PROJECT PROPOSAL FOR THE

CONSTRUCTION OF CMERCIAL MIXED USE

BUILDING

PROJECT TO BE IMPLEMENTED IN ADDIS

ABEBA YEKA SUB-CITY

PROMOTER: - BARSENA GENERAL TRADING PLC

November, 2020
Addis Ababa

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 APPLICATION LETTER
TO WHOM IT MAY CONCERN
Dear Sir/Madam;
We are here to request Land for investment with its license by name of our private
trading which it named BARSENA GENERAL TRADING PLC. It is found in 2011.
Since the establishment of BARSENA GENERAL TRADING PLC, we are exercising
different business activities so as to crate job opportunity for our society as well as
developing our financial capacity and making benefit the government also.

Dear sir/madam we are here today as we begun before participating on our country’s
development, we are looking for an opportunity which enables as to take over the
developments of our country through investment. Which it is too vast and can give better
job opportunity than any other that can keep the truck our begun development.

Hence, if your organization accepting our application, give us an opportunity and signing
the project agreement with achieved anticipated results BARSENA GENERAL
TRADING PLC will have self-motivated, energetic and experiences in business duties
and committed to undertake the intention of this investment program from design,
planning, implementing, monitoring and evaluation of the activities with responsibilities
to deliver the desired result of the project with required quality for targeted groups.
We are looking forwards your positive response!!
Better Cooperation for better development!

AHMEDNAAJI MUKTAAR
 C/C BAR SEENAA PLC

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 I. Executive Summary ---------------------------------------------------6
1. Introduction --------------------------------------------------------------------6
1.1. General Background-----------------------------------------------------7
1.2. Objective of the project--------------------------------------------------7
1.3. Project Description ------------------------------------------------------8
1.4. Project Rationale ---------------------------------------------------------8
1.5. The Significance of the project -----------------------------------------9
1.6. Project Location ---------------------------------------------------------10
2. The Market Study ------------------------------------------------------------10
2.1. Market Analysis ---------------------------------------------------------10
2.2. The Demand-Supply Gap ---------------------------------------------11
2.3. Current supply of Mixed Use Building ------------------------------12
2.4. Future market or Demand of commercial Building rental--------12
2.5. Target customers -------------------------------------------------------13
2.6. Marketing Promotion and Strategy-----------------------------------14
2.7. Competition -------------------------------------------------------------14
2.8. The project facilities and Services plan------------------------------15
3. Technical Study --------------------------------------------------------------16
3.1. Description of the project Service/ Product mix -------------------16
3.2. Land Use Plan -----------------------------------------------------------17
3.3. Construction work and Technology ---------------------------------18
3.3.1. Construction schedule ----------------------------------------------18
3.3.2. Architectural Design & Layout ------------------------------------18
3.3.3. Structural Design ---------------------------------------------------19
3.3.4. Reinforced Concrete -------------------------------------------------19
3.3.5. Foundation Design --------------------------------------------------20
3.3.6. Construction Plan and process ------------------------------------20
3.4. Utilities -------------------------------------------------------------------21
3.5. Project Implementation-------------------------------------------------22
4. Organizational Structure ---------------------------------------------------22
4.1. Organization and Management ---------------------------------------22
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 4.2. Man Power ---------------------------------------------------------------22
4.3. Organizational Structure ----------------------------------------------23
5. Financial Requirement and Analysis -------------------------------------25
5.1 Fixed Investment --------------------------------------------------------26
5.2 Working Capital---------------------------------------------------------28
5.2.1 Operating Expense at full Capacity -------------------------------28
5.2.2 Operating Expenses --------------------------------------------------29
5.2.3 Pre-service Expenses -------------------------------------------------29
5.3 Financial analysis and Statements ----------------------------------30
5.3.1 Underlying Assumption ----------------------------------------------
30
5.3.2 Sources of Fund ------------------------------------------------------31
5.3.3 Bank Loan Repayment Schedule ----------------------------------31
5.3.4 Depreciation Schedule ----------------------------------------------32
5.4 Financial Statement ---------------------------------------------------32
5.4.1 Income loss/statement ----------------------------------------------32
5.4.2 Cash flow Statement--------------------------------------------------34
5.5 Financial Analysis ------------------------------------------------------34
5.6. Environmental Impact of the Project --------------------------------35
6. Monitoring and Evaluation-------------------------------------------------36

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I. Executive Summary
1. Project name: Mixed use Building [mole]
2. project Type: Multipurpose service Commercial building
3. Nationality: Ethiopian
4. Project Owner: BAR SEENAA PLC
5. Project location: Addis Ababa City
6. Project composition: multipurpose Building (G+10) used for diverse
business centers like banking & insurance, super market, shops,
restaurant, café, beauty salon, Pharmacy, bed rooms and offices.
7. Premises Required: 1500 m2
8. Total investment Cost: 80,000,000 ETB is required from this
amount 30% or 24,000,000 ETB from owner equity and the rest
70% 56,000,000from bank loans.
9. Employment opportunity: for 36 to56 individuals on permanent
130 on casual basis
10. Social and Economic Benefit: provide better Building service,
employment opportunities, generation of income and benefits for
the urban people.

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 1. Introduction
1.1. General Background
The current fast and dynamic economic growth of Ethiopia especially in
urban area necessitates equivalent growth of building and construction
sector. The sector should expand rapidly to support the overall economic
development sustainable.
In the building sector of the economy, the multi- purpose in the one
becoming rapidly expanding in urban areas of the country, since
dynamic economic development of urban economy requires the
construction of these buildings in towns to support the growing of
business service sectors like supermarkets, Beauty salon, shops, offices
cinemas, Computer Center, Cafeterias, restaurant, assembly hall, guest
house and other activities.
Investment and property development play an important role in any
emerging markets or economies. Property generally comprises reside vial
houses and commercial real estate property (mainly mixed us building)
developed for rental business and sale. The property investment market
in Ethiopia remained under developed for several years. As a
consequence, the supply of residential houses and non-residential real
estate that can be used for residence, office space, shopping malls and
catering services in the urban centers of the country is
disproportionately low to cope with the growing demand in the country
spinning from the average growth in GDP of 5.5 percent over the last ten
years and population increase. The relatively good performance of the
macro-economy (real growth in GDP, low inflation rate and growth in
investment and export sector) has stimulated unprecedented investment
growth in the property sector over the last five years. The growth of
investment in the property market over the last five years in consistent
with the global experience suggesting that investment in the residential

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and commercial property (real estate) is greatly influenced by the
performance of the macroeconomic conditions.
In general, a stable macroeconomic condition leads to economic and
business growth and develops investors’ confidence. This certainly spurs
large demand in the property market for office space, shopping malls,
catering services, apartment and residential houses. Following growing
demand trends, and with the expectation of high return on their
investment capital, large number of land developers pooled their
financial resources and invested in the property market.
To this effect, the owner of the envisioned Mixed Use Building BAR
SEENAA PLC planned to construct in Addis Ababa city and undertaken
this project study to check the market, technical and financial feasibility
of this project. The promoter is very ambitious and committed to realize
the project. Hence, he expects to get the necessary support from the city
administration to make the project to be operational.
Looking at the past trends and permits issues by the Government to the
construction of real estate properties including the mixed use building in
the major urban areas of the country especially in Addis Ababa one can
easily conclude that the momentum is more likely to continue. Besides,
the government policies and incentives for the private sector investment
are very promising that motivates the promoter to engaged in mixed use
building business.
1.2. Objective of the Project
The major goal of this project is to contribute towards the growth of the
trade sector in the city. Its specific objectives include the following.
 To construct and develop modern shops, offices, and restaurant,
bedroom & cafeteria facilities that enable to provide standard services
to visitors.
 To undertake trading and other refuted business activities that enable
to generate a reasonable to the invested capital.

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 To develop modern business center that would provide services of
international standard in order to attract foreign visitors and thereby
contribute towards the generation of hard currency for the country.
 To create employment opportunities for the population in the city and
 Contribute towards the beautification of the town through the
construction of modern building infrastructure and facilities.
1.3. Project Description
The long-term goal of the project is become the best choice in area and
its surrounding areas by creating a differentiated experience capitalizing
on personal service. The proposed project will have a total area of
1500m2, designed to reader a multipurpose giving business, which will
in turn plays significant role towards solving shortage of business center
in the city.
The owner plans the project to render banking and insurance, shopping
facility, bank and cafeteria services to create high quality class to satisfy
the interest of customers in the city. Based on environmental and other
considerations, the entrepreneur has determined the type and size of the
building which is already determined by the site; conceptual planning
and preliminary analysis have been carried out by analysts. In order to
attract its clients to the service, the project will develop high standard
shop & banking rooms and office of best choices and will also save best
quality restaurant and café, national and international dish and various
types of soft drinks.

1.4. Project Rationale

Internationally the economic growth that this country is experiencing,
the good governance created and even if the town is in its nascent stage
of development, such kind of projects are feasible and would be a model
development in promoting and attracting different urban investments.

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In order to respond to the created environment, the town is in need of
major, basic and feasible urban projects to be developed.
The existing promising investment opportunities, the demands of service
need along with relatively sound investment support made by the
government in such kinds of feasible projects, compelled the project
promoter to initiate the multipurpose oriented business project to be
established. Despite the promising business opportunities of the city, the
trend on such kinds of investment found to be not sufficient. The
mismatch between the demand for and supply of such kind of services in
easily observed in the city.
Therefore, the existing shortage or absence in the supply of these
services, along with its commercial and administrative access, better
location and infrastructure access, escalating trend of urbanization and
business activities, thus it is with such reason that this project is
identified and proposed and assumed to be more profitable.
In general, the country’s decentralized state based economy, privatized
and free market economy; good governance creates a favorable
environment for the development of investment for private investors.

1.5. The Significance of the Project

The envisaged project deemed to add to the economic development of the
nation in general and in Addis Ababa City 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 as well as for the
region.

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 B. Employment opportunity
One of the problems that our country 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 56 individuals and more than 130individuals
during construction.
C. Sources of Social service
In addition to serving as a source of employment and income for the city
Administration, the project renders social services for different group of
people. Hence, it also provides the following services;
 Serve as a source of mental satisfaction for the different users,
 Since, the center encompasses different recreational areas; it will
divert the attention of the users from different evil deeds.
 It deemed to minimize the demand for shops and other bundles of
services in the area.
Furthermore, it serves as the pilot experience and ground for other
investor to enter in to such kinds of urban development. It also
contributes on the efforts made on as a character given building for
physical development pattern of the city scope.
1.6. Project Location
As aforementioned on the introductory part the envisioned project is
intended to be located in Addis Ababa city. Addis Ababa is located at an
elevation of 2,200 meters (7,200fit) and is a grassland biome, located at
901’48’’ N380 44’24’’ E/ 9.030000 N 38.740000E. The city lies at the foot
of mount Entoto and forms part of the water shed for the Awash River.
2. The market Study
2.1. Market Analysis
There are a number of factors which affects the demand of standardized
mixed use building. Of these factors, the most important to have

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influence is population growth and the level of income. The currently
expanding industrial park around the city and the city has been inviting
skilled and unskilled labor forces to the town; in addition, the number of
both government and non-government offices has been increasing. Above
all the increase in the number of population of the 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
with suitable infrastructure and service.
As clearly indicated in the introductory part of this proposal, the market
demand gap for mixed use building 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 mixed use building in Addis is very high and hence the
demand and the supply gap is very wide.
2.2. The Demand-Supply Gap
Addis Ababa is situated in very center of Ethiopian for the whole country
business, which is highly known for its surrounding industrial park and
also 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.
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
town. Since Addis Ababa is an important commercial center in addition
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there is a significant increase in business activates and hence increasing
the number of traders to the town. 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. They are mostly villa type premises modified as show
rooms and sailing posits. As a result, there is a large gap between the
developed and that of the supply for modern bed rooms; Bank and
cafeteria accommodation hence this project would not face any problem
of demand scarcity for it business Centre and it would provide good
service to customers.
2.3. Current Supply of Mixed Use Building
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 is booming highly due
to the recent rapid growth experienced in Ethiopia. As a result, a good
number of local and international organizational 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.
2.4. Future Market or Demand of Commercial Building Rental
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.

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 Following our survey of office space users in the city are mainly firms
providing banking, cafeteria and restaurants, bed room, supermarkets
service, computer Center Crevice. 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 five-year growth and
transformation plan (GTP), the Ethiopian economy is expected to
increase by 11% for base case scenario and 14% under the optimistic
case scenario. Assuming that demand for office space is directly related
to the growth in the economy, the forecast for office space demand is
shown in the following table;
Table:1 Office Space Demand Forecast
Years Office space demand under base case Office space demand under high
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: Estimation based on GTP’s forecasted Ethiopian Economic
Growth.
2.5. Target customers
The target customers of this envisaged project include: -
1. Business Community
2. Nearby business organization
3. The government bureau
4. Small accounts(SOHO) SME
5. Nongovernmental organizations

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2.6. Marketing Promotion and Strategy
In order to penetrate and gain considerable market share, one of the
major marketing strategies for the project is consistently rendering
quality service to its tenants. Due emphasis must be placed on improving
quality of service and facilities. The major marketing strategies to
promote the project and gain considerable market share include:
 Advertising through different means focusing on the existing service
and facilities,
 Promote in association to the key location and nearby business
 Working on sustained promotional work,
 Working on public relations to reach and influence key personas
and organization with a capacity of making decision,
 Keeping the quality of its service/ facilities and consistently
improving with changing situations.
 Seasonal discount pricing different others customer centric
marketing strategies will be used by the company.
2.7. 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 come
up with the different competitors in the market. Moreover, it will
frequently conduct competitors research which focuses on, the strength
and the weaknesses, the different competitors’ strategies, the techniques
they use in rendering the service, their customer handling methods, and
others. Generally, the project has many other projects all over Ethiopia
which compete with it.

2.8. The Project Facilities and Services Plan

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 In order to provide mixed use business center building services of a high
standard, it has been planned to construct and develop the
infrastructure and facilities that would viable to meet the requirements of
an international standard business center. Accordingly, various
buildings and facilities will be constructed phase by phase starting with
the most needed ones that are essential to commence the operation of its
business activities. With the completion of construction, the building will
provide a combined service such as shops, bedroom, restaurant and café
service as well as modern business center that primarily serve its guests
and major clients.
Table:2 The plan is that the ground will be partitioned in to different
rooms:
Building Description UOM Unit price
in Birr
Basement Parking and warehouse car
Ground Supermarket, Pharmacy, Banking, Insurance Laundry M2
1st floor Shopping center, M2
2nd floor Shopping center, M2
3rd-floor Computer Center, Beauty salons(man and women), M2
4th floor Cafeteria & Restaurant(Modern M2
and traditional, Coffee Shop,
5th floor Different governmental, NGO & other private business M2
organization offices
6th floor Multipurpose Assembly hall, M2
7th8the& Bedrooms service or apartment and other M2
9thfloor
10th floor Office of the building administration M2
Total
Since the project will be engaged in mixed building the main sources of
its annual revenue would be from the rental of building spaces such as
shops, offices, and banking, café & restaurant bedrooms. Therefore, the
sources of revenue have been classified in to one category namely the
rental of banking & supermarket, offices, shops, bedrooms restaurant
and café based on these classifications. Based on the market price of
similar mixed use building in the area, the envisioned buildings set the

15
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 44,865,000.00
3. Technical Study
3.1. Description of the project Service/ Product mix
The envisioned mixed purpose building will provide different rental
services to the different customer groups for different purpose. The
building will have basement, ground and eight floors. The purpose of the
building explained as follows;
 The ground floor, first floor second floor and third floor designed
for different business centers like banks, supermarket, beauty
salon(man and women), Computer center, pharmacy, internet
café, boutiques, different shops and other business activities,
 The fourth floors designed for Cafeteria & Restaurant(Modern and
traditional, Coffee Shop,
 Fifth floor is designed for Different governmental, NGO & other
private business organization offices,
 Sixth floor is designed for Multipurpose Assembly hall,
 From 7th – 9th floors are designed for bed room or apartment or
for other services.
 Tenth floor if designed for Office of the building administration,
 Also Besides the buildings will have enough parking facility for its
customers and green area in its compound.

3.2. Land Use Plan

The total land required for the envisioned project is estimated to be
1500m2. The total area for the construction of the building will be
1,320m2, as revealed below.

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 Table: 3 land utilization Plan
SN Description Land M2
Grou 1st 2nd 3rd 4th 5th 6th 7th 8th 9th 10th
nd
1 Building G+10
(G+10)
1.1 Basement 1320

1.2 Ground
1.3 First floor 1320

1.4 Second Floor 1320

1.5 Third Floor 1320

1.6 Fourth floor 1320

1.7 Fifth floor 1320

1.8 Sixth floor 1320

1.9 Seventh floor 1320

1.10 Eighth floor 1320

1.11 Ninth floor 1320

1.12 Tenth floor 1320

Parking & 180

Green area
Total 1500

3.3. Construction Work and Technology

3.3.1. Construction Schedule
The construction project is proposed to be started on April 2019, and is
expected to be finished on January 2021. as seen in the abbreviated
construction schedule above, a majority of the schedule’s time is made
up of five major activities; Concrete, building Enclosure, masonry,
mechanical &HVAC and Electrical install. Concrete activities include
processes such as placing foundations and slab on deck. The Building
17
Enclosure Phase includes erecting the scaffolding that will allow for
exterior sheathing installation and bricklaying.
Mechanical and Electrical install coincide with each other due to the
need for coordination between the two divisions. There are several
periods of construction during the schedule in which there are multiple
construction activities occurring at the same time.
The construction site must be organized accordingly as these processes
take place. As with any construction project, the goal of the schedule was
to complete all construction activities before the required Date of
completion.
This date of completion is practical based on the time of year in which
the building will be completed. The team allowed a two-week contingency
for any setbacks. Typically, winter construction tends to cause
unforeseen delays that negatively impact a construction project. These
conditions can and will almost undoubtedly impact the project schedule
by causing unforeseen delays and project inefficiency.

3.3.2. Architectural Design & Layout

Although functional spaces for the project were laid out in significant
detail, the rest of the building had designated spaces but n set layouts. It
was at the discretion of the project promoter to devise typical layouts for
the non-detailed commercial and office spaces. To make sure that the
building’s layouts were practical, the project owner researched typical
architectural layouts for laboratory and executive office spaces.
The walls and partitions throughout the floor were congruent with the
structural frame and column locations.

3.3.3. Structural Design

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

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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.

3.3.4. Reinforced Concrete

The project group prepared hand structural design calculations for a
typical bay of a reinforced concrete frame. In all reinforced concrete bay
designs, a superimposed dead load 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.
3.3.5. Foundation Design
The design of a superstructure may be accurate, have considered all
possibilities and still fail because the substructure is incapable of
distributing the applied loads to the supporting soil.
Foundation design takes more into consideration than merely the loading
from the columns. While the main part of the project focused on the
structural frame and its alternate designs, a preliminary foundation plan
was designed based upon maximum load carried from the

19
superstructure through the columns. The foundation design conducted
by the project team consisted of the selection of foundation type,
determination of the bearing capacity and the design for typical interior
and exterior spread footings.
3.3.6. Construction Plan and process
The project team developed a coordinated project schedule and
construction plans that would reflect the expectations for an actual
construction project. The project schedule was developed using the
preliminary designs given to the project team.
Additionally, the group considered typical construction activities and
durations taken from similar construction projects as well as realistic
constraints on building development. For instance, it is necessary for the
structural frame to be completed before concrete can be placed for the
slab on deck. Hand drawn construction plans detailing site entrances
and storage areas were coordinated with the project schedule to give the
reader visualizations of the construction site set up through various
periods of the construction process.
The construction process for this project is normally a disjointed three
mages development by which the conceptualized need of the promoter of
this project is translated into a functional facility that will meet their
needs in terms of time, cost and quality.
Based on a general program of the project owners the consultant who is
going to be hired makes site studies, develops structural designs,
prepares drawings and specifications, determines quantities involved and
estimated the resultants costs. All these activities will be done in the first
phase of the project which is the design stage after the document are
produced by the designers have been received, and the works secured
the project is supposed to enter the tendering stage. At this stage
contractor 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
20
 compare the bids and award the contract for the lowest responsible
bidder. This, is of course, presupposes that the favorable proposal does
not exceed the allocated budget.
After the award is made and the contract signed between this project
owner and the contractor, the project constructor is expected to prepare
and submits a detailed construction program which includes material
schedule, manpower requirement and cash flow forecast.
After the award is made and the contract signed between this project
owner and the contractor, the project constructor is expected to prepare
and submits a detailed construction program which includes material
schedule, manpower requirement and cash flow forecast.

3.4. Utilities
A number of utilities world be put in place in order to ensure smooth
functioning of the project. These utilities include:
 Water Supply,
 Supplementary Electricity supply.
 Telephone line Internet Broadband
 Fuel, Oil and lubricant
 Drainage Facility
3.5. Project Implementation
The project’s implementation is expected to take 24 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:4 project Implementation schedule
SN Activities Date
1 Land request processing April-Jun, 2019
2 Land approval July, 2019
3 Bank loan processing June-July 2019

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4 Site Development August 2020
5 Building and construction work August/2020-December 2021
6 Preparation for service January, 2022
7 Service execution February, 2022

4. Organizational Structure
4.1. Organization and Management
The organizational structure should be in a way that the company able to
achieve its objectives as well as the satisfaction of standard requirement.
In addition to this, the structure should fit the dynamics of all customers
in the building ranging from small business to large tenants.

4.2. Man Power

The total manpower required for the building will be 34 to 56 persons.
The manpower list and the corresponding labor cost are shown in part
five of this document.

4.3. Organizational Structure

The organizational structure of the project is designed by including all
the necessary personnel under the right division. At the top of the
organizational structure, there will be manager with the responsibility of
supervising the overall activity of the building. Depending up on the
nature of the center and the amount of work to be performs; there exist
auxiliary units under the general manager.
Employees under each unit will be supervised by the department head
that is accountable for the general manager. General Manager is
appointed by owner.

Owner

22
 General Manager

Building Marketing Technical and maintenance

manager

HRM and finance

Cashie Purchase IT, Electricity and

Fig: 1 organization structure of the Building

As clearly shown in the organizational structure, the center organization

has one general manager and three main sections. Under the general
manager there are the, marketing Department, maintenance and
building administration department. Under building admin dept. there
exist two sections i.e., HRM & finance and general service. Further sub
sections are also organized under technical and maintenance manager.
The following section deals with the duties and responsibilities of each
department.
A. The General Manager’s Duties and Responsibilities
 He/she will plan, organize, direct and control the overall activities of
the building.
 He/she will devise policies and strategies that will enable the center to
be profitable.
 He/she will incorporate modern technological innovation that will
facilitate the service delivery of the building to increase customer’s
satisfaction.
 He/she will plan, organize, direct and control the human and non-
human resources of the building so as to achieve the short and long
run objectives of the organization.
B. Building Administration Department
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The building Administration Department of the multipurpose building
has two main sections (HRM and Finance and General Service section). It
has responsible for undertaking the following activities;
 Manage the human resources and control employee’s activity
 Well non-human resources of the project, which include; effective
handling of the different resources of the building, and devise
strategies of controlling against fraud and damage.
 Will provide the right material or inventory to the center with right
price at the right time.
 Will plan, organize direct and control the financial transaction of
the building by using all the necessary documents.
 Accountant and casher that will collect money from the customers.
 Will develop sound financial control system by developing modern
financial control systems.
 Will prepare the annual financial statements and prepare
condensed reports for both the General Manager and other
concerned government body.
 Follow the overall status of the business and provide maintenance
and repair services,
C. The marketing Department
 Will handle the overall marketing activities of the organization
which include planning, organizing, directing, and controlling.
 Will develop the marketing strategies for future multipurpose
building development
 Will develop effective customer handling strategies.
 Execute the promotion methods.
D. Technical and maintenance manager
 Will handle the overall physical maintenance and related issues
 Will make sure electricity and back up is organized.
 Follow up security issues and educate tenants

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  Works in collaboration with general service to make sure tenants
are well served.
5. Financial Requirement and Analysis
The financial resource is a prime resource for undertaking any activities.
Hence for implementing this mixed use building a total of 80,000,000
ETB is required. From this 30% or 24,000,000 birr will be covered by the
promoter of the project while the rest 70% will be covered through loan
from bank at the prevailing interest rate.
Therefore, the said amount of finance is needed for undertaking the
following.

5.1. Fixed Investment

A. Land, Building & Construction
Table: 5
S.N Description of works Total Cost in birr
1 Building construction 77,060,990.00
2 Site Development 150,200.00
3 Design and supervision 200,000.00
4 1 Year land lease & (10%) down payment
st
362,445
Total 77,773,635

B. Building Machineries and Equipment’s

Table:6

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 SN Description Measurem Qty Unit cost in Birr Total cost in
ent Birr.
1 Generator Unit 1 200,000.00 200,000.00
2 Carpentry tool box Set 1 40,000.00 40,000.00
3 Electrician tools box Set 1 35,500.00 35,500.00
4 Plumber tools kit Set 1 12,300.00 12,300.00
5 Fire extinguisher Unit 15 6,000.00 90,000.00
(Security Equipment)
6 Total 377,800.00

C. Vehicle
Table:7
SN Description UOM Qty Unit Cost in Total cost in Remark
Fr. Birr
1 Mini-Bus Unit 2 600,000.00 1,200,000.00 Duty Free
Total 1,200,000.00

D. Office Equipment’s
Table: 8
SN Description Measurement Qty Unit cost in Total cost in
birr Birr

1 Managerial tables Unit 5 2,600.00 13,000.00

2 Managerial chairs Unit 5 1,950.00 9,750.00
3 Office table with chair Unit 7 1,350.00 9,450.00
4 Secretarial table with chairs Unit 2 1,450.00 2,900.00
5 Computer with chairs Unit 5 15,000.00 75,000.00
6 Shelf Unit 3,500.00 3,500.00
7 Filing cabinets Unit 1 1,500.00 1,500.00
8 Guest chairs Unit 5 900.00 4,500.00
9 Fax & Telephone machine Unit 5 1,300.00 1,300.00
10 Carpet and Curtain LS 1 23,000.00
Total 143,900.00

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 5.2. Working Capital
5.2.1. Operating Expense at full Capacity2
a. Salary Expense
Table:9
SN Position No Qualification Monthly Annual
salary in salary in
Birr Birr
1 General manager 1 BA in management 3000 36,000
2 Building Admin 1 BA in Acct/Mgt 2500 30,000
3 Secretary 2 10+2 in secretariat science 1000 24,800
4 HRM Officer 1 10+2 in HRM/Management 950 11,400
5 Technical and 1 Diploma in building maintenance 1500 18,000
maintenance manager
6 Finance head 1 BA in Accounting 2500 30,000
7 IT Technician 2 Diploma in computer science/IT 1150 27,600
8 Marketer 1 Diploma in marketing 1150 13,800
9 Accountant 1 Diploma in accounting 1150 13,800
10 Guards/Security 8 Basic 500 48,000
11 General Service head 1 Diploma in Management 1500 18,000
12 Purchaser 1 Diploma in purchasing &Sup Mgt 1150 13,800

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13 Electrician 1 10+2 in general electricity 1000 12,000
14 Plumber 1 10+2 in general mechanic 1000 12,000
15 Casher 2 10+1 in bookkeeping 850 20,400
16 Cleaner 5 Unskilled 450 27,000
17 Maintenance officer 2 10+2 in General mechanic 1000 24,000
18 Driver 2 10 completed 850 20,400
Total 34 401,000
Benefit (20%) 80,200
Grand Total 481,200

5.2.2. Operating Expenses

Table: 10
SN List of Items Annual cost in birr Assumptions Used
1 Audit and legal fee 34,000.00 2000 birr/per, month
2 Stationery supplies 6,000.00 500 birr/month
3 Promotional Cost 50,000.00 Lump sum annual cost
4 Property Insurance 770,609.90 1% of the building
5 Cleaning Supplies 10,800.00 900 br. Per month
6 Uniforms 1,670.00 180 per pes for 16 people
7 Water consumption 5,000.00 2500 m3 by 3.15 birr
8 Electric consumption 14,208.00 30,000KWH By Br.0.4736
9 Fuel 42,672.00 2032 lit per year by Br. 21
10 Oil &Lubricants 4,267.20 10% of fuel cost
11 Telephone & fax 18,000.00 1500 per month
12 Repair expense 1,541,219.00 2% of building cost
13 Miscellaneous costs 36,000.00 3000 per month
Total 2,534,446.10

5.2.3. Pre-service Expenses

Table: 11
SN Description Cost in birr
1 Project proposal 50,000.00

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2 Licensing fee and others
Total 50,000.00

Summary of Total initial investment cost

Table: 12
SN Description Cost in Birr
1 Land, building & construction 77,773,635
2 Building machines &Equipment’s 377,800.00
3 Vehicle 1,200,000.00
4 Office Equipment 143,900.00
5 Total fixed investment cost 79,495,335
6 Salary expense 481,200.00
7 Operation Expense 2,534,446.10
8 Pre service Expense 50,000.00
9 Total Working capital 865,636.20
10 Sub total 83,426,617.30
11 Contingency (10%) 8,342,661.73
Total initial investment capital 91,769,279.03

5.3. Financial Analysis and Statements

5.3.1. Underlying Assumption
The financial analysis of the mixed use building is based on the data
provided in the preceding sections and the following assumptions.
A. Construction and Finance
Construction period 2 Years
Source of finance 30% equity and 70 loans
Bank interest rate 10%
B. Depreciation
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 Building 10%
Building machinery and equipment 10%
Office Equipment’s 10%

5.3.2. Sources of Fund

The source of fund to finance the project is planned to be from two
sources. These are promoter’s equity and bank loan. The loan is expected
to be obtained from one of the local lending institutions. Since the project
is expected to take some times to repay all its debts, the bank loan is
assumed to obtain on long term credit basis. Taking the financial
position of the promoters into account, equity contribution and bank
loan to finance the total investment outlays of the project are assumed to
be 30% and 70% respectively. Accordingly, the total financial
requirement from the two sources will be;
Table: 13
SN Description Percentage share Amount
Owners Share 30% 24,000,000.00
Bank Loan 70% 56,000,000.00
Total 100% 80,000,000.00

5.3.3. Bank Loan Repayment Schedule

Table:14
Year Principal Interest (10%) Total annual Payment in Remaining Balance
Payment ETB
0 0 00 00 67,769,279.03
1 6,776,927.90 6,776,927.90 13,553,855.80 60,992,351.13
2 6,776,927.90 6,098,847.73 12,875,775.63 54,215,423.23

3 6,776,927.90 5,488,962.96 12,265,890.86 47,438,495.33

4 6,776,927.90 4,940,066.66 11,716,994.56 40,661,567.43
5 6,776,927.90 4,446,059.99 11,222,987.89 33,884,639.53
6 6,776,927.90 4,001,453.99 10,778,381.89 27,107,771.63
7 6,776,927.90 3,601,308.59 10,378,236.49 20,330,783.73

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 8 6,776,927.90 3,241,177.73 10,018,105.63 13,553,855.83
9 6,776,927.90 2,917,059.96 9,693,987.86 6,776,927.93
10 6,776,927.90 2,625,353.97 9,402,281.87 0

5.3.4. Depreciation Schedule

Table: 15
SN Description Original Value in Depreciation Depreciation per
Birr rate in % year in Birr
1 Construction and Building 77,773,635 10 7,777,363.5
2 Bldg. Machines &Equipment’s 377,800.00 10 37,780.00
3 Vehicle 1,200,000.00 5 60,000.00
4 Office Equipment 143,900.00 10 14,390.00
Total 79,495,335.00 7,853,533.5

5.4. Financial Statement

5.4.1. Income Loss/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 7,593,524.75in the
first year and increase to ETB 19,237,351.48starting from the third year
of the project life and hence it is found to be profitable.

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Table: 16 Mixed use Building Profit/Loss Statement
Revenue Year 1 Year 2 Year 3
Rental Income 28,560,000.00 38,240,000.00 44,865,000.00
Expenses
Salary Expense 481,200.00 625,560.00 721,800.00
Operating Expenses 2,534,446.10 3,294,779.93 3,801,669.15
Deprecation Building 7,777,363.5 7,777,363.5 7,777,363.5
Deprecation Bld. Machineries 37,780.00 37,780.00 37,780.00
and Equip.
Deprecation of Vehicle 60,000.00 60,000.00 60,000.00
Deprecation office Equip 14,390.00 14,390.00 14,390.00

Interest Expense 6,776,927.90 6,098,847.73 4,940,066.66

Lease payment 30,000 30,000 30,000
Total Expense 17,712,107.50 17,938,721.16 17,383,069.31
Profit before Tax 10,847,892.5 20,301,278.84 27,481,930.69
Tax (30%) 3,254,367.75 6,090,383.65 8,244,579.21
Net profit 7,593,524.75 14,210,895.2 19,237,351.48

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 5.4.2. Cash flow Statement
Table: 16
Year Year 0 Year 1 Year 2 Year 3 andafter
Equity Capital 24,000,000.00
Loan principal 64,072,194.24
Net sale 28,560,000.00 38,240,000.00 44,865,000.00
Total Cash in flow 91,769,279.03 28,560,000.00 38,240,000.00 44,865,000.00
Cash payment
Salary Expense 0 481,200.00 625,560.00 721,800.00
Investment 67,769,279.03 0 0 0
Pre operating Expense 50,000.00 0 0 0
Operating Cost 0 2,534,446.10 3,294,779.93 3,801,669.15
Loan repayment 0 13,553,855.80 12,875,775.63 12,265,890.86
Lease payment 0 30,000.00 30,000.00 30,000.00
Tax payment 0 3,254,367.75 6,090,383.65 8,244,579.21
Total payment 67,819,276.03 19,853,869.65 22,916,499.21 25,063,939.22

Cash surplus deficit 23,950,003.00 8,706,130.35 15,323,500.79 19,801,060.78

Cumulative cash flow -49,997 8,656,133.35 23,979,634.14 67,780,694.92

5.5. Financial Analysis

A. Profitability
According to the projected income statement, the building will start
generating profit in the 2nd year of operation. Important ration such as
profit to total sales, net profit to equity (Return on equity) and net profit
plus interest on total investment (return on total investment) show as
increasing trend during the lifetime of the project. The income statement
and the other indicators of profitability show that the project is viable.

B. Pay-Back Periods

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The investment cost and income statement projection are used to project
the pay-back period. The building’s total investment will be fully
recovered at the 5.2 year of operation.

5.6. Environmental Impact of the Project

The EIA of the project activities was determined by identifying the
environmental aspects and then undertaking an environmental risk
assessment to determine the significant environmental aspects. The
environmental impact assessment has included all phases of the project
namely construction phase and operational phase.
The building has both positive and negative impact
Positive impact of the project
The positive impact of the project is: -
 Generation of employment opportunity
 Source income for the government through business income tax
 Income generation for the promoter
 Being exemplary for other investors who want to engage in the
same business line.
Negative impact of the project
The project has the following negative impacts:
 Noise and Dust emission during Construction
There are some noises during the construction due to the
construction operation and the company will use construct the
construction during the day time. Again there is the emission of
dust which will be mitigated by sprinkling water on the service.
 Problem on workers on construction
During construction there are some problems that will materialize on
workers. These are: damage on operation by using machines,
construction materials and others. To mitigate such impact, the
company will provide safety insurance and safety equipment’s.
 Sewerage during operation
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During operation there are some wastes emitting from the mixed use
building. These are wastes from the latrine and will be mitigated by using
modern waste treatment technology.
6. Monitoring and Evaluation
A. Monitoring
With support of executive bodies and decisions in line with agreed up on
project as well as guidelines between stakeholder bodiesand the project
owner. The project owner shall monitor all activities [Land request
processing, Land approval, Bank loan processing, Site Development,
Building and construction work, Preparation for service and service
execution] required to make the process of the project from beginning to
end and deliver required commercial service efficiently and effectively.

B. Evaluation
The project promoter evaluates the on-going process of the project at
each phase of implementation. Even if joint evaluation conducted at the
end of the project, the engineering estimation of bill of quantity is the
basic tool of project success evaluation. This evaluation will be based on
the agreed upon project document.

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