Feasibility Study to Build & Sell 8,000 Residential Units in Southern Amman - Jordan

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Information about Feasibility Study to Build & Sell 8,000 Residential Units in Southern...

Published on July 9, 2016

Author: TariqAlBasha1

Source: slideshare.net

1. FEASIBILITY STUDY TO BUILD & SELL 8,000 RESIDENTIAL UNITS IN SOUTHERN AMMAN Targeting adult earners receive a median monthly income of JOD 350 DISCLAIMER The purpose and scope of this feasibility study is to introduce the subject matter and provide a general idea and information on the said area. All the material included in this document is based on data/information gathered from various sources and is based on certain assumptions. Although, due care and diligence has been taken to compile this document, the contained information may vary due to any change in any of the concerned factors, and the actual results may differ substantially from the presented information. Tariq Al-Basha – Feasibility Study Specialist Investment Opportunities in Jordan

2. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 1 of 12 Contents Investment Summary ................................................................................................................. 3 Investment Projections ........................................................................................................... 3 Investment Appraisals ............................................................................................................ 3 The Target Audience.............................................................................................................. 3 Project Details ........................................................................................................................ 3 Project Construction Cost....................................................................................................... 3 Project Revenue Assumption ................................................................................................. 3 Required Capital..................................................................................................................... 3 Project Timeline ......................................................................................................................... 4 Revenue Assumptions ............................................................................................................... 5 Construction Cost Assumptions ................................................................................................. 6 The Construction Plan per One Building (Sqm) ...................................................................... 6 The Payment Percentage of Construction Works (%)............................................................. 7 The Price per Square Meter for Construction Works (Sqm/JOD)............................................ 8 Cash Outflow of One Building for Construction Works............................................................ 9 Cash Outflow of 100 Buildings (One Phase) for Construction Works...................................... 9 Cash Outflow of 800 Buildings (All Phases) for Construction Works......................................10 Cash Flow (In & Out).................................................................................................................11 About the Author.......................................................................................................................12

3. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 2 of 12 ﴾ُ‫م‬‫ي‬ِ‫ك‬َ‫ح‬ْ‫ل‬‫ا‬ ُ‫م‬‫ي‬ِ‫ل‬َ‫ع‬ْ‫ل‬‫ا‬ َ‫ت‬ْ‫ن‬َ‫أ‬ َ‫ك‬‫ا‬‫ن‬ِ‫إ‬ ‫ا‬َ‫ن‬َ‫ت‬ْ‫م‬‫ا‬‫ل‬َ‫ع‬ ‫ا‬َ‫م‬ ‫ا‬‫َل‬ِ‫إ‬ ‫ا‬َ‫ن‬َ‫ل‬ َ‫م‬ْ‫ل‬ِ‫ع‬ َ‫َل‬ َ‫ك‬َ‫ن‬‫ا‬َ‫ح‬ْ‫ب‬ُ‫س‬ ‫وا‬ُ‫ل‬‫ا‬َ‫ق‬﴿ ‫العظيم‬ ‫هللا‬ ‫صدق‬ ‫البقرة‬ ‫سورة‬–‫آية‬32

4. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 3 of 12 Investment Summary The aim of this feasibility study to propose an investment opportunity in the capital city of Jordan that is Amman. The proposed investment is to build and sell 8,000 residential units over 10 phases in a period that does not exceed 7 years from the commencement of the project. Investment Projections It is expected that the project will generate a total revenue of JOD 168 million over a period of 7 years in which its total net profit is JOD 42 million. In addition, the total construction cost of the project is expected to be JOD 126 million. Investment Appraisals The expected payback period of the shall be at the end of Year 6, where the project is also expected to achieve a return on investment (ROI) of %140 and internal rate of return (IRR) of % 3.55% in Year 7. The Target Audience The target audience of this project is adult Jordanians who earn monthly JOD 350 on average as the selling price of one residential unit is JOD 21,000 that is 60 times their monthly income. Project Details 1. The Project will build and sell 8,000 residential units (Apartments); 2. Each building shall have 8 residential units (Apartments); 3. The total number of buildings shall 1,000 residential buildings; 4. The total number of phases of this project is 10 phases; 5. The construction duration of each phase is 18 months; and 6. The construction duration of all the project is 6 years. Project Construction Cost 1. In each phase, the project shall build 800 residential units (Apartments) or 100 buildings; 2. The land area of each building is 360 m² (sqm) where the purchase price of square meter is JOD 100 and the total land price is JOD 36,000; 3. The total built-up area is 800 m² (sqm) where it shall have 8 residential units (Apartments) in which the size of each apartment is 70 m² (sqm) where the total cost of each square meter is JOD 157.5; 4. The total cost of one building is JOD 126,000 in which JOD 90,000 will be paid for construction works and one phase is JOD 1,260,000; and 5. The total sellable area of the building is 560 m² (sqm) or 70% of the total built-up area. Project Revenue Assumption 1. The selling price of each residential unit is JOD 21,000 where the selling price per square meter is JOD 300. 2. It is assumed that the project will sell 200 apartments every 6 months. Required Capital The required capital to start the project is JOD 30 million.

5. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 4 of 12 Project Timeline Entry No. of Units 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months 42 Months 48 Months 54 Months 60 Months 66 Months 72 Months Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Phase 1 800.00 Phase 2 800.00 Phase 3 800.00 Phase 4 800.00 Phase 5 800.00 Phase 6 800.00 Phase 7 800.00 Phase 8 800.00 Phase 9 800.00 Phase 10 800.00 Total 8,000.00

6. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 5 of 12 Revenue Assumptions Entry 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months 42 Months 48 Months 54 Months 60 Months 66 Months 72 Months 78 Months Cash In Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Phase 1 4,200,000 4,200,000 4,200,000 4,200,000 Phase 2 4,200,000 4,200,000 4,200,000 4,200,000 Phase 3 4,200,000 4,200,000 4,200,000 4,200,000 Phase 4 4,200,000 4,200,000 4,200,000 4,200,000 Phase 5 4,200,000 4,200,000 4,200,000 4,200,000 Phase 6 4,200,000 4,200,000 4,200,000 4,200,000 Phase 7 4,200,000 4,200,000 4,200,000 4,200,000 Phase 8 4,200,000 4,200,000 4,200,000 4,200,000 Phase 9 4,200,000 4,200,000 4,200,000 4,200,000 Phase 10 4,200,000 4,200,000 4,200,000 4,200,000 Total 4,200,000 8,400,000 12,600,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 12,600,000 8,400,000 4,200,000 Cumulative 4,200,000 12,600,000 25,200,000 42,000,000 58,800,000 75,600,000 92,400,000 109,200,000 126,000,000 142,800,000 155,400,000 163,800,000 168,000,000

7. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 6 of 12 Construction Cost Assumptions The Construction Plan per One Building (Sqm) No. Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 Building Permits 800.00 2 Shoring 800.00 800.00 800.00 3 Public Landscape 80.00 80.00 80.00 4 Basement Structure 180.00 180.00 180.00 180.00 5 Basement MEP 180.00 180.00 180.00 180.00 6 Basement Finishes 180.00 180.00 180.00 180.00 7 Ground Floor Structure 180.00 180.00 180.00 180.00 8 Ground Floor MEP 180.00 180.00 180.00 180.00 9 Ground Floor Finishes 180.00 180.00 180.00 180.00 10 First Floor Structure 160.00 160.00 160.00 160.00 11 First Floor MEP 160.00 160.00 160.00 160.00 12 First Floor Finishes 160.00 160.00 160.00 160.00 13 Second Floor Structure 160.00 160.00 160.00 160.00 14 Second Floor MEP 160.00 160.00 160.00 160.00 15 Second Floor Finishes 160.00 160.00 160.00 160.00 16 Third Floor Structure 160.00 160.00 160.00 160.00 17 Third Floor MEP 160.00 160.00 160.00 160.00 18 Third Floor Finishes 160.00 160.00 160.00 160.00

8. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 7 of 12 The Payment Percentage of Construction Works (%) No. Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 Building Permits 100.00% 2 Shoring 40.00% 40.00% 20.00% 3 Public Landscape 40.00% 40.00% 20.00% 4 Basement Structure 40.00% 20.00% 20.00% 20.00% 5 Basement MEP 40.00% 20.00% 20.00% 20.00% 6 Basement Finishes 40.00% 20.00% 20.00% 20.00% 7 Ground Floor Structure 40.00% 20.00% 20.00% 20.00% 8 Ground Floor MEP 40.00% 20.00% 20.00% 20.00% 9 Ground Floor Finishes 40.00% 20.00% 20.00% 20.00% 10 First Floor Structure 40.00% 20.00% 20.00% 20.00% 11 First Floor MEP 40.00% 20.00% 20.00% 20.00% 12 First Floor Finishes 40.00% 20.00% 20.00% 20.00% 13 Second Floor Structure 40.00% 20.00% 20.00% 20.00% 14 Second Floor MEP 40.00% 20.00% 20.00% 20.00% 15 Second Floor Finishes 40.00% 20.00% 20.00% 20.00% 16 Third Floor Structure 40.00% 20.00% 20.00% 20.00% 17 Third Floor MEP 40.00% 20.00% 20.00% 20.00% 18 Third Floor Finishes 40.00% 20.00% 20.00% 20.00%

9. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 8 of 12 The Price per Square Meter for Construction Works (Sqm/JOD) No. Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 1 Building Permits 14.00 2 Shoring 55.00 55.00 55.00 3 Public Landscape 15.00 15.00 15.00 4 Basement Structure 11.20 11.20 11.20 11.20 5 Basement MEP 10.80 10.80 10.80 10.80 6 Basement Finishes 18.00 18.00 18.00 18.00 7 Ground Floor Structure 11.20 11.20 11.20 11.20 8 Ground Floor MEP 10.80 10.80 10.80 10.80 9 Ground Floor Finishes 18.00 18.00 18.00 18.00 10 First Floor Structure 11.20 11.20 11.20 11.20 11 First Floor MEP 10.80 10.80 10.80 10.80 12 First Floor Finishes 18.00 18.00 18.00 18.00 13 Second Floor Structure 11.20 11.20 11.20 11.20 14 Second Floor MEP 10.80 10.80 10.80 10.80 15 Second Floor Finishes 18.00 18.00 18.00 18.00 16 Third Floor Structure 11.20 11.20 11.20 11.20 17 Third Floor MEP 10.80 10.80 10.80 10.80 18 Third Floor Finishes 18.00 18.00 18.00 18.00

10. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 9 of 12 Cash Outflow of One Building for Construction Works Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Land Price 36,000 Building Permits 11,200 - - - - - - - - - - - - - - - - - Shoring - 17,600 17,600 8,800 - - - - - - - - - - - - - - Public Landscape - - - - - - - - - - - - - - - 480 480 240 Structure - - - 806 403 1,210 806 1,120 762 1,075 717 1,075 717 358 358 - - - MEP - - - - 778 389 1,166 778 1,080 734 1,037 691 1,037 691 346 346 - - Finishes - - - - - 1,296 648 1,944 1,296 1,800 1,224 1,728 1,152 1,728 1,152 576 576 - Total 47,200 17,600 17,600 9,606 1,181 2,894 2,621 3,842 3,138 3,610 2,978 3,494 2,906 2,778 1,856 1,402 1,056 240 Cumulative 47,200 64,800 82,400 92,006 93,187 96,082 98,702 102,544 105,682 109,291 112,269 115,763 118,669 121,446 123,302 124,704 125,760 126,000 Cash Outflow of 100 Buildings (One Phase) for Construction Works Description Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12 Month 13 Month 14 Month 15 Month 16 Month 17 Month 18 Land Price 3,600,000 - - - - - - - - - - - - - - - - - Building Permits 1,120,000 - - - - - - - - - - - - - - - - - Shoring - 1,760,000 1,760,000 880,000 - - - - - - - - - - - - - - Public Landscape - - - - - - - - - - - - - - - 48,000 48,000 24,000 Structure - - - 80,640 40,320 120,960 80,640 112,000 76,160 107,520 71,680 107,520 71,680 35,840 35,840 - - - MEP - - - - 77,760 38,880 116,640 77,760 108,000 73,440 103,680 69,120 103,680 69,120 34,560 34,560 - - Finishes - - - - - 129,600 64,800 194,400 129,600 180,000 122,400 172,800 115,200 172,800 115,200 57,600 57,600 - Total 4,720,000 1,760,000 1,760,000 960,640 118,080 289,440 262,080 384,160 313,760 360,960 297,760 349,440 290,560 277,760 185,600 140,160 105,600 24,000 Cumulative 4,720,000 6,480,000 8,240,000 9,200,640 9,318,720 9,608,160 9,870,240 10,254,400 10,568,160 10,929,120 11,226,880 11,576,320 11,866,880 12,144,640 12,330,240 12,470,400 12,576,000 12,600,000

11. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 10 of 12 Cash Outflow of 800 Buildings (All Phases) for Construction Works Entry 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months 42 Months 48 Months 54 Months 60 Months 66 Months 72 Months Cash In Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Land Price 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 - - Building Permits 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 - - Shoring 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 - - Public Landscape - - 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Structure 241,920 797,440 940,800 940,800 940,800 940,800 940,800 940,800 940,800 940,800 698,880 143,360 MEP 116,640 665,280 907,200 907,200 907,200 907,200 907,200 907,200 907,200 907,200 790,560 241,920 Finishes 129,600 993,600 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,382,400 518,400 Total 9,608,160 11,576,320 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 2,991,840 1,023,680 Cumulative 9,608,160 21,184,480 33,784,480 46,384,480 58,984,480 71,584,480 84,184,480 96,784,480 109,384,480 121,984,480 124,976,320 126,000,000

12. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 11 of 12 Cash Flow (In & Out) Entry 6 Months 12 Months 18 Months 24 Months 30 Months 36 Months 42 Months 48 Months 54 Months 60 Months 66 Months 72 Months 78 Months Cash In Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Selling Residential Units 4,200,000 8,400,000 12,600,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 12,600,000 8,400,000 4,200,000 Total 4,200,000 8,400,000 12,600,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 16,800,000 12,600,000 8,400,000 4,200,000 Cumulative 4,200,000 12,600,000 25,200,000 42,000,000 58,800,000 75,600,000 92,400,000 109,200,000 126,000,000 142,800,000 155,400,000 163,800,000 168,000,000 Cash Out Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Land Price 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 3,600,000 - - - Building Permits 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 1,120,000 - - - Shoring 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 4,400,000 - - - Public Landscape - - 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 - Structure 241,920 797,440 940,800 940,800 940,800 940,800 940,800 940,800 940,800 940,800 698,880 143,360 - MEP 116,640 665,280 907,200 907,200 907,200 907,200 907,200 907,200 907,200 907,200 790,560 241,920 - Finishes 129,600 993,600 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,512,000 1,382,400 518,400 - Total 9,608,160 11,576,320 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 12,600,000 2,991,840 1,023,680 - Cumulative 9,608,160 21,184,480 33,784,480 46,384,480 58,984,480 71,584,480 84,184,480 96,784,480 109,384,480 121,984,480 124,976,320 126,000,000 126,000,000 Net Cash (5,408,160) (3,176,320) - 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 9,608,160 7,376,320 4,200,000 Cumulative (5,408,160) (8,584,480) (8,584,480) (4,384,480) (184,480) 4,015,520 8,215,520 12,415,520 16,615,520 20,815,520 30,423,680 37,800,000 42,000,000 Required Capital 30,000,000 Cumulative 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 30,000,000 Net Cash after Required Capital (35,408,160) (3,176,320) - 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 4,200,000 9,608,160 7,376,320 4,200,000 Cumulative (35,408,160) (38,584,480) (38,584,480) (34,384,480) (30,184,480) (25,984,480) (21,784,480) (17,584,480) (13,384,480) (9,184,480) 423,680 7,800,000 12,000,000 ROI -18.03% -28.61% -28.61% -14.61% -0.61% 13.39% 27.39% 41.39% 55.39% 69.39% 101.41% 126.00% 140.00% IRR -53.68% -35.69% -24.41% -16.79% -11.38% -7.42% -4.43% 0.16% 2.50% 3.55%

13. Tariq Al-Basha – tariqalbasha@outlook.com – 00962 7 9767 7418 – July 9, 2016 Page 12 of 12 About the Author General Info  Date/Place of Birth: 18th March, 1988 – Kuwait  Marital Status/Nationality: Single – Jordanian  Months/Years of Experience: 3 Years Key Objectives 1. Long-term consulting project or permanent managerial position. 2. Continue my education in the financial field by obtaining the CMA designation. Corporate Experience 1. Relationship Officer @ Bank of Jordan [5th May 2016 – Present] 2. Marketing & Business Development Officer @ Mostaqbal [15th April 2015 – 14th July 2015] 3. Project Finance Officer @ Integrated Technical Solutions [1st June 2013 – 26th February 2015] Consultancy Experience 1. Senior Advisor/Associate @ PanBuck Jordan PSC [14th December 2015 – 30th April 2016] 2. Financial Modelling Specialist/Consultant @ International House [14th November 2015 – 30th April 2016] 3. Financial Modelling Specialist/Consultant @ Shirlaws Middle East [31st May 2015 – 31st December 2015] Freelancing Experience 1. Feasibility Study Specialist @ Stars Aviation [13th December 2015 – 18th January 2016] 2. Business Planning Specialist @ Jordanian Job Opportunities [29th November 2015 – 21st December 2015] Education 1. Awarded 1st Class Honours in Bachelor of Arts (Honours) Business Management from The University of Greenwich [2009 - 2012] 2. Awarded 2nd Class Honours in International Foundation Diploma from The University of Greenwich [2008 - 2009] 3. Awarded 75.1% in Tawjihi - Scientific Stream from Amman Baptist School [1999-2006] 4. Primary School from Amman International School [1992-1999] Accounting & Finance Courses 1. Certified Management Accountant Course @ Majody for Auditing – 6th November 2014 – 29th July 2015]. Test Score 1. International English Language Testing System (IELTS) – 26th July 2008 [Score: 6.0 out of 9.0]. Key Skills 1. Budgeting & Forecasting 2. Business Development 3. Business Coaching 4. Business & Financial Modelling & Planning 5. Credit & Financial Analysis 6. Feasibility Studies 7. Market & Research Studies 8. SMEs Development

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