Page 73 - ISU Echague LUDIP

LEASE OF LAND FOR ECO/FARM TOURISM

Assumptions:

1. Lease area: 17.88 hectares or 178,800 square meters
2. Lease rate per square meter for Agro-Industrial Area: .1% of prevailing market rate (P3,500 x.1% = P35/square meter)

3. Escalation: 10% every 3 years
4. Revenue share from Gross Sales: 1% of Gross sales for years 1-7; 2% from years 8-15; and, 3% year 16 onwards

5. Term: 25 years renewable by another 25 years
6. Grace Period: 5 years or start of operations whichever comes first
7. Deposits: Advance Lease - equivalent to 6 months rent; Security Deposit - equivalent to 6 months rent; and, Performance Security - equivalent to

12 months rent
8. Operating Cost: 60% of Gross Revenues

9. Proposed Leasing Strategy: Lease land on "as-is, where-is" basis
10. Development Ratio: 60% buildable area, 40% open space
11. Estimated Development Cost: Land Development @ P3,000/sqm or P536.4 million; Structures @P25,000/sqm or P2.682 billion

Observations:

1. By doing straight leasing of a 17.88 hectare area for Farm-Eco Tourism Development, the Echague Campus Administration is projected to earn

around P898.316 million in 25 years. This excludes the share from gross sales that is expected to be generated.
2. Average annual Net Income earnings would be around P35.93 million which can help augment the development fund for Campus projects.
3. The project, which can be modelled similar to the organic farm resorts in Laguna and Batangas is expected to generate around 100 employees and

can serve as market for the agricultural products produce by the Campus University.

CONTENT:
ISABELA STATE Land Use Development and ISU Projections
UNIVERSITY Infrastructure Plan on lease of land
Main campus
for various land
uses 73