Waltz on the Danube
Waltz on the Danube
Executive Summary
The purpose of this case is to establish the viability of the 75 million shopping center project located along the Danube River in the city of Gyor. As the director of Hungarian operations for ECE Projektmanagement Dr. Philipp von Wilmowsky had worked for two years on the 30,300 square meter shopping center. So while Gyor lack significant a shopping center thus creating a site that had great potential there were several major questions that would define the success of the project.
The question that transcends the project is whether equity investors be sufficiently rewarded to justify there financing interests. The answer to this question is dependent on several factors including the viability of the market and the adequacy of the rents. Also the design selected could financially impact the returns on invested capital. The use of sensitivity analytics could be used to compare and contrast the different options and help differentiate between the levels of risk associated with each. Understanding and avoiding the risks associated with such a massive project in an emerging market will allow Philipp to proceed with the deal and help ensure he can convince the equity investors to back the deal.
In conclusion the recommendation would be to pursue scenario 3. While it is not the most elegant of designs, its beauty is in the practicality and simplicity of the design. This will appease the equity investors without compromising on sales area or floor space. The justification for this plan is presented in a series of exhibits that proves even with less than idea circumstances the equity investors will be ensured their required rate of return.
Analysis
1. Is there an adequate market in Gyor?
Gyor was chosen as an attractive site on the basis of the adequacy of its market. Gyor is a central geographic location within Hungary's burgeoning economy and that has been accentuated as the strength of the
Executive Summary
The purpose of this case is to establish the viability of the 75 million shopping center project located along the Danube River in the city of Gyor. As the director of Hungarian operations for ECE Projektmanagement Dr. Philipp von Wilmowsky had worked for two years on the 30,300 square meter shopping center. So while Gyor lack significant a shopping center thus creating a site that had great potential there were several major questions that would define the success of the project.
The question that transcends the project is whether equity investors be sufficiently rewarded to justify there financing interests. The answer to this question is dependent on several factors including the viability of the market and the adequacy of the rents. Also the design selected could financially impact the returns on invested capital. The use of sensitivity analytics could be used to compare and contrast the different options and help differentiate between the levels of risk associated with each. Understanding and avoiding the risks associated with such a massive project in an emerging market will allow Philipp to proceed with the deal and help ensure he can convince the equity investors to back the deal.
In conclusion the recommendation would be to pursue scenario 3. While it is not the most elegant of designs, its beauty is in the practicality and simplicity of the design. This will appease the equity investors without compromising on sales area or floor space. The justification for this plan is presented in a series of exhibits that proves even with less than idea circumstances the equity investors will be ensured their required rate of return.
Analysis
1. Is there an adequate market in Gyor?
Gyor was chosen as an attractive site on the basis of the adequacy of its market. Gyor is a central geographic location within Hungary's burgeoning economy and that has been accentuated as the strength of the