4 grains, seeds and
fruit; industrial or
medicinal plants;
straw and fodder.
Source: Ministry of Finance, Department of Customs Nepal
With changing consumer preferences and lifestyle, economic growth and higher
disposable income with lowering of trade barriers, Nepal has emerged as an attractive
destination for international brands and similar trend is also observed in apple. In
Nepal more than 40,000 metric tons (MT) of apples, worth more than US$12 million
are imported from India and China. Annually, only about 10% of the apples from
Jumla make their way out of the district. Despite their higher prices compared to local
varieties, consumers prefer imported apples due to uniformity of size, proper sorting,
grading and post-harvest activities adopted, attractive packaging and better
appearance. The peak season for imported apples is normally January-July, which is
the off season for domestic produce. During last 2-3 years, Chinese apples with
protective sleeves have flooded Nepal markets and giving very tough competition to
Indian apple growers.

o Marketing Infrastructure:
 As per the survey conducted, it was observed that very few organized
markets for grains, fruits and vegetables and other food items exist in
entire Nepal. Most of them are kirana stores or small grocery shops.
Table 7 Market centres in Nepal: 2014/15

Collecti Wholes
Development Haat Retail
on ale Total
Region Bazaar Market
Center Market
Eastern 541 46 45 5 637
Central 232 158 97 15 502
Western 102 138 25 2 267
Mid-western 35 91 5 3 134
Far Western 16 49 18 1 84
Total 926 482 190 26 1,624
Source: Annual Progress Report Fiscal Year 2071/72 (2014/15) ABPMDD, DOA
Hariharbhawan, Lalitpur
 The annual progress report 2014-15 by ABPMD

 D shows only 190 organized markets exist for fruits and vegetables and other
food items and rest exist as un-organized markets like Haat Bazaar and
wholesale markets.
 Lack of market information systems, high marketing costs, non-availability or
high cost of quality packaging materials: The project will assist farmers
through farmers service centers. Farmers will be provided with daily market
prices/ other information and aggregation services to plan harvesting and
adopt post-harvest practices to reduce marketing cost and post-harvest losses,

 Kathmandu, the capital city of the Nepal is the most populated city and is
commercial hub of the Nepal with about 8.0 Million population. As per the
2011 census, the population of Kathmandu valley has grown at a rate of 7.8%
during 2001 to 2011. Kathmandu consumes around 1200 MT of Fruits and
Vegetables per day and more than 90% of this consumption is supplied
through only two wholesale markets i.e. Kalimati Wholesale Market and
Private Fruit Market in the city.
 Besides, there is growing demand for healthy and pesticide residue free grains,
fruits and vegetables in Kathmandu and adjoining urban centers due to
increasing awareness and changing consumption pattern. Besides, the existing
markets don’t have any post-harvest infrastructures like cold stores, ripening
chambers etc.
4 Market of the Proposed Mall

4.1The project targets all investors in the commercial and the services sectors from all
over the Valley to enable the residents to get shopping and entertainment services in
one place (Mall) that meet the needs of all family members.
Major drawback of existing marketing chain is a large number of intermediaries,
resulting in increased margins in the chain and multiple handling. As depicted earlier
in para 1.2.3.4, the producer/ farmer receives only 40-45% of price paid by consumer
and while other actors receive the lions share in supply chain without adding much
value. Following supply chain model is proposed to minimize the intermediary
interventions and increase price realization to farmers or first grade of producers. The
proposed model has been developed in view of the present scenario and international
developments, which are expected to influence similar developments in Nepal.

4.2Expected Services and Products

The expected project services include the provision of areas for rent, at least for the
following:
 The hypermarket.
 Restaurants (franchise or local).
 Clothing, shoes, accessories gifts and perfumes stores (international and local)
similar to malls in Amman and the Gulf States.
 Electronics shops.
 Banking services.
 Services shops, such as a pharmacy, Dry Cleaning, Ironing steam and plated
jewelry…etc.
 Bags and gifts shops of leather products.
 Major Telecommunications Companies such as Telecom, NCell
 Famous and reputable cafes.
 Recreational Center for children and adults.
 Safe and clean environment.
 Car parking for mall shoppers and visitors for more than 358 cars inside the
mall, and about 100 cars in front of the mall.
 Others, such as kiosks, which often used to sell candies, ice cream, chips,
potatoes and mobile phone shops and accessories ... etc.
4.3Expected Prices
Since currently there are no malls in nearby area, the prices found in nearby shops in
Maharjgunj have been reviewed. The prices in the commercial markets scattered in
teaching site have been collected. The prices ranged from 40000 to 100000 NRs. per
month for the shop, which has an area about 400-600 square feet. By taking the
average of the leased space of 500 Sq.Ft., then the price per square feet will range
from 800-2000NRs / month / ft2 .Thus, we have determined the pricing strategy for
the project in order to fit with the prevailing prices in , taking into account the
additional services provided by the mall compared to those provided by the current
markets. The following is the expected average rent prices in the Mall.
Table : Expected Average Rent Prices

- Basement-1 as per the schedule of parking charge
- Ground Floor- Rs.300 per sq. ft. per month
- First Floor- Rs. 250 per sq. ft. per
- Second Floor- Rs. 200 per sq.ft. per month
Statement Average Annual Rent (JD / m2)
Hypermarkets - Rs250
Retail Shops - Rs .300
Ice rink - Rs. 300
Restaurant, and
Recreational Games Center Rs. 200

Movie and Theatre Rs.200

Kiosks Rs.40,000 per Number per month
Mall Services Fee (lighting and air conditioning the walkways in summer and winter,
security guard, maintaining the cleanliness of Mall walkways and an effective Mall
Management that can be referred tenant.
4.4Promotion
Promotional strategy for the project includes the following:
 Focusing on the administrative staff who is experienced in marketing
and management of shopping malls, in order to attract the most
potential tenants of the Mall.
 Offering price discounts and payment facilities for the first tenants who
are interested to rent in the mall especially from of international
companies and agencies in order to encourage them. In addition,
Franchisee India a series of incentives and discounts can be offered for
locally known major traders in the market.
 Designing a website and using the social media.
 Brochures for the Mall and its services.
 Advertisements in local newspapers and other media at the beginning
of the project.
 Placing billboards on the main streets and on roads leading to the Mall.
 Conducting a grand opening ceremony and invite all concerned parties
to this ceremony.
 Allocating a big budget for promotion, as the mall needs a constant
publicity and advertising, through all means of publicity, advertisement
and media with a focus on recurring festivals and events during the
year.
4.41Selling
Sales strategy for the project includes the following:
 Direct selling to potential tenants, such as hypermarkets, chain stores
and international and local commercial brands, etc.
4.42Services
Services Provision Strategy for the project includes the following:
 Qualified management team that includes the Mall Manager, Marketing
Manager, maintenance technicians and administrators who follow the
needs of the tenants.
 The presence of a Security and Protection Company that provide
security services to the mall, the tenants and the mall customers.
 The presence of a Cleaning Company that conduct cleanliness of the
passageways and entrances to the Mall around the clock.
 Providing air conditioning in summer / winter.
 Providing enough spaces for cars parking inside and outside the mall,
even during peak times.

Membership in the International Council of Shopping Centers (ICSC),

knowing that the membership costs is reasonable as it does not exceed US 800
a year, and in return, the mall will get many services either free or at
discounted prices, such as mentioning the mall name in the International
Directory of Shopping Centers, as this will facilitates the possibility of
attracting investors from leading international brands, as well as enhance the
promotion of the Mall. It should also be noted that there is an international
university emanating from this Assembly “University of Shopping Centers”,
which is concerned with the teaching of disciplines needed for Malls and
shopping centers.
 Obtaining local and international quality certificates, which give more
confidence to tenants and mall visitors.
 Respecting the rules of hygiene, cleanliness and public safety.
 Maintenance of equipment on an ongoing basis.
 Attaching great importance on the decent appearance of the employees.
 Attaching great importance on the good and decent treatment of tenants.
 Attaching great importance on providing new and innovative services, and
using the technology to deal with the tenants and visitors.
 Credibility in dealing with tenants.
 Conducting promotional activities occasionally, such as kids’ festivals and
other, in addition to joint activities with the tenants to attract more visitors
and customers to them all.
4.5 Expected Market Share
As previously mentioned, the Mall is one of its kinds in Kathmandu, and thus its
market share is measured by its designed capacity design, or its ability to
accommodate potential tenants of various fields in the commercial and service
sectors. As previously explained, the mall has been designed to have a total area of
37,662 m2, divided into three main floors, in addition to one underground floor for
parking area , as the floor can accommodate more than 458cars and 432 bikes..
4.6Demand Analysis
The demand on the services provided by the mall is affected by:

- The number of population.
- The intensity of commercial activity.
- Crowding of the shopping areas in the main city areas and absence of parking
spaces.
- Rent prices.
- Changes in shopping habits.
Considering the area is one the elite’s residence like Office of President, Residence of
Prime Minister and Chief Justice, US, Indian, Russian ,Japanese , Australian, Shree
Lankan, Bangladeshi, Pakistani, UAE etc. embassies and many more diplomatic
missions are within the periphery of radius 1 km. The people working and living
aboard who have tendency of shopping in departmental stores and hypermarket are

living at Maharajgunj, Lazimpat, Golfutar, Baluwatar which are first circle of the
market of the project.
It is note worthy that the proposed Mall site (JibanKunjMaharajgunj) covers more
than the population of Maharajgunj, in addition to Baluwatar, Lazimpat, Ranibari,
Panipokhari, Basbari, Golfutar, Madikhatar etc, as it covers a circle with radius of a
distance that can be traveled in a quarter of an hour drive, this means about 500,000
people, which is the expected date to launch the Mall. And in case of expanding the
circle to cover the area traveled in half an hour by car, and then it can be said that the
mall services will cover more than 1.2 million people.
By dividing the two figures on the Mall area which is amounted to 37562.5 m2, we
find that the number of people covered by the mall services per square meter of the
mall equals 16.67person / m2 or 1.55 person / ft2 of the people who are 15-minute
away by car. For those who are 30-minutes drive, the coverage rate stands at 40
people / m2 or 3.72 person/ft2. According to international studies, the coverage rate of
up to 4 persons / ft2 is considered appropriate. And by assuming that the average
visits to the Mall is six times a year by the people of no more 15minutes drive, while
those who are between 15-30 -minutes away by car, they will visit the mall twice a
year. With the adoption of these figures, we find that the average number of daily
visitors to the mall will be more than 8,200 people on most days of the year, and will
reach more than 12 thousand visitors during summer and holiday seasons and Back to
School Festival.
To determine the purchasing power of visitors, we will use the results of the
Household .Expenditure Survey in 2013, and reflecting them on the potential
customer numbers, in order to get to the second criterion, which measures how much
a person would spend on a range of goods and services provided by the Mall divided
by the Mall area. The following tables show the average household and per capita
expenditure on a range of goods and services provided by rented stores in the Mall.
4.61Food Consumption Pattern of Nepal
The consumption pattern has been changing due to rapid increase in urbanization in
Nepal. The food items such as fresh fruits, vegetables, pulses etc. are being included
in the regular diet of Nepalese people because of health consciousness. The per capita
consumption is provided in table below:
Table 8 Average Per capita food consumption (kg per year)

Category Urban Rural Total
Fine rice 57.5 27.1 38.5
Coarse rice 65.1 109.4 92.8
Beaten, flattened rice 6.7 6.4 6.5
Maize & Maize flour 10.2 21.9 17.5
Wheat, Wheat flour 24.6 24.4 24.5
Millet 4.1 5.7 5.1
Pulses 12.9 13.0 12.9

Sugar 8.6 7.6 8.0

Meat and Meat Products 14.5 2.6 3.1
Fish 2.0 1.9 1.9
Egg 2.8 1.6 2.0
Milk 45.9 31.8 37.1
Milk Products 1.9 1.9 1.9
Ghee 0.8 0.7 0.8
Apples 5.7 2.8 3.9
Bananas 22.0 21.7 21.8
Mangoes 5.5 9.5 8.0
Other Fruits 9.5 6.8 7.8
Potato 29.2 29.6 29.4
Onion 8.9 7.1 7.7
Tomato 10.3 7.6 8.6
Cauliflower/Cabbage 11.8 9.4 10.3
Other Vegetables 27.9 27.3 27.6
Mushroom 0.3 0.2 0.2
Source: Annual Household survey Nepal 2015-16, Central Bureau of

statistics & UNDP report
The consumption has increased in various segments of food items such as vegetables,
grains and cereals. Based on the secondary research, household consumption pattern
in the Nepal is described below.
Between 2013-2014 and 2015-2016, Nepal per capita consumption of cereals and
grains increased by 8.44% in value terms while per capita fruits consumption has
declined by 14.68%. On the other hand, there was minute change in per capita
vegetable consumption during the same period.
4.62Emerging Trend in Consumption
Due to awareness on safe food, harmful impacts of pesticide menace and health
consciousness and large disposable incomes, there is growing concern among
urbanites for safe and pesticide free food products especially vegetables. More than
ever, consumers are demanding fresh produce to be available all year round and
demand greater variety and high quality. Convenience food are growing in popularity
with an increase in the range of products available, including snack packs, pre-cut and
pre-packed (trimmed, washed, peeled) vegetables and fruits, ready-to-eat salads and
meals etc.

4.7Overview of Main Competitors
Despite the latent demand, retail in Nepal is dominated by unorganised sector and
organised retail is still at a nascent stage in Nepal. There are very few organised
players such as Bhatbhateni, Big Mart, Gemini Grocers, Sale ways, Namaste etc. Bhat
bhateni has 13 super stores in Nepal and offers a full range of 120,000 products from
750 local and international suppliers, including a wide range of groceries, fresh fruits
and vegetables; a broad range of leading international liquor, toiletries and cosmetics
brands; and an extensive choice of kitchenware, clothing, sports, toys and electrical
items. While there are 19 big mart stores and 3 Sales ways stores. In general, it has
been observed that there is less bargaining power of the customers due to lack of
competition in organised retail and they pay fixed prices.
Figure 4 Typical Neighbourhood store in Nepal
Figure 5 Typical Hypermarket in Nepal

Source: Triveni Group 2
There are many markets in area, the main and the largest is the main market in the
2
image available in the website of the Group

business area and prospective markets. As for the Malls, there are no Malls in the
particular Maharajgunj within Ring Road, but there are hypermarket chains such as
Namaste branches, and big mart branches, KK Mart Branch and Bhatbhateni
Supermarket. Thus there are no direct competitors for the proposed Mall. However,
the following tables show an overview of the main Malls, which maybe similar to the
proposed Mall, as well as the famous Malls in valley in order to identify their main
characteristics, advantages and strengths, so they can serve as a guide to the proposed
mall to the extent possible.
Bhatbhoteni Supermarket- Chakrapath
Within the first Circle The mall was established on a land with an area of 7Ropanies,
and a built-up area of about 60,000 Sq. Ft.. The mall consists of four floors, and
includes a variety of shops and a hypermarket in addition to a series of restaurants,
and offers a variety of services, and contains a large number of parking spaces. The
estimated number of visitors to the mall is almost 5,000 visitors a day. All of the
shops are operated by the same management
Genal Description
 The mall includes a hypermarket, which offers a diverse range of services,
including food, beverages, clothing, personal care and household products.
 The mall includes 19 restaurants including Naglo Bakery.
 The mall has a parking lot with an estimated area underground.
 The mall includes one recreational center.
Saleways Hypermarket
Within the first Circle The mall was established on a land with an area of 2 Ropanies,
and a built-up area of about 10000 Sq. Ft.. The mall consists of ground floor, and
includes a variety of shops and a hypermarket in addition to a series of restaurants,
and offers a variety of services, and contains a large number of parking spaces. The
estimated number of visitors to the mall is almost 1,000 visitors a day. All of the
shops are operated by the same management
-escription
 The mall includes a hypermarket , which offers a diverse range of services,
including food, beverages, clothing, personal care and household products.
 The mall includes 1 good restaurant
 The mall has a parking lot with an estimated area
5. Technical Study
5.1 The Designed Capacity
Project Description
Building PEB Multistory Building
Building Usage Mall

Building Area 40580 SQM / 436799.48 SqFt.

(Floor Area)
A. CIVIL WORKS
Clearing and grubbing the site for construction by removing bushes, leveling
of undulated ground, shorting and stacking/storing selected top soil for reuse
SITE
in landscaping works, disposing unsuitable materials from site, etc. ,all
CLEARANCE complete as per drawings, specifications and instructions of the Engineer.
EARTHWORK IN Excavation in foundations in all type of soils for foundation, trenches,

EXCAVATION footing, pits, basement, etc. to the required depth including dewatering by
manual or mechanical means etc. as per specifications with all contractor’s
own machinery and equipment, providing crossing of track, shoring,
strutting, timbering and buttressing with appropriate materials and all such
measures necessary to retain in position the sides of the foundation pit and
including refilling the excavated material with watering, ramming, leveling
the site and disposing off the surplus/unusable earth to outside the
construction premises, etc. all complete as per drawings, specifications and
instructions of the engineer.
Providing and laying one layer dry brick on flat soling in foundation and
FLAT BRICK SOLING floor with approved chimney made first class brick in required line and level
including filling joints with sand all complete as per drawings, specifications
and instructions of the Engineer.
Providing and laying machine mixed Plain
Cement Concrete of nominal mix 1:3:6 (1cement: 3 sand: 6 coarse aggregate)
PLAIN CEMENT for leveling course in foundations and floor of building, pathway, etc in all
CONCRETE level with broken stone aggregate of size not more than 25 mm of approved
quality including formwork wherever
necessary,dewatering,batching,mixing,transporting,placing,compacting,
curing, including all lead and lift, etc. all complete per drawings,
specifications
Providing and laying in position machine mixed and machine vibrated design
P.C.C. FOR R.C.C. mix cement concrete of specified grade for reinforced cement concrete work
WORKS using OPC 43 grade cement with various design mixes (various grades of
concrete) with 20 mm graded machine crushed stone aggregate of approved
quality in various locations and heights including transportation of concrete
to site of placing, compaction, finished to required line and level, protection
and curing, etc. all complete as per drawings, specifications and the
instructions of the Engineer, but excluding the cost of centering, shuttering,
and reinforcement, but including the cost of admixtures in recommended
proportions (as per IS:9103) to accelerate, retard setting of concrete improve
workability, improve strength without impairing strength and durability as
per direction of Engineer for the following grades of the structural concrete:
(Mix design is essential), Foundation, RCC Mat, 650mm Thick,(m3)- do - as
above but M20 concrete with minimum cement content of 360 kg/m3 at any
location, level, height and shape as shown in the drawings and schedule.
BASEMENT WALL, SHEAR WALL, M20concrete with minimum cement
BASEMENT WALL content of 360kg/m3 at any location, 400mm thick,4.5mhigh,(m3)
Supplying and laying centering, shuttering of various pattern formworks with
FORM WORK 19/12 mm thick water proof ply wood & steel adjustable
props for all kinds of RCC works for foundations, columns, shear walls,
beams, slab, staircase, lintel, sill, pergola, including nails, propping
scaffolding, staging, supporting and bracing in proper lines and level, sealing
the joints with heavy duty brown self adhesive tape, aligning to line and

levels including Ties, PVC Spacer, Providing openings/ cutouts/pockets,

applying de shuttering chemical,de shuttering as approved by the Engineer
etc.,
Providing and fixing in position Fe 500 steel reinforcement of various
REINFORCEMENT diameter confirming to relevant IS code in R.C.C. works including
WORK straightening, cutting, bending, binding with20 SWG annealed wire for tying
the reinforcement bars at each junctions (binding wire shall not be measured
separately)including all waste and cut pieces, provision for adequate numbers
of spacers, chairs, providing
and placing cement mortar (1:1) cover blocks to keep the bars in intended
position at all levels all complete as per drawings, specifications and
instructions of the Engineer. (Authorized lap
length and for the bar length exceeding 10meter in length shall be measured
for The payment).
These details have been reached based on the field survey results and the analysis of
the market size previously mentioned.
It is noteworthy mentioning the importance of paying attention to the “Tenants Mix”,
so that tenants are carefully selected at each floor, while maintaining the non-
recurrence of the powerful competitors, as the presence of a single tenant from each
category should be enough.
In special cases, two tenants of the same category may be allowed, taking into account
the low possibility of affecting one another, or affecting other secondary competitor
tenants.
In general, it has taken into account the possibility of future expansion through the
construction of new floors on the same building if necessary.
5.2 Required Fixed Assets
Rs.000
Existin
S. No. Description g Addition Total Cost
Land & Land 30,000, 30,000,
1 Development - 000 000
1,507,508 1,507,508
2 Building - ,955 ,955
55,000, 55,000,
3 Plant & Machinery - 000 000
Furniture, Fixtures 15,000, 15,000,
4 & Fittings - 000 000
10,000, 10,000,
5 Computers 000 000
34,700, 34,700,
6 Vehicle - 000 000
5,000, 5,000,
7 Office Equipment 000 000
Interest Capitalised 141,477,464 141,477,464

1,798,686,42 1,798,686,42
Total - 0 0
Pre Operation Exp. 27,000,000 27,000,000

1,825,686,42 1,825,686,42
Total Project Cost - 0 0

Financing Pattern of
the Project
Equity & Internal
Accrual
Equity - 547,705,926 547,705,926
Term Loan I 35,000,000 35,000,000
1,242,980,49 1,242,980,49
Term Loan II - 4 4
-
Total Financing 1,825,686,42 1,825,686,42

Pattern - 0 0
The table below shows the total cost of fixed assets, which amounted to 1It

em Unit Price (JD)

6 Required Human Resources
The following table shows the human resources required for the project. The number
of required staff is about 15 employees, with total salaries of Rs. 24 million annually.
BOD
Director General
Chief Execucative Hr/Administration

Mall Manager FinanceManager
Office Manager
Marketing Technical Finance

Hr Department
Department Department Department
6.1Director General
The Director General shall perform the following tasks:
 Directing administrative staff.
 Determining the vision, mission and the strategy of the Mall, and reflecting them
in all means of communicating with employees, tenants and Mall goers.
 Major customers’ files and concluding big deals
 Setting prices for the Mall services, and signing contracts (partnerships).
 Following-up and coordinating the work in all the Mall facilities.
 Evaluating the success of the Mall in achieving the objectives set for it (the
performance).
 Reporting the Mall/Company performance to the Board of Directors
6.2Chief Executive Officer
The CEO performs the following tasks:

 Identifying the available opportunities to attract new tenants and setting

priorities to reach them, and the preparation for signing contracts between
them and the Director General.
 Providing offers and negotiation on fees and prices within the mall's policy to
sign new contracts.
 Conducting surveys and market research.
 Make relation with landlord and pay the said lease amount timely
 Reflecting the needs of customers, and reporting them to the Director
General / the Owner.
 Preparing for festivals and promotions inside and outside the Mall.
 Developing and implementing expansion plans and increase sales.
 Documenting all contact information and addresses of customers.
 Representing the Mall / Company in meetings related to his/her work.
6.3Mall Manager
The Mall Manager performs the following tasks:
 Managing the Mall smoothly.
 Following-up tenants and urged them to abide by the Mall policy and system,
in terms of working hours and not disturbing other tenant while doing
decoration.
 Participating with the Director General and Marketing Manager in developing
the Mall policy.
 Following-up the movement inside the mall, and keeping the Mall
environment safe and clean through following-up the security company and
the cleaning company.
 Managing the relationship with tenants, and reflecting their needs and
reporting them to the Director General.
 Maintaining the absence of issues between tenants among themselves for any
reason, and to take all possible measures to maintain calm and tranquility in
the Mall, and notifying the owner with the main emergency events.
6.4Finance Manager
 Managing the operational process of the Mall, and working on their
sustainability and following-up the rest of the staff.
 Submitting periodic reports to the Director General. The Leasing
Administrator shall perform the following tasks:
 Developing a plan for leasing within the Mall strategic plan, in consultation
with the Director General and Marketing Manager.
 Clarifying and carrying out essential tasks for renting the mall, and bringing in
tenants, and thus generate income.
 Allocating the required or permitted capital expenditure to the tenants.
 Setting specific tasks to the Team Work, to ensure achieving the given and
specified dates for delivery.
 Setting budget for the leasing activities in consultation with the Director
General and the Director of Administrative and Financial.
 Developing a plan to deal with the vacant shops (not leased), and those their
lease contracts has expired.

 Determining the potential increases on the rent cost since the beginning and
the duration of each contract, taking into account the rise in the annual price
“step - rent and CPI”.
 Accelerating the leasing process by following-up the market and competitors,
and preparing appropriate proposals for the owner and the tenant.
6.5HR cum Duty Manager

The Leasing Administrator shall perform the following tasks:
 Participating in the preparation of the Mall estimated budget in collaboration
with the concerned managers.
 Following-up to the preparation, reviewing, amending and adopting the
administrative system and organization, which includes the procedures, rules
regulations, organizational and functional structure tasks, competencies, job
description cards and a powers list.
 Controlling the policies and procedures for financial plans, and making sure
they comply with the laws and regulations.
 Budget preparation, including salaries, allowances, operating expenses,
maintenance and operation programs, projects under manufacturing and new
projects.
 Following-up cashing and financial performance.
 Conducting procedures and policies that ensure the attendance and departure
of employees, and paying their financial dues based on their attendance, and
recording the employees’ leaves.
 Preparing the payroll for the Mall staff, and the reports on the discipline at
work.
 Following-up periodic purchases and inventory.
 Following-up the cleaning company and the security and guarding company
under the guidance of concerned Director / Official.
7. Required Licenses
The following table shows the necessary licenses from various authorities to
implement the project.
 Company registration
 Permission of Metropolitan cooperation- Design passes map approval
 Environment Impact Assessment – Department of Urban Planning Ministry of
Environment
 Income Tax- Proper office of Tax- Department of Income Tax
 VAT- Proper office of VAT- Department of Income VAT
8. Project Timetable

The following figure shows the timeline to implement the project, which amounts
to14months, as follows:
 Studies Design, licensing, approvals and registration of the company is already
completed.
 Construction and finishing
 Equipment, furniture
 Run and Employment and Operation
The trial runs will take place in the end of 13 th month with the completion of all
necessary work in construction and equipment erection. The process will run over a
period of 10 to 15 days, after which the commercial operation is supposed to start.
The project is envisaged to take an overall period of about 13-15 months for
completion and commence the commercial operation finalization of the project.
M M M M M M M M M M M M
Project Component 1 2 3 4 5 6 7 8 9 1 1 1
0 1 2
Approvals and Sanctions
Marketing and Business Development
Activities
a) Land Development, Leveling and
Boundary Wall
b) Infrastructure (Architect designs for
building, roads, drainage etc.)
c) Construction of Buildings including
Basement
f) Finalization of Equipment with
Design and Tendering Process
f) Equipment Supply
g) Installation of Equipment
h) Recruitment Process
i) Trial run of Facility
Figure 6 Project Implementation Schedule
8.1.Section Selection
Dedicated and specialized Mall Management Team will be deployed to identity and
shortlist stores/ locations for setting up stores as per guidelines developed by senior
management team. Management Team shall finalize stores from identified locations
by its category; management team will complete the formalities for leasing of stores.
8.2.Interior Decoration and Fixture Oder Placement

Specialized professional interior decorators will be engaged to design and finalize

store layout. Identical store layout and rack positions will be maintained across all the
stores to give identical store image. Procurement team will finalize vendors for supply
of fixtures and equipment for retail stores and will place orders in bulk for
procurement.
8.3.Fixture installation, Team Recruitment and Training
Installation and team recruitment will start in 3 rd month of store launch. Teams will be
training, and localized marketing campaigns will start on 3rd month to generate
consumer awareness in catchment areas.
Further launch of mall will follow the same process and timelines.
Figure 7:Gantt chart for Brand Promotion Activities
Total Duration 24 months

9. Financial Study
9.1 Financial Assumptions
The following table illustrates the financial assumptions of the project.
Inflation Rate 5%
Financing Structure
Equity constitutes 30% of the investment and loans constitute70%
Interest Rate 11%
Working Capital – 279.904 million
Pre-Operating Expenses 2% of total investment
Tax Rate 25%
Cleaning company fees Rs 10 per Sq Ft PA
Security company is given in the annex

Water and fuel 0.5% of revenues

Depreciation 12.398 million annually in first year and diminish by the balance
reduction.
Maintenance Cost 0.5% of revenues
Other operating expenses 0.5% of revenues
Marketing Expenses 5% of revenues
Staff Benefits 25% of salaries
Annual Salaries Increase 10% of salary
Assets Depreciation Rate 2%-20% of the asset value
Accounts Receivable One month
9.2 Investment Cost
The project's Investment cost is estimated at 1798.686 million distributed among
fixed assets.270 million pre-operating expenses and Rs.279.904 working capital in
total of NRs1825.686 million.
Total 17,341
9.3 Financing
The project will be financed with the shareholders by 30% which is estimated at
aboutRs.547.706 million, while the other 70% of the project investment cost will be
financed through bank loans of about Rs1277.98 million. The following table shows
the financing structure for financing the project.
Total 17,341 100%
9.4 Revenues
The following table shows the total revenues of the project, where it is noted that the
revenues in the first year amounts to aboutRs131.178 million, and increased to reach
up to Rs236.118 million in the tenth year due to growth and increase in occupancy
rates.
Description Trial Ope. 1st Year 2nd Year 3rd Year
Hyper market
Total Areas (sq.ft.) 36,796 36,796 36,796 36,796
Rate Per sq. ft. per month 10% 250 250 275 275
Sales Revenue per Annam 55,195 110,389 121,428 121,428
Ice rink
Total Areas (sq.ft.) 2,940 2,940 2,940 2,940
Rate Per sq. ft. 10% 300 330 363 399


Night Club
Total Areas (sq.ft.) 14,836 14,836 14,836 14,836
Restaurant & Game Zone
Total Areas (sq.ft.) 53,969 53,969 53,969 53,969
Movie Theater
Total Areas (sq.ft.) 23,279 23,279 23,279 23,279
Parking
Car Parking
Total Areas (sq.ft.) 105,606 105,606 105,606 105,606
Parking Space for Car 458 458 458 458

Occupancy % 40% 45% 50% 55%
Available car for parking 183 206 229 252
No. of hour per day 24 24 24 24

Occupancy% 30% 35% 40% 45%
No. of hour per day for parking 7 8 10 11
Hourly Rate 5% 100 105 110 116


Bike parking
Total Areas (sq.ft.) 25,044 25,044 25,044 25,044
Parking Space for Car 432 432 432 432

Occupancy % 30% 35% 40% 45%
Available car for parking 130 151 173 194
No. of hour per day 24 24 24 24

Occupancy% 30% 35% 40% 45%

No. of hour per day for parking 7 8 10 11
Hourly Rate 5% 35 37 39 41
Total Revenue 30,033 83,386 111,831 146,000
Table 22: The Expected Revenue sues – Basement (B1)
9.5 The Projected Costs
Operating Costs
The following table shows the project's operating costs. Cleaning company fees in
year 1 amounted to 34.318 million which increase to reach Rs.62.150 in year 10.
Moreover, the salaries cost amount to Rs24 million in Year 1 which increases
toRs.56.591 million in year 10.
The following table shows the project expected operating costs for ten years.
ting Cos Projected Operating Costs of the Project
1st 2nd 3rd
Description Base Trial Ope. Year Year Year
Salary expenses 10% 6,360 12,720 13,992 15,391
Printing and Stationery 10% 60 120 132 145
Travelling Expenses 10% 600 1,200 1,320 1,452
Transportation 10% 120 240 264 290
Consultancy, Legal & Audit
Fee 10% 1,200 2,400 2,640 2,904
Communication Expenses 10% 300 600 660 726
Vehicle Running Expenses 10% 1,200 2,400 2,640 2,904
Lease Rent 10% 900 1,800 1,980 2,178
Water & Electricity 10% 360 720 792 871
Repair & Maintenance 10% 600 1,200 1,320 1,452
Misc. Expenses 10% 300 600 660 726
Total Cost 12,000 24,000 26,400 29,040
Year 10
9.6 Projected Financial Statements
Economic Analysis
The following table shows the economic analysis of the project during the first ten
years, we conclude that:
 The internal rate of return is 16.14%. It exceeded four times the return on
assets, which means the economic feasibility of the project
 The present value of the project reached about 1238.054 million by
discounting inflection rate of 5% pa, which means the economic feasibility of
the project.

 The profitability index of the project reached 1.46 times, which means that the
expected value of the project will increase by double the investment value,
which proves that the project is feasible.
The project payback period is 7.1 years.
Particulars 4t
Trial Ope. 1st Year 2nd Year 3rd Year Ye
Net profit after tax before Interest 144,003 329,949 375,830 396,781 426

2,59
Total Capital employed 1,928,346 2,059,140 2,224,287 2,398,765 1
Equity capital 547,706 547,706 547,706 547,706 547,
1,61
Net worth 617,334 801,628 1,040,275 1,308,253 0
Total Debt 1,311,012 1,257,512 1,184,012 1,090,512 977,

Return on Capital employed 7.47% 16.02% 16.90% 16.54% 16.4

Return on Equity 12.71% 33.65% 43.57% 48.93% 56.4

Return on Net worth 11.28% 22.99% 22.94% 20.48% 19.1

Debt to Total Capital 67.99% 61.07% 53.23% 45.46% 37.6

Debt/ Net worth ratio 2 12/100 1 57/100 1 14/100 83/100 60/1
S5Social Analysis
The following table shows the social analysis of the project. It is noticed that the
number of staff required for the project will increase from 15 employees in the first
year to 23 employees in the tenth year. All employees in the project are local.
10. Risk and Sensitivity Analysis
10.1 Risk Analysis

The following table shows the risk matrix analysis that may face the project.
ype of Risks Risk Assessment
Financial Risks
Credit Risk
Credit risk represents the risk of the company's financial loss as a result of the
customer's default of the contractual obligation or that of the party dealing with the

company through a financial instrument. These risks are mainly caused by trade
receivables and others.
Liquidity Risk
Liquidity risk is the risk resulting from the company's inability to meet its financial
obligations at time. The company's liquidity management is to ensure as much as
possible that the company always maintain enough liquidity to meet its obligations as
they become due and payable in normal and emergency conditions without incurring
unacceptable losses or risks that affect the company's reputation.
Risk of currency fluctuation

Currency risk is the risk of the fluctuation of the value of financial instrument, due to
fluctuations in foreign currency exchange rates.
The financial risks that may face the company are low, because the company payment
method is cash (Nepalese Rupees).
There is no risk of currency exchange, because the company sales and purchases by
local currency but certain imported goods value will be fluctuated.
There is no risk of inflation because the company's pricing is based on a periodic basis
Risks Type of Risks Risk Assessment
inflation risk
It is the risk associated with the possibility that the inflation or the rise in the cost of
living might lead to the decrease the real value of the investment.
Business risk (sector risk)

Strategic Risk
It is the risk resulting from taking bad decisions by the company's management, or
implementing the decisions in a wrong way, or not taking the decisions at the right
time; which leads to losses or causes loss of alternative opportunities.
Legal and Regulatory Risks
These risks are reflected as a result of non-compliance with laws, guidelines and
instructions governing the work. Legal risks are caused by the company's break of the
laws governing the work in the state in which the company operates. While regulatory
risks arise from the company’s violation of laws and standards issued by the
regulatory authorities.
Reputation Risk

Reputation risk arises from influential negative public views which result in great
losses of customers or money. It includes the actions of the company's management or
its employees which project a negative image of the company, its performance
The risks are considered moderate before the company’s establishment, because of
getting the approval of the official authorities such as municipality and concern
Departments of NG
Reputational risk is very high, as the company deals with very sensitive issues such as
entertainment activities, food and beverage.
Market risk in the short term will be low because of the low competition from other
companies in the area and its relationships with customers and other stakeholders.
Reputation risk also results from circulating rumors about the company and its
activities.
Competition Risk
Competition risk results from domestic and external competitors and reduces sales
and profits.
Operational Risk
Operational risk involves losses resulting from the failure of internal operations,
human resources and systems.
It includes:
IT Risks
They are losses arising from downtime or systems failure due to the infrastructure,
information technology, or the lack of systems, and any failure or malfunction in the
systems.
They include: the crash of computer systems, breakdowns in communication systems,
programming errors, computer viruses and opportunities losses due to breakdown.
Human Resources Risk

Losses caused by employees or related to them (intentionally or unintentionally). It
also includes acts that are intended as methods of cheating, abusing property or
circumvent the law, regulations or company policy by
Operational risks are very low, for the company will contract with specialized
technical bodies to develop the required information systems, in order to manage
operations
Competitive salaries will be paid
Information security plan will be put in place to safely keep the company information
officials or employees, as well as losses arising from the relationship with the
customer, shareholders, regulators and any third party.
State Risk
State Risk includes politicians 'interference, civil unrest, wars, financial and monetary
policies and high level of debts.

State Risk is considered to be low, due to security and political stability; international
reports indicate that State Risk is low both in medium and long terms.
10.2 Sensitivity Analysis
First: Increase of Investment Cost By 10%
The following table shows the results of the sensitivity analysis when investment cost
increases by10%.
Internal Rate of Return (IRR) -13.96%
The Present Value at a discount rate of 5% -1064.179 Million
Net Present Value at a discount rate of 10% -370.932
Profitability Index (Time) -26%
Payback period (Year) -7.97
The Net Profit Ratio –52% an average of 10 years
Return on Investment –12.42%an average of 10 years
Second: Reducing Revenues by 10%

The following table shows the results of the sensitivity analysis when reducing
revenues by 10%.
Index Base Impact Change
Internal Rate of Return (IRR) 15.52%
The Present Value at a discount rate of 5% -1158.468 million
Net Present Value at a discount rate of 10% --478.604million
Payback period (Year) 8.31
The above analysis shows the low sensitivity of the project in case of reducing the
revenues or demand by 10%. It indicates that:
Third: Increasing the Operating Costs by 10%

The following table shows the results of the sensitivity analysis when increasing the
operating costs by 10%.
Internal Rate of Return (IRR) -14.98%
The Present Value at a discount rate of -@5% -1090.826 million
Net Present Value at a discount rate of 10%-428.962 million
Payback period (Year) -7.42

11Promoter’s Profile
The project is to be set up as a separate Private Limited Company by Mr.Pukar

Narsimha Rana who is also the owner of Hotel City Dreams. The Promoter has
already established a new Company named as, “City of Dreams Project” (CDP).The
promoter has long experience in setting up new businesses and nurturing the
businesses in fast growth mode. The Group is now one of the fastest growing business
houses in the country. His son Mr. Sameep Narsimha Rana is graduated in business
and willing to start has new carrier by the project. Its main corporate office situated at
the heart of Kathmandu city, Lajimpart, it is run by the professionals and experts with
profound knowledge and extensive experience in diverse fields of businesses.
It was the establishment of project which gradually paved the way for the birth of the
project. The success of this company spurred us to gradually embark upon other areas
of business. At the same time, the consistent economic growth coupled with rising
investment in various sectors in the country proved vital for the remarkable
consolidation of the group. Under the umbrella of Group, the following six
companies are currently operating:
Mission
“To Deliver Services and Products in the most Effective, Efficient and Ethical
Manner”
Core Values
The Group is strictly value- driven. In fact, these values continue to guide us in our
day to day business activities. The four core values which have helped us to grow and
thrive are as follows:
 Ethics: “We vow to be reliable, honest, transparent and ethical in everything we
do”
 Excellence: “We are simply obsessed with achieving the highest standards of
quality”
 Responsibility: “We are serious to abide by environmental and social principles in
our business”
 Pioneering: “We believe in taking on new challenges to develop innovative
solutions”



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Rano Itahari Complex Pvt. Ltd.

1.2 Initial Indicators of the Project: e Mixed - use Shopping Mall.

 Restaurants (franchise / local).

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 Clothing, footwear, accessories, gifts, perfumes stores

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2.11 OBJECTIVE OF COMPLEX

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hypermarket covering the space of 43,384.31Sq.ft.by itself. This will

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• Type of building is solid with earthquake resistive structure, concrete

2.3About the Promoters

 Nepal is passing through a phase of transformation

Table 1: Means of Finance (In Mn NPR)

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2.51Key Financial Indicators

Table 2: Key Financial Indicators

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According to the International Labor Organization, 68% of Nepal's population is

3.2Socio Economic Profile of Nepal

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Figure 1 Age wise Population of Kathmandu Metropolitan City

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Table 4 Non-Residential Nepalis

Nepal is a developing country with an agricultural economy. In recent years, the

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Table 5: GDP of Nepal (in BillionNPR) for 2015-16

Agriculture and Forestry sector is the leading sector in terms of contribution to

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Other Community, Social and Others; 7.12%

Public Administration and De-

Real Estate, Renting and

Mining and Quarrying; 0.55%

Hotels and Restaurants; 1.93% Wholesale and Retail Trade; 13.21%

Figure 2: Percentage Contribution to GDP by different Sectors (2015-16)

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Figure 3 Per Capita Income in Nepal

Source: Economic survey, Nepal (New Business Age Newspaper Article,

3.5Export Import of Food Products in Nepal

Table 6: Import and export statistics of Food Items in Nepal

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(Figures in ‘000 NPR)

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Table 7 Market centres in Nepal: 2014/15

 The annual progress report 2014-15 by ABPMD

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4 Market of the Proposed Mall

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4.2Expected Services and Products

Table : Expected Average Rent Prices

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Movie and Theatre Rs.200

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Membership in the International Council of Shopping Centers (ICSC),

The demand on the services provided by the mall is affected by:

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Table 8 Average Per capita food consumption (kg per year)

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Sugar 8.6 7.6 8.0

Source: Annual Household survey Nepal 2015-16, Central Bureau of

4.62Emerging Trend in Consumption

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