KENYATTA ROAD ESTATE BUSINESS PLAN
Project: Residential Development in Kenya, Kenyatta road, Gatundu.
Location: off Thika road, along Kenyatta road.
MARCH 14th 2011
This is a project proposal for the construction of a high class residential estate comprising of 800 No. Maisonettes on a parcel of land situated at Kenyatta road off Thika road, Gatundu.
The project has been conceived, designed and will be implemented by www.a4architect.com .
The estimated development cost for the project is KES 5,600,000,000.00
The project completion period shall take 12 months from ground breaking to hand over.
Sales for 800 Units @ KES 10,000,000 will be in the range of KES 8,000,000,000.00
Returns shall be in the range of KES 2,400,000,000.00 with gross profits falling in the range of 43 percent.
A4architect is a dynamic property consulting company specializing in providing a one-stop service for the management and development of a variety of property development projects. It provides its clients, who may be property owners, developers or tenants, with the expertise to guide a project through the complex development process from concept through to building completion.
Depending on the requirements of their client, A4architect can provide a full or partial consulting service. The company’s involvement can vary from sourcing suitable sites, arranging local authority approvals, managing the professional team or providing a complete project management service.
The principals behind the firm have several years experience in designing and managing to completion several projects of various natures.
The project comprises the construction of 800 No. residential units each comprising of 3 no. bedrooms for Sale at Kenyatta road on a subdivision measuring just about 100 acres.
10% to 20% of the 100 acres will be set aside for social amenities.
The overall theme of the development would be one of maximizing on the plot use whilst maintaining reasonable individual privacy within a ‘Green Sustainability’ architecture.
In order to ease the impact of the overall cost of the development it is proposed to carry out the construction in phases to be jointly agreed on with the client.
Each 1 acre plot will have 9 No. units.
The construction will be phased in 10 phases comprising of 80 No. units respectively.
Each of the phases shall be planned to deliver units that are complete and ready for occupation. This will facilitate pre-selling of some of the units prior to the end of construction. This would be achieved through pro-active networking with property managers and estates officers in large corporations and use of the internet.
The foregoing will result in further cushioning of the net effect of the cost of financing the project.
In order to enable planning of major infrastructural requirements such as water storage and foul water disposal right from the outset, a master plan of the entire development shall be evolved. Thus the capacity of some of the facilities may initially exceed the needs of the accommodation provided, but this would be done with the full knowledge that the development will grow to fully utilize the facilities provided.
Auxiliary features include:
• Paved walkways .
• Safe gated community neighborhood
• Inbuilt car parkings.
• Extra rain-water storage .
• Planted landscaped 24-hr. irrigated gardens.
• Solar power electrical wiring
• A choice of 3 different designs to choose from.
The country ambience would further be enhanced by having strategically planted palm trees which would serve the added role of acting as wind breaks.
The development budget is as follows:
800 No. 3 bedroom maisonettes in 10 blocks each measuring 9 acres.
• The development budget includes professional fees
1.00 Building details
1.10 Type of houses: 3 bedroom Maisonnettes.
1.12 Gross floor area per Unit m2: 150m2
1.13 Building Cost per m2: 40,000[including external works and consultancy fees]
1.14 Building Cost Per Unit including External Works, consultancy fees and Land: KES 6,000,000
2.00 Construction cost breakdown
Total Building works[including Infrastructure& Electric Fencing]-
KES 6,000,000 x 800 = KES 4,800,000,000
3.00 Land Cost- [100 acres] = KES8,000,000.00 per acre x 100 acres=800,000,000
OVERALL PROJECT COST INCLUDING LAND= 4,800,000,000.00
+ 800,000,000= KES 5,600,000,000.00
1.11 Projected sale price per unit KES 10,000,000.00
1.12 Overall sales revenue=800 X 10,000,000= 8,000,000,000.00
1.13 Gross anticipated profit =KES 8,000,000,000.00- KES 5,600,000,000.00
1.14 Gross profit margin 43%
Kenyatta road is situated 25 minutes drive from Nairobi’s Central Business District off Thika road.
The estate is connected to the mains water supply from the Thika Municipal Council and also has easily connected electricity supply from KPLC.
Developments in this area are predominantly single family residences. The occupancy is predominantly homeowners. The majority of the buildings here are of high-class standard and are well constructed and maintained.
Given the proximity of the site to Nairobi’s CBD, well as the good communication available along Thika road, the site would realize good returns on a single family residential development.
The planned development intends to maximize this potential by creating accommodation that is spacious whilst at the same time making optimum use of the space available.
At the moment, there are similar developments in this area, consisting of single family maisonettes –K.U BOMA ESTATE.
In the locality of the planned development, there exist several properties which are either owned by the residents or are rental properties.
The closest competition perhaps comes from the high-class K.U BOMA Estate and Ngoingwa Estate.
It is planned that marketing the development for sale shall commence before the construction begins.
Consequently it is anticipated that by the time the first block is completed there shall be an inflow of funds that can either be utilized to start construction of the next phase.
The sale price for each unit has been set at KES 10,000,000.00.
EXECUTION OF THE PROJECT
A4architect will in this provide the client with a full design/build service. This shall include
1. Design and specification
Architectural, structural, mechanical and electrical drawings shall be prepared and necessary approvals sought.
During the various stages of the design, the client shall be kept fully informed and client approval sought prior to proceeding to the next stage. The engineering design shall be done by registered engineers under the guidance of A4architect. Detailed specifications shall be developed with close consultation with the client.
2. Project estimates
Subsequent to completion of the design, a Quantity Surveying firm under the guidance of A4architect shall undertake construction cost estimates for the project.
3. Preparation of tender and contract documents
After final design has been done and client approval obtained, tender documents shall be drawn up for the general and specialist contractors. The specialist contract documents shall be prepared with guidance from the relevant engineers.
Selected contractors shall be invited to tender for the various work packages. We shall then analyze the tenders returned and forward our recommendation to the client.
5. Contract documentation
With the contractors have been selected, we shall draw up the required contract documents and enter into contract with the contractors on the client’s behalf.
6. Project management
Subsequent to the contracts being signed and mobilization to the site, we shall provide superintendence and project management. This will entail ensuring that the project is brought in on time and under budget by constant monitoring of operations on site and remedying any issues that may prevent timely completion or cause expenditure to exceed the budget.
7. Contract administration
We shall handle all matters relating to the various contracts including but not limited to stage payments, performance bonds, extensions of time and relationships between the various trades involved in the project’s execution.
8. Sales and marketing
In conjunction with an estate agency approved by the client, we have produced a presentation package to be used in the sales and marketing of the units.
a) Design to Tender
The design to tender process will take a total of 1 month. This will include commissioning of all engineering design, preparation of bills of quantities and obtaining of all relevant approvals for the development.
Construction of the entire project is estimated to take a maximum of 12 months.
MARKETING AND SALES
Marketing of the properties has been planned to start even before ground is broken for the start of the construction. This serves the dual purpose of creating awareness of the availability of quality property for sale and to confirm the validity of the market intelligence.
A reputable real estate agency will be appointed and will be supplied with a virtual presentation kit that includes a walk through movie of the development. A prospectus of the development will also be made for distribution to potential purchasers.
In order to provide a more tangible feel of the development, a show unit will be built within eight weeks of commencement of the project. This will enable even the doubtful potential purchasers to appreciate the quality of the development.
Francis Gichuhi Kamau B.Arch. U.o.N M.A.A.K[A] Registered Architect
+254 721 410684