Project Proposal for the construction of shopping mall Building

Project to be implemented in --------------------------

Client: - _________________________

Date
Executive Summary

1. Project name: U- shaped Mall construction

2. project Type : Multipurpose service business building

3. Nationality: Ethiopian

4. Project Owner: _________________

5. Project location:

6. Project composition: multipurpose Building (G+1) used for diverse

business centers like super market, shopes, restaurant, café,
beauty salon, Pharmacy, and offices.

7. Area Required: 20000 m2

8. Total investment Cost:

9. Employment opportunity:

10. Social and Economic Benefit: provide better Building service,

employment opportunities, generation of income and benefits for
the local people.
 1. Introduction

1.1. General Background

The current fast and dynamic economic growth of Ethiopia especially in

urban area 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 urban areas of the nation since dynamic
economic development of urban economy requires the construction of
these buildings in towns to support the growing of business service
sectors like supermarkets, Beauty salon, shops, offices cinemas,
Computer Center, Cafeterias, restaurant, assembly hall, guest house and
other activities. In this regard, mixed used building expands in the all
parts of the country.

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 percent 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 (real estate) 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.

To this effect, the owner of the envisioned U shaped Mixed Use Building
Ato ____________ who has been living for long time in this town, planned
to construct in place town 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,
she expects to get the necessary support from the city administration to
make the project to be operational.

Looking at the past trends and permits issues by the Government to the
construction of real estate properties including the mixed use building in
the major urban areas of the country specially in Addis Ababa one can
easily conclude that the momentum is more likely to continue.

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.

vehicles
Project Scope

The project scope is defined in the following manner:

  A completed G+1 storey shopping mall with parking lot for vehicles
complete with all utilities and amenities like electricity, plumbing,
vigilance system, communication system, fire protection system
and aesthetic designing.

 Provide high skill training to the maintenance staff of the client for
precautionary and preventive maintenance of the building and the
facilities

 Handover of the shopping mall with a high scale event launch with
sufficient public promotion.

 The project scope is decided by an agreement between the client

and the organization and has limited chances to be changed
during any stage.

1.2. objective of the project

The major goal of this project is to contribute towards the growth of the
trade sector in place town. Its specific objectives include the following.

 To construct and develop modern shops, offices, and restaurant,

bedroom & cafeteria facilities that enable to provide standard services
to visitors.

 To undertake trading and other refuted business activities that enable

generating a reasonable to the invested capital.

 To develop modern business centre that would provide services of

international standard in order to attract foreign visitors and thereby
contribute to wards the generation of hard currency for the country.

 To create employment opportunities for the population in the town

and

 Contribute towards the beautification of the town through the

construction of modern building infrastructure and facilities.
 1.3. Project description

The long-term goal of the project is to become the best choice in place
and its surrounding areas by creating a differentiated experience
capitalizing on personal service. The proposed project will have a total
area of 20000m2, designed to reader a multipurpose giving business,
which will in turn plays significant role towards solving shortage of
business center in place town.

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 restaurant and café, national and international dish
and various types of soft drinks.

1.4. Project Rationale

Internationally the economic growth this country is experiencing, the

good governance created and even if the town is in its nascent stage of
development these project are the first in kind in the town are feasible
and would be a model development in promoting and attracting different
urban investments.

In order to respond to the created environment the town is in need of

major, basic and feasible urban projects to be developed.

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 in the town,
the trend on such kinds of investment was found to be minimal. Since
there is no such kind of modern tourist facilities and business station in
the town to accommodate the existing demand of these services in the
town and the surrounding areas. The mismatch between the demand for
and supply of such kind of services in easily observed in the town.

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 decentralized state based economy, privatized

and free market economy; good governance creates a favorable
environment for the development of investment for private investors.

1.5. the significance of the project

The envisaged project is deemed to add to the economic development of

the nation in general and zone and town in specific with following ways:

A. Employment opportunity

One of the problems that our country faces is unemployment. Therefore,

the current objective of the government is to work on tackling the
problem of unemployment and fostering the development process either
through creating self-employment or employment in other organizations.
Hence, this project will hire to give opportunities for unemployment

B. Sources of social service

In addition to serving as a source of employment and income for the

region, the project renders social services for different group of people.
Hence, it Is also provide the following services;

 Serve as a source of mental satisfaction for the different users,

 Since, the center encompasses different recreational areas; it will

divert the attention of the users from different evil deeds.
 It deemed to minimize the demand for shops and other bundles of
services in the area.

Furthermore, it serves as the pilot experience and ground for other

investor to enter in to such kinds of urban development. It also
contributes on the efforts made on as a character given building for
physical development pattern of the townscape.

1.6. Project Location

As aforementioned on the introductory part the envisioned project is

intended to be located in place town at about ___ km from Addis Ababa.

2. The market Study

2.1. 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 coffee processing industry in the town and around the town
has been inviting skilled and unskilled labor forces to the town; in
addition, the number of both government and non government offices
has been increasing. Above all the increase in the number of population
of the town 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 of the town or close to the road.

As clearly indicated in the introductory part of this proposal.

2.2. Target customers

The target customers of this envisaged project include:-

1. business Community

2. Nearby business organization

 3. the government bureau

4. Nongovernmental organizations

2.3. 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.

2.4. 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 Ethiopia
which compete with it.

2.5. 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, bedroom, restaurant and café
service as well as modern business center that primarily serve its guests
and major clients.

The plan is that the ground will be partitioned in to different rooms:

Building Description UOM Unit price

in Birr

Ground Supermarket, Pharmacy, Banking & M2

Insurance

1st floor Beauty salon, shop, Computer Center, M2

Cafeteria & Restaurant

Parking Service Car

Total

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 & restaurant bedrooms. Therefore, the
sources of revenue have been classified in to one category namely the
rental of banking & 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 envisioned buildings set the
following fair price (Before VAT) for its service.

3. Technical Study

3.1. description of the project Service/ Product mix

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 eight floors. The purpose of the
building explained as follows;

 the ground floor and first 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,

 Besides, the buildings will have enough parking facility for its
customers and green area in its compound.

3.2. land Use Plan

The total land required for the envisioned project is estimated to be

20000m2 . the total area for the construction of the building will be
________m2, as revealed below.

Table land utilization Plan

SN Description Land M2

Ground 1st floor

1 Building (G+1)

1.1 Ground
1.2 First floor

Parking & Green area

Total 20000

3.3. Construction work and Technology

3.3.1. Construction schedule

The construction project is proposed to be started on august 2015, and

is expected to be finished on januare 2016. 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 & HVAC 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 was
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.

3.3.2. Architectural Design & Layout

Although functional spaces for the project were laid out in significant
detail, the rest of the building had designated spaces but no 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 were congruent with the
structural frame and column locations.

3.3.3. Structural design

One of principle deliverables of our project is the structural design of the

building. The structural bays were coordinated wit the layout of the
building adjustments were made to the bays if specific layouts are
necessary. The frame was 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 was completed for two frames; one of structural
steel and one of reinforced concrete. The structural steel frame was
chosen for further design based on cost per square meter, local
availability of material and constructability considerations, such as
erection and fabrication. The steel system was then designed for lateral
loading with necessary adjustment being made to framing.

3.3.4. 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 was 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 was assumed. Loads were
calculated based on the requirements of the minimum Design loads for
Buildings and other Structures.

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

3.3.6. construction Plan and process

The project team developed a coordinated project schedule and

construction plans that would reflect the expectations for an actual
construction project. The project schedule was developed using the
preliminary designs given to the project team.
Additionally, the group considered typical construction activities and
durations taken from similar construction projects as well as realistic
constraints on building development. For instance, it is necessary for the
structural frame to be completed before concrete can be placed for the
slab on deck. Hand drawn construction plans detailing site entrances
and storage areas were coordinated with the project schedule to give the
reader visualizations of the construction site set up through various
periods of the construction 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
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.
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.

3.4. Utilities

A number of utilities world be put in place in order to ensure smooth

functioning of the project. These utilities include:

 Water Supply,

 Supplementary Electricity supply.

 Telephone line Internet Broadband

 Fuel, Oil and lubricant

 Drainage Facility

3.5. Project implementation

The project’s implementation is expected to take 12 months. The major

activities include cleaning the area around the building, Procurement of
equipments and start rendering services. The time schedule for the above
matured major activities is presented below:

Table: project Implementation schedule

SN Activities Date

1 Land request processing

2 Land approval

3 Site Development

4 Building and construction work

5 Preparation for service

6 Service execution

4. Organizational Structure

4.1. Organization and management

The organizational structure should be in a way that the company able to

achieve its objectives as well as the satisfaction of standard requirement.
In addition to this, the structure should fit the dynamics of all customers
in the building ranging from small business to large tenants.

4.2. Man Power

The total manpower required for the building will be 5 persons. The
manpower list and the corresponding labor cost are shown in part five of
this document.

4.3. 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 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 owner.

Owner

General Manager
 Building Admin Marketing Technical and
maintenance manager

HRM and finance IT, Electricity

and plumper
Cashier Purchaser

Fig: organization structure of the Building

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

 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.

 Follow up security issues and educate tenants

 Works in collaboration with general service to make sure tenants

are well served

5. financial Requirement and Analysis

The financial resource is a prime resource for undertaking any activities.

Hence for implementing this mixed use building a total of 5,000,000 ETB
is required. From this 30% 1,584,480.5 birr will be covered by the
promoter of the project while the rest 70% 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.N Description of works Total Cost in birr

1 Building construction

2 Site Development

3 Design and supervision

Total

B. Building Machineries and Equipments

 SN Description Measur Qty Unit cost Total cost in
ement in Birr Birr.

1 Generator Unit

2 Carpentry tool box Set

3 Electrician tools box Set

4 Plumber tools kit Set

5 Fire extinguisher Unit

(Security Equipment)

6 Total

C. Vehicle

SN Description UOM Qty Unit Cost Total cost in Remark

in Fr. Birr

1 Unit 1 Duty Free

Total

D. Office Equipments

SN Description Measurement Qty Unit cost in birr Total cost in Birr

1 Managerial tables Unit

2 Managerial chairs Unit

3 Office table with chair Unit

4 Secretarial table & chairs Unit

5 Computer with chairs Unit

6 Shelf Unit

7 Filing cabinets Unit

8 Guest chairs Unit

9 Fax & Telephone machine Unit

10 Carpet and Curtain LS

Total

5.2 Working Capital

5.2.1 Operating Expense at full Capacity2

a. salary Expense

SN Position No Qualification Monthly Annual

salary in salary in
Birr Birr

1 General manager 1 BA in management

2 Building admin 1 BA in Acct/Mgt

3 Secretary 1 10+2 in secretariat science

4 HRM Officer 1 10+2 in HRM/Management

5 Technical and 1 Diploma in building

 maintenance manager maintenance

6 Finance head 1 BA in Accounting

7 IT Technician 1 Diploma in computer

science/IT

8 Marketer 1 Diploma in marketing

9 Accountant 1 Diploma in accounting

10 Guards/Security 4 Basic

11 General Service head 1 Diploma in Management

12 Purchaser 1 Diploma in purchasing

&Sup Mgt

13 Electrician 1 10+2 in general electricity

14 Plumber 1 10+2 in general mechanic

15 Casher 2 10+1 in bookkeeping

16 Cleaner 5 Unskilled

17 Maintenance officer 1 10+2 in General mechanic

18 Driver 1 10 completed

Total

Benefit (20%)

Grand Total
Summary of Total initial investment cost

SN Description Cost in Birr

1 Land, building & construction

2 Building machines & Equipments

3 Vehicle

4 Office Equipment

5 Total fixed investment cost

6 Salary expense

7 Operation Expense

8 Pre service Expense

9 Total Working capital

10 Sub total

11 Contingency (10%)

Total initial investment capital

5.3 Financial analysis and Statements

5.3.1 Underlying Assumption

The financial analysis of the mixed use building is based on the data
provided in the preceding sections and the following assumptions.

A. construction and finance

Construction period 1 Years

Source of finance _______

Bank interest rate ________

B. depreciation

Building 10%

Building machinery and equipment 10%

Office Equipments 10%

6. Environmental impact of the project

The EIA of the project activities was determined by identifying the

environmental aspects and then undertaking an environmental risk
assessment to determine the significant environmental aspects. The
environmental impact assessment has included all phases of the project
namely construction phase and operational phase.

The building has both positive and negative impact

Positive impact of the project

The positive impact of the project is:-

 Generation of employment opportunity

 Source income for the government through business income tax

 Income generation for the promoter

 Being exemplary for other investors who want to engage in the

same business line.

Negative impact of the project

The project has the following negative impacts:

1. noise and Dust emission during Construction

 There are some noises during the construction due to the
construction operation and the company will use construct the
construction during the day time. Again there is the emission of
dust which will be mitigated by sprinkling water on the service.

2. problem on workers on construction

During construction there are some problems that will materialize on

workers. These are: damage on operation by using machines,
construction materials and others. To mitigate such impact the company
will provide safety insurance and safety equipments.

3. swages during operation

During operation there are some wastes emitting from the mixed use
building. These are wastes from the latrine and will be mitigated by using
modern waste treatment technology.