Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

1. Project to Be implemented in snnp region bench maji

zonemizanaman sub city
2. Promoter:-Ato habtamu teka

April , 2021 Mizan Aman

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 Executive Summary

3. Project name: Mixed use Building

4. project Type : Multipurpose service business building
5. Nationality: Ethiopian
6. Project Owner: Ato habtamu teka
7. Project location: snnp region bench maji zone mizan
aman sub city
8. Project composition: multipurpose Building (G+4) used
for diverse business centers like banking & insurance,
super market, shops, restaurant, café, beauty salon,
Pharmacy, bed rooms and offices.
9. Primeses Required: 400 m2
10.Total investment Cost: 12,491,589.03.20 ETB is required
from this amount 30% or 3,747,476.7 ETB from owner
equity and the rest 70% or 8,744,112.3 from bank
loan.
11.PROJECT LIFE 10 YEARS
12 NUMBER OF WORKING DAYS 365
13 Employment opportunity: 11 individuals on permanent
80 on casual basis
14.Social and Economic Benefit: provide better Building
service, employment opportunities, generation of
income and benefits for the local people.
B FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )
14 NPV (NET PRESENT VALUE) 8,744,112.3
15 IRR (INTERNAL RATE OF RETURN) 24 YEARS
16 PBP ( PAY BACK PERIOD) 4 YEARS AND 9 MONTHS
C ANALYSIS RESULT
THE PROJECT IS TECHNICALLY FEASIBLE, FINANCIALLY AND COMMERCIALLY
VIABLE AS WELL AS SOCIALLY AND ECONOMICALLY ACCEPTABLE. HENCE, THE
Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

PROJECT IS WORTH IMPLEMENTING.

Table of Contents
Executive Summary........................................................................................................5
Introduction.....................................................................................................................6
General Background....................................................................................................6
2 Project Objectives........................................................................................................8
2.1 General Objective..................................................................................................8
2.1.1 Specific objective............................................................................................8
Project description.......................................................................................................8
Project Rationale.........................................................................................................9
The significance of the project....................................................................................9
Project Location........................................................................................................10
3The market Study........................................................................................................11
Market Analysis........................................................................................................11
The Demand-Supply Gap..........................................................................................11
Current supply of Mixed use building.......................................................................12
Future market or Demand of commercial Building rental........................................12
Target customers.......................................................................................................13
Marketing promotion and strategy............................................................................13
Competition...............................................................................................................13
The project facilities and Services plan.....................................................................14
4 Technical Studies.......................................................................................................16
4.1 Description of the project Service/ Product mix.................................................16
4.1.1 Land Use Plan...............................................................................................16
4.2 Construction work and Technology....................................................................17
4.2.1 Construction schedule...................................................................................17
4.2.2 Architectural Design & Layout....................................................................17

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 4.2.3 Structural design...........................................................................................18
4.2.4 Reinforced concrete......................................................................................18
4.2.5 Foundation Design........................................................................................18
4.2.6 Construction Plan and process......................................................................19
4.3 Utilities................................................................................................................19
5 Engineering and civil works......................................................................................21
5.1 Land, Building and Civil Works.........................................................................21
5.2 Manpower and training requirement...................................................................22
5.2.1 Manpower requirement.................................................................................22
Labor Availability..................................................................................................23
Project implementation..............................................................................................23
Organizational Structure............................................................................................24
Organization and management..................................................................................24
6 Financial analysis.......................................................................................................31
6.1 Repair and Maintenance Cost..............................................................................31
6.2 Depreciation and Amortization...........................................................................31
6.3 Total Revenue......................................................................................................32
6.4 Discounted Payback Period.................................................................................32
6.5 Cash flow.............................................................................................................32
6.6 Benefit cost ratio.................................................................................................32
6.7 Internal Rate of Return........................................................................................33
6.8 Net present value.................................................................................................33
7 Conclusions and Recommendations..........................................................................34
Conclusion.................................................................................................................34
Recommendations.....................................................................................................35
References.....................................................................................................................36
Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

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2 Introduction

2.1 General Background

The current fast and dynamic economic growth of Ethiopia especially in Benche ShekoZone
necessitates equivalent growth of building and construction sector. The sector should expand
rapidly to support the overall economic development sustainable.

In the building sector of the economy, the multi- purpose in the one becoming rapidly
expanding in Benche Sheko Zone since dynamic economic development of urban economy
requires the construction of these buildings in the city to support the growing of business service
sectors like supermarkets, Beauty salon, shops, offices cinemas, Computer Center, Cafeterias,
restaurant, assembly hall, apartments and other activities. In this regard, mixed used building
expands in the all parts of the city.
Investment and property development play an important role in any emerging markets or
economies. Property generally comprises residential houses and commercial real estate property
(mainly mixed us building) developed for rental business and sale. The property investment
market in Ethiopia remained under developed for several years. As a consequence, the supply of
residential houses and non-residential real estate that can be used for residence, office space,
shopping malls and catering services in the urban centers of the country is disproportionately low
to cope with the growing demand in the country spinning from the average growth in GDP of
5.5% over the last ten years and population increase. The relatively good performance of the
macro-economy (real growth in GDP, low inflation rate and growth in investment and export
sector) has stimulated unprecedented investment growth in the property sector over the last five
years. The growth of investment in the property market over the last five years in consistent with
the global experience suggesting that investment in the residential and commercial property is
greatly influenced by the performance of the macroeconomic conditions. In general, a stable
macroeconomic condition leads to economic and business growth and develops investors’
confidence. This certainly spurs large demand in the property market for office space, shopping
malls, catering services, apartment and residential houses. Following growing demand trends,
and with the expectation of high return on their investment capital, large number of land
developers pooled their financial resources and invested in the property market.
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

To this effect, the owner of the envisioned Mixed Use Building Mr ……… who has been living
for long time in this city, planned to construct in size sub city and undertaken this project study
to check the market, technical and financial feasibility of this project. The promoter is very
ambitious and committed to realize the project. Hence, they expect to get the necessary support
from the city administration to make the project to be operational.
Besides, the government polices and incentives for the private sector investment are very
promising that motivates the promoter to engaged in mixed use building business.

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2 Project Objectives

2.1 General Objective

The major goal of this project is to contribute towards the growth of the trade sector in Benche
Sheko Zone size sub city administration. Its specific objectives include the following.

2.1.1 Specific objective

 To construct and develop modern shops, offices, and restaurant& cafeteria facilities that enable to
provide standard services to customers.
 To undertake trading and other refuted business activities that enable to generate a reasonable to the
invested capital.
 To develop modern business centre that would provide full services on city standard.
 To create employment opportunities.
 Contribute towards the beautification of the city through the construction of modern building
infrastructure and facilities.
 To establish economically viable, socially acceptable and environmentally friend mixed use
Apartment.

2.3 Project description

The long-term goal of the project is become the best choice trade center in the city. The proposed
project will have a total area of 400 m2, designed to reader a multipurpose giving business,
which will in turn plays significant role towards solving shortage of business center in Benche
Sheko Zone.size sub city administration .

The historical nature of the city as business unique location in one of the most attractive
centerin Ethiopian (75% urban center). The owners plan the project to render banking and
insurance, shopping facility, offices and cafeteria services to create high quality class to satisfy
the interest of customers in the city. Based on environmental and other considerations, the
entrepreneur has determined the type and size of the building which is already determined by the
site; conceptual planning and preliminary analysis have been carried out by analysts.
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

In order to attract its clients to the service, the project will develop high standard shop & banking
rooms and office of best choices and will also save best quality apartments, restaurant and café.

2.4 Project Rationale

The existing promising investment opportunities, the demands of service needs along with
relatively sound investment support made by the government in such kinds of feasible projects,
compelled the project promoter to initiate the multipurpose oriented business project to be
established. Despite the promising business opportunities of the city, the trend on such kinds of
investment found tonot enough. The mismatch between the demand for and supply of such kind
of services in easily observed in the city.

Therefore, the existing shortage or absence in the supply of these services, along with its
commercial and administrative access, better location and infrastructure access, escalating trend
of urbanization and business activities, thus it is with such reason that this project is identified
and proposed and assumed to be more profitable.

In general, the country’s privatized and free market economy; good governance creates a
favorable environment for the development of investment for private investors.

2.5 The significance of the project

The envisaged project deemed to add to the economic development of the city in general in
specific with following ways:

A. Source of Revenue

As public policy of any nation, the government collects different forms of taxes from different
business organizations and individuals. Among the different forms of taxes, business income
taxes, payroll income tax and VAT are collected from undertaking business activities. Therefore,
the building will serve as sources of revenue for the city.

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 B. Employment opportunity

One of the problems that our country faced is unemployment. Therefore, the current objective of
the government is working on tackling the problem of unemployment and fostering the
development process either through creating self employment or employment in other
organization. Hence, this project will hire 26individuals and more than eighty individual during
construction.

2.6 Project Location

The license area is located in ,Benche Sheko Zone size sub-city administration, . The total area
of the project is 400m2.. It is surrounded by main asphalt road at west part, south east by resident,
south west resident, and resident, at North part.

3 The market Study

3.1 Market Analysis

There are a number of factors which affects the demand of standardized mixed use building. Of
these factors, the most important to have influence is population growth and the level of income.
The currently expanding service industry in resident, and from every corner of the south west of
the country the size sub-city has been inviting skilled and unskilled labor forces to the center; in
addition, the number of both national offices has been increasing. Above all the increase in the
number of populations increases for the provision of different services. Nowadays, most of the
private business organizations need their own small-medium offices in order to give their
services and provide their products, and they prefer the place that found in the center or close to
the road.

As clearly indicated in the introductory part of this proposal,resident, is the dynamically growing
urban center of south west Ethiopia. Though the market demand gap for mixed use building is
not clearly understand there is wider gap for such demand as many merchants, organizations are
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

flouring to the city every day. From prior business experiences, the demand of mixed-use
building is very high and hence the demand and the supply gap is very wide.

3.2 The Demand-Supply Gap

There has been a significant growth in the number of local and international trades across the
south west of Ethiopia. This increase is mainly associated with the stimulation of economic
activist and partly due to an increase in the flow of international and local traders in to the Since
Benche Sheko Zone size sub-city is an important commercial center in addition there is a
significant increase in business activates and hence increasing the number of traders. Even
though there is a lack of quantitative estimates that depict the actual demand and also the annual
growth rate commercial facilities are scarce in the city. As a result, there is a large gap between
the developed and that of the supply for modern Bank and cafeteria accommodation hence this
project would not face any problem of demand scarcity for it business center and it would
provide good service to customers.

3.3 Current supply of Mixed-use building

Commercial building/office sector has shown a dynamic change in the past few years. The
reason for this could be rapid economic growth and a supporting public infrastructural
development. Other factors relevant in the specific case of commercial buildings are the large
increases in national and international businesses, particularly firms in the services sector.

The business of multipurpose buildings in Benche Sheko Zone size sub-city in booming highly
due to the recent rapid growth experienced in the area.. As a result, a good number of local and
international organizational are coming in place. Government offices which used to operate in
limited spaces all over the city are also concentrating on leasing new and modern buildings.
Increasing numbers of international organization which in the past had typically converted

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 residences into office space are now moving towards renting whole floors or even multiple floors
in modern city-center commercial buildings.

3.4 Future market or Demand of commercial Building rental

The demand for office space is a derived demand because firms rent space as an input to the
production of services or goods they provide to businesses and households in the local or
national economy.

Following our survey of office space users in several areas are mainly firms providing banking,
offices, cafeteria and restaurants, supermarkets, computer center service. Future demand for
office space is actually driven from growth in number of offices in the city which in turn is
influenced by the macro-economic growth in the country. Assuming that demand for office
space is directly related to the growth in the economy, the forecast for office space demand is
shown in the following table;
Table 1: Office Space Demand Forecast
Office space demand under Office space demand under
base case economic high case economic
Years Growth Growth
2010/201 9,916,543 11,304,859
3
2011/201 11,007,363 12,057,416
4
2012/201 12,218,173 12,953,878
5
2013/201 13,562,173 13,963,577
6
2014/201 15,054,011 14,554,534
7
2015/201 16,709,952 14,987,431
8
Source: estimation based on GTP’s forecasted Ethiopian Economic Growth

3.5 Target customers

The target customers of this envisaged project include: -

1. Business Community
2. Business organization
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

3. The government bureau

4. Non-governmental organizations

3.6 Marketing promotion and strategy

In order to penetrate and gain considerable market share, one of the major marketing strategies
for the project is consistently rendering quality service to its tenants. Due emphasis must be
placed on improving quality of service and facilities. The major marketing strategies to promote
the project and gain considerable market share include:

 Advertising through different means focusing on the existing service and facilities
 Promote in association to the key location and nearby business
 Working on sustained promotional work.
 Working on public relations to reach and influence key personas and organization with a
capacity of making decision.
 Keeping the quality of its service/ facilities and consistently improving with changing situations.

 Seasonal discount pricing different others customer centric marketing strategies will be used by
the company.

3.7 Competition

There are different forms of competition that may face the envisaged mixed-use building. These
are price and non-price-based competition. Moreover, there are different competitors that will
compete with the project either directly or indirectly. But the mixed-use building under
discussion has diversified marketing strategies that could enable it Cope up with the different
competitors in the market. Moreover, it will frequently conduct competitors research which
focuses on, the strength and the weaknesses, the different competitors’ strategies, the techniques
they use in rendering the service, their customer handling methods, and others. Generally the
project has many other projects all over Benche ShekoZone size sub-city which compete with it.

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3.8 The project facilities and Services plan

In order to provide mixed use business center building services of a high standard, it has been
planned to construct and develop the infrastructure and facilities that would viable to meet the
requirements of an international standard business center. Accordingly, various buildings and
facilities will be constructed phase by phase starting with the most needed ones that are essential
to commence the operation of its business activities. With the completion of construction, the
building will provide a combined service such as shops, offices, restaurant and café service as
well as modern business center that primarily serve its guests and major clients.

Table 2: The plan is that the ground will be partitioned in to different rooms:
Buildin Description Measu Uni Total per
g re t day ,month ,and year
pri
ce
in
Bir
r
Baseme Parking Cars 5/ 10*25*30*12=90,000
nt Service per
hou
r
Ground Supermarket, M2 280 280*7*30*12*2=806,40
1 and 2 Pharmacy, / 0
Banking &
Insurance
2st
floor Bed room M2 280 280*14*30*12*2=2,217
-3rd Cafeteria and ,600
floor Restaurant
4th floor Different M2 280 280*2.5*30*12=604,80
governmental 0
and other
offices

Total per year 3,718,800

Since the project will be engaged in mixed building the main sources of its annual revenue would
be from the rental of building spaces such as shops, offices, and banking, café and restaurant.
Therefore, the sources of revenue have been classified in to one category namely the rental of
banking and supermarket, offices, shops, bedrooms restaurant and café based on these
classifications. Based on the market price of similar mixed use building in the area, the
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

envisioned buildings set the following fair price (Before VAT) for its service, hence when the
building construction fully get operational it is assumed to generate a yearly income of ETB
10,447,800.

4 Technical Studies

4.1 Description of the project Service

The envisioned mixed purpose building will provide different rental services to the different
customer groups for different purpose. The building will have basement, ground and twelve
floors. The purpose of the building explained as follows;

 The ground floor, first floor second floor and third floor designed for different business centers
like banks, supermarket, beauty salon(man and women), Computer center, pharmacy, internet
café, boutiques, different shops and other business activities,

 4 floors designed for Offices.

4.1.1 Land Use Plan

The total land required for the envisioned project is estimated to be 400m 2. The total area for the
construction of the building will be 400m2, as revealed below.

Table 3: land utilization Plan

N Description Land M2
o Baseme Groun First floor-fourth
nt d floor
1 Building (G+4) 280
1. Basement
1
1. Ground 280
2
1. First floor 280
3
Total 280 280 280

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4.2 Construction work and Technology

4.2.1 Construction schedule

The construction project is proposed to be started on Jun 2021, and is expected to be finished on
Jun 2022. As seen in the abbreviated construction schedule above, a majority of the schedule’s
time is made up of five major activities; concrete, building Enclosure, masonry, mechanical and
Electrical install. Concrete activities include processes such as placing foundations and slab on
deck. The Building Enclosure Phase includes erecting the scaffolding that will allow for exterior
sheathing installation and bricklaying.

Mechanical and Electrical install coincide with each other due to the need for coordination
between the two divisions. There are several periods of construction during the schedule in
which there are multiple construction activities occurring at the same time.

The construction site must be organized accordingly as these processes take place. As with any
construction project, the goal of the schedule will to complete all construction activities before
the required Date of completion.

This date of completion is practical based on the time of year in which the building will be
completed. The team allowed a two-week contingency for any setbacks. Typically, winter
construction tends to cause unforeseen delays that negatively impact a construction project.
These conditions can and will almost undoubtedly impact the project schedule by causing
unforeseen delays and project inefficiency.

4.2.2 Architectural Design & Layout

Although functional spaces for the project were laid out in significant detail, the rest of the
building had designated spaces but set layouts. It was at the discretion of the project promoter to
devise typical layouts for the non-detailed commercial and office spaces. To make sure that the
building’s layouts were practical, the project owner researched typical architectural layouts for
laboratory and executive office spaces. The walls and partitions throughout the floor will
congruent with the structural frame and column locations.
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

4.2.3 Structural design

One of principle deliverables of the project is the structural design of the building. The structural
bays were coordinated with the layout of the building adjustments will be made to the bays if
specific layouts are necessary. The frame will be made up of a grid with repeating standard
structural bays. Included in the structural system are bay sizes, shape and size of structural
members, floor compositions and curtain walls. These elements were established to resist gravity
ad lateral loads as appropriate.

The gravity load design willbe completed for two frames; one of structural steel and one of
reinforced concrete. The structural steel frame will choose for further design based on cost per
square foot, local availability of material and constructability considerations, such as erection
and fabrication. The steel system will then be designed for lateral loading with necessary
adjustment being made to framing.

4.2.4 Reinforced concrete

The project group prepared hand structural design calculations for a typical bay of a reinforced
concrete frame. In all reinforced concrete bay designs, a superimposed dead load of 8 pounds per
square foot will be assumed for mechanical equipment, floor coverings and ceilings.

Similarly, the design of the typical bay accounted for the use of different commercial space, in
which a live load of 1000 pounds per square was assumed. Loads will be calculated based on the
requirements of the minimum Design loads for Buildings and other Structures.

4.2.5 Foundation Design

The design of a superstructure may be accurate, have considered all possibilities and still fail
because the substructure is incapable of distributing the applied loads to the supporting soil.

Foundation design takes more into consideration than merely the loading from the columns.
While the main part of the project focused on the structural frame and its alternate designs, a
preliminary foundation plan was designed based upon maximum load carried from the
superstructure through the columns. The foundation design conducted by the project team

17
 consisted of the selection of foundation type, determination of the bearing capacity and the
design for typical interior and exterior spread footings.

4.2.6 Construction Plan and process

The construction process for this project is normally a disjointed three mages development by
which the conceptualized need of the promoter of this project is translated into a functional
facility that will meet their needs in terms of time, cost and quality.

Based on a general program of the project owners the consultant who is going to be hired makes
site studies, develops structural designs, prepares drawings and specifications, determines
quantities involved and estimated the resultants costs. All these activities will be done in the first
phase of the project which is the design stage after the document are produced by the designers
have been received, and the works secured the project is supposed to enter the tendering stage.
At this stage contractors study the project document analyze and subsequently determine the
construction methods, built up their unit rates and submit their bids for the works. The promoter
of this project intends to compare the bids and award the contract for the lowest responsible
bidder. This, is of course, presupposes that the favorable proposal does not exceed the allocated
budget.

After the award is made and the contract signed between this project owners and the contractor,
the project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.

After the award is made and the contract signed between this project owner and the contractor,
the project constructor is expected to prepare and submits a detailed construction program which
includes material schedule, manpower requirement and cash flow forecast.

4.3 Utilities

A number of utilities world be put in place in order to ensure smooth functioning of the project.
These utilities include:

Table 4: Utilities
N Cost
o Description Qty. Unit cost (Birr)
 Project Proposal for the construction of Mixed use Building MIXED USE BUILDING

100,00 1.30*10,00
1 Electricity supply, kWh 0 0 130,000
10*500,00
2 Water Supplym3 50,000 0 500,000

3 Telephone and Internet

Broadband 20,000

4
Fuel, Oil and lubricant 2000 19*2000 38,000
1,188,00
Total 0

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5 Engineering and civil works

5.1 Land, Building and Civil Works

The Mixed-use building has a total site area of 400 m 2. The building floor area has
covered280 m2 and the remaining 120 m2 is left for construction. The type of buildings
and its corresponding civil construction cost is given on Table 5.

Table 5: List of Building and Civil Works and Their Costs

N Description
o Total price
A. SUB-STRACTURE
1 excavation and earth 231,570.67
works
3 Masonry works 241,958.87

2 concrete work 2,300,546.3

4
Sub total 2,874,074.9
1
B. SUPER STRACTURE
1 Concrete work 1,874,337.9
0
2 Block work 772,513.85
3 Roofing 292,087.45
4 Carpentry and joinery 744,739.45
5 Metal works 541,839.45
6 Finishing 932,358.89
7 Painting 396,778.33
8 Electrical installation 357,309.45
9 Sanitary installation 472,001.45
Subtotal 5,295,151.1
7

A+B 9,500,00
0

Grand total 9,500,000

 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

As shown on Table 5, the total cost of building and civil work is estimated at Birr
9,500,000. and out of which the proponent has worked more than birr 12,491,589.03.20
million.

5.2 Manpower and training requirement

5.2.1 Manpower requirement

The list of manpower and the annual cost of labor is indicated in Table 6.

Table 6: Manpower Requirement and Annual Labor Cost

Position N Qualification Monthl Annual
S o y salary
N salary in Birr
in Birr
1 General 1 BA in 25,
manager management 000 300,000.00
2 Building 1 BA in Acct/Mgt 1
admin 5,000 180,000.00
3 Secretary 1 10+2 in 4,
secretariat 000
science 48,000.00
4 Marketer 1 Diploma in 5,
marketing 000 60,000.00
5 Accountant 1 Diploma in 5,
accounting 000 60,000.00
6 Guards/ 2 Basic 2,
Security 500 30,000.00
7 General 1 Diploma in 1
Service head Management 2,000 144,000.00
8 Purchaser 1 Diploma in 1
purchasing &Sup 2,500
Mgt 150,000.00
9 Casher 1 Diploma in Sup 9,
Mgt 500 114,000.00
10 Cleaner 4 Unskilled 3,
000 36,000.00
Total 14
Benefit
(20%)
Grand Total 103,200 1,238,400

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5.2.2 Labor Availability

Workers for this type of plant are available throughout the year. No foreseeable problems
are expected as most of the work requires no previous skills.

5.3 Project implementation

The project’s implementation is expected to take 24 months. The major activities include
Bank loan processing construction of the building, cleaning the area around the building,
Procurement of equipment’s and start rendering services. The time schedule for major
activities is presented below:

Table 7: project Implementation schedule

S Activities Date
N
1 Preparation Project Proposal May 2021
2 Bank loan processing June-July 2021
3 Site Development July 2021
4 Building and construction August, 2021-feb2022
work
5 Preparation for service march, 2022
6 Service execution jun, 2022

5.4 Organizational Structure

5.4.1 Organization and management

Organizational Structure

The organizational structure of the project is designed by including all the necessary
personnel under the right division. At the top of the organizational structure, there will be
 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

manager with the responsibility of supervising the overall activity of the building.
Depending up on the nature of the center and the amount of work to be performs; there
exist auxiliary units under the general manager.

Employees under each unit will be supervised by the department head that is accountable
for the general manager. General Manager is appointed by the owners

As clearly shown in the organizational structure, the center organization has one general
manager and three main sections. Under the general manager there are the, Marketing
Department, Maintenance and Building administration department. Under building admin
dept there exist two sections i.e., HRM & finance and general service. Further sub
sections are also organized under technical and maintenance manager. The following
section deals with the duties and responsibilities of each department.

A. The General Manager’s Duties and Responsibilities

 He/she will plan, organize, direct and control the overall activities of the building.

 He/she will devise policies and strategies that will enable the center to be profitable.

 He/she will incorporate modern technological innovation that will facilitate the service
delivery of the building to increase customer’s satisfaction.

 He/she will plan, organize, direct and control the human and non-human resources of the
building so as to achieve the short and long run objectives of the organization.

B. Building Administration Department

The building Administration Department of the multipurpose building has two main
sections (HRM and Finance and General Service section). It has responsible for
undertaking the following activities;

 Manage the human resources and control employee’s activity

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  Well non human resources of the project, which include; effective handling of the
different resources of the building, and devise strategies of controlling against fraud and
damage.

 Will provide the right material or inventory to the center with right price at the right time.

 Will plan, organize direct and control the financial transaction of the building by using all
the necessary documents.

 Accountant and casher that will collect money from the customers.

 Will develop sound financial control system by developing modern financial control
systems.

 Will prepare the annual financial statements and prepare condensed reports for both the
General Manager and other concerned government body.

 Follow the overall status of the business and provide maintenance and repair services

C. The marketing Department

 Will handle the overall marketing activities of the organization which include planning,
organizing, directing, and controlling.

 Will develop the marketing strategies for future multipurpose building development

 Will develop effective customer handling strategies.

 Execute the promotion methods.

D. Technical and maintenance manager

 Will handle the overall physical maintenance and related issues

 Will make sure electricity and back up is organized.

 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

 Follow up security issues and educate tenants

 Works in collaboration with general service to make sure tenants are well served

Owners

General Manager

Building Maintenanc Marketi

administration e ng
Departme Depart
nt ment

Perso Prom
Fin otion
nnel
an
&Pro
ce
perty
Of
Figure 1.organizational structure

IT, Supervisor
Ele s
ctri
5.6 Financial Requirement and Analysis

25
 The financial resource is a prime resource for undertaking any activities. Hence for
implementing this mixed use building a total of 1,728,000 ETB is required. From this
30% 518,400 birr will be covered by the promoter of the project while the rest 70%
(1,728,600) will be covered through loan from bank at the prevailing interest rate.

Therefore the said amount of finance is needed for undertaking the following.
5.1 fixed Investment
A. Land, Building & Construction
S. Description of works Total Cost in birr
N
1 Building construction 9,500,000
2 Site Development 50,000
3 Design and supervision 20,000.00
4 1st Year land lease 80,000
Total 9,650,000.00

B. Building Machineries and Equipment’s

S Descriptio Meas Qty Unit cost Total cost
N n urem in Birr in Birr.
ent
1 Generator Unit 1 150,000.00 150,000.00
2 Carpentry Set 1 27,000.00 27,000.00
tool box
3 Electrician Set 1 18,500.00 18,500.00
tools box
4 Plumber Set 1 12,300.00 12,300.00
tools kit
5 Fire Unit 8 16,000.00 128,000.00
extinguishe
r
(Security
Equipment
)
Total 223,800 335,800

.
 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

C. Office Equipments
S Descriptio Measureme Qt Unit Total
N n nt y cost in cost in
birr Birr
1 Manageria Unit 1 12,600.0 12,600.00
l tables 0
2 Manageria Unit 1 19,500.0 19,500.00
l chairs 0
3 Office Unit 1 12,000.0 12,000.00
table with 0
chair
4 Computer Unit 1 15,000.0 15,000.00
with chairs 0
5 Shelf Unit 3,500.00 3,500.00
6 Filing Unit 1 1,500.00 1,500.00
cabinets
7 Guest Unit 1 4900 4900
chairs
8 Fax & Unit 1 1,300.00 1,300.00
Telephone
machine
Total 70,300.00

Working Capital
Operating Expenses

S List of Items Annual cost in Assumptions Used

N birr
1 Audit and legal fee 48,000.00 4000 br/per ,month
2 Stationery supplies 12,000.00 1000 br/month
4 Property Insurance 84,009.00 1% of the building
5 Cleaning Supplies 12,000.00 1000 br. Per month
6 Uniforms 12,000.00
7 Water 5,000.00 2500 m3 by 3.15 br
consumption
8 Electric 130,000.00 100,000KWH By
consumption Br.1.30
9 Fuel 38,000.00 2000 lit per year by

27
 Br.19
11 Telephone & fax 20,000.00 1800 per month
12 Repair expense 72,018.00 2% of building cost
13 Miscellaneous 40,000.00 6000 per month
costs
Total 473,027.00

Pre-service Expenses
S Description Cost in birr
N
1 Project proposal 10,000.00
2 Licensing fee and
others
Total 10,000.00

Summary of Total initial investment cost

S Description Cost in Birr Percentage
N Share(%)
1 Land, building & construction 9,650,000.00 76.35
2 Building machines 335,800.00
&Equipments 2.66
3 Office Equipment 70,300.00 0.56
4 Total fixed investment cost 10,056,100.0
0 80.56
5 Salary expense 1,238,400.00 9.80
6 Operation Expense 513,027.00 4.06
7 Pre service Expense 100,000.00 0.79
8 Total Working capital 731,836.00 5.79
9 Sub total 2,583,263.00 20.44
10 Investment capital 12,639,36
3.00
100
Total initial investment 12,639,363.00
capital
 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

6 Financial analysis

The financial analysis of this mixed use project is based on the data presented in the
previous chapters and the following assumptions: -

Finishing period 1 years

Source of finance 30 % equity
Debt finance 70 % loan
Bank interest 17 %
Discount cash flow 10 %
Accounts receivable 30 days
Raw material (perishable) 3 days
Raw Material (non perishable) 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost

29
6.1 Repair and Maintenance Cost

The annual repair and maintenance cost of the plant is estimated based on the following
rates.

Table 8: Repair and Maintenance Cost

Item Rate
Machinery and equipment 5% of the total cost or Book
value
Building and civil works 2% of the total cost or Book
value
Utilities 5% of the total cost or Book
value

6.2 Depreciation and Amortization

The following depreciation rates are applied to depreciate the assets of the project:

 Buildings and associated Civil works 5%, linear to scrap Value

 Machinery and Equipment’s 10%, linear to scrap Value

6.3 Total Revenue

Based on the projected profit and loss statement, the project will generate a profit
throughout its operation life. Annual net profit after tax increases from Birr 3,718,800 at
the beginning of the project to Birr 4,502,429 during the last year of operation year. The
detail is presented in the Annex.

6.4 Discounted Payback Period

The payback period, also called pay–off period is defined as the period required recovering
the original investment outlay through the accumulated net cash flows earned by the
project. Accordingly, based on the projected cash flow ,it is estimated that the project’s
initial investment will be fully recovered within 3 year 4 months.
 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

6.5 Cash flow

The projected cash flow of the envisaged project shows that the project would generate
positive net cash flows throughout the operation years. Cumulative cash flow generated by
the project towards the end of the first operation year will amount to Birr 3,718,800. At the
end of the project life, this amount will rise to Birr 7,618,548. The detail is presented in
Annex.

6.6 Benefit cost ratio

The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum
of its discounted investment and operating costs.

When BCR > 1, accept the project

When BCR < 1, reject the project

When BCR = 1, be indifferent

Bt n

 (1  r ) t
t 0
BCR  n
C
 (1  tr ) t
t 0

BCR is 5 and positive this indicates this project would return 5 birr in benefits for each
birr spent.

31
6.7 Internal Rate of Return

The internal rate of return (IRR) is an indicator of the efficiency or quality of an

investment. A project is a good investment proposition if its IRR is greater than the rate
of return that could be earned by alternate investments or putting the money in a bank
account. Accordingly, the IRR of the project after tax is computed to be 34.13%
indicating the viability of the project.

6.8 Net present value

Net present value (NPV) is defined as the total present (discounted) value of a time series
of cash flows. NPV aggregates cash flows that occur during different periods of time
during the life of a project into a common measuring unit i.e. present value. It is a standard
method for using the time value of money to asses’ long-term projects. NPV is an indicator
of how much value an investment or project adds to the capital invested. In principle a
project is accepted if the NPV is non-negative. Accordingly, the net present value of the
project at 10% discount rate is found to be Birr 3,439,417 which is acceptable.

7 Conclusions and Recommendations

Conclusion

The objective of this proposed feasibility study is primarily to facilitate the entrepreneur
with the investment information and provide an overview about project. The proposed
feasibility may form the basis of an important investment decision and in order to serve
this objective, the document covers various aspects of Concept Development, Start-up,
Production, Marketing, Finance and Business Management.

The feasibility is based on the information obtained from various agricultural sources as
well as discussions with businessmen. For financial model, since the forecast/projections
relate to the future periods, actual results are likely to differ because of the events and
circumstances that don’t occur frequently as expected.
 Project Proposal for the construction of Mixed use BuildingMIXED USE BUILDING

Whilst due care and attention has been taken in performing the exercise, no liability can
be inferred for any in-accuracy or omissions reported from the results thereof. It is
essential that our report be read in its entirety with financial model in order to fully
comprehend the impact of key assumptions on the range of values determined.

The project is accessible and has the necessary infrastructure such as road, telephone,
water and electric power. The proposed project clearly identifies all the necessary
equipment, inputs, management of the company and the required man power. The highest
authority in the project will be vested in the hand of the owner. He will control the
overall activities of the proposed project. Demand projection divulges that there is high
demand for feed production in the country. Accordingly, the planned project is set to
provide quality products in the area.

The proposed project possesses wide range of economic and social benefits such as
increasing the level of investment, tax revenue and employment creation for both women
and youths. It will have also environmental concerns to protect it by planting trees around
its working area and by utilizing environmental friendly raw materials. Generally, the
project is technically feasible, financially and commercially viable as well as socially and
economically acceptable. Hence the project is worth implementing.

Recommendations

Financial sensitivity analysis shows that the project is highly sensitive to decrease in sales
revenue but relatively less sensitive to increase in raw material and investment costs.
Therefore, it is recommended that the company should give a great attention for the
possible reasons for sales reduction. In this case, different mechanisms should be selected
and implemented to increase sales. In addition to this, the company should decrease its
cost that lowers profitability. The project must utilize modern promotional styles to
capture the planned market share. To do so, it has to design effective strategy to achieve
this plan.

Although, due care and diligence has been taken to compile this document, the
contained information may vary due to any change in any of the concerned factors, and

33
 the actual results may differ substantially from the presented information. In this case,
any delaying to implement the project creates some problem on its profitability as there is
always change like change in price of services and goods, cost of raw materials,
customers preference and purchasing power etc.….So, it is recommended that investors
should implement the project as soon as possible before any change occurred.

References

Chandra, P; 2006.Projects Planning, Analysis, Selection, Financing, Implementation, and

Review, six edition. Tata McGraw-Hill publishing company Limited, New Delhi.

Eyob Deraro (2013) Project Proposal for the construction of Mixed use Building.
Wikipedia: The Free Encyclopedia. Retrieved December 10, 2006 from the World Wide
Web www.wikipedia.org.
Project Proposal for the construction of Mixed use Building
Promoter:- wr tsehay welde

Location mizan aman sub city hibret kebele