Key takeaways
- The sample 64-unit project has a sales value of THB 324.5 million and net profit of THB 72.8 million, or 22.4% of revenue.
- Monthly cash flow shows Peak Funding of around THB 98.8 million, even though the profit figure looks high.
- Finance costs are zero in this budget, and the reported IRR is a nominal rate, so it must be read with care.
Sample project data
This data comes from an anonymised working example, used to show how a condotel feasibility study is structured. All figures are illustrative.
| Inventory | Sample condotel project: 1 building, 64 units, 30 sq m each |
| Land | 1,867 sq m (467 sq wah), 18,750 THB/sq m |
| Saleable area | 1,920 sq m |
| Average selling price | 169,000 THB/sq m, or THB 5.07 million per unit |
| Total sales value | THB 324.48 million |
Cost budget by category
| Category | THB | % of total cost |
|---|
| (1) Land | 35,000,000 | 14.99% |
| (2) Soft Cost | 6,916,935 | 2.96% |
| (3) Construction | 115,824,080 | 49.60% |
| (4) Finance costs | – | 0.00% |
| (5) Operating costs | 19,642,536 | 8.41% |
| (6) Sales and marketing | 42,182,400 | 18.06% |
| (7) Specific Business Tax (SBT) and transfer fee | 13,952,640 | 5.97% |
| Total cost | 233,518,591 | 100.00% |
Key details
- Soft cost design and permit applications 500 THB/sq m, EIA design 80 THB/sq m, liaison with government agencies THB 1.92 million, public relations THB 0.92 million, construction supervision THB 2.76 million
- Construction building 35,000 THB/sq m, totalling THB 67.2 million; utilities THB 32 million, swimming pool THB 6 million, landscaping THB 4.67 million, interior design THB 1.54 million, interior fit-out THB 4.42 million; an average total of 60,325 THB per sq m sold
- Operating costs other development costs 3% of project value, project management 3%, construction insurance 0.15% of construction cost
- Sales marketing cost of 3% of project value and commission of 10%, which is a high assumption and should be checked against actual sales channels
- Tax and fees Specific Business Tax (SBT) of 3.3% and transfer fee of 1%, as assumptions
Profit and ratios
| Sales value | 324,480,000 |
| Total cost | (233,518,591) |
| Profit before tax | 90,961,409 |
| Tax at 20% | (18,192,282) |
| Net profit | 72,769,127 |
| Profit on Cost before tax | 38.95% |
| Net profit on cost | 31.16% |
| Net profit on revenue | 22.43% |
The original file calls the pre-tax profit line EBITDA, but because this budget has no interest or depreciation, the figures happen to coincide. The term should not be used for the profit of a project built for sale.
Receipts and payments plan
The sales terms are set as follows: booking deposit of THB 100,000 per unit, contract deposit of 30% of the price, an instalment of 40% when the structure, walls and floors are complete, and 30% on transfer. Units are sold in 4 batches of 16 units each, with an 18-month construction period and a 48-month project duration.
| Receipts | THB |
|---|
| Booking deposits, 64 units | 6,400,000 |
| Contract deposits | 90,944,000 |
| Construction instalment 40% | 129,792,000 |
| Transfer payment 30% | 97,344,000 |
| Total | 324,480,000 |
Cumulative cash flow curve
| Stage | Cumulative (THB m) | Key events |
|---|
| Month 13 | (35.5) | Land purchase and start of soft cost payments |
| Month 18 | (49.7) | Construction paid at full rate (contract deposits for the first batch received in month 14) |
| Month 30 | (94.2) | Construction payments continue |
| Months 36–41 | (98.8) | Peak Funding |
| Month 42 | 18.1 | 40% instalment received |
| Month 48 | 91.7 | 30% transfer payment received (before corporate income tax) |
How to read the returns
| Indicator | Value | Basis |
|---|
| Annual IRR (nominal rate) | 33.83% | Monthly IRR × 12, following the method in the original file |
| Annual IRR (effective) | 39.60% | (1 + 2.82%)12 − 1 |
| Peak Funding | THB 98.8 m | Lowest point of cumulative cash flow |
Both figures are calculated from cash flow before corporate income tax. Months 1–12 have no entries, so returns are counted from the first sum paid in month 13. If deposits or capital were set aside before then, the true IRR would be lower.
Cautions before use
- There are no finance costs in the budget. If Peak Funding of THB 98.8 million has to be raised from real funding sources, there must be interest or a return to shareholders.
- The budget and the cash flow differ by THB 0.75 million. Total payments in the cash flow are THB 232.77 million, against THB 233.52 million in the budget. Most of the difference is the commission on booking deposits of THB 0.64 million, which is not entered in the cash flow.
- Booking deposits and instalments are customer advances. In accounting terms they are not revenue until control is transferred, and using them for construction must be checked against the contract terms and the relevant law.
- The model assumes 100% of units are sold with no contract cancellations. Test the cases where not all units sell and where construction costs exceed the budget.
- A condotel must be viewed from both sides. The condominium licence, the hotel licence and the rental pool management agreement must be consistent before any return commitment is written into buyer contracts.
- Transfer fee Check any temporary reduction measures and their expiry date as at the date of the model.