PROJECT PROPOSAL FOR THE DEVELOPMENT OF

G+12 MIXED USE AND APARTMENT

AT ADDIS ABABA CITY

PROJECT LOCATION: ADDIS ABABA

PROMOTER: WECHECHA GENERAL TRADING PLC

July , 2023

Addis ababa,Ethiopia

1
Contents
I. EXECUTIVE SUMMARY.........................................................................................................................4
1. INTRODUCTION...................................................................................................................................5
1.1 Profile of the Promoter......................................................................................................................6
1.2 Purpose of the document..................................................................................................................6
1.3 Objectives of the Project...................................................................................................................6
1.4 Description of the Project..................................................................................................................7
1.5 Project Rationale...............................................................................................................................9
1.6. Physical Characteristic of Project Area.......................................................................................10
1.6.1. District map of Addis Ababa...............................................................................................10
1.6.2. Climate...............................................................................................................................11
1.6.3. Standard of living...............................................................................................................12
1.6.5. Tourism..............................................................................................................................13
1.6.6. Government.......................................................................................................................13
1.6.7. Crime.................................................................................................................................14
1.6.8. Landmarks..........................................................................................................................14
1.6.9. Culture...............................................................................................................................14
1.6.10. Development.....................................................................................................................16
1.6.11. Education...........................................................................................................................16
1.6.12. Transport...........................................................................................................................17
1.6.13. Twin cities – sister cities.....................................................................................................18
1.7. Premises Required and Land Use Plan............................................................................................18
1.8. Benefit of the Project:.....................................................................................................................19
1.8.1 Source of Employment.............................................................................................................19
1.8.2 Source of Government Revenue...............................................................................................20
1.8.2. Sources of Social Service..........................................................................................................20
2. THE MARKET STUDY..........................................................................................................................21
2.1. Market Analysis.........................................................................................................................21
2.1.1. The Demand-Supply Gap...................................................................................................24
2.1.2. Current supply of Market Mall...........................................................................................25
2.2. Future market or Demand of Market Mall................................................................................25
2.3. Marketing promotion and strategy............................................................................................26

2
 2.4. Competition...............................................................................................................................27
2.5. The project facilities and Services plan......................................................................................27
3. TECHNICAL STUDY.............................................................................................................................29
3.1. Description of the Project Service/ Product Mix........................................................................29
3.2. Construction schedule...............................................................................................................29
3.3. Architectural Design & Layout...................................................................................................30
3.4. Structural design........................................................................................................................30
3.5. Reinforced concrete..................................................................................................................31
3.6. Foundation Design.....................................................................................................................31
3.7. Construction Plan and process...................................................................................................31
3.8. Utilities.......................................................................................................................................32
3.9. Project implementation.............................................................................................................33
4. ORGANIZATIONAL STRUCTURE..........................................................................................................34
4.1. Organization and management.................................................................................................34
4.2. Man Power................................................................................................................................34
4.3. Organizational Structure............................................................................................................36
5. FINANCIAL REQUIREMENT AND ANALYSIS........................................................................................39
4.1. Fixed Investment............................................................................................................................39
4.2. Operating Expenses at Full Capacity...............................................................................................43
4.3. Underlying Assumption..................................................................................................................46
4.4. Source of Income............................................................................................................................46
4.5. Loan Repayment Schedule..............................................................................................................47
4.6. Projected Revenue..........................................................................................................................47

3
 I. EXECUTIVE SUMMARY

1 Project Name G+12 Business Center and Apartment Mall Building

2 Project Promoter W wechecha General Trading plc

3 Promoters Address Addis Ababa City

4 Nationality Ethiopian

5 Project location Addis Ababa City

The underground floor designed for Car Raking

services and Warehouses, Ground Floor up to 6 th Floor
designed for different business centers like, Cafeteria,
Supermarkets, Pharmacies, Banking & Insurance and other
6 Project Composition
business activities, governmental, private, NGO & other
offices services etc While 6th Floor to 10th Floor
Designed for Residential Houses and Related
Facilities.

7 Premises Required 5000 M2

The total initial investment cost for implementing this project

is ETB. 300,000,000. Out of the total budget of the project
Planned Initial
8 30% or ETB. 90,000,000.00 will be covered by the owner
Investment Capital
equity; and Financial institutions will cover the rest 70% or
ETB. 210,000,000.00
The total work force requirement of the project will be
estimated at about 5 5 0 employees. From total workers
Employment
9 Permanent workers are 300 (Skilled 200, & Unskilled 100).
Opportunity
Casual workers 250 (skilled 50 and unskilled 200)

4
1. INTRODUCTION

The project envisage project proposal is planned to invest on Modern Business Center and
Residential Mall Building in Addis Ababa City Administration . Shopping malls today are
increasing in dimension with more goods and variety of wares due to improved living
standards resulting to pursuit of high quality consumer goods, which in turn reveals the
demand for efficient shop-ping processes.

Ethiopia is now well-known as among the five fastest growing economies of the world.
According to IMF, the average growth of the economy is about 10.7% for the last 11
consecutive years, up to 2013/14. The development is broad-based and in paradigm
transformation. This fruits of success is attributed to the contributions of the Ethiopians,
both residing inside the country and the Diasporas’, within the development policy and
strategy environment of the Government. Besides the country is determined to sustain the
on-going growth and transformation of the economy as explained by the Growth and
Transformation Five Year Plan II i.e. for 2015/16 – 2019/20.

Ethiopia’s economic growth brought a wide range of social and economic developments,
which includes, among others, the increased expansion of business and investment. In such
development environment Addis Ababa, the capital city of the fast growing nation,
Ethiopia, has its own very favorable specific features related to business and investment in
Mall. In addition to the presence of many embassies, Addis Ababa is the seat of African
Union (AU), UN-Economic Commission for Africa (ECA), many UN and multilateral
organizations, international NGOs and different national aid agencies that have thousands
of expatriates and foreigners which makes Addis Ababa the resident of many diplomatic
missions next to New York and Brussels. These developments therefore, among many other
investment opportunities, demand inclusive shopping’s of best goods and services (e.g.
restaurants, cinemas, garden) within a short time in a specific suitable area and Addis
Ababa lacks such modern Mall that fits to its current development needs and beyond.

5
Shopping malls have multifaceted contributions for the socio-economic development of a
nation. It is also expressed, in addition to the inclusive provision of best goods and quality
services, in terms of job creation, revenue generation for the government, expansion and
facilitation of business and investment, tourist attraction, etc. Moreover, shopping centers
have become an integral part of the economic and social fabric of their communities.

1.1 Profile of the Promoter

The promoter of the project is an Ethiopian business owners which take part in investment
in response of the call made by Ethiopian government to all Ethiopian and Ethiopian born
to participate in the renaissance of their country. The Promoter has accumulated ample
experience, diversified-skills in the area, and adopted working with many people. Thus,
these experiences primarily motivated the promoter to develop the inception of this
project idea.

1.2 Purpose of the document

The objective of the feasibility study is primarily to facilitate potential entrepreneurships in
project identification for investment. The project feasibility may form the basis of an
important investment decision and in order to serve this objective; the document/study
covers various aspects of project concept development, start-up, production, marketing, ,
finance and business management. The document also provides sectoral information, brief
on Government policies and international scenario, which have some bearing on the
project itself. This particular feasibility is regarding the development of mall for
commercial purpose.

1.3 Objectives of the Project

Therefore, the envisaged Mall development has the following objectives:
1) To establish a World Class Mall in Addis Ababa, that meets the development needs
of the country. The Mall will encompass many shops and stores in the shopping
mall, multiplexes office complex, and other amenities like food court, restaurants,
gym, children and elderly game centers, cinema and theater halls and gardens and
playgrounds.

6
 2) To get significantly high rate of return from the investment and contribute to the
country’s image building process. International experiences show that investing on
modern mall and multiplex is surely attractive and lucrative.

3) To serve as the source of government revenue through business income tax.

4) To serve as a role model for other investors who wants to invest in similar business
undertakings
5) To contribute somewhat to the governments objectives of reducing the problem of
un-employment through crating employment opportunities to the citizens both on
permanent and temporary basis.

1.4 Description of the Project

Shopping is an activity in which a customer browses the available goods or services
presented by one or more retailers with the potential intent to purchase a suitable
selection of them. A typology of shopper types has been developed by scholars which
identifies one group of shoppers as recreational shoppers, that is, those who enjoy
shopping and view it as a leisure activity.

A retailer or a shop is a business that presents a selection of goods and offers to trade or
sell them to customers for money or other goods.

Shoppers' shopping experiences may vary, based on a variety of factors including how the
customer is treated, convenience, the type of goods being purchased, and mood.

According to a 2000 report, in New York State, women purchase 80% of all consumer
goods.

A larger commercial zone can be found in many cities, more formally called a central
business district, but more commonly called "downcity" in the United States, or the "high
street" in Britain, and souks in Arabic speaking areas. Shopping hubs, or shopping centers,
are collections of stores; that is a grouping of several businesses in a compact geographic
area. It consists of a collection of retail, entertainment and service stores designed to serve
products and services to the surrounding region.

7
Traditionally, shopping hubs were called bazaars or marketplaces; an assortment of stalls
lining streets selling a large variety of goods. The modern shopping centre is now different
from its antecedents, the stores are commonly in individual buildings or compressed into
one large structure (Mall).

Markets have existed since ancient times. Some historians have argued that a type of
market has existed since humans first began to engage in trade. Open air, public markets
were known in ancient Babylonia, Assyria, Phoenecia, Greece, Egypt and on the Arabian
peninsula. However, not all societies developed a system of markets. The Greek historian,
Herodotus noted that markets did not evolve in ancient Persia.

Across the Mediterranean and Aegean, a network of markets emerged from the early
Bronze Age. A vast array of goods was traded including: salt, lapiz-lazuli, dyes, cloth, metals,
pots, ceramics, statues, spears and other implements. Archaeological evidence suggests
that Bronze Age traders segmented trade routes according to geographical circuits. Both
produce and ideas travelled along these trade routes.

The majority of retail markets are operated by the public sector and administered by local
governments. A small number are operated by private groups or individuals. Traders can
be licensed to trade on a single pitch but not at a national level or when trading on private
land. This piecemeal licensing system has contributed to declining public confidence in the
reputation of markets. A voluntary scheme has been set up by The Market People, backed
by the National Association of British Market Authorities (NABMA) to address this
problem. It provides consumers with traceability of traders and goods as well as the ability
to rate and contact the traders. A Market is issued to an operator or trader, once they have
provided proof of identity, insurance and, where required, a hygiene certificate.

A study conducted by the Retail Alliance noted that Britain had 1,124 traditional retail
markets, 605 farmers’ markets, 26 wholesale markets and more than 45,700 retail traders
and that retail markets had an annual turnover of over £3.5 billion while wholesale
markets had turnover of £4.1 billion annually. The data also shows that traditional outdoor
street markets continue to dominate the market space, but are in decline. Markets also
have significant appeal for tourists and visitors.

8
Some researchers make a distinction between traditional markets and gentrified markets.
Traditional markets which are primarily held outdoors on specific days, focus on high
volume produce sold with low margins. In the gentrified market, the focus is on specialty
produce, notably organic foods, hyper-local produce, artisanal products, vintage clothing or
designer brands. Whereas traditional markets are in decline, gentrified markets represent
a major growth opportunity.

In places around the world, the term shopping centre is used, especially in Europe,
Australia, and South America. Mall is a term used predominantly in North America. Outside
of North America, "shopping precinct" and "shopping arcade" are also used. In North
America, Gulf countries, and India, the term shopping mall is usually applied to enclosed
retail structures (and is generally abbreviated to simply mall), while shopping centre
usually refers to open-air retail complexes; both types of facilities usually have large
parking lots, face major traffic arterials, and have few pedestrian connections to
surrounding neighborhoods.

In the United Kingdom and Ireland, "malls" are commonly referred to as shopping centers.
Mall primarily refers to either a shopping mall – a place where a collection of shops all
adjoin a pedestrian area – or an exclusively pedestrianzed street that allows shoppers to
walk without interference from vehicle traffic. In North America, mall is generally used to
refer to a large shopping area usually composed of a single building which contains
multiple shops, usually "anchored" by one or more department stores surrounded by a
parking lot, while the term "arcade" is more often used, especially in the United Kingdom,
to refer to a narrow pedestrian-only street, often covered or between closely spaced
buildings.

1.5 Project Rationale

The rapid growth in industrial sector further demands linkages (vertical and like raw
materials, inputs, auxiliary materials, inputs, auxiliary material, technology, market and
others that make them to be efficient and successful in their operation. The establishment
of new firms and expansion of the existing one can have the advantage to provide those
facilities.

9
The government of Ethiopia has developed a conducive investment policy packages and
other sect oral reforms at federal and regional level to attract a huge private investment for
the wellbeing of the nation and its citizens as a whole. Besides, it is also currently
implementing the five years growth and transformation plan that gave a space for
industrialization.

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 promoters to initiate this plant.

Despite the promising business opportunities of the area, the trend on such kinds of
investment found to be minimal and none-existing. Particular to our capital, even though
there are a number of malls in the city, all have limitations in availing combined services
for different users like Secured VIP Services, Special restaurants for vegetarians, traditional
restaurants and women only gym & swimming pools . The mismatch between the demand
for supply and supply of such kind of market center is easily observed in the country.
Therefore, the existing shortage or in adequate development of such standard mall, along
with its commercial and administrative access, better location and access, escalating
demand significantly. Thus, it is trend of urbanization and business has given the
opportunity for the project to be reason that this project will identified, proposes and
assumed to be more profitable.

1.6. Physical Characteristic of Project Area

1.6.1. District map of Addis Ababa

Addis Ababa lies at an elevation of 2,200 meters (7,200 ft) and is a grassland biome, located
at 9°1′48″N 38°44′24″E Coordinates: 9°1′48″N 38°44′24″E. The city lies at the foot of
Mount Entoto and forms part of the watershed for the Awash. From its lowest point, at
2,326 meters (7,631 ft) above sea level in the southern periphery, Addis Ababa rises to
over 3,000 metres (9,800 ft) in the Entoto Mountains to the north.

The city is divided into 10 boroughs, called sub cities, (kifle ketema), and 99 wards The 10 sub cities are:

Nr Subcity Area (km²) Population Map Density

10
1 Addis Ketema 7.41 271,644 36,659.1
2 Akaky Kaliti 118.08 195,273 1,653.7
3 Arada 9.91 225,999 23,000
4 Bole 122.08 328,900 2,694.1
5 Gullele 30.18 284,865 9,438.9
6 Kirkos 14.62 235,441 16,104
7 Kolfe Keranio 61.25 546,219 7,448.5
8 Lideta 9.18 214,769 23,000
9 Nifas Silk-Lafto 68.30 335,740 4,915.7
10 Yeka 85.46 337,575 3950.1

1.6.2. Climate

Addis Ababa has a subtropical highland climate (Kö ppen: Cwb). The city has a complex mix
of highland climate zones, with temperature differences of up to 10 °C (18 °F), depending
on elevation and prevailing wind patterns. The high elevation moderates temperatures
year-round, and the city's position near the equator means that temperatures are very
constant from month to month. As such the climate would be maritime if its elevation was
not taken into account, as no month is above 22 °C (72 °F) in mean temperatures.

Mid-November to January is a season for occasional rain. The highland climate regions are
characterized by dry winters, and this is the dry season in Addis Ababa. During this season
the daily maximum temperatures are usually not more than 23 °C (73 °F), and the night-
time minimum temperatures can drop to freezing. The short rainy season is from February
to May. During this period, the difference between the daytime maximum temperatures and
the night-time minimum temperatures is not as great as during other times of the year, with
minimum temperatures in the range of 10–15 °C (50–59 °F). At this time of the year, the city
experiences warm temperatures and a pleasant rainfall. The long wet season is from June to
mid-September; it is the major winter season of the country. This period coincides with
summer, but the temperatures are much lower than at other times of year because of the
frequent rain and hail and the abundance of cloud cover and fewer hours of the

11
predominant religion was also Ethiopian Orthodox with 82.0% of the population, while
12.7% were Muslim, 3.87% Protestant, and 0.78% Catholic.

1.6.3. Standard of living

According to the 2007 national census, 98.64% of the housing units of Addis Ababa had
access to safe drinking water, while 14.9% had flush toilets, 70.7% pit toilets (both
ventilated and unventilated), and 14.3% had no toilet facilities. In 2014, there were 63
public toilets in the city, with plans to build more. Values for other reported common
indicators of the standard of living for Addis Ababa as of 2005 include the following: 0.1% of
the inhabitants fall into the lowest wealth quintile; adult literacy for men is 93.6% and for
women 79.95%, the highest in the nation for both sexes; and the civic infant mortality rate is
45 infant deaths per 1,000 live births, which is less than the nationwide average of 77; at
least half of these deaths occurred in the infants' first month of life.

1.6.4. Economy

The economic activities in Addis Ababa are diverse. According to official statistics from the
federal government, some 119,197 people in the city are engaged in trade and commerce;
113,977 in manufacturing and industry; 80,391 Homemakers of different variety; 71,186 in
civil administration; 50,538 in transport and communication; 42,514 in education, health
and social services; 32,685 in hotel and catering services; and 16,602 in agriculture. In
addition to the residents of rural parts of Addis Ababa, the city dwellers also participate in
animal husbandry and cultivation of gardens. 677 hectares (1,670 acres) of land is irrigated
annually, on which 129,880 quintals of vegetables are cultivated. It is a relatively clean and
safe city, with the most common crimes being pick pocketing, scams and minor burglary.
The city has recently been in a construction boom with tall buildings rising in many places.
Various luxury services have also become available and the construction of shopping malls
has recently increased. According to Tia Goldenberg of IOL, area spa professionals said that
some people have labeled the city, "the spa capital of Africa.

12
1.6.5. Tourism

Tourism is a growing industry within Addis Ababa and Ethiopia as a whole. The country
has seen a 10% increase in tourism over the last decade, subsequently bringing an influx of
tourists to Addis Ababa. In 2015, the European Council on Tourism and Trade named
Ethiopia the #1 tourist spot in the world.

The city has a zoo which is famous for its lions. They were considered to be "genetically
unique".

1.6.6. Government

Pursuant to the Ethiopian Constitution of 1995, the city of Addis Ababa is one of the two
federal cities that are accountable to the Federal Government of Ethiopia. The other city
with the same status is Dire Dawa in the east of the country and both federal cities are
located within the State of Oromia. Earlier, following the establishment of the federal
structure in 1991 under the Transitional Charter of Ethiopia, the City Government of Addis
Ababa was one of the then new 14 regional governments. However, that structure was
changed by the federal constitution in 1995 and as a result; Addis Ababa does not have
statehood status.

The administration of Addis Ababa city consists of the Mayor, who leads the executive
branch, and the City Council, which enacts city regulations. However, as part of the Federal
Government, the federal legislature enacts laws that are binding in Addis Ababa. Members
of the City Council are directly elected by the residents of the city and the Council, in turn,
elects the Mayor among its members. The term of office for elected officials is five years.
However, the Federal Government, when it deems necessary, can dissolve the City Council
and the entire administration and replace it by a temporary administration until elections
take place next. Residents of Addis Ababa are represented in the federal legislature, the
House of Peoples' Representatives. However, the city is not represented in the House of
Federation, which is the federal upper house constituted by the representatives of the
member states. The executive branch under the Mayor comprises the City Manager and
various branches of civil service offices.

13
The current Mayor of Addis Ababa is En. Takele Uma from the Oromo Democratic party
(ODP), which is the member of the ruling coalition Ethiopian People’s Revolutionary
Democratic Front (EPRDF).

1.6.7. Crime

Addis Ababa is considered to be extremely safe in comparison to the other cities in the
region. On a crime index, Addis Ababa scores a 44.28, putting it at a crime level of
moderate. Violent crimes are very unlikely to happen in the city.

1.6.8. Landmarks

A financial district is currently under construction in Addis Ababa that will include many
high-rise buildings.

Addis Ababa is the headquarters of the United Nations Economic Commission for Africa
and the African Union. The fossilized skeleton, and a plaster replica of the early hominid
Lucy (known in Ethiopia as Dinkinesh) is preserved at the National Museum of Ethiopia in
Addis Ababa. Meskel Square is one of the noted squares in the city and is the site for the
annual Meskel at the end of September annually when thousands gather in celebration.

The city is home to the Ethiopian National Library, the Ethiopian Ethnological Museum
(and former Guenete Leul Palace), the Addis Ababa Museum, the Ethiopian Natural History
Museum, the Ethiopian Railway Museum and National Postal Museum.

Notable taller architecture in Addis Ababa includes the Huda Tower, Nani Tower, Bank
Misr Building, as well as the approved Angola World Trade Center Tower, Abyssinia Bank
Tower, Mexico Square Tower, and the 200 million dollars AU Conference Center and Office
Complex.

1.6.9. Culture

Notable buildings include St George's Cathedral (founded in 1896 and also home to a
museum), Holy Trinity Cathedral (once the largest Ethiopian Orthodox Cathedral and the
location of Sylvia Pankhurst's tomb) as well as the burial place of Emperor Haile Selassie

14
and the Imperial family, and those who fought the Italians during the World War II. There is
also Menelik's old Imperial palace which remains the official seat of government, and the
National Palace formerly known as the Jubilee Palace (built to mark Emperor Haile
Selassie's Silver Jubilee in 1955) which is the residence of the President of Ethiopia. Jubilee
Palace was also modeled after Buckingham Palace in the United Kingdom. Africa Hall is
located across Menelik II avenue from this Palace and is where the United Nations
Economic Commission for Africa is headquartered as well as most UN offices in Ethiopia. It
is also the site of the founding of the Organization of African Unity (OAU), which eventually
became the African Union (AU). The African Union is now housed in a new headquarters
built on the site of the demolished Akaki Prison, on land donated by Ethiopia for this
purpose in the south western part of the city. The Hager Fikir Theatre, the oldest theater in
Ethiopia, is located at the Piazza district. Near Holy Trinity Cathedral is the art deco
Parliament building, built during the reign of Emperor Haile Selassie, with its clock tower.
It continues to serve as the seat of Parliament today. Across from the Parliament is the
Shengo Hall, built by the Derg regime of Mengistu Haile Mariam as its new parliament hall.
The Shengo Hall was the world's largest pre-fabricated building, which was constructed in
Finland before being assembled in Addis Ababa. It is used for large meetings and
conventions. Itegue Taitu Hotel, built in 1898 (Ethiopian Calendar) in the middle of the city
(Piazza), was the first hotel in Ethiopia.

In the Merkato district, which happens to be the largest open market in Africa, is the
impressive Grand Anwar Mosque, the biggest mosque in Ethiopia built during the Italian
occupation. A few meters to the southwest of the Anwar Mosque is the Raguel Church built
after the liberation by Empress Menen. The proximity of the mosque and the church has
symbolized the long peaceful relations between Christianity and Islam in Ethiopia. The
Roman Catholic Cathedral of the Holy Family is also in the Merkato district. Other features
of the city include the large Mercato market, the Jan Meda racecourse, Bihere Tsige

Recreation Centre and a railway line to Djibouti. Sport facilities include Addis Ababa and
Nyala Stadiums. The 2008 African Championships in Athletics were held in Addis Ababa.

15
The Entoto Mountains start among the northern suburbs. Suburbs of the city include Shiro
Meda and Entoto in the north, Urael and Bole (home to Bole International Airport) in the
east, Nifas Silk in the south-east, Mekanisa in the south, and Keraniyo and Kolfe in the west.
Kolfe was mentioned in Nelson Mandela's Autobiography "A Long Walk to Freedom", as the
place he got military training.

Addis Ababa has a distinct architectural style. Unlike many African cities, Addis Ababa was
not built as a colonial settlement. This means that the city has not a European style of
architecture. This changed with the Italian invasion of Ethiopia in 1936. The Piazza district
in the city center is the most evident indicator of Italian influence. The buildings are very
much Italian in style and there are many Italian restaurants, as well as small cafes, and
European-style shopping centers. 3Parks include the Africa Park, which is situated along
Menelik II Avenue.

1.6.10. Development

The city hosts the Future center, a child care center that provides children with a higher
standard of living. The center is managed under the direction of the mayor's office, and the
international NGO Glocal Forum serves as the fundraiser and program planner and
coordinator for the WAF child center in each city. Each WAF city is linked to several peer
cities and public and private partners to create a unique international coalition.

Launched in 2004, the program is the result of a strategic partnership between the Glocal
Forum, the Quincy Jones Listen Up Foundation and Hani Masri, with the support of the
World Bank, UN agencies and major companies.

1.6.11. Education

Addis Ababa University was founded in 1950 and was originally named "University College
of Addis Ababa", then renamed in 1962 for the former Ethiopian emperor Haile Selassie I
who had donated his Genete Leul Palace to be the university's main campus in the previous
year. It is the home of the Institute of Ethiopian Studies and the Ethnological Museum. The
city also has numerous public universities and private colleges including Addis Ababa
Science and Technology University, Ethiopian Civil Service University, Admas University

16
College, St. Mary's University, Unity University, Kotebe Metropolitan University and Rift
Valley University.

1.6.12. Transport

Public transport is through public buses from three different companies (Anbessa City Bus
Service Enterprise, Sheger, Alliance), Light Rail or blue and white taxis. The taxis are
usually minibuses that can seat at most twelve people, which follow somewhat pre-defined
routes. The minibus taxis are typically operated by two people, the driver and a weyala
who collects fares and calls out the taxi's destination. Sedan taxis work like normal taxis,
and are driven to the desired destination on demand. In recent years, new taxi companies
have appeared which uses other designs, including one large company using yellow sedan
taxis.

 Road

The construction of the Addis Ababa Ring Road was initiated in 1998 to implement the city
master plan and enhance peripheral development. The Ring Road was divided into three
major phases that connect all the five main gates in and out of Addis Ababa with all other
regions (Jimma, Debre Zeit, Dessie, Gojjam and Ambo). For this project, China Road and
Bridge Corporation (CRBC) was the partner of Addis Ababa City Roads Authority (AACRA).
The Ring Road has greatly helped to decongest and alleviate city traffic. Intercity bus
service is provided by the Lion City Bus Services.

 Air

The city is served by Addis Ababa Bole International Airport, where a new terminal opened
in 2003. The old Lideta Airport in the western "Old Airport" district is used mostly by small
craft and military planes and helicopters.

 Railway

Addis Ababa originally had a railway connection with Djibouti City, with a picturesque
French style railway station, but this route has been abandoned. The new Addis Ababa-

17
Djibouti Railway started operation in September 2016, running parallel to the route of the
original railway line.

 Light rail

Addis Ababa opened its light rail system to the public on 20 September 2015. The system is
the first of its kind in sub-Saharan Africa.

The Ethiopian Railway Corporation reached a funding agreement worth millions of dollars
with the Export and Import Bank of China in September 2010 and the light rail project was
completed in January 2015. The route is a 34.25-kilometre (21.28 mi) network with two
lines; the operational line running from the center to the south of the city. Upon
completion, the east-west line will run from Ayat to the Torhailoch ring-road, and from
Menelik Square to Merkato Bus Station, Meskel Square and Akaki.

1.6.13. Twin cities – sister cities

1. Chuncheon, South Korea, 2004
2. Beersheba, Israel, 2004
3. Leipzig, Germany, 2004
4. Ankara, Turkey, 2006
5. Washington, D.C., United States, December 2013

1.7. Premises Required and Land Use Plan

Within the current lease law, urban land is transferred by two principal modalities. The
first is through allotment mechanism for projects and programs that have welfare
implications and national significance. The second modality is reserved for market
allocation through an auction system. Entities that have privileged to get access through
allotment are a substitute plot of land for displaced households for urban renewal,
government entities for office premises, social service institutions run by the government
or charitable organizations, government support housing development program, religious
institutions for place of worship and cemetery, working premises for micro and small
enterprises, manufacturing industries, a lawful tenants of kebele or government house,
diplomatic mission and international organization, and projects having special significance

18
for a country development (Proclamation No. 721/2011, 2011). Throughout this time,
about 1,735.45 hectares of serviced land has been allotted, of which 1,479.22 hectares were
for government-sponsored housing programs such as low-cost housing (condominium)
and enterprise housing, 59.23 hectares for manufacturing and 197 hectares for social
services.
High land prices in populous cities have led to the concept of the "vertical mall," in which
space allocated to retail is configured over a number of stories accessible by elevators
and/or escalators (usually both) linking the different levels of the mall. The challenge of
this type of mall is to overcome the natural tendency of shoppers to move horizontally and
encourage shoppers to move upwards and downwards. The concept of a vertical mall was
originally conceived in the late 1960s by the Mafco Company, former shopping center
development division of Marshall Field & Co. The Water Tower Place skyscraper, Chicago,
Illinois, was built in 1975 by Urban Retail Properties. It contains a hotel, luxury
condominiums, and office space and sits atop a block-long base containing an eight-level
atrium-style retail mall that fronts on the Magnificent Mile.

Vertical malls are common in densely populated cities like Addis. Consequently the
shopping center is split over then floors vertically – two locations horizontally – connected
by elevators, escalators and bridge walkways.

The total land required for this project is depending on the availability of land by the city
administration and w decision.

1.8. Benefit of the Project:

The envisaged project deemed to contribute to the economic development of the country in
the following ways:
1.8.1 Source of Employment
One of the problems, that our country facing is unemployment. Therefore, the objectives of
our government are working on tackling the problem of unemployment either through
creating self-employment or through employment in other organizations. Hence, the
envisaged manufacturing plant deemed to contribute somewhat to solve the problem of
unemployment. Upon completion, the project assumed to generate additional employment

19
opportunities for about more than 3550 individuals directly on temporary and permanent
basis and more than 3000 individuals indirectly.
1.8.2 Source of Government Revenue
To redistribute income, the government collects different forms of taxes from different
business undertakings and individuals as income tax. Among the different forms of taxes,
business income tax is collection from undertaking business activities. Therefore, the
project will serve as sources of revenue for the regional state.
1.8.2. Sources of Social Service
In addition to serving as a source of employment and income for the region, the project is
also serves as a source of mental satisfaction for the different users, 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 mall development.
1.8.3 Build good image of the Country
Designed to provide secured and standardized shopping place, varieties of restaurants,
entertainment options, gym & spa services for VIP families, Diplomats, Tourists and
celebrities, so as it builds good image of the country.

20
2. THE MARKET STUDY
2.1. Market Analysis
A number of factors affect the demand of standardized mall. Of these factors, the most
important to have influence is population growth and the level of income. The currently
expanding the service and industrial sector in the city and around has been inviting skilled
and unskilled labor forces to the city; 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 city 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 city.

Though the market demand gap for market mall in the city is not clearly understand there
is wider gap for such demand as many merchants, organizations are flouring to the city
every day. From prior business experiences, the demand of standard mall in the city is very
high and hence the demand and the supply gap is very wide.

Addis Ababa, which is the largest as well as the dominant political, and economic centre of
the country, is home to about 5,000,000 inhabitants (18% of urban residents in the
country) in 2016 (CSA, 2013). The city accounted for 30% of the national GDP; 20% of the
country's urban labour force, 68% of the country's urban jobs in real estate, 40% in
information and communication, and 36% in financial services (Egis International in
association with IAU-IdF&Urba Lyon , 2016). The roles and contributions of the city in the
nation economic growth are expected to grow significantly in the country`s strive for
middle-income status. Therefore, the city ought to allocate and supply adequate serviced
land for development objectives (housing which might be residential or/and non-
residential buildings, land for infrastructure development, social development, investment
projects both foreign direct investments and domestic investment).

Addis Ababa is the capital of Ethiopia, which has been one of the world’s fastest-growing
economies over the past decade and has bold plans to become a major regional
manufacturing and energy hub. The economy remains heavily dependent on the
agricultural sector, which accounts for 43% of economic output; this makes the economy

21
particularly vulnerable to adverse weather conditions like the recent droughts, which have
exposed weaknesses such as elevated domestic food prices.

The government is the primary driver of growth with large capital allocations made
towards infrastructure works which have been planned to improve access to basic services,
create jobs and reduce poverty. Poverty is still widespread however, and relief is heavily
reliant on donor support.

The Ethiopian economy only started to emerge in 1991 after two decades of socialist rule.
Even so, state-owned enterprises that run the country’s telecommunications, power and
banks do not operate effectively and there has not been enough true commitment by the
government to encourage privatization of industries or a market economy. The overall
business environment is mostly closed to foreigners, and any FDI is restricted to certain
sectors such as construction, manufacturing and agriculture.

Construction and development of real estate in Addis Ababa is flourishing on the back of
infrastructure expenditure on road network improvements. High-rise, mixed-use buildings
across the city have been delivered along main arterial routes primarily on small parcels of
land usually owned by one individual. All land is owned by the government with the use of
urban land granted via 99, 80 and 70 year leases for residential and social services,
manufacturing and business respectively. Leases or tenancy agreements are normally
signed for the duration of one year with bi-annual rental payments made while parking and
the tenant typically pays service charges annually. Tenancy agreements do not carry rental
escalations and are renewed at the same or a renegotiated rate.

relevancy?.

The office sector in Addis Ababa is divided into three distinct areas of activity: aid and
development agencies; government and state-owned enterprises; and local privately-
owned businesses.

The African Union headquarters dominates the Addis Ababa skyline in Kazanchis with NGO
offices and foreign embassies also located in the area and its surrounds. The main office

22
nodes are in the City’s downtown, which includes Meskel Square and bole district, and the
CBD, which starts from Merkato and extends down to Mexico Square.

The buildings in the CBD are often single-tenant, occupied by government bureaus, state
bank enterprises and other parastatals. The downtown area of Bole, Meskel and Piassa is
fast becoming the main commercial hub for local private businesses due to its good road
infrastructure and the route of the recently-opened metro running through it. Occupancy
levels here are high at around 90% when compared to other office nodes where
occupancies are usually as low as 35% to 40%. In the main nodes, office developments are
high-rise within mixed-used schemes and are confined to small land holdings. Office
buildings are generally poor quality and accompanied by inadequate parking, property
management and maintenance services.

A large number of formal retail shopping precincts are scattered across the city. Retail
layouts are not designed as per typical modern shopping malls and instead normally form
part of the lower floors of a multi-level, mixed-use building comprising of office and
sometimes residential components. The retail component of these buildings can range
anywhere from 2,000m² to 6,000m² and usually comprise of high proportions of apparel,
jewellery and home appliance offers. Shoa is the only supermarket chain in Ethiopia and
seven of its stores are in Addis Ababa. While the supermarkets are present in shopping
malls, they are usually located in more discreet parts with no objective to attract higher
foot fall from a more prominent or high traffic location in the mall.

Zefmesh Mall, one of the only solely retail buildings in Addis Ababa, is planning to
introduce lifestyle elements such as cinemas, food courts and gaming arcades, which will
make it the only mall in the city with a comprehensive retail and entertainment offering.

The consumer market is limited by its low purchasing power, but the sheer size of the
population in Addis Ababa and even surrounding cities illustrates the huge potential
demand for better retail offerings. There are currently no international retailers in the city;
however, America’s Walmart and Kenyan supermarket chain Nakumatt are rumoured to be
interested in making an entry. With the existing trade restrictions on foreign entities, only

23
local agents can be used to distribute international products and this is limiting
opportunities for higher-quality and truly competitive retail propositions.

Addis Ababa boasts considerable growth potential in a market that offers a stable political
and economic environment, very little crime and disorder, as well as a large consumer
population in need of better goods and services. Allowing market entry to foreign-owned
entities would accelerate growth and improve economic diversification; international
companies would be able to further explore opportunities and take advantage of the strong
growth outlook and positive operating climate.

2.1.1. The Demand-Supply Gap

Addis Ababa city is a major business center and commercial route that attracts thousands
of business travelers. These are also the most important groups of potential customers that
include both the local and foreign tourists and the modern business community who
choose services that range from economic to high class standards. These groups would also
choose a healthy comfortable climate that combines a more traditional type with that of
modern shops, offices, bedrooms restaurants and cafeterias. Even though when compared
with similar African cities Addis Ababa seems to have no standard mall, the existing supply
is far behind the growing demand for standard mall. Hence, the project will solve the
serous demand problem in the city.

Over the last decade, there has been a significant growth in the number of local and
international trades across the country. 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 city. Since Addis Ababa is an important commercial center in
addition there is a significant increase in business activates and hence increasing the
number of traders to the city. Even though there is a lack of quantitative estimates that
depict the actual demand and also the annual growth rate Hotel facilities and urban
commercial facilities are scarce in the city. So far in the city there is no development of such
kind standard mall and it is the first of its kind in the city and will promote other investors
from the city and the surrounding areas. As a result there is a large gap between the

24
developed and that of the supply for modern market mall accommodation hence this
project would not face any problem of demand scarcity for it business centre and it would
provide good service to customers.

2.1.2. Current supply of Market Mall

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 Addis Ababa is booming highly due to the recent
rapid growth experienced in Ethiopia. As a result, a good number of local and international
organizations 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 and NGOs which in the past had typically
converted residences into office space are now moving towards renting whole floors or
even multiple floors in modern city-center commercial buildings.

2.2. Future market or Demand of Market Mall

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
regional or national economy.

Following our survey of office space users in Addis Ababa are mainly firms providing
banking, cafeteria and restaurants, bed room, supermarkets service, computer Center
service. The different customers for commercial buildings also include shops and offices
that are currently renting out to provide their goods and services.

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. Following
the government second five year growth and transformation plan (GTP), the Ethiopian

25
economy is expected to increase by 11% for base case scenario and 14% under the
optimistic case scenario.

Assuming that demand for mall is directly related to the growth in the economy, the
forecast for mall demand is shown in the following table;

Table: Demand Forecast

Market space demand under Market space demand under high

Years base case economic case economic

Growth Growth

2010/2011 9,916,543 11,304,859

2011/2012 11,007,363 12,057,416

2012/2013 12,218,173 12,953,878

2013/2014 13,562,173 13,963,577

2014/2015 15,054,011 14,554,534

2015/2016 16,709,952 14,987,431

Source: own estimation based on GTP’s forecasted Ethiopian Economic Growth

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.

26
  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 Mall. These are price
and non price based competition. Moreover, there are different competitors that will
compete with the project either directly or indirectly. But Mall 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 Addis which compete with it.

2.5. The project facilities and Services plan

In order to provide mall 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, super markets, special guest
houses, restaurant and café service as well as modern business center that primarily serve
its guests and major clients.

27
The plan is that the ground will be partitioned in to different floor services and facilities:

total price
Unit price in
Building Description UOM area in
Birr/month
Birr/year

Basement Basem
Parking Service -1 to -3 free free
s ents
Supermarkets, Pharmacies, 1,400,000 16,800,00
Ground M2 7000
Banking & Insurance 0
1,300,000 15,600,00
1st floor Different commercial shops M2 7000
0
14,400,00
7000 1,200,000
2nd floor Different commercial shops M2 0

13,200,00
Different governmental, 7000 1,100,000
3rd floor M2 0
private, NGO & other offices

Sports, game, cinema hall, art 7000 1,000,000 12,000,00

4th floor M2 0
galleries

5he - 10 th Apartment Residential 4,000,000 50,000,00

M2 4*7000 0
floor Houses Mall

Total 300,000,00
0

Since the project will be engaged in mall development the main sources of its annual
revenue would be from the rental of mall spaces. Therefore, the sources of revenue have
been classified in to one category namely the rental of mall. Based on the market price of
existing building in the Addis, the envisioned mall 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 300,000,000

28
3. TECHNICAL STUDY
3.1. Description of the Project Service/ Product Mix

The envisioned mall will provide different rental services to the different customer groups
for different purpose. The building will have basement of -1 to -2, ground and then floors.
The purpose of the building explained as follows;

 the ground floor, designed for different business centers like

Supermarkets, Pharmacies, Banking & Insurance, first floor and second floor
different shops Different commercial shops and other business activities,
 The third floor designed for Different governmental, private, NGO & other
offices services,
 4th floor Sports, game, cinema hall, art galleries and spa zone,
 5he - 8 th three VIP restaurants, recreational zones, SPA and special Guest houses
Besides, the mall will have enough parking facility under its two floor basement with a
capacity of more than 200 cars parking at a time, a basement floor serving as store for its
customers and green area, water pool and VIP open space parking in its compound.

3.2. Construction schedule

Construction of the project is proposed to be started on October 2020, and is expected to

be finished on October 2023. 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.

29
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 especially at the first year.

3.3. Architectural Design & Layout

Although functional spaces for the project were laid out in significant detail, the rest of the
building had designated spaces but not 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.

3.4. Structural design

One of principle deliverables of our project is the structural design of the building. The
structural bays were coordinated with 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 foot, 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.

30
3.5. 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 7.5 pounds per square foot 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 of 125 pounds per square was assumed. Loads were calculated based
on the requirements of the minimum Design loads for Buildings and other Structures.

3.6. 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.

3.7. 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

31
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.

3.8. Utilities

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

32
  Water Supply,
 Supplementary Electricity supply.
 Telephone line Internet Broadband
 Fuel, Oil and lubricant
 Drainage Facility
3.9. Project implementation

The project’s implementation is expected to take 36 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 the above
matured major activities is presented below:

Table: project Implementation schedule

SN Activities Date

1 Land request processing March, 2020

2 Land approval April, 2020

3 Bank loan processing June, 2020

4 Site Development July, 2020

5 Building and construction work October , 2020- September 2023

6 Preparation for service October, 2023

7 Service execution November, 2023

33
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.

A shopping property management firm that specialized in owning and managing shopping
malls neither are nor right in place in Ethiopia. Even though Shopping center management
and advisory firms are bringing about professional management practices to the largely
fragmented shopping center development industry none existence of them in this country
forced the promoter to establish its own organizational structure and management.

4.2. Man Power

The total work force requirement of the project will be estimated at about 5 5 0
employees. From total workers Permanent workers are 300 (Skilled 200, & Unskilled
100). Casual workers 250 (skilled 50 and unskilled 200)
Sr.No Job Title Qualification No of Monthl Annual
Job y salary Salary
titles
A Permanent Employees

1 General Manager 1 25000 300,000

1.1 Secretary BA in secretary Since/Office 1 5000 60,000

Mgt
2 As General Manager MA. In real property Mgt 1 20000 240,000

3 Room division Dep’t BA/MA in real propperty 1 15000 180,000

Mgt
3.1 BA/MA in real propperty 26 10000 3,120,000
Front Office section Mgt
3.2 House Keeping section BA/MA in real propperty 52 10000 6,240,000
Mgt
4 Supportive Dep’t BA/MA in real propperty 1 15000 180,000
Mgt
4.1 security Militery science trayning 36 3000 1,296,000

4.2 Marketing &sales BA. In Marketing &sales Mgt 30 10000 3,600,000

4.3 Engineering & hotel BSC/MSC in Civil 14 15000 2,520,000

Maintenance Engineering

34
4.3.1 Sanitary technician level III in sanitary 4 8000 384,000

4.3.2 Electrician level III in electricity 4 8000 384,000

4.3.3 carpentry level III in carpentry 4 8000 384,000

4.3.4 construction technician level III in construction 6 8000 576,000

4.4 finance and accounts BA/MA in finance and 16 10000 1,920,000

accounting
4.5 purchase and general store BA/MA in Supplies Mgt 10 10000 1,200,000

4.6 personnel sections BA/MA in HRM 6 10000 720,000

5 Food & Beverage Dep’t BSC in Food & Beverage 1 15000 180,000
preparation
5.1 Food & Beverage production level III in Food & Beverage 22 10000 2,640,000
preparation
5.2 Food & Beverage service level III in hotel service 50 10000 6,000,000

6 Rented services like 114 -

banking, insurance, ticket
office and personal care
services
Sub total 32,124,000

B Casual Employees -

Architect BSC/MSC in Architectural 2 20000 480,000

7 Engineering
Civil Engineer BSC/MSC in Civil 480,000
8 Engineering 2 20,000
Construction Management BSC/MSC in Construction 240,000
9 Management 1 20,000
Electrical Engineer BSC/MSC in Electrical 480,000
10 Engineering 2 20,000
Sanitary Engineer BSC/MSC in Sanitary 480,000
11 Engineering 2 20,000
Land Escape Engineer BSC/MSC in Land Escape 480,000
12 Engineering 2 20,000
laborers 15,336,000
13 200 3000

subtotal 200
32,124,000
Grand Total 550
NB. The salary of casual workers can be considered in the construction costs

35
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 Purchas
er
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

36
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

i. He/she will plan, organize, direct and control the overall activities of the building.
ii. He/she will devise policies and strategies that will enable the center to be
profitable.
iii. He/she will incorporate modern technological innovation that will facilitate the
service delivery of the building to increase customer’s satisfaction.
iv. 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;

i. Manage the human resources and control employee’s activity

ii. 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.
iii. Will provide the right material or inventory to the center with right price at the
right time.
iv. Will plan, organize direct and control the financial transaction of the building by
using all the necessary documents.
v. Accountant and casher that will collect money from the customers.
vi. Will develop sound financial control system by developing modern financial
control systems.

37
 vii. Will prepare the annual financial statements and prepare condensed reports for
both the General manager and other concerned government body.
viii. Follow the overall status of the business and provide maintenance and repair
services.
C. The marketing Department
i. Will handle the overall marketing activities of the organization which include
planning, organizing, directing, and controlling.
ii. Will develop the marketing strategies for future multipurpose building
development
iii. Will develop effective customer handling strategies.
iv. Execute the promotion methods.
D. Technical and maintenance manager

i. Will handle the overall physical maintenance and related issues

ii. Will make sure electricity and back up is organized.
iii. Follow up security issues and educate tenants
iv. Works in collaboration with general service to make sure tenants are well served

38
5. FINANCIAL REQUIREMENT AND ANALYSIS

The Financial analysis include insight to the total capital outlay required for the project
which would consist of total fixed investment cost, and pre- production costs; the source of
finance for the total planned initial investment cost requirement and other parameter of
feasibility analysis including projection of profit/loss statement, cash flow statement and
payback analysis. Hence, the total initial investment cost for implementing this project is ETB.
300,000,000. Out of the total budget of the project 30% or ETB. 45,000,000.00 will be covered by
the owner equity; and Financial institutions will cover the rest 70% or ETB. 105,000,000.00

Table Summary of Total initial Investment cost

SN Description Cost in Birr
50,828,849
1 Land, Building & Construction
2 Machines & Equipments 5,549,800
3 Vehicles 10,000,000

4 Office Equipment 531,800

- Total Fixed Investment Cost 72,910,449
5 Pre service Expense 50,000
6 Raw materials(Six Month Cost) 43,717,795
7 Salary 32,124,000
8 Operating Expense 10,747,756

Total Working capital 77,089,551

Total Initial Investment Capital 300,000,000.00

4.1. Fixed Investment

The fixed investment cost of the project consists of land acquisition and development,
construction costs of building and civil works, costs for purchase of plant machinery and
equipment, cost of purchase of vehicles, purchase of other fixed asset and other pre
production capital expenditure. Accordingly the fixed investment cost constitute the the
resource required for land acquisition, site preparation and development, design and

39
engineering cost, building construction cost, civil works(service facilities), purchase of
hotel machinery and equipment, purchase of transportation vehicles, purchase of office
furniture and equipment and capital costs required for other fixed assets.

A. Building & Construction

SN DESCRIPTION Total Cost in Br

1 Mall Building 14,163,411.00
2 Swimming pool 6,760,000.00
3 Tennis & basket Court 3,000,000.00
4 Wedding Shade & Gardening 4,000,000.00
5 Generator House 60,500.00
6 Parking & green area 2,220,000.00
7 Internal Road & Spacing 1,200,000.00
8 Open recreation area 1,760,500.00
9 Children Play Ground 2,346,000.00
10 Guard house 120,000.00
11 Fences 1,200,000.00
12 Site Development 2,675,000.00
13 Design and Supervision 500,000.00
14 Land lease Initial Fee 1,823,437.50
Total 50,828,849

B. Machinery equipments
SN Description Measur Qty Unit Price Total Price in Br
ement in Br

1 Hotel Service Machineries equipment

1.1 Laundry Machine with all accessories No 5 200,000.00 1,00,000.00

1.2 Bar table No 10 5,000.00 50,000.00

1.3 Bar chare No 40 2,500.00 1,00,000.00

1.4 Dining Tables No 70 4,400.00 3,080,000.00

1.5 Dining Chairs No 250 2,230.00 5,75,000.00

1.6 Coffee Tables with chairs Set 80 6,500.00 520,000.00

1.7 Chairs with tables for bed Rooms No 330 3,500.00 1,155,000.00

40
1.8 Bed with all accessories for Family No 30 30,000.00 900,000.00
Room

1.9 Bed with all accessories for Double No 50 25,000.00 1,250,000.00

Room

1.10 Bed with all accessories for Suit Room No 60 17,500.00 1,050,000.00

1.11 Beds with all accessories for Single No 80 15,000.00 1,200,000.00

room

1.12 Comfort Chair(sofa) for reception No 15 10,000.00 150,000.00

1.13 Sofa Fixture for family room Set 30 25,000.00 750,000.00

1.14 LCD 32” TV for Bed room Unit 220 17,200.00 3,784,00.00

1.15 LCD 60” TV for Restaurant café and Unit 25 50,000.00 1,250,00.00
Bar

1.16 Kitchen Equipments LS 2,100,00.00

1.17 Coffee machine Set 6 50,000.00 300,00.00

1.18 Water tanker Set 5 35,00.00 175,000.00

1.19 Refrigerator No 20 20,500.00 410,000.00

1.20 Balcony & alcohol display Set 12 75,000.00 900,000.00

1.21 Satellite Dish No 2 10,000.00 20,000.00

1.22 Satellite Receiver Equipment No 240 2,500.00 600,000.00

/Decoder

1.23 Phone set No 250 2,000.00 500,000.00

1.24 Receptionist table with chairs Set 2 40,000.00 80,000.00

1.25 Other bed room facilities LS 1,00,000.00

1.26 Decoration (painting, Carpet and LS 1,20,000.00

curtain)

1.27 Other miscellaneous Equipments LS 700,000.00

Total 0

2 Assembly Hall machinery & 0

Equipment

2..1 Multimedia projector machine & its Set 6 200,500.00 1,200,000.00

accessories

41
2.2 Adjustable hall screen Pecs 6 76,300.00 457,8,000.00

2.3 Decorative and stage lgh system Lot 6 168,000.00 1,008,000.00

2.4 Public addressing system of auditoria Unit 6 155,000.00 930,000.00

type

2.5 Chair with adjustable backrest and Unit 4000 2,000.00 8,000,000.00
seat (for three hall)

2.6 Laminated conference table LS 10 20,500.00 205,000.00

2.7 Carpet & curtain Pecs - 750,000.00

2.8 CD player LS 6 5,000.00 30,000.00

Total 0

3 Green and gardening area machineries 375,000.00

& equipment

4 Children play ground equipments LS 850,000.00

5 Children Game center machinery & LS 1,80,000.00

Equipments

6 Spa, Massage, Beauty Salon & Sauna LS 2,520,000.00

machinery & Equipments

7 Wedding Shade equipments LS 450,000.00

8 Gymnasium and fitness Center Ls 1,250,000.00

machineries Equipment

9 Swimming Pool Equipments LS 275,000.00

10 Guard Equipments LS 50,000.00

11 Store Equipments Ls 150,000.00

12 Generator 500 KVA 600,000.00

13 Other Miscellaneous Equipments & 500,000.00

machineries

Grand Total 5,549,800

A. Vehicles

SN Description Qty Unit Total Price Remar

Price in Br k

42
1 V8 or similar standard car for 1 5,000,000 5000000 Duty
General manager free
2 Prado or equivalent standard for 1 3,000,000 3000000 Duty
as manager free
3 Double cup for department 3 1000,000 3000000 Duty
heads free
4 Min Bus Van 3 1000000 300000 Duty
free
5 Mid Bus 2 2000000 4000000 Duty
free
Total 10,000,00
0

D. Office Equipment
Total Price in
SN Description Measurement Qty Unit Price in Br
B
1 Office chairs Unit 30 2,000.00 60000
2 Office tables Unit 10 3,000.00 30000
3 Computer Unit 12 15,000.00 180000
4 Printer Unit 6 6,000.00 36000
5 Computer table with Set 12 2,000.00 24000
6 chairs
Managerial Chair with Set 6 8,000.00 48000
7 tableCabinet
File Unit 4,000.00 16000
8 Office Shelves Unit 5,000.00 10000
9 Telephone Set Unit 700.00 2800
10 Decoration (Curtain set 125,000.00
carper)
Total 531,800

43
D. Pre – Service Expense

SN Description Cost in Br.

1 Project proposal 10,000.00

2 Licensing fee and others 10,000.00
3 Environmental Assessment Impact 20,000.00
4 Staff Capacity Building 10,000.00
Total 50,000

4.2. Operating Expenses at Full Capacity

i. Raw materials
Measure Cost perTotal Annual
SN Description
ment Month in Br cost Br.

1 Raw Materials for restaurant and Cafe LS 6,728,979.71 80,747,756.50

2 Raw materials for Bar LS 5,000,000 20,795,000.00

3 Other raw materials & inputs LS 5,000,000 20,000,795.00

Total 16,728,979.71 43,717,795.00

44
II. Salary Expense
Sr.No Job Title Qualification No of Monthl Annual
Job y salary Salary
titles
A Permanent
Employees
1 General Manager 1 25000 300,000

1.1 Secretary BA in secretary Since/Office Mgt 1 5000 60,000

2 As General Manager MA. In Hotel Mgt 1 20000 240,000

3 Room division Dep’t BA/MA in Hotel Mgt 1 15000 180,000

3.1 BA/MA in Hotel Mgt 26 10000 3,120,000

Front Office section
3.2 House Keeping section BA/MA in Hotel Mgt 52 10000 6,40,000

4 Supportive Dep’t BA/MA in Hotel Mgt 1 15000 180,000

4.1 security Militery science trayning 36 3000 1,96,000

4.2 Marketing &sales BA. In Marketing &sales Mgt 30 10000 3,600,000

4.3 Engineering & hotel BSC/MSC in Civil Engineering 14 15000 2,520,000

Maintenance
4.3.1 Sanitery technitian level III in sanitary 4 8000 384,000

4.3.2 Electrisian level III in electricity 4 8000 384,000

4.3.3 carpentery level III in carpentery 4 8000 384,000

4.3.4 constraction technisian level III in constraction 6 8000 576,000

4.4 finance and accounts BA/MA in finance and accounting 16 10000 1,920,000

4.5 purchase and general BA/MA in Supplies Mgt 10 10000 1,200,000

store
4.6 personnel sections BA/MA in HRM 6 10000 720,000

5 Food & Beverage Dep’t BSC in Food & Beverage 1 15000 180,000
priparation
5.1 Food & Beverage level III in Food & Beverage 22 10000 2,640,000
production preparation
5.2 Food & Beverage level III in hotel service 50 10000 6,000,000
service
6 Rented services like 114 -
banking, insurance,
ticket office and
personal care services
Sub total 32,124,000

B Casual Employees -

Architect BSC/MSC in Architectural 2 20000 480,000

7 Engineering
Civil Engineer BSC/MSC in Civil Engineering 480,000
8 2 20,000

45
 Construction BSC/MSC in Construction 240,000
9 Management Management 1 20,000
Electrical Engineer BSC/MSC in Electrical 480,000
10 Engineering 2 20,000
Sanitary Engineer BSC/MSC in Sanitary Engineering 480,000
11 2 20,000
Land Escape Engineer BSC/MSC in Land Escape 480,000
12 Engineering 2 20,000
laborers 15,336,000
13 200 3000

subtotal 250
32,124,000
Grand Total 550

iii. Other Operating Expenses

SN Description Annual Cost br. Assumption Used

1 Property Insurance 1448590.38 1 % of fixed Investment Cost

2 Audit & Legal Fee 54000 3000 per month
3 Uniforms 60000 200*300 br.
4 Telephone, fax and postal 24000 2000 per month
5 Cleaning goods supplies 60000 5000 per month
6 Repair and maintenance 2,897,181.00 2 % of the Fixed Cost
7 Advertisement 500,000.00 % of sales
8 Stationery and supplies 12,000.00 1000 per month
9 Electricity 94,000.00 0.47 br*200,000KWh per year
10 Water 30,000.00 3*10,000 M3 per year
11 Fuel 257,600.00 14000 lit*18.4 br
12 Oil and lubricant 25,760.00 10% of fuel cost per year
13 Miscellaneous Expense 144,000.00 12,000 per month
Total 5,607,131.38

46
4.3. Underlying Assumption

The financial analysis of the envisioned mall is based on the data provided in the Preceding
sections and the following assumptions.

The total initial investment cost for implementing this project is ETB. 300,000,000.
Out of the total budget of the project 30% or ETB. 45,000,000.00 will be covered by
the owner equity; and financial institutions will cover the rest 70% or ETB.
105,000,000.00.
A. Construction and Finance

Construction period 3 years

Source of finance 30% equity and 70% loan

Bank interest rate 10%

Operation Costs and raw materials increase by 5% after year 3

Salary and wages increase by 5% after year 3

Annual Sales revenue increased by 5% after year 3

B. Working Capital

Accounts receivable 30 days

Work in progress 5 days

Cash in hand 5 days

Account payable 30 days

4.4. Source of Income

SN Description % share Amount (in Birr)

1 Owners Share 30 45,000,000.00

2 Bank Loan 70 105,000,000.00.

Total 100 150, 000,000.00

47
 4.5. Loan Repayment Schedule
Year Principal Payment Interest (10%) Total Annual Payment Remaining Balance
0 - - 300,000,000.00
-
1 15,000,000 15,000,000 30,000,000 135,000,000
2 15,000,000 13,500,000 28,500,000 120,000,000
3 15,000,000 12,000,000 27,000,000 105,000,000
4 15,000,000 10,500,000 25,500,000 90,000,000
5 15,000,000 9,000,000 24,000,000 75,000,000
6 15,000,000 7,500,000 22,500,000 60,000,000
7 15,000,000 6,000,000 21,000,000 45,000,000
8 15,000,000 4,500,000 19,500,000 30,000,000
9 15,000,000 3,000,000 18,000,000 15,000,000
10 15,000,000 1,500,000 16,500,000 0

4.6. Projected Revenue

Based on the capacity of the envisioned mall indicated in previous chapter, the total
revenue of the project is projected as indicated in the table below;

total price
Unit price in
Building Description UOM area in
Birr/month
Birr/year
Basement Basem
Parking Service -1 to -2 free free
s ents
Supermarkets, Pharmacies, 1,400,000
Ground M2 7000
Banking & Insurance 16,800,000
1,300,000 15,600,000
1st floor Different commercial shops M2 7000

7000 1,200,000
2nd floor Different commercial shops M2
14,400,000

Different governmental, 7000 1,100,000

3rd floor M2 13,200,000
private, NGO & other offices

Sports, game, cinema hall, art 7000 1,000,000

4th floor M2 12,000,000
galleries and spa zone

5he - 9 th 4,000,000
Four star hotel M2 5*7000 48,000,000
floor
120,000,00
Total
0

48
Since the project will be engaged in mall development the main sources of its annual
revenue would be from the rental of mall spaces. Therefore, the sources of revenue have
been classified in to one category namely the rental of mall. Based on the market price of
existing building in the Addis, the envisioned mall 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 120,000,000

49