feasibility study to build a 4-storey residential building in amman - jordan

INVESTMENT OPPORTUNITIES IN JORDAN

Building a 4-Storey Residential Building in the West of Amman

Feasibility Study – Version One

Tariq Al-Basha – Feasibility Studies Specialist

6/24/2014

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 - 00962 7 9767 7418 - [email protected]

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Contents Introduction .................................................................................................................................................. 4

Project Description........................................................................................................................................ 4

The Spaces of the Building ............................................................................................................................ 5

Expected Land Area to be Bought................................................................................................................. 5

Construction Cost .......................................................................................................................................... 5

Project Revenues .......................................................................................................................................... 6

Total Selling Prices per Floor ......................................................................................................................... 6

Cash Flow (In & Out) ..................................................................................................................................... 7

Important Notes............................................................................................................................................ 8

About the Author .......................................................................................................................................... 9


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﴿قالوا سبحانك ل علم لنا إلا ما علامتنا إناك أنت العليم الحكيم﴾

صدق هللا العظيم

23آية –رة البقرة سو


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Introduction The residential building will be built on almost a land area of 787.50 m² and it will be

divided into 4 floors.

The total cost of the project will be JOD 1,169,925.08 (USD 1,651,388.79).

The expected revenues from selling all the residential apartments will be between JOD

1,520,000.00 to 1,560,000.00 (USD 2,145,378.63 to 2,201,835.96).

The expected net profit before tax will be between JOD 350,074.92 to 390,074.92 (USD

494,107.40 to 550,564.74).

Project Description

The project consists of one residential building that has 8 residential apartments (“flats”);

spread equally over 4 floors.

The apartments’ size of the first, second and third floors are 150 m² per each apartment

that includes 3 bedrooms, 3 bathrooms, kitchen, living room, guest room, balcony,

laundry room and corridors.

The apartments’ size of the ground floor is 170 m² per each apartment that includes 3

bedrooms, 3 bathrooms, kitchen, living room, guest room, balcony, laundry room,

corridors, garden and car parking.

The facilities provided in the building are:

Car parking that caters 8 cars (96 m²);

Guard Room – (24 m²);

Service Rooms including a room for water tanks, room for boilers, room for diesel

tanks and storage (160 m²); and

A 6-person-elevator.

The owners of third floor apartment have the right to buy 20 m² of the building roof.

The roof of the building accommodates additional water tanks, solar water heating

system (SWH) and satellites.


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The Spaces of the Building Entry No. of Flats Total Floor Area (Sqm) Space for Sale (Sqm)

Underground Floor - 350.00 280.00

Ground Floor 2.00 350.00 340.00

First Floor 2.00 350.00 300.00

Second Floor 2.00 350.00 300.00

Third Floor 2.00 350.00 300.00

Roof - - 40.00

Total 8.00 1,750.00 1,560.00

Expected Land Area to be Bought

Formula: Land Area in Sqm (X) x [The average of the maximum percentage of the building

(42%) from the land area of housing sector (B) and the maximum percentage of the building

(48%) from the land area of housing sector (C)] = Total built-up Area (Sqm)

X x [100 / ((42 + 48) / 2))] = 1,750

X x 100/45 = 1,750

X = 1,750 x 45/100

X = 78,750 /100

X = 787.50 sqm

Construction Cost Entry Measurement Unit No. of Units The Cost per Unit (JOD) Total Cost (JOD)

Cost of Purchasing the Land Square Meter 787.50 742.86 585,000.00

Designs and plans Square Meter 1,750.00 10 17,500.00

Infrastructure Works Square Meter 1,750.00 60 105,000.00

Structure Works Square Meter 1,750.00 70 122,500.00

Electromechanical Works Square Meter 1,750.00 55 96,250.00

Finishing Works Square Meter 1,750.00 100 175,000.00

Site Supervision & Management Construction Cost 498,750.00 6.17% 30,772.88

General & Administrative Expenses

Construction Cost 498,750.00 3% 14,962.50

Licenses, Permits and Others Total Cost 1,146,985.38 1% 11,469.85

Reserves Total Cost 1,146,985.38 1% 11,469.85

Total 1,169,925.08


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Project Revenues Entry No. of

Flats Space for

Sale (Sqm) No. of Flats

to buy Space for Sale per Flat (Sqm)

Selling Price per sqm (JOD)

Total Selling Price per Flat (JOD)

Total Selling Price (JOD)

Underground Floor - 280.00 8.00 35.00 1,000.00 35,000.00 280,000.00

Ground Floor 2.00 340.00 2.00 170.00 1,000.00 170,000.00 340,000.00

First Floor 2.00 300.00 2.00 150.00 1,000.00 150,000.00 300,000.00

Second Floor 2.00 300.00 2.00 150.00 1,000.00 150,000.00 300,000.00

Third Floor 2.00 300.00 2.00 150.00 1,000.00 150,000.00 300,000.00

Roof - 40.00 2.00 20.00 1,000.00 20,000.00 40,000.00

Total 8.00 1,560,000.00

Total Selling Prices per Floor

Entry No. of Flats

Space for Sale per each Flat (Sqm)

Space for Sale per each Flat (Sqm)

Selling Price per sqm (JOD)

Best Case Scenario per

each Flat

Worst Case Scenario per

each Flat

Best Case Scenario per each Floor

Worst Case Scenario per each Floor

Notes Per

Floor

Includes the underground floor and/or roof (Best Case Scenario)

Includes the Underground Floor

and does not include the roof (Worst Case

Scenario)

JOD JOD JOD JOD

Ground Floor 2.00 205.00 205.00 1,000.00 205,000.00 205,000.00 410,000.00 410,000.00

First Floor 2.00 185.00 185.00 1,000.00 185,000.00 185,000.00 370,000.00 370,000.00

Second Floor 2.00 185.00 185.00 1,000.00 185,000.00 185,000.00 370,000.00 370,000.00

Third Floor 2.00 205.00 185.00 1,000.00 205,000.00 185,000.00 410,000.00 370,000.00

Total

1,560,000.00 1,520,000.00


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Cash Flow (In & Out) Entry Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month 8 Month 9 Month 10 Month 11 Month 12

Cash In

Capital 1,169,925.08

Total Cash In (Monthly) 1,169,925.08 - - - - - - - - - - -

Total Cash In (Cumulative) 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08 1,169,925.08

Cash Out

Cost of Purchasing the Land 585,000.00

Designs and plans

17,500.00

Infrastructure Works

26,250.00 26,250.00 26,250.00 26,250.00

Structure Works

30,625.00 30,625.00 30,625.00 30,625.00

Electromechanical Works

24,062.50 24,062.50 24,062.50 24,062.50

Finishing Works

35,000.00 35,000.00 35,000.00 35,000.00 35,000.00

Site Supervision & Management

2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53 2,797.53

General & Administrative Expenses 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88 1,246.88

Licenses, Permits and Others 11,469.85

Reserves 955.82 955.82 955.82 955.82 955.82 955.82 955.82 955.82 955.82 955.82 955.82 955.82

Total Cash Out (Monthly) 598,672.55 48,750.23 31,250.23 61,875.23 61,875.23 59,687.73 59,687.73 64,062.73 64,062.73 40,000.23 40,000.23 40,000.23

Total Cash Out (Cumulative) 598,672.55 647,422.78 678,673.01 740,548.24 802,423.47 862,111.20 921,798.93 985,861.66 1,049,924.39 1,089,924.62 1,129,924.85 1,169,925.08

Total Net Cash (Monthly) 571,252.53 (48,750.23) (31,250.23) (61,875.23) (61,875.23) (59,687.73) (59,687.73) (64,062.73) (64,062.73) (40,000.23) (40,000.23) (40,000.23)

Total Net Cash (Cumulative) 571,252.53 522,502.30 491,252.07 429,376.84 367,501.61 307,813.88 248,126.15 184,063.42 120,000.69 80,000.46 40,000.23 0.00


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Important Notes

This study is subject to the Building and Planning Regulations for the city of Amman No.

67, 1979.

The land price includes all the applicable fees, charges and taxes.

The price of designs and plans includes all the possible amendments and changes on

the designs and plans.

The prices of infrastructure, structure, electromechanical and finishing works include

workers’ salaries and wages and the cost of all the required materials, goods, equipment

and transport to build the building.

By and large, the areas and prices are approximate.


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About the Author

Awarded First Class Honours in Bachelor of

Arts (Honours) Business Management from

the University of Greenwich – UK.

Working as a Project Finance Officer for an

Iraqi-owned Group in which representing the

CEO and shareholders' interest in 23

companies, subsidiaries and affiliates in Iraq,

Jordan, Lebanon and UAE.

Previous works related to feasibility studies:

1. Feasibility & Financial Studies for Mall

& Hotel in Basra – Iraq; the total land

area is 5,810 m² and the total built-up

area is 25,988 m².

2. Feasibility & Financial Studies for

Medical Diagnostic Center in Basra –

Iraq; the total land area is 7,770 m²

and the total built-up area is 18,350

m².

3. Financial Studies for Mixed-use

Development in Basra – Iraq; the total land area is 152,367 m² and the total built-

up area is 77,949 m².

4. Financial Studies for Mixed-use Development in Basra – Iraq; the total land area

is 135,000 m² and the total built-up area is 90,000 m².

5. Financial Studies for Mall & Hotel in Karbala – Iraq; the total land area is 6,511

m² and the total built-up area is 21,400 m².

6. Financial Studies for Medical Diagnostic Center in Baghdad – Iraq; the total land

area is 2,450 m² and the total built-up area is 8,245 m².

7. Financial Studies for Mixed-use Development in Baghdad – Iraq; the total land

area is 115,690 m² and the total built-up area is 337,665 m².

feasibility study to build a 4-storey residential building in amman - jordan

Real Estate