Luxury Tourism Investment Opportunity in Gallipoli, Apulia: A Case Study
0
22
0
In the picturesque coastal town of Gallipoli, Apulia, a unique investment opportunity has emerged in the luxury tourism sector. This case study examines the potential of transforming an already successful residence into a high-end tourist destination, leveraging regional grants and strategic improvements.
The Property
The property is a well-established residence in Gallipoli, fully renovated in 2015 and currently operating at full capacity. Its prime location and excellent condition make it an ideal candidate for upgrading to a luxury tourist destination.
Current Status:
Fully occupied
Managed as a residence by a single person
Excellent condition due to recent renovation
The Investment Opportunity
Total Project Cost: €2,000,000
Property Acquisition: €1,600,000 (estimate)
Improvements and Renovations: €400,000
Financing Structure:
Bank Loan: €1,500,000
Equity Investment: €500,000
MiniPIA Turismo Non-Refundable Grant: €1,000,000 (to be received in Year 3)
Loan Terms:
Duration: 10 years
Interest Rate: 4.77% per annum
Period | Monthly Payment | Annual Cost |
Years 1-2 (Interest Only) | €5,962.50 | €71,550 |
Years 3-10 (After Partial Repayment) | €6,405.22 | €76,862.68 |
Planned Improvements
To qualify for the MiniPIA Turismo grant and enhance the property's appeal, the following improvements are planned:
Swimming pool construction
Solar panel installation
Smart home technology integration
Minor systems upgrades
Furniture renewal
These improvements are estimated to cost around €400,000.
Financial Projections
Cash Flow Sensitivity Analysis:
Year | Scenario | Revenue | Expenses | Net Cash Flow | Cumulative Cash Flow |
1 | All | €2,100,000 | €2,071,550 | €28,450 | €28,450 |
2 | 0% Growth | €100,000 | €71,550 | €28,450 | €56,900 |
10% Growth | €110,000 | €71,550 | €38,450 | €66,900 | |
20% Growth | €120,000 | €71,550 | €48,450 | €76,900 | |
3 | 0% Growth | €1,100,000 | €1,076,862.68 | €23,137.32 | €80,037.32 |
10% Growth | €1,121,000 | €1,076,862.68 | €44,137.32 | €111,037.32 | |
20% Growth | €1,144,000 | €1,076,862.68 | €67,137.32 | €144,037.32 |
Potential Return on Investment (ROI)
Assuming a 30% increase in property value over three years and using the 20% growth scenario:
Property Sale Price after 3 years: €2,600,000
Outstanding Loan Balance: €500,000
Total Cash Inflows: €2,744,037.32
Total Cash Outflows: €1,000,000
Net Profit: €1,744,037.32
ROI: 348.81%
Why This Investment Makes Sense
Established Property: Reduces startup risks
Prime Location: Gallipoli is a sought-after tourist destination in Apulia
Strategic Improvements: Targeted upgrades to increase property value and appeal
Financial Support: Leveraging the MiniPIA Turismo non-refundable grant
Experienced Management: Our team has a track record in luxury tourism properties
High Potential ROI: The projected ROI of 348.81% over three years is attractive
Conclusion
The project in Gallipoli represents a compelling investment opportunity in the luxury tourism sector. With its prime location, planned improvements, and the financial boost from the MiniPIA Turismo grant, this project offers significant potential for high returns.
However, it's important to note that this is a hypothetical scenario. Actual returns may vary due to market fluctuations, unforeseen expenses, or changes in the tourism industry. Potential investors should conduct thorough due diligence and consider all risks before making investment decisions.
For more detailed information or to arrange a site visit, please contact us today
Phone (UK): +44 208123 1402
Phone (IT): +39 351400 1402
Email: info@marietrulli.com
Related Posts
