UNIVERSITY OF MINDANAO

College of Architecture and Fine Arts Education

Bachelor of Science in Architecture

In partial fulfillment of the requirements in

AR424(1001): Architectural Business Management
Instructor: Ar. Nikki Barena

Proponents:
ENRIQUEZ, EDGAR CHRISTIAN E.
ORQUISTA, EZEKIEL L.
PAGADUAN, JANN ANDREW M.
PEÑAFLOR, CHRIZA MAE D.
ROSETE, HARVEY B.

December 26, 2021

 CHAPTER I

INTRODUCTION

1.1. Name of the Project and Location

This project feasibility study is titled “A Proposed 2-Storey Commercial Building in

J.P. Laurel, Bajada, Davao City” and the proposed business name shall be “Euphoria
Plaza”.

The business name “Euphoria Plaza” came from one of the Top 10 Most Beautiful
English Words which means a feeling or a state of intense excitement and happiness.

This project will put emphasis on providing a paved public space for citizens for a
business purpose either directly by housing a specific business or by generating a profit, as
with residential rental buildings. It is a real estate intended for use by for-profit businesses
such as office complexes, shopping malls, service stations and restaurants.

Figure 1.1. Euphoria Plaza Logo

The symbol to be used is wings which is emblematic to the business name. It has two
colors, the orange symbolizes joy, enthusiasm, and happiness while the green represents
tranquility.

The new Euphoria Plaza Building shall be situated in J.P. Laurel, Bajada, Davao City
beside Imperial Appliance Plaza comprising an area of 1504 square meters (marked X on
 Figure 1.2 below). The project site is conveniently located near the residential area and
commercial buildings.

Figure 1.2. Location Map

The site selection is dependent on the zoning provided by the Davao City.

1.2. Descriptive Definition of the Project

The Euphoria Plaza is a property used exclusively for business related purposes and
offers profitable rental spaces that targets entrepreneurs and businesses. The commercial
building will provide a workspace intended for different entrepreneurs and businesses to
conduct income-generating activities.

Davao city is a first class highly urbanized city in the Davao region and has a total land
area of 2,444 sq. km making it the largest city in the Philippines in terms of land area. The
city also serves as the main trade, commerce, and industry hub of Mindanao.

1.3. Project’s Long-Term Objectives

The Euphoria Plaza long term objective focuses on gaining competitive advantage,
profitability, return on investment and good business image. These objectives will help the
 business in monitoring its performance and provide a clear direction to where the business
is heading in the future.

1. To establish the business image of Euphoria Plaza as profitable rental working

spaces intended for different entrepreneurs and businesses in Davao City. This will
help the business gain competitive advantages against its competitor.
2. To establish the building as a model of sustainable design and show its benefits
through its effect on the users.

1.4. Scope and Limitation of the Study

1. Market Feasibility
• The presence of competition in the area will not be significant since the
business is expected to gain competitive advantage through its price, quality,
and strong marketing program.
2. Technical Feasibility
• The site is approximately 1,504 square meters, the area for the development
of the proposed 2-Storey commercial building will cover approximately 500
square meters of area (including the parking area).
• The commercial building will strictly follow the standards and can o beyond
the standards dictated in the National Building Code and Fire Code of the
Philippines.
3. Management Feasibility
• The proposed business shall be setup as a single proprietorship, it shall be
owned and managed by a single individual.
4. Financial Feasibility
• The total amount of funding or startup capital shall be P 12,855,657.88. P
8,000,000 shall be sourced from HSBC while the remaining will be
provided by the proprietor.
5. Socio Economic Feasibility
• The construction of the building will generate job opportunities for
approximately ten (10) skilled workers and fifteen (15) laborers for the
duration of the project.
• During the initial operation of the business, it will only require four (4) staff
which will be hired an agency.
 CHAPTER II

MARKET STUDY

2.1. Service Description

The Euphoria Plaza is a 2-storey Commercial Building with 8 available rentable

spaces and an area. The site is in the downtown area of Davao, where most people frequently

visit pass by for leisure, labor, or buying home essentials. The site imposes a safe and

accessible feeling for the location is in the middle of the city.

The Euphoria Plaza offers a safe, convenient, accessible, and modernistic aesthetics

for the clients and visitors. Renting fees of the rentable spaces in the Euphoria Plaza on which

floor the specific space is located. Four accessible and convenient spaces are obviously placed

on the ground floor level of the building while 4 less accessible spaces will be on the second

floor of the building, thus having affordable renting fee.

2.2. Market Description

The Euphoria Plaza is strategically situated in Bajada, Davao City, along J.P. Laurel

Avenue, Daang Maharlika Highway or Pan-Philippine Highway, thus making the site very

accessible to all public transportations. The project caters different types of customers such as:

Small business owners: The Euphoria Plaza will set small business owners as a target market.

These business owners will intend their small business to grow as they are earning, positioning

their branch or their business in a place where a mass of people frequently visit would be very

beneficial for the business even in the long run.

Brand Owners: Being known to the masses does not meaning that this type of business does

not need attention. This business has been recognized by many people, most importantly they

also have been recognized by some other related businesses to be their competitors. The
accessible attribute of the site and strategic location, cater different kinds of people visiting the

area.

Company Offices: A company office in the building is beneficial for the Euphoria Plaza for

most of this renter will be residing in the building for a couple of months or years, thus people

working in the office will be daily visitors on the other businesses in the building.

2.3. Demand

The Philippines is entitled as one of the fastest-growing economies in Asia. According

to the released data by Philippine Statistics Authority (PSA), the second fastest-growing

economy is Davao City on year 2017 with a 10.7%. And with a projected 6.7% gross domestic

product (GDP) rate on the year 2018. Davao Regional Development Plan’s (DRDP) main

engine will be making Davao City as their main area to focus for its industrial and commercial

hub of the entire Mindanao. Several planned developments will be coming into the city such

as wastewater collection & treatment facilities and Davao City’s Light Rail Transit System

which will widen the city’s range of transportation. With all these projects, already on its way

property prices in Davao City will surely be affected. As a matter of fact, a few big companies

are already present such as the Ayala Land’s Azuela Cove and the coming Megaworld’s Davao

Park District, SMDC’s SM City Ecoland, Robinsons Land’s Robinsons Cyberpark Davao, and

DMCI’s Verdon Parc. Interested investors are quickly on the move for residential and

commercial spaces for the upcoming developments.

2.4. Price Study

Pricing on each rentable space varies on which floor the space is located and current

rental rate of nearby competitors. Euphoria Plaza rental rate:

 Floor Rental Rate

Ground Floor P 50,000 per month

Second Floor P 48,000 per month

2.5 Existing Competition

In this variety of business, it is not just important to be informed about the competitors

of the business but also the competitors of the renters of the building. The renter’s competitors

will largely affect the span of which the renter will stay in the building. For the mean time

renters in the building cannot be identified, recognized competitors of Euphoria Plaza are:

Competitor Rental Rate

Gaisano Mall of Davao 50,000 Php to 80,000 Php or more per month

Rentable Spaces in F. Torres Street 60,000 Php per month

Victoria Plaza 50,000 Php to 70,000 Php or more per month

Competitor’s Strengths and Weaknesses Table

Competitor Strengths Weaknesses

Gaisano Mall of Davao • Popular • Crowded

• One of the biggest • Almost everything is

malls in the area. branded and

• Different brands are expensive.

available. • Situated in a high-

• One of the oldest traffic area.

malls in Davao, thus • Building is outdated.

trusted mall.
 • Building is

accessible.

• Ensures safety and

security. Nearby big

establishments.

Rentable Spaces in F. • Nearby big • Limited parking area.

Torres Street establishments. • Most people

• Famous area for frequently visit the

teenagers. area only during the

• Trendy businesses evening.

and building design.

Victoria Plaza • Building is • Building is outdated.

accessible. • Situated in a high-

• Ensures safety and traffic area.

security. Nearby big • Crowded

establishments.

• One of the oldest

malls in Davao but

Euphoria Plaza’s Strengths and Weaknesses

Strengths Weaknesses

• Accessible • Limited parking slots

• Modern building design • Capital is limited to the proprietor’s

• Spacious available rentable spaces financial condition

• Strategic location • Numerous competitors

 • Complete papers (permits and • Competitors are old developments

licenses) and popular

• Ensures safety and security of the

clients and visitors with the use of

CCTVs.

• New building

2.6. Marketing Program

Apart from the building’s strategic location, Euphoria Plaza will also recognize

affordability, safety & security, neatness, and proper maintenance as one of its main objectives

to achieve its long-term goals.

 CHAPTER III

TECHNICAL FEASIBILITY

3.1. The Service

Euphoria Plaza offers 8 commercial spaces with an area ranging from 90 sqm to 100

sqm a tenant may rent on the ground floor or on the second floor. A big parking area to

accommodate a lot of costumers from each commercial spaces.

Each commercial space has a floor area of 90 sqm – 100 sqm with a common comfort

room for women and men in each story and built in with exhaust fans to ensure proper

ventilation., also provided with glass windows each to promote natural sunlight to come

through.

CCTV cameras, as well as a fire alarm and protection system, are installed throughout

the facility. There is always also a security guard to ensure the safety of costumers and tenants.

1. Commercial Spaces

There are 8 commercial spaces in total in the building so there is no overcrowding and

a somehow peaceful environment for the tenants. The commercial spaces are an open plan so

that the tenants are free to design and modify it on their own, unless otherwise they will do

major changes. The air-conditioning unit in each room is also included. Each unit has its own

electric or loan meter.

3.2. Service process

1. Renting procedure

The minimum contract is 1 year and should give a month’s advance and security deposit

as payment before they can occupy the space. There is a contract that should be signed by both
parties containing the terms and conditions and a photocopy of the renter’s valid identification

card. Monthly payment is collected every 1st day of the month and no cooking in any form is

allowed inside because it is a commercial space and for the safety of all, but a rice cooker is an

exception. There should be no tenant that sleeps or live in the commercial space. Minimal to

medium changes in the spaces is allowed but bringing it back to its original form when turning

over the space is a must and any damage in the space will be deducted in the deposit given.

The procedure ends with the signing of an agreement document, which will be given to the

tenant, as well as a duplicate key to their commercial space of choice.

2. Moving out

When the renter wants to move out before even completing the contract expires then

they will have to pay an amount for breaking the contract. And if they want to move out when

the contract expires, they shall remove all the things in the commercial space on the day that

the contract expires and revert the space in its original form. They shall also return the keys

and duplicate keys to the owner for safety purposes. They shall receive the deposited money

after 10 business days when it is done inspecting the space for any damage.

3. Renewing the contract

If a renter wants to renew its contract, then they will be given another agreement form

containing the terms and condition and signed by both parties.

4. Eviction

Any renter who has repeatedly broken the contract's terms and conditions, such as those

who are habitually late with payments or who break the house rules will be expelled from the

premises. within seven (7) days after receiving written notification from management.

5. Location
 Euphoria Plaza is located at the center of downtown avenue in Davao city, a strategic

location that is near malls, hospitals, hotels, churches, schools and is easily accessible to

everyone.

Tourists: The project's location is about 13 minutes away from Francisco Bangoy

International Airport is in Davao City and is easily accessible by public transit from the city's

leading tourist attractions.

Students: The site is near schools and universities such as Davao Christian Highschool,

San Pedro College, and Davao Chong Hua Highschool area a few to name the schools that are

close by.

Employees from offices/malls: The location is near Bajada Road (J.P. Laurel). Offices

such as Bangko Sentral, SSS, Robinsons, Landco, and malls such as Abreeza, Victoria Plaza,

Gaisano Mall, as well as hospitals such as San Pedro Hospital and Davao Mental Hospital, are

all located on Avenue), making it convenient for potential office/mall employees to commute

to Euphoria Plaza.

Fig. 1 Site Location from the Central Business District

THE SITE
 Fig 1.2. J.P. Laurel Road to Lot

Fig 1.3. Actual Lot

3.3. Project Layout

The lot is 1504 square meters with a 29-meter frontage. The proposed location of the

Euphoria Plaza within the vicinity will occupy approximately 800 square meters building

footprint excluding parking area.

Fig 1.4. Ground Floor Plan

Fig 1.5. Second Floor Plan

3.4. Building
3.5. Legal Consideration

For this type of business, it was necessary to determine whether the property was zoned

for the use. construction of a rental business in such a way that the maximum height or number

of floors are achieved restriction. For new construction, a building permit must be obtained

from the provisions of the Philippines' National Building Code and Fire Code "Rooms shall

have a minimum size of 6.00 square meters (65 square feet)," it stated. rooms with a minimum

horizontal dimension of 2.00 meters (6 feet, 7 inches) 3.00 square meters (32 feet) of human

habitations with a minimum horizontal dimension of 1.50 meters (5 feet) for kitchens; and 1.20

meters (13 square feet) with a minimum for bathrooms, a horizontal dimension of 90

centimeters (3 feet) is recommended.

Another legal consideration is the implementation of the Davao City Rainwater

Ordinance of 2009, which states that medium to large commercial, institutional, agricultural,

and industrial establishments, as well as medium to high-end residential subdivisions, must

adopt and develop appropriate technologies related to rainwater utilization. Then, as the general

steps in applying for a job, the following procedures take place. Permit for this type of business

venture (businesscoachphil.com, 2011): Register with the Department of Trade and Industry

(DTI) if you will be the sole owner of the property, or with the Securities and Exchange

Commission (SEC) if you will be a corporation. Obtain a Barangay Permit. Obtain a Municipal

or City Hall Building Permit and an Occupation Permit. There, you must also obtain your Fire

Safety Permit. Register with the Internal Revenue Service (BIR). Obtain your registration

certificate (COR). This will include a schedule of your tax obligations with the national

government, as well as receipts.

THE PHILIPPINES' FIRECODE

 Section 10.2.12.4 of the Philippine Fire Code addresses fire safety requirements for

commercial buildings, including rental spaces. The following are excerpts from the law

(Bfp.gov.ph, 2008):

A. General Prerequisites

1. Any apartment building that meets all of the preceding requirements of this Section for hotels

may be considered a hotel, and the following requirements for apartment buildings will not

apply.

2. Each individual unit covered by this Section must at the very least comply with Section

10.2.12.6 of this IRR, entitled Single and Two-Family Dwellings, contains the bare minimum.

B. Exit Information

1. Exit Types and Capabilities in General:

a. Exits with the same configuration, types, and capacities as required by Section. This

IRR's 10.2.12.3 must be provided.

b. Street floor exits must be large enough to accommodate the street floor's occupant

load plus the required amount of traffic.

2. The number of exits

1. Every living unit must have at least two (2) separate exits.

Exception 1: Any living unit with a direct exit to the street or yard.

A single exit may be at ground level or via an outside stairway serving a maximum of

two units, or via an enclosed stairway with a fire-resistance rating of one (1) hour or more
serving that apartment only and not communicating with any floor below the floor of exit

discharge or other area not a part of the apartment served.

3. Corridor Width at a Minimum

1. Corridors with a required capacity of more than 50 people must be of this type. sufficient

width to accommodate the required occupant load but not less than more than a hundred and

twelve centimeters (112 cm).

2. Corridors with a required capacity of no more than 50 people must be no less than greater

than 91 centimeters (91 cm).

4. Exit Availability

1. Exits must be separated from one another, as required by Section 10.2.5.2 of this code IRR.

2. Exits must be designed in such a way that there are no dead-end pockets, hallways, or

passageways.

3. Exits and exit access must be placed in such a way that:

i. There will be no need to travel more than fifteen and one-half meters (15.50 m) within

any single living unit to reach the nearest exit or an entrance unit of the apartment that provides

access to an exit on the same floor via a public corridor ground floor

ii. There will be no need to use the stairs within any individual living unit than one (1)

story above or below the apartment's floor level to the nearest exit or the entrance unit.

iii. Any apartment's entrance unit is within thirty-one meters (31 m) of an elevator within

forty-six and a half meters (46.50 m) of an exit in a building protected by approved Section

10.2.6.5 of this IRR requires a supervised sprinkler system.

4. Self-closing units between apartments and corridors are required.

5. Discharge from Exits

1. Discharge from exits shall be the same as required for hotels 50 m.

6. Signage and lighting

1. Every public space, hallway, stairwell, and other means of egress must have one illumination

in accordance with IRR Section 10.2.5.11 All apartment complexes shall include emergency

lighting

2. In all cases, signs in accordance with Section 10.2.5.12 of this IRR must be provided

apartment complexes systems of Alarm.

a. Every apartment building with four (4) or more storeys, or more than four (4) storeys,

or more than four (4) storeys, or more than four (4) storeys, in each of the twelve (12) apartment

units, an automatic fire detection and alarm system shall be installed. Except buildings provided

with approved, in accordance with Section 10.2.6.4 of this IRR, supervised sprinkler protection

in accordance with IRR Section 10.2.6.5

b. Apartment buildings of no more than three (3) stories in height are permitted.

Provided with a manual fire alarm system, if dwelling units are installed using a single – station

or multi –station smoke detectors.

7. Extinguishing Requirements

1. Except in buildings where all guest sleeping rooms or guest suites have a unit opening

directly outside at the street or grade level or exterior exit access arranged in accordance with
Section 10.2.5.2 of this IRR in buildings up to and including three (3) storeys in height, all

buildings shall be protected throughout by an approved, supervised sprinkler system.

2. All dwelling units must have listed quick response or listed residential sprinklers.

3. Portable fire extinguishers must be installed in accordance with IRR Section 10.2.6.5.

3.6. Utilities and Waste Management

Utilities like electricity and water are easily accessible. Other services, such as internet

access and cable television, are also easily accessible.

Waste disposal at the proposed project site is accomplished using a designated garbage

area and a regular garbage collection schedule established by the local government. The city

has 80 garbage truck units, with 24 to 25 trucks passing by major highways every night and

more than 20 trucks picking up garbage from subdivision collection points every morning.

3.7. Prospective Issues and Contingency Plans

While the proprietor is confident that this project will be implemented smoothly and

without major issues, it is still prudent to plan for any contingencies that may affect or impede

the project's progress. In this regard, potential problems that may arise must be discussed, along

with Euphoria Plaza’s potential responses or contingency plans, so that these problems can

be addressed as soon as possible resolved.

PROPERTY OWNERSHIP

Shareholders own corporations, and they invest money in the company by purchasing

stock. The percentage of shares they own determines how much of the company they own. The

shareholders elect a board of directors, which is a group of persons (mostly from outside the
company) who are legally accountable for the company's governance. The board of directors

oversees the corporation's important policies and decisions, sets goals, and holds management

accountable for meeting them, and chooses and reviews the top executive, commonly referred

to as the CEO (chief executive officer). The board also approves the distribution of earnings to

shareholders in the form of dividends, which are cash payments made to shareholders.

FINANCIAL CAPACITY

The members of the corporation company are liable for the access of capital of the

business. Limited financial resources may represent a threat to the organization. As a result, it

is critical to plan for these eventualities throughout the building or management of the business.

Therefore, the company will make sure to prioritize the business primary needs for the

processing of the construction till its production.

 CHAPTER IV

MANAGEMENT FEASIBILITY

Before the operation of the business, the construction of the building requires the

following phase which will be taken over by the corporation: Pre-Implementation Phase,

Implementation Phase and Post Implementation Phase.

Pre-Implementation Phase

All plans and drawings for the approval of the City Engineers Office in the Application

of Building Permit must be prepared by a licensed professional in collaboration with the

members of the corporation of the business. Architectural plans, structural plans, plumbing

plans, electrical plans, and mechanical plans are all included.

Implementation Phase

For any construction project, a license to construct must be obtained through Philippine

Contractors Accreditation Board. For this project, since the members are all professional

architects, they will incorporate their ideas and use their license to construct this project. It is

of course the corporate will already have voted for electing the director to manage the

construction. The construction shall be initiated by the board of directors who oversees the

management of the daily operations of the corporation, and often do so by hiring a management

team such as skilled workers and sub-contractors for specialized activity such as plumbing,

electrical and painting. In addition, for the management and man powering of the business the

director will also hire personnel for the maintenance and security of the building.

Post Implementation Phase

 The application of an occupancy permit will begin as a condition for the business permit

application once construction has progressed to ninety percent (90%) completion. The

Euphoria Plaza will run as a corporation business, therefore, it is owned and run by corporate

owners which is also easy to comply and set up with the licensing requirements. The

advantages of a corporation include personal liability protection, business security and

continuity, and easier access to capital. Furthermore, each shareholder owns a certain

proportion of the company based on the number of shares they own. Ownership of a company

is easily transferable due to the ease with which corporation shares can be purchased or sold.

This is especially beneficial to the long-term viability and continuation of a firm.

MAJOR ROLES & RESPONSIBILITIES

Information Desk Attendant

• Responsible for recording all transactions of the business including internal communications

to the tenants

• Monitors expiring contracts and informs tenant at least a month before expiration Responsible

for processing all permits and licenses of the business

• Entertains walk in clients for any inquiries

Security Guard

• Ensures the security of the establishment

• Assist in the arrival of guest such as carrying their luggage to designated rooms

Utility personnel

• Ensures the function and organized services in the building

• Maintains the mechanical and other utility services in the building

Maintenance personnel

• Ensures the organization of such as the cleaning the building and maintaining the landscapes.
 CHAPTER V

FINANCIAL FEASIBILITY

5.1. Major Assumptions

1. Operations

- This business is open 24 hours a day, seven (7) days a week throughout the year.

- All transactions made by the tenants shall be in cash and/or dated checks.

- Payables of the business shall be in the form of check except for transactions amounting

to P 1,000 or less.

- A petty cash fund of P 3,000.00 shall be setup to defray petty cash expenses such as for

the supplies and similar items.

- Inflation is projected at 5% per year for maintenance and utilities expense.

- The source of capital shall be through debt and equity.

- The bank loan of P 8,000,000 will be obtained.

- There will be drawings of P 500,000.00 per year.

- Fixed asset depreciation will be calculated using the straight-line approach with a 20-

year useful life and no salvage value, while equipment, furniture, and fixtures will have a 5-

year useful life.

- Interest of bank loan has 4.99 percent fixed interest rate for 10 years.

- Percentage tax is paid quarterly based on the TRAIN Law.

- Security deposits for those yearly occupants are released at the termination of the

contract.

- All fees are inclusive of electricity and water.

- Real Property Taxes are paid at the beginning of the year at P 26,400.

- Rate of Rental Space:

Rentals Rate
Monthly P 50 000 for Ground Floor
P 48 000 for Second Floor
Annual P 600 000 for Ground Floor
P 576 000 Second Floor

Table 5.1. Rate of Rental Space at Euphoria Plaza

- Taxes and Licenses:

Year 1 Year 2 Year 3

P 31,453.05 P 9,168.05 P 9,168.05

Table 5.2. Taxes and Licenses Cost

- Advertising Expense Year 1 (1st quarter only) P 6,000.00.

- Insurance Expense is 0.5% of assured amount; Assured amount is P 8,000,000.00

- Cleaning and Maintenance at P 2,000.00

- Repairs and Maintenance of the Building is at 0.50% of the construction cost, with

increment of 0.25% per year.

- Staff are hired from an agency and paid at minimum wage every 15th and 30th day.

- Utilities expense:
 Item No. Description Cost
1 Cleaning & Maintenance P 2 000
2 Maintenance of Equipment P 20 000
3 Water & Energy Expense P 30 000
TOTAL P 52 000

Table 5.3. Utilities Expense

2. Balance Sheet

Current Assets

This consists of cash in bank, cash on hand, and the petty cash fund.

Non-current Assets

Fixed asset shall consist of the Office Equipment, Furnitures and Fixtures, Land and

Building. The building shall depreciate in 20 years while the Office Equipment and the

Furnitures & Fixtures shall depreciate for 5 years. All are computed using the straight-line

method.

Current Liabilities

- All suppliers are paid on or before the end of each period, therefore, there is no account

payable.

- No statutory contributions and deductions payable since the staff will be hired from an

agency.

- Utilities Expense Payable is the current unpaid portion for the electricity and water

consumption by the business to be settled in the month following the billing period.
- Percentage tax payable is the tax due based on annual net income of the business, paid

in the following year of the taxable period.

- Interest Expense Payable is the unpaid bank interest loan at the end of each period.

Non-current Liabilities

- Loan Non-Current is composed of the non-current portion of the bank loan which is

payable monthly.

- Security Deposit is considered as non-current as the tenants are expected to stay for

more than a year. It is release at the expiration of the contract.

Capital

- It is composed of the capital balances and drawing of the proprietor.

- Part of the capital is the estimated fair market value of the land and improvements at P

8,000,000.

Income Statement

Revenue

- It consists of the rent revenue generated by the business. Assumption is based on the

monthly basis for rental spaces on both ground and second floors. This includes light and water.

Exclusive of the rent revenue is the advance payment for security deposits.

- No rental fee adjustment is projected for the first five years of operation.

- Rent revenue is based on occupancy projection as follows:

 Year Floor No. of Occupancy Rate
st
Spaces 1 Quarter 2 Quarter 3rd Quarter
nd
4th Quarter
2021 Ground Floor 4 10% 50% 70% 70%
Second Floor 4 10% 30% 50% 50%
2022 Ground Floor 4 80% 80% 80% 80%
Second Floor 4 70% 70% 70% 70%
2023 Ground Floor 4 90% 90% 90% 90%
Second Floor 4 80% 80% 80% 80%
2024 Ground Floor 4 90% 90% 90% 90%
Second Floor 4 80% 80% 80% 80%
2025 Ground Floor 4 90% 90% 90% 90%
Second Floor 4 80% 80% 80% 80%

Table 5.4. Projected Occupancy Rate at Euphoria Plaza

- Occupancy projection is based on assumption by the proprietor based on current

occupancy rate of existing competitions in the area.

Operating Expense

- The taxes and licenses are the annual and regulatory requirement for the business to

operate legally. The business is expected to incur bigger expenses in taxes and licenses during

the first year at P 31,453.05 due to additional processing fees followed by P 9,168.05 the

following year.

- Percentage Tax is computed at 3% of the gross rent income payable every quarter as

indicated by the TRAIN law.

- No income tax provision for the sole proprietor.

- The advertising expense includes prints and social media platform payments as

indicated in the marketing plan of this study. Expected to be incurred in the first quarter of the

operation.
- The Insurance expense is the annual premium paid to cover the property from possible

fire and damages brought by acts of God, terrorism, and other damages. This is computed at

0.50% of the assured amount by the bank which is P 8,000,000.

- The Interest Expense is the periodic expense incurred due to the loans

availed by the business. Principal amount and the interest are paid monthly.

- Cleaning and Maintenance Expense include the soaps, detergents, and other cleaning

materials.

- The Utilities Expense include is for the electricity and water consumed monthly. It is

paid in the month following the billing period.

- Agency Fee is the monthly salary due to the staff that is paid every 15th and 30th of the

month. There is no outstanding obligation at the end of each period.

- Repairs and Maintenance of the Building covers the repairs and maintenance for

plumbing works, electrical, mechanical (for air-conditioning units).

- The Real Property Taxes is computed based on the land, existing improvements and the

new building. This is paid in the beginning of the year.

- Depreciation – for Furniture and Fixtures is the allocated cost on a yearly basis. Furniture and

Fixture is depreciated over 5 years.

- Depreciation – for Office Equipment is the allocated cost on a yearly basis. Office Equipment

is depreciated over 5 years.

- Depreciation – for Building is the allocated cost on a yearly basis. Building is depreciated

over 20 years.
5.2. Total Project Cost

The Total Project Cost is P 9,529,500 which includes the cost of the building, furniture

and fixtures, office equipment, and the one-year operating expense.

Building

Item No. Description Labor and Material Costs

1 General Requirements P 350 100.00
2 Earthworks P 770 600.00
3 Rebars and Concreting P 2 850 000.00
4 Masonry Works P 1 640 000.00
5 Forms and Scaffolds P 560 200.00
6 Tileworks P 640 250.00
7 Electrical Works P 410 800.00
8 Plumbing Works P 835 900.00
9 Roofing P 350 100.00
10 Painting Works P 615 000.00
11 Parking Area/Easements/Walkways P 200 750.00
TOTAL BUILDING COST P 9 223 700.00

Table 5.5. Project Cost

The building cost amounts to 9,960,000.00 php including the following scope of work

stated in Table.

Furnitures and Fixtures

Item No. Description Qty. Unit Price Value

1 Water Closets 8 P 7 000.00 P 56 000.00
2 Urinals 4 P 3 000.00 P 12 000.00
3 Sink 4 P 700.00 P 2 800.00
4 Office Equipment 2 P 40 000.00 P 80 000.00
5 Air Conditioners 10 P 15 500.00 P 155 000.00
TOTAL FURNITURE AND FIXTURE COST P 305 800.00

Table 5.6. Furniture and Fixtures Cost

5.3. Initial Working Capital Requirements

1. Working Capital Requirement

 The business shall have an initial working capital of P 750,00 to cover the operation

expense in its first year. This shall include the building permit fee, Business permit fees, Taxes

(Percentage Taxes and Real Property Tax), Insurance Expense, Cleaning and Maintenance

Expense, Utilities Expense, Agency Expense, Repairs Expense.

2. Cash

The cash balance shall include the Petty Cash Fund, Cash on Hand including the

commercial checks and the Cash in Bank Cash-on-Hand are the cash received from the tenants

which includes the cash for deposit still in the cashier box or cash endorsed to the owner. The

Petty Cash Fund shall have a maintaining balance of P 3,000. It shall be replenished when it

reaches 50% of its maintaining balance.

3. Credit Policy

The business in general does not allow credit to its tenant. It shall exercise fair and just

management of its defaulting tenants as provided within the bounds of the law.

5.4. Alternative Sources of Financing

It is important to acknowledge the potential of having financing problem thus

alternative sources should be realized. Online loan calculators of different financial institution

are available to gain information on their financing schemes. Among financing institutions

considered are Pag-IBIG and other banks.

Fig. 5.1. PAG-IBIG Amortization Breakdown

Though Pag-IBIG offers the minimal monthly amortization compared to banks, the

maximum loanable amount is only P 6,750,000. This requires an additional capital amounting

P 2,779,500 from the proprietor.

5.5. Sources of Financing the Project

The Total Project Cost amounts to P 9,529,500. To finance this project, the proprietor

shall avail of the bank loan through home loans option. The loan with HSBC is payable within

10 years at 4.99 interest rate. The loan is expected to generate proceeds of about P 8,000,000.

The additional P 1,529,500 shall be provided by the proprietor from his personal savings

account.
 CHAPTER VI

SOCIO – ECONOMIC STUDY

Upon the construction of the Euphoria Plaza, it offers temporary jobs in the

construction industry. This will benefit also to the economic status as according to the

Philippine Statistics Authority, the Philippines' gross domestic product (GDP) increased by

11.8 percent in the second quarter of 2021. (PSA). Manufacturing, wholesale, and retail trade,

as well as motor vehicle and motorcycle repair, are all major contributions to growth.

Moreover, upon completion of the construction until the permit for occupancy has been

approved and it will start to run the business. The Euphoria Plaza will start generating income

from the renters and the taxes will raise money for local and national governments, which can

be used for community development. This is due to the functioning of Euphoria Plaza as well

as increasing sales and earnings at other local enterprises. The more money that is made, the

more taxes that are paid to the government. In addition, the local government will be able to

collect annual statutory and regulatory fees such as clearances, fire safety permits, business

permits, and so on, resulting in an increase in revenue for the LGU.

Finally, because Euphoria Plaza is built in accordance with all applicable regulations,

it is expected to give a safe and modest place to remain for our renters and users, therefore

enhancing their living conditions and well-being, in accordance with government sanitary and

safety norms.
 CURRICULUM VITAE

Name: Edgar Christian E. Enriquez

Address: Doña Ascuncion, Barangay Pampanga, Davao City
Mobile No./Tel. No.: 09475658759
Email: e.enriquez.482433@umindanao.edu.ph

PERSONAL DATA

Nationality: Filipino
Sex: Male
Marital Status: Single
Date of Birth: June 23, 1999
Place of Birth: Davao City

EDUCATION

Elementary: University of Immaculate Conception

Junior High: University of Immaculate Conception
Senior High: University of Immaculate Conception
College: University of Mindanao
 CURRICULUM VITAE

Name: Ezekiel L. Orquista

Address: Tabon, Bislig City, Surigao Del Sur
Mobile No./Tel. No.: 09684394055
Email: e.orquista.482395@umindanao.edu.ph

PERSONAL DATA

Nationality: Filipino
Sex: Male
Marital Status: Single
Date of Birth: November 7, 1999
Place of Birth: Bislig City, Surigao Del Sur

EDUCATION

Elementary: San Isidro Elementary School

Junior High: Tabon M. Estrella National High School
Senior High: Andres Soriano Colleges of Bislig
College: University of Mindanao
 CURRICULUM VITAE

Name: Jann Andrew M. Pagaduan

Address: Prk. 5-B San Miguel, Tagum City
Mobile No./Tel. No.: 09363401140
Email: j.pagaduan.476339@umindanao.edu.ph

PERSONAL DATA

Nationality: Filipino
Sex: Male
Marital Status: Single
Date of Birth: January 14, 2000
Place of Birth: Lupon, Davao Oriental

EDUCATION

Elementary: Comara T. Manuel Central Elementary School - II

Junior High: Tagum City National Comprehensive High School
Senior High: University of Mindanao Tagum College
College: University of Mindanao
 CURRICULUM VITAE

Name: Chriza Maye D. Peñaflor

Address: Center Tamugan Marilog Dist. Davao City
Mobile No./Tel. No.: 09611299946
Email: c.penaflor.482780@umindanao.edu.ph

PERSONAL DATA

Nationality: Filipino
Sex: Female
Marital Status: Single
Date of Birth: October 31, 1999
Place of Birth: Legazpi City, Albay

EDUCATION

Elementary: Center Tamugan Elementary School

Junior High: Gov. Vicente Duterte National High School
Senior High: University of Mindanao
College: University of Mindanao
 CURRICULUM VITAE

Name: Harvey B. Rosete

Address: Wali, Maitum, Sarangani Province
Mobile No./Tel. No.: 09661726204
Email: h.rosete.477256@umindanao.edu.ph

PERSONAL DATA

Nationality: Filipino
Sex: Male
Marital Status: Single
Date of Birth: August 10, 1999
Place of Birth: General Santos City

EDUCATION

Elementary: Malalag Central Elementary School

Junior High: Malalag National High School
Senior High: Malalag National High School
College: University of Mindanao