Avatar resort town on 25 hectares in one of the most dynamic resort areas of the Altai Mountainss. Format - apartment building with the sale of apartments and further high-yield operation.
AVATAR - partner lot 10.07 ha
Category of land: lands of settlements
Acceptable floors: up to 4 floors
Location: Altai Republic, Chemal district, Ayula village
Status: owner
Area of the plot: 10.07 ha / 100 700 m2
The cost of the plot: 1,007 billion RUB, (the cost and payment terms are subject to discussion)
We offer a land plot of 10.07 hectares in the Chemal district of the Altai Republic - one of the most famous and popular tourist areas of the Altai Mountainss.
The project format is a low-rise resort development with the possibility of selling apartments to private investors and further operation of part of the fund in a profitable model.
Resort apartments differ from the classic urban real estate in that the demand for them is formed not only by buyers for personal residence, but also by investors, tourists, entrepreneurs, as well as customers focused on rest, restoration of health and long-term stay in a natural location.
1. Growth macrofactors
Deficit quality of supply
The market of premium resort apartments in Altai is in the stage of active formation, tourist interest in the region is growing, while there is a limited number of quality facilities for year-round accommodation in the premium, wellness and medical wellness segments.
Major tourism and resort projects with federal investors are already being implemented and announced in the Altai Republic, confirming the investment interest in the region, but the volume of modern rooms and apartment complexes does not yet cover potential demand.
In premium locations of Altai, the declared prices for quality resort real estate can be in the range of 500-700 thousand RUB/m2. The actual sale price will depend on:
• Project concepts;
• construction phase;
• level of service;
• specific characteristics;
• Engineering support;
• infrastructure;
• quality of management;
• Market situation at the time of sales.
1.2. Development of transport accessibility
One of the long-term growth factors is the development of the transport infrastructure of the Altai Republic.
Potential impact on the market can be:
• Improved accessibility of vehicles;
• development of airport infrastructure;
• Expansion of air traffic;
• Increased domestic tourism;
• interest in natural and health-improving areas.
Additional potential may be associated with tourists from Asia, including China, China remains one of the world's largest markets for outbound tourism, but to assess the real impact on the Altai, one must consider:
• visa regulations;
• Direct routes are available;
• cost of travel;
• marketing of the direction;
• readiness of the region’s infrastructure to receive foreign guests;
• Language and service adaptation.
International demand should therefore be seen as an additional scenario, not as a guaranteed source of load.
Deficit of accommodation facilities
The Altai Republic receives a significant tourist flow of millions of trips each year, and there are still not enough quality facilities for year-round accommodation, especially in the premium, wellness and medical tourism segments.
An additional factor is the limited land suitable for resort and residential development, and land in the category of land with low-rise development has increased investment value, since the transfer of new territories for similar projects requires long-term approvals and is not always possible.
2. Uniqueness of the Avatar site
The partner lot with an area of 10.07 hectares is included in the total land mass of about 26 hectares.
The remaining area forms the infrastructure and resort core of the project, and the concept envisages:
• sanatorium and medical center "Avatar-Life";
• wellness park;
• Year-round public spaces;
• Climate pavilions and biohomes;
• Rest and recovery areas;
• Lectures and spaces for health programs;
• Infrastructure of year-round stay.
This environment increases the investment attractiveness of the site, and the developer gets the opportunity not only to build apartments, but also to build the facility into a resort ecosystem with a medical and wellness anchor.
3. Key advantages of the site
Lands of human settlements
The land category allows to consider the site as a site for capital development in compliance with town-planning regulations, the permitted type of use and the requirements of the PPZ.
2.Admissible floors up to 4 floors
The format of low-rise buildings corresponds to the resort nature of the territory and allows you to form a comfortable density.
Scale of 10.07 hectares
The area of the site makes it possible to design not point buildings, but a complex resort environment with improvement, walking routes and public spaces.
Location of the site
The proximity to the Katun River, the natural surroundings and the species characteristics increase the attractiveness of the project for buyers and guests.
Privatization and lack of transit flow
The left bank of the Katun River is perceived as a more calm and secluded territory, which is important for wellness and medical format.
6. Synergy with the infrastructure of the Avatar project
A medical center, wellness zones, public spaces and year-round services can add value to the apartment fund.
4. Medical center "Avatar-Life"
Year-round load anchor
Avatar Life is a medical and health center focused on restorative, anti-stress and wellness programs.
Potential specialization of the center:
• Stress recovery and reduction programs;
• detox directions;
• longevity programmes;
• unloading and dietary therapy under medical supervision;
• Recovery from overwork and chronic stress;
• Excursion therapy: nature, movement, regime and recovery.
The medical activities of the center must be carried out with the appropriate license, and health and medical programs must be conducted under the supervision of specialized specialists.
A key value of a health center for a development project is the creation of a year-round flow of guests, and unlike a traditional tourist accommodation, medical and wellness programs often offer a longer stay of approximately 14 to 21 days.
This reduces the project’s seasonality dependence and supports off-season loading.
5.Why the demand for wellness format will grow
The demand for wellness tourism, recreation programs and recreation in natural locations is growing in Russia and abroad.
Several factors influence this:
• Increased stress levels in large cities;
• interest in disease prevention and recovery;
• Transition from short rest to health + impressions programs;
• The willingness of the audience to pay for quality environment, service and results;
• Shortage of year-round wellness resorts in natural locations.
A wellness tourist usually spends more time at the site than a regular tourist and consumes more extras:
• food;
• procedures;
• consultations;
• excursions;
• sport;
• Bath and spa programs.
For the developer, this means the ability to combine the income from the sale of apartments with the operating profitability of the service infrastructure.
Project synergy
The project can work according to the following logic:
Medical center → Constant flow of guests → Loading apartments → Growth of profitability → Growth of the cost of the object.
For the developer and investor, this gives several advantages:
1.The medical center creates additional demand for accommodation.
The apartments receive longer stays, approximately 14 to 21 days.
3. The investment model of return enhances sales.
4.A part of the fund can be kept in management and receive operating income.
5 Infrastructure increases the price per square meter and the liquidity of the apartments.
Preliminary financial valuation
Urban mathematics
Area of the plot: 100 700 m2
Designed building spot: 28,000 m2
Floor: up to 4 floors
Potential total area: 112,000 m2
Area sold ratio: 0.70
Potential area for sale: 78,400 m2
Potential fund size
With an average area of the apartment of 30 m2:
78,400 m2/30 m2 = 2,613 apartments
The rounded settlement fund is about 2,610 apartments.
The actual number of lots may be lower if the project will increase the share:
• Public spaces;
• commercial premises;
• wellness infrastructure;
• technical premises;
• family apartments of a larger area;
• Recreational and recreational areas.
8.Preliminary CAPEX
The calculation of CAPEX is made on the basis of the sold area of 78,400 m2.
|
Article |
Cost benchmark |
Sum |
|
Construction of 4-storey buildings |
100-120 thousand ./m2 |
7.8–9.4 billion |
|
Improvement |
10-15 thousand RUB/m2 of the sold area |
0.8–1.2 billion |
|
Engineering infrastructure |
6-9 thousand RUB/m2 of the sold area |
0.5–0.7 billion |
|
Commercial and public areas |
multi-assessment |
0.3–0.5 billion |
|
CAPEX total |
|
9.4–11.8 billion |
|
Land plot |
|
1.007 billion |
|
Total investment with land in mind |
|
10.4–12.8 billion |
9. Potential sales revenue
The calculation is made on the sold area of 78 400 m2.
|
Implementation price |
Area for sale |
Potential revenue |
|
500 thousand ./m2 |
78,400 m2 |
39.2 billion |
|
600 thousand ./m2 |
78,400 m2 |
47.0 billion |
|
700 thousand ./m2 |
78,400 m2 |
54.9 billion |
10.Profit potential and ROMI
The calculation is made taking into account CAPEX and the cost of the land plot.
Total investment including land: 10.4-12.8 billion RUB.
|
Implementation price |
Revenue |
Investment |
Potential profit |
ROMI |
|
500 thousand ./m2 |
39.2 billion |
10.4–12.8 billion |
26.4–28.8 billion |
206–277% |
|
600 thousand ./m2 |
47.0 billion |
10.4–12.8 billion |
34.2-36.6 billion |
267–352% |
|
700 thousand ./m2 |
54.9 billion |
10.4–12.8 billion |
42.1-44.5 billion |
329–428% |
Even after the decrease in the density of development, the project retains a high potential of development margins.
The final economy will depend on:
• the actual density of the building;
• construction costs;
• the pace of sales;
• the stages of bringing lots to the market;
• the cost of project financing;
• the tax model;
• structure of the transaction;
• the share of the fund retained in management;
• Costs of marketing, design and project management.
11.Operational model after sales
Basic parameters
Average tariff: 10,000-15,000 RUB/day
Potential load: 65-80%
Basic scenario: 10,000 RUB/day and 70% download
Profitability of one apartment
With an average area of the apartment of 30 m2, the price of the lot will be:
|
Implementation price |
The cost of the apartment is 30 m2 |
|
500 thousand ./m2 |
15 million |
|
600 thousand ./m2 |
18 million |
|
700 thousand ./m2 |
21 million |
Gross yield on revenue of 2.55 million RUB per year:
|
Cost of the apartment |
Gross revenue |
Gross yield |
|
15 million |
2.55 million /year |
17,0% |
|
18 million |
2.55 million /year |
14,2% |
|
21 million |
2.55 million /year |
12,1% |
With a net margin of 50-65% of gross revenue, the net income of one apartment can be:
2.55 million x 50–65% = 1.28–1.66 million per year
|
Cost of the apartment |
Net income |
Estimated net return |
|
15 million |
1.28–1.66 million /year |
8,5–11,1% |
|
18 million |
1.28–1.66 million /year |
7,1–9,2% |
|
21 million |
1.28–1.66 million /year |
6,1–7,9% |
Thus, the project can be interesting not only as a development story, but also as a long-term profitable asset.
Potential capitalization of the operating fund
With an estimated selling area of 78,400 m2 and an average area of an apartment of 30 m2, the fund is about:
78,400 m2/30 m2 = 2,613 apartments
For conservative rounding, the operating model uses a figure of 2,610 apartments.
Gross annual revenue of the entire fund under the baseline scenario:
2.55 million RUB × 2,610 apartments = 6.66 billion RUB per year
With a net operating margin of 50-60%:
• NOI at 50% margin:
6.66 billion x 50% = 3.33 billion
• NOI at margin of 60%:
6.66 billion × 60% = 4.00 billion
When capitalizing on the multiplier 10–13, the potential cost of the rental flow of the entire fund can be:
|
NOI |
Multiplier |
Potential capitalization |
|
3.33 billion |
10 |
33.3 billion |
|
3.33 billion |
13 |
43.3 billion |
|
4.00 billion |
10 |
40.0 billion |
|
4.00 billion |
13 |
52.0 billion |
The estimated capitalization range of the entire operating fund is 33-52 billion.
13.Financial benefits of the project
1. More realistic building density
The 28,000 m2 development spot on a 100,700 m2 plot gives a more balanced model for the resort project: less congestion, more air, green spaces and space for service.
2. Long-term residence
Wellness and medical programs offer longer rides, roughly 14 to 21 days, higher than the classic tourist accommodation.
3. Decreasing seasonality
Wellness and rehabilitation programs are in demand not only in the summer, but also in the off-season.
4. Investment format of sales
The buyer acquires not just an apartment, but a potential income asset in the resort location.
5. Increased liquidity
Apartments near wellness and medical infrastructure may have a higher appeal compared to standard resort housing.
6 Synergy with the medical center
The medical anchor creates an additional stream of guests and enhances the operating model.
Project risks and management
1. Seasonal.
Removed by the medical center (14-day programs).
2. Competition
There are no sites of this scale in Altai.
Infrastructure of the region
It is solved in partnership with the holding "7 Stars of Altai" (water, roads, energy).
4. Sales
The apartment market is growing.
The Avatar project combines several strong factors:
• 10.07 hectares in the lands of settlements;
• Location in the Chemal district of the Altai Republic;
• proximity to the Katun River;
• the possibility of low-rise development up to 4 floors;
• synergy with the medical and wellness center;
• the potential for year-round loading;
• market interest in Altai resort real estate;
• the ability to combine development profit and operating income.
The project can become one of the most notable resort development assets of the Altai Republic, provided that the city planning parameters, engineering capabilities, market sales strategy and professional management of the operating model are confirmed.
