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Zhengguo Health Maintenance Valley Nursing Real Estate Cooperative Development Project of Tonghua City
2016/11/29     Source:

1. Introduction to the Project

1.1 Project Background

1.1.1 Product Planning

Zhenguo Health maintenance valley is located in Ying’gebu Water Reservoir of Ying’gebu Town, Tonghua County. It is a national medium-sized reservoir with the design capacity of 17 million m3 and the water surface area of 10 km2. Zhenguo Health maintenance valley is a water source protection area. Along the upstream of the river, there is not any industrial project. Lush vegetations and natural beautiful scenery makes its ecological environment outstanding. Tonghua Zhenguo Group has constructed Zhenguo Health maintenance valley Phase I Project since 2008 by relying on rich natural resources here. The investment into the project till now has reached 350 million Yuan. The constructions of Four-star Resort Hotel, European-style Castle, Water Holiday Villas, Waterfront Restaurant and Forest Huts, etc. have been completed. A series of services, e.g. exhibition reception, leisure sightseeing, catering and entertainment, diet therapy, and medicated bath are provided. The annual received tourists have reached 150,000. The sightseeing-health industrial chain has come into shape.

Zhenguo Group is planned to put the investment of 1 billion Yuan for Health maintenance valley Phase II Project. Health Care nursing Real Estate Project is now seeking partners for joint development. The location of project is determined to be at the midstream of reservoir area. It is backed on mountains, facing the water. It stays away from wind and faces sun. Feng Shui here is really good. The area has a broad vision. The terrain here is sooth. It is very suitable for the construction of high-end villa and landscape building. Forest, lush vegetations, extensive water surface, local temperature, humidity and pleasant, high negative oxygen ions make it an ideal place for Health Care nursing Real Estate Project.

1.1.2 Market Overview

With the accelerated aged tendency of population of our country, there is a huge development space and investment value for the holiday entertainment and health nursing project. Currently, our government invests to the holiday entertainment and health nursing project. The project shall be based on the current economic and social situation, and conform to the current national policies. Moreover, there are enormous social and economic values in the holiday entertainment and health nursing project, so it is of great significance in promoting economic development, improving people’s livelihood and promoting social development. It is also beneficial to stimulate domestic demands, promote economic development, improve people’s livelihood, and promote harmony social construction. It is also helpful to improve the industrial layout and realize sustainable development. In a word, it is an important measure for the foundation of country and the favoritism of people.

The elderly population in China is expanding from a general view and the increment is speeding up. The dependency burden of elderly population is heavier and heavier. Next, the elderly population is unevenly distributed and the aging trend is transferring. As we all know, China has a large population and there is a great variation in the economic and social development levels in different regions. Moreover, the aging trend of population shows obvious regional imbalance. From the perspective of regional distribution, the aging population in the east and middle parts of China is most severe and the population pressure in the west of China is relative small. From the perspective of time trend, the population in the east of China is gradually moving to the middle and west parts of China. In addition, that people getting old before getting rich indicates that the pressure of economic development is increasing. The number of China's population aged 65 and above in 2014 has reached 137.55 million, accounting for 10.1% of the total proportion.

2014 China’s Total population and its Composition Analysis

Indexes

Year-end balance

 (ten thousand)

Proportion (%)

Total population

136782

100

Including; city and town

74916

54.77

village

61866

45.23

Including: male

70079

51.2

Female

66703

48.8

Including: aged 0-15 (aged 16 excluded)

23957

17.5

Aged 16-59 (aged 60 excluded)

91583

67

Aged 60 and above

21242

15.5

Including: aged 60 and above

13755

10.1

Health Care nursing Real Estate is the combination of elderly care real estate and health care real estate. The combination is not only theoretical but also practical. It is the upgraded combination of elderly care real estate and health care real estate.

Health Care nursing Real Estate is an effective carrier and a formation for social elderly care services which include home elderly care, community elderly care and institutional elderly care. It is a consumption carrier of modern service industry which is aimed to improve the standard of living, quality of life and civic dignity. It is now leading and driving the development of elderly care industry and life health industry.

The functional combination of health care nursing real estate absorbs the advantages of health care nursing real estate and abandons the disability of health caring and palliative care of elderly care estate and the luxury decoration style of health real estate, and thus functions are more intensive and target service groups are more effective. Meanwhile, as an independent form, its customers, complete set of facilities and featured functional elements make it more easy and efficient to expand target customers compared with a simple elderly care or health estate. Its market acceptance degree is high and its profitability is higher. Meanwhile, its selective range of investors and project sites is of better suitability, and is helpful for the realization of welfare, public welfare and profitability of this industry.

Elderly care tourism is a new rising and fashionable tourism in recent years. It is more favored by the old people. The elderly care tourism is rapidly developed in our country. With the variation of seasonal climates, the old people are more willing to choose a comfortable environment to spend their holidays in recent years, such as tourist resorts, small cities with pleasant environment and city suburbs with beautiful sightseeing. The main manifestation forms include “birds” type elderly care tourism, “ecological elderly care tourism”, the elder’s “sojourn group”, the elder’s “elderly care tribe” and “village tourism”, and the elder’s “long tourism”, etc.

Currently, the elder population is 7 million in Tonghua. The elder population is increased by 5% per year. The elder population in 2015 will reach 8.4 million. There are 69 elderly care institutions with the total bed of 1276. There totally are 1093 old people received in these institutions. According to the “Opinions on Promoting the Development of Elderly Care Services of the People’s Government of Jilin Province”, the number of beds per thousand of elderly people shall reach 30 beds at the end of the 12th Five-Year Plan. It is planned to build an elderly care center to solve the elderly care problem of this city. From this, it can be concluded that the elderly care services will be expanded.

1.1.3 Advantageous Conditions of Project Construction

(1) Policy advantage

The “Law of the People’s Republic of China on Protection of the rights and Interests of the Elderly” (hereinafter referred to as “elderly law”) has come into force since July 1, 2013. “Elderly law” regulates the provision of livable environment for the elderly as the indemnificatory right of the elder. All leveled governments shall increase the investments to elderly care services based on the local economic development level and the service demands of the elderly. All leveled governments and institutions shall take measures from the respects of finance, tax, land and financing etc. to encourage and support enterprises, public institutions, social organizations or individuals to construct, renovate, or lease elderly care facilities.

The “12th Five-Year Plan of Social Elderly Care Service System (Exposure Draft)” issued by the Ministry of Civil Affairs specifies the construction target of China elderly care service system during the period of “12th Five-Year Plan” and says that the potential market value of elderly nursing and life care services in China till 2020 will reach 500 billion Yuan. It is the wind indicator of the development of private elderly care service institutions. How to cut such an enormous benefit cake? Many realtors have launched the new mode of “community elderly care” real estate.

(2) Transportation advantage

The transportation of project location is convenient. Tonghua-Shengyang Highway passes through the project location. It is about 19 km from the center of county, 40 km from Tonghua Airport, and 220 km from Shenyang Airport.

1.2 Content and Scale of Project Construction

(1) Residential area: single-room apartments, suites and villas under planned construction.

(2) Life leisure and cultural entertainment area: the ecological park, vegetable plantations, reservoir fishing areas, the health ecological botanical and zoological garden area, outdoor fitness area, gym, chess hall, dancing hall, teahouse, library, etc., and universities for the elderly under planned construction

(3) Service area: attentive services provided to the elderly, a variety of emergency measures under various emergency situations, e.g. emergency calls, daily care, agency services, etc.

(4) Business area: the construction of shopping malls, supermarkets and restaurants etc. to meet the procurement demands of basic daily supplies and provide the services of laundry, hairdressing, banking and postal etc.

(5) Other functional areas: hotels, short-term vacation rentals, and child care centers, etc.

1.3 Total Investment of the Project and Capital Raising

1.3.1 Total Investment of the Project

Table 1: Summary Table of Total Investment of the Project   Unit: RMB10,000

No.

Expense Name

Amount of Investment

Proportion of Total Investment %

Remarks

1

Construction investment

85000

85

 

2

Interest incurred in construction period

 

 

 

3

Working capital

15000

15

 

 

Total investment of the project (1+2+3)

100000

100

 

1.3.2 Financing

Self-raised by the enterprise.

1.4 Financial Analysis and Social Evaluation

1.4.1 Main Financial Indexes

Table 2: List of Major Indexes for Forecast of Economic Benefits

No.

Name

Unit

Index

Remarks

1

Sales income

RMB10,000/a

115800

Normal year

2

Total profit

RMB10,000/a

24400

Normal year

3

FIRR of all investments

%

17

After income tax

4

FNPV (Ic=10%)

RMB10,000

29440

After income tax

5

Period for recovery of all investments (after tax)

a

6.2

Including 2 years of construction period

6

Rate of return on investment

%

19

After income tax

Note: "RMB10,000" in the Table shall be RMB.

1.4.2 Social Evaluation

It can meet the demands of the elderly for social welfare facilities, improve the urbanized social elderly care service system, provide multi-functional elderly care services for the public and upgrade the elderly care career to a higher level. This project can facilitate the long-term development of elderly care industry in Tonghua. The project is adaptive and complementary to the current elderly care institutions (center), so the economic and social benefits are good.

1.5 Cooperative Ways

Joint venture and cooperation.

1.6 What to be Invested by Foreign Party

Capital, technologies, management investments

1.7 Construction Site of the Project

Yingerbu Town, Tonghua County

1.8 The On-going Condition of Project

The project proposal has been completed.

2. Introduction to Partner

2.1 Basic Conditions

Name: People's Government of Yingerbu Town, Tonghua County

Address: Yingerbu Town, Tonghua County

Legal Representative: Wang Haibin

2.2 Overview

Ying’ebu Town belongs to Tonghua County. It is located in the northwest of Tonghua County, about 23 kilometers from the center of Tonghua County. It has jurisdiction over 12 administrative villages, and 2 communities with the total population of 10412, including the rurul population of 8742. The town covers an area of 185.6 km2, including arable land of 27,910 acres where the area of paddy fields is 6598 acres. The main economy form of town is agriculture, and the subsidiary economy form is featured products. The Chinese herbal medicines are developed rapidly. The economic cultivated area is 4570 acres, accounting for 21% of the dry field. There are 3 enterprises in this town, i.e. magnesia factory, sweet corn plant, wood processing plants.

2.3 Contact Method

Contact address: No. 557, Tuanjie Road, Tonghua County

Zip Code: 134100

Contact Person: Yu Yang

Tel:0435-5231167   15043513333

Fax: 0435-5231167

E-mail: thxjhj@sina.cn

 

Contact Person of Project City (Prefecture):

Contact Unit: Economic and Technical Cooperation Bureau of Tonghua City

Contact Person: Sun Xiaodi

Tel:0435-3650957  13843515611

E-mail: th3650957@126.com

Website: http://www.tonghua.gov.cn/

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