ALEMNESH TAMIRE AYALEW
PROJECT PROPOSAL
FOR
MIXED USE BUILDING
SUBMITTED TO;- HARARI INVESTMENT MINES & ENERGY OFFICE
January, 2023
The project under consideration can be identified in a way as
mentioned below
PROJECT SUMMERY
NAME OF THE OWNER; W/ro Alemnesh Tamire Ayalew
INVESTMENT SECTOR; Mixed Use Building Project
PROJECT STATE ; New
LOCATION OF THE PROJECT; At Harar Town.
PROJECT LAND REQUIRE:- Own Land Requesting To Legalize
INITIAL INVESTMENTCAPITAL 45.5 million
TYPE OF OWNERSHIP:-Private
NATIONALITY OF THE OWNERs:- Ethiopian
Executive Summary
Mixed use building is a highly profitable Business that has been growing rapidly over
the past several years in Ethiopia; it has uniquely combing and coordinating diverse
elements in to one particular place. This role helps the growing Harar Town
residents and other investors by providing rental service for different business
owners. Mixed use building Construction takes the results of the planning
processes and manages the creation of quality public infrastructure within the
community on behalf of those who are engaged in different activities that don’t have
their Owen building as a result Mixed use building Construction will solve the trade–
offs between various business owners and demand for office. On the other hand this
building project will have social and economic Benefit in provide better Building
service, employment opportunities, generation of income and other benefits for the
local people.
This project proposal will explore the highest and best use for a mixed-use
development project located at the hub of Capital city of Harari Regional State
which is in well known area called ”Arategna”. The project composition of
multipurpose Building (G+4) used for diverse business centers like banking &
insurance, super market, shops, restaurant, café, beauty salon, Pharmacy, offices and
others.
Construction and development of the Mixed use building Construction is expected
to take 24 months to complete the entire building work along with a cost of birr
from the owner.
After thorough market and financial feasibility analysis of potential uses for the site,
has been determined that Mixed use building rental business is soundly profitable
business. Hence describe in more detail the specific elements of this mixed-use
Building project.
Product Description and General Background
The current fast and dynamic economic growth of Ethiopia especially in Harar area
necessitates equivalent growth of building and construction sector. The sector should
expand rapidly to support the overall economic development sustainable.
The building sector support’s the growing of business service sectors like supermarkets,
Beauty salon, shops, offices, Computer Center, Cafeterias, restaurant, assembly hall,
guest house and other activities besides mixed use building supports the above business
sectors in providing place of work in one building.
Investment and property development play an important role in any emerging markets or
economies. The growth of investment in the property market over the last five years in
consistent with the global experience suggesting that investment in the residential and
commercial property is greatly influence the performance of the macroeconomic
conditions. 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.
This Mixed use building is Sole proprietary business, which is owned by W/ro Alemnesh
Tamire Ayalew, the owner of the Mixed Use Building. W/ro Alemnesh Tamire Ayalew who
is constructing the building in Harar Town town is made feasibility study in the sector
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 building.
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 country especially in Harar
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.
Objective of the project
The objective of the project is the provision of affordable business areas to categories of
the population which cannot access a satisfactory business areas solution due to the
severe supply and affordability gaps affecting the sector in Harar through providing fair
rental service. More specifically, the project will target two social groups: the
individuals and association,
⮚ To provide modern shops, offices, and restaurant & cafeteria facilities that
enable to provide standard services to visitors.
⮚ To undertake trading and other refuted business activities that enable to
generate a reasonable to the invested capital.
⮚ To create employment opportunities for the population in the town
⮚ To exceed customer expectations with superior service
⮚ To develop a business that survives off its own cash flow
⮚ Contribute towards the beautification of the town through the construction of
modern building infrastructure and facilities.
Mission
Our mission is to provide our customers a unique and relaxing rental service experience
similar to working at their home.
Keys to Success
The keys to success are:
1. To obtain higher profits, it is really important to acquire request for rent service
from different business centers like Cafés, beauty salon, office as well as other
business sectors.
2. By giving convenient service in order to satisfy our customers so they will stay and
even promote our service to others.
3. Relations in business sector are really important in success of a retail business as it
is a order based business.
4. Provide better prices than all our competitors.
Project description
The project will be implemented on my own land and it is located in the center of Harar
Arategna area in front of Gabriel Church , in Hakim Woreda , Kebele 17 also the passing
by Street have close proximity to the mentioned areas.
The goal of the project is to become the best choice in the mentioned Town and its
surrounding areas by creating a differentiated experience capitalizing on personal service.
The proposed project will be designed to reader a multipurpose giving business, which
will in turn plays significant role towards solving shortage of business center in Area.
Significance of the project
This mixed use building project supposed to add to the economic development of the
nation in general and the surrounding areas in specific with following ways:
A. Source of Revenue
As public policy of any nation, the government collects different forms of taxes from
different business organizations and individuals. Among the different forms of taxes,
business income taxes, payroll income tax and VAT are collected from undertaking
business activities. Therefore, the building will serve as sources of revenue for the town.
B. Employment opportunity
One of the problems that our Country/ Region faced is unemployment. Therefore, the
current objective of the government is working on tackling the problem of
unemployment and fostering the development process either through creating self
employment or employment in other organization. Hence, this project will hire a lot of
individuals after the completion of the construction and during construction.
C. 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 Business.
MARKETING PLAN
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.
Though the market demand gap for mixed use building in Harar is not clearly understand,
there is wider gap for such demand as many merchants, organizations are flouring to the
town every day. From prior business experiences, the demand of mixed use building in
Harar Town is very high and hence the demand and the supply gap is very wide.
Target customers
The target customers of this project include:-
1. business Community
2. Nearby business organization
3. The government bureau
4. Nongovernmental organizations
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 personals and organization
with a capacity of making decision.
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
coupe 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.
Operational Plan
The planned land Usage services
Building Description UOM Unit price
in Birr
Ground Supermarket, Offices 177M2
1st stair Cafeteria & Restaurant, Pharmacy , shop, 241M2
Computer Center,
2nd stair Different governmental, NGO & other offices 149M2
3rd stair Beauty salon, office and others 149M2
4th stair office and others 160M2
Total 876M2
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, , 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, hence when the building construction fully get operational it
is assumed to generate a yearly income of ETB 7,462,500.
⮚ The ground Stair, first floor and second floor designed for different business centers
like; supermarket, beauty salon(man and women), Computer center, pharmacy,
internet café, boutiques, different shops and other business activities,
⮚ The third and fourth Stair designed for office and others services. Besides, the
buildings will have enough parking facility for its customers.
Project implementation
The project’s kickoff is expected to take 2.5 years after land approval is completed. 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:
Project Implementation schedule
SN Activities
1 Land approval 1 month
2 Site Development 3 months
3 Building Basic structure 12 months
4 Building and construction work 10 months
5 Preparation for service 3 months
6 Service execution 1 month
Organizational Structure Organization and Management
There are different forms of legal ownership of business enterprises along the available
Business enterprises; I choose sole proprietorship. The very reason to choose such kind of
business ownership is to be beneficiaries form the different policies and strategies of the
government in the area.
Organizational Structure
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.
The owner of the building hire General Manager at the top of the organizational
structure, manager will be with the responsibility of supervising the overall activity of the
building. Depending up on the nature of the work to be performed two Departments
heads are employed under each unit there will be different employees under the
supervision of the division managers.
Fig: organization structure of the Building
Owne
r
General
Manager
Marketing Manager Technical and maintenance
manager
Finance HR and
Officers Marketing Store Carpenter, Electrician
officers Keeper and other staffs
As clearly shown in the organizational structure, the building has one general manager
and two main sections.
Under the general manager there are the, Marketing Department and technical and
maintenance department.
Under Technical and Maintenance dep’t, there are store keepers and other technical
staffs; under Marketing Dep’t HR, marketing officers and accountant and Cashers.
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 45,500,000 ETB is required and it will be
covered by the owner of the project.
Environmental impact of the project
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
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.
The negative impact of the project is:- 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.
Fixed Investment
Bill of Quantity for Building Construction
Project:-Mixed use Building
Owner:- w/ro Alemnesh Tamire Ayalew
Bill of Quantity
Item Description Amount
A ASUB STRUCTURE
1 Excavation & Earth work 601,200
2 Concrete work 2,172,450
3 Masonry work 766,160
Sub-Total(A) 3,539,810
B B. SUPER STRUCTURE
1 Concrete work 8,340,800
2 Block work 772,900
3 Roofing 790,000
4 Plastering 1,160,000
5 Carpenter & Joinery 6,568,000
6 Metal work 3,463,280
7 Finishing 2,871,440
8 Glazing 490,840
9 Painting 533,160
10 Electrical installation 6,508,000
11 Sanitary installation 796,400
Sub-Total(B) 32,294,820
Total (A+B) 35,834,630
VAT 15% 5,375,195
Grand Total 41,209,825
Sales forecast
No Description Unit(M2) Unit Price(birr) Total cost (birr)
1 Ground 177 875 154,875
2 1st floor 241 750 180,750
3 2nd floor 14 625 93,125
9
4 3rd floor 14 625 93,125
9
5 4th floor 16 625 100,000
0
Total Revenue per month 621,875
Note: this sales forecast only depict the monthly rent of current market
Building Machineries and Equipments
SN Description Measurement Qty Unit cost Total cost
1 Generator Unit 1 2,050,000 2,050,000
2 Carpentry tool box Set 1 72,000 72,000
3 Electrician tools box Set 1 74,425 74,375
4 Plumber tools kit Set 1 50,000 50,000
5 Fire extinguisher Unit 10 25,000 250,000
2,496,375
Total
Office Equipments
Description Measurement Qty Unit cost Total cost
NO in birr in Birr
1 Managerial tables Unit 3 10,400 31,200
2 Managerial chairs Unit 3 7,800 23,400
3 Office table with chair Unit 6 6,000 36,000
4 Computer Unit 3 40,000 120,000
5 Shelf Unit 1 30,000 30,000
6 Filing cabinets Unit 1 60,000 60,000
7 Guest chairs Unit 4 3,200 12,800
8 Fax &Telephone Machines Unit 3 5,200 15,600
Total 329,000
Working Capital
Salary Expense
N Types of the labor Qty Monthly Total Annual
o salary Monthly Salary
1 General manager 1 10,000 10,000 120,000
2 Marketing Manager 1 6,000 6,000 72,000
3 tech & maint. manager 1 6,000 6,000 72,000
5 Accountant 1 4,000 4,000 48,000
4 Casher 1 3,000 3,000 36,000
6 Electrician 1 3,000 3,000 36,000
7 Maintenance officer 1 3,000 3,000 36,000
8 Carpenter 1 2,400 2,400 28,800
12 Store keeper 1 2,400 2,400 28,800
10 Janitor 6 2,000 12,000 144,000
11 Guard 2 2,000 4,000 48,000
Total 17 669,600
Operating Expenses
Annual
SN List of Items cost in birr
1 Stationery supplies 24,000
2 Promotional Cost 160,000
3 Property Insurance 340,000
4 Cleaning Supplies 40,000
5 Water consumption 30,000
6 Electric consumption 70,000
7 Fuel 60,000
8 Oil & Lubricants 20,000
9 Telephone & fax 36,000
10 Repair expense 400,000
11 Miscellaneous costs 80,000
Total 1,260,000
Summary of Total initial investment cost
S/N Description Cost
1 Land, building & construction 41,209,825
2 Building machines & Equipments Office 2,496,375
3 Equipments 329,000
Total fixed investment cost 44,035,200
4 Salary expense 334,800
5 Operation Expense 630,000
Total Working capital 964,800
Sub total 45,000,000
6
Contingency 5000,000
Total initial investment capital 45,500,000
Financial Statement
Project revenue and production costs are listed and compared to see whether the project
generate profits or not. Starting from first year of the project operation, the project will
generate a reasonable amount of net profit for the owners throughout its life period.
Profit and loss statement shows that the project will generate net profit of ETB 4,541,390
in the first year and increase to ETB 5,010,177 in the second year.
Mixed use Building profit/Loss Statement
Alemnesh Tamire Ayalew Mixed use
Building
Profit/loss Statement For
year ended
Year 1 Year 2
Rental Income 7,462,500 8,208,750
Expenses
Salary Expense
334,800 375,444
Operating Expenses 630,000 665,910
Lease payment 10,000 10,000
Total Expense Profit 974,800 1,051,354
before Tax 6,487,700 7,157,396
Tax (30%) 1,946,310 2,147,219
Net profit 4,541,390 5,010,177
Cash flow Statement
Alemnesh Tamire Ayalew Mixed use
Building Cash flow Statement For year ended
Year 0 Year 1 Year 2
Net sale 0.00 7,462,500 8,208,750
Total Cash inflow 45,500,000 7,462,500 8,208,750
Cash payment
Salary Expense 0.00 334,800 375,444
Investment 0.00 0.00 0.00
Operating Cost 0.00 630,000 665,910
Lease payment 0.00 10,000 10,000
Tax payment 0.00 1,946,310 2,147,219
Total payment 0.00 2,921,110 3,198,573
Cash surplus/ deficit 0.00 4,541,390 5,010,177
Cumulative cash flow 45,500,000 40,958,610 35,948,433
Therefore, as clearly observed from the above financial as well as non financial analysis the project
is deemed to be viable. So, the fate of success of this mixed use Building with the owner’s
motivation of work is very promising for any financial institution and furthermore the business
idea has been tested through the prime analysis and findings have shown that the
business has a strong potential for success.
