NAKURU 1 ACRE FOR SALE OPPOSITE STATE HOUSE.Profit per year=kes 130m

NAKURU 1 ACRE FOR SALE OPPOSITE STATE HOUSE.

This 1 acre land for sale is located in a prime area of Nakuru town directly opposite Nakuru State House.

Here is a link the the google map https://maps.google.com/maps/ms?msid=205617053586273466800.0004dd1fc97f0b9bb2d1f&msa=0&ll=-0.285043,36.083114&spn=0.005407,0.010203

This land can be developed to a number of commercial usages such as hotel, shopping mall or offices.

Return on Investment as Hotel.

If developed into a hotel, the returns will be as below.

Cost Item

Kshs

%

Land

57,000,000.00

14.7429299

Preliminary

1,800,000.00

0.46556621

Construction

249,600,000.00

64.5585139

External Works

12,480,000.00

3.2279257

Contingency

4,992,000.00

1.29117028

Professional fees

12,480,000.00

3.2279257

Project Management fees

2,496,000.00

0.64558514

Marketing

850,000.00

0.21985071

Financial Charges

44,928,000.00

11.6205325

Total

386,626,000.00

100

Financing Plan

Kshs

%

Developer

137,026,000.00

35.4414861

Debt Finance

249,600,000.00

64.5585139

Presales

0.00

0

Total

386,626,000.00

100

PROFIT
TOTAL INCOME PER YEAR

130,560,000.00

TOTAL EXPENDITURE

386,626,000.00

RETURN ON INVESTMENT IN YEARS

2.96

Assuming a modest accommodation charge of kes 2,000 per room per night, Only 20 days per month occupancy rate and the profits accrued from the sale of beverages and food to offset the running costs such as salaries, maintenance, cleaning etc, the hotel project will pay back in 3years.

Also, we have assumed construction cost per m2 to kes 40,000 .This ensures the highest possible quality of construction to take place without any compromise to workmanship and quality of materials.

A charge of kes 2,000 per night in Nakuru is still quite modest and low considering most hotels situated in such prime areas charge kes 3,500 and above per night. This ensures that the highest chance will be the rates increasing to the usual kes 3,000 to 4,000 or 100% occupancy as opposed to the assumed 20 out of 30 days occupancy rate.

With the numerous tourist attractions in Nakuru such as Lake Nakuru, Menengai crator, Lake Naivasha,Elementaita etc, this will surely attract a huge amount of visitors willing to spend at the hotel.

Use of the space as an office block.

Assuming kes 50 per square foot rent, the rental income for the 1600m2 per floor x 5 floors will be kes 48m per year.

The construction cost reduces to kes 35,000 per m2 since offices take less construction costs than hotels.

The return on investment is 7.3 years as tabulated below.

Cost Item

Kshs

%

Land

57,000,000.00

16.143193

Preliminary

1,800,000.00

0.50978504

Construction

224,000,000.00

63.4399162

External Works

11,200,000.00

3.17199581

Contingency

4,480,000.00

1.26879832

Professional fees

11,200,000.00

3.17199581

Project Management fees

2,240,000.00

0.63439916

Marketing

850,000.00

0.24073182

Financial Charges

40,320,000.00

11.4191849

Total

353,090,000.00

100

Financing Plan

Kshs

%

Developer

129,090,000.00

36.5600838

Debt Finance

224,000,000.00

63.4399162

Presales

0.00

0

Total

353,090,000.00

100

PROFIT

48,000,000.00

TOTAL INCOME PER YEAR

48,000,000.00

TOTAL EXPENDITURE

353,090,000.00

RETURN ON INVESTMENT IN YEARS

7.36

Conclusion.

Hotel investment for this plot is better than office block investment with a return on investment of 3 years compared to 7 years.

Francis Gichuhi Kamau, Architect.

info@a4architect.com

0721410684.

Francis Gichuhi (692 Posts)

Architect Francis Gichuhi . B.Arch. University of Nairobi. Registered Architect, Kenya. Member, Architectural Association of Kenya. Contacts. email info@a4architect.com. Telephone +254721410684


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  1 comment for “NAKURU 1 ACRE FOR SALE OPPOSITE STATE HOUSE.Profit per year=kes 130m

  1. kagia muchiri
    October 31, 2015 at 7:47 pm

    Hi. Hello my friend i wanted to know if the land is there or it was bought and exalty where the is situated . on which side of the state house is behind state house or the side of 58 estate ? Hoping to hear from u soon regards Kagia muchiri .

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