THE FEASIBILITY OF RELOCATION OF WARREN GOLF CLUB : A MARKET AND FINANCIAL ANALYSIS

Abstract

In anticipation of the National University of Singapore's (NUS) campus expansion programme, the Land Office has offered Warren GolfClub a 5 year lease with effect from 1st January 1992 for its present site at Folkestone Road (which is located adjacent to the NUS) instead of a 30 year lease offered to other private members' golfclubs in Singapore. This lease stipulates that Warren has to pay an increased fixed expense comprising the new land lease premium and property tax payments amounting to $2,616,600 for 5 years, i.e., beginning 1992 to end 1996 as compared to previously of a T.O.L.(Temporary Occupation License) of$24,000 per year. Warren has to relocate when its existing lease expires in 1997. To facilitate its relocation, the Land Office has offered a 36 ha site at Kranji as an alternative and possibly an additional 9 ha site adjacent to it. An analysis of Warren's financial accounts was performed to determine the profitability of its operations. Based on this analysis, recommendations were made to enhance Warren's projected operating surpluses for 1993 to 1996 to meet with this increased fixed expenses. Warren may take advantage of the new site to develop a new 9 hole golfclub under Phase 1 and possibly an additional 9 hole when the adjacent site is made available to it. New memberships will be launched and thus, a market analysis of the golfing market was carried out to determine future market support and prices. Findings from this analysis and projections for its future departmental operations based on a comparative analysis of similar golf clubs were utilized to construct a Discounted Cash Flow Model to evaluate the feasibility of its relocation to Kranji.