Sinbona Mall

BUSINESS PLAN FOR TESFAYE ALEMU MIXED USE BUILDING
PROJECT PROPOSAL FOR THE DEVELOPMENT OF 2

BASEMENTS AND G+ 10 FOR SINBONA MIXED USE BUILDING
THE PROJECT TO BE IMPLIMENTED IN SHEGER CITY,

KOYE FACHE SUB-CITY
PROJECT OWNER: -TESFAYE ALEMU
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ETHIOPIA, ADDIS ABABA

DATE: JULY, 2023 G.C
Table of Contents
1 Executive Summary................................................................................................................................5
2 . Introduction...........................................................................................................................................6
2.1 General Background.............................................................................................................................7
Ethiopia construction industry update........................................................................................................7
Affordable housing construction keeps pace with Ethiopian demand....................................................8
Ethiopian infrastructure construction remains robust.............................................................................8
Commercial building work underway in Ethiopia..................................................................................9
Ethiopia’s building projects keep on rolling...........................................................................................9
2 The Organization Objectives.................................................................................................................12
2.1 General Objective...........................................................................................................................12
2.1.1 Specific objective....................................................................................................................12
Commercial Mixed use Aapartment................................................................................................12
2.3 Project description..........................................................................................................................14
2.4 Project Rationale............................................................................................................................15
2.5 The significance of the project.......................................................................................................15
2.6 Project Location.............................................................................................................................16
3. The market Study.................................................................................................................................18
3.1 Market Analysis.............................................................................................................................18
3.2 The Demand-Supply Gap...............................................................................................................19
3.3 Current supply of mixed use and residential apartment building....................................................20
3.4 Future market or Demand of Ccommercial Building.....................................................................21
3.5 Target customers............................................................................................................................21
3.6 Marketing promotion and strategy.................................................................................................22
3.7 Competition....................................................................................................................................22
3.8 The project facilities and Services plan..........................................................................................22
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4 Technical Studies..................................................................................................................................24
4.1 Description of the project Service..................................................................................................24
4.1.1 Land Use Plan.........................................................................................................................24
4.2 Construction work and Technology...............................................................................................25
4.2.1 Construction schedule.............................................................................................................25
4.2.2 Architectural Design & Layout...............................................................................................25
4.2.3 Structural design......................................................................................................................26
4.2.4 Reinforced concrete.................................................................................................................26
4.2.5 Foundation Design..................................................................................................................26
4.2.6 Construction Plan and process.................................................................................................27
4.3 Utilities...........................................................................................................................................27
5.1 Land, Building and Civil Works....................................................................................................28
5.2 Manpower and training requirement..............................................................................................29
5.2.1 Manpower requirement...........................................................................................................29
5.2.2 Labor Availability...................................................................................................................30
5.3 Project implementation..................................................................................................................30
5.4.1 Organization and management....................................................................................................30
6 Financial analysis..................................................................................................................................36
6.1 Repair and Maintenance Cost.........................................................................................................36
6.2 Depreciation and Amortization......................................................................................................36
6.3 Total Revenue................................................................................................................................37
6.4 Discounted Payback Period............................................................................................................37
6.5 Cash flow.......................................................................................................................................37
6.6 Benefit cost ratio............................................................................................................................37
6.7 Internal Rate of Return...................................................................................................................38
6.8 Net present value............................................................................................................................38
Recommendations................................................................................................................................39
List of table
Table 1: Office Space Demand Forecast…………………………………………. 12
Table 2: The plan is that the ground will be partitioned in to different rooms…14
Table 3: land utilization Plan ………………………………………….……….…..16
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Table 4: Utilities…………………………………………………………………… 20
Table 5: List of Building and Civil Works and Their Costs ……………………..21
Table 6: Manpower Requirement and Annual Labor Cost………………………22
Table 7: project Implementation schedule………………………………………. 23
Table 8: Repair and Maintenance Cost ……………………………………………3
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BUSINESS PLAN FOR TESFAYE ALEMU MIXED USE AND COMMERICAL SHOPPING MALL
1 Executive Summary
KEY INFORMATION HIGHLIGHTS
PROJECT TITLE Tesfaye Alemu Mixed Use Building
PROJECT OWNER Tesfaye Alemu
LAND REQUIREMENT 0.5 Hectares (5,000 M2)
PROJECT AREA Shegr City, Koye Feche sub-city
PRODUCTION CAPACITY 2 B+ G+10 Building and 2 blocks of G+3 Malls
SERVICES TO BE Rental Rooms Primary & secondary level schools, Hospital (higher Clinics) with
RENDERED standardized Pharmacy Public Library with average size Youth recreational sites;
Various Prayer sites & Play grounds Supermarkets & other facilities that may be
required by the ‘would be residents ‘Apartment and Wholesales Shopping Mall .
MARKET For Domestic and International Trader/user
COST OF THE PROJECT For implementing this project a total of 500,000,000.00 birr is required. From this
total investment capital, 458,446,223.00 birr will be used for fixed investment
while 41,553,777.00 birr will be used for working capital . from this 30% or
150,000,000.00. birr will be covered by the promoter of the project while the rest
70% or 350,000,000.00 birr will be covered by the financial institutions.
EMPLOYMENT 243 PERMANENT SKILLED AND 204 LABOURERS

CREATION
PROJECT LIFE 10 YEARS
NUMBER OF WORKING 365 DAYS

DAYS
FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )
NPV (NET PRESENT VALUE) 554,439,417.00 BIRR
IRR (INTERNAL RATE OF RETURN) 34.13%
PBP ( PAY BACK PERIOD) 8 year and 9 month
ANALYSIS RESULT
The Project Is Technically Feasible, Financially And Commercially Viable As Well As Socially And Economically
Acceptable. Hence, The Project Is Worth Implementing.
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2 . Introduction
With a per capita income of about 280 US Dollar, Ethiopia is one of the poorest countries in the
world. The agriculture sector which accounts for the average 45% of GDP, is a source of livelihood
for about 80% of the country's population (MoFED, 2010). With a population of about 110 million
people, it is the second most populous country in Africa. Moreover, its population is growing rapidly
at an annual growth rate of 2.6 per cent (CSA, 2007). Addis Ababa, the capital city, is located almost
at the geographic center of the country, with an estimated population of about 3 million (CSA,
2007). The combination of high population and high urban growth rates coupled with a high
prevalence of urban poverty have placed enormous strain on Ethiopian cites. This is especially true
in Addis Ababa as it has a share of 23% of the country’s urban population (CSA, 2007).
The urban poverty is manifested by persistently growing unemployment; poor quality dwellings and
homelessness; increasing number of slums and squatter neighbors; congestion; lack of basic services
and infrastructure. These factors combine to produce the critical urban issue: the lack of affordable,
healthy commercial housing for all sectors of the urban population. Currently, in Addis Ababa, there
in strong commercial housing demand as a result of the mismatch between the expanding urban
population and limited commercial housing supply (Tesfaye, 2007).
In recognition of the magnitude of the problem, the Ethiopian government has launched t h e
Integrated C o m m e r c i a l Housing Development Program ( IHDP) in 2004 which among other
things, aims to increase the commercial housing supply for the low to middle-income groups of
population (MoWUD, 2004). Up on launching the program, the government was confronted which
extremely high demand, and to date the program only managed to build about half of the demanded
units (UN-HABITAT, 2010). As commercial housing supply lags behind demand, and commercial
housing conditions continue to worsen in the face of teeming urban population in the country, it
became increasingly imperative that a new paradigm has to be adopted if the commercial housing
challenge is to be met. It is little surprise that faced with ever expanding cities, poor and dwindling
financial resources and unimpressive performance of public provision, commercial housing policy
emphasis is shifting from state provision towards facilitation of private sector participation in
commercial housing development.
Enablement strategy to commercial housing would prefer the government to assume the role of
supporter in contrast to provider in the commercial housing sector. Instead of embarking on the
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construction of dwelling units, the government is to concentrate on reforming and managing the legal,
regulatory and financial policy framework in such a way as to create an environment for the people
and the private sector to provide commercial housing.
The requirement for private sector developers to make affordable commercial housing or at least
include a percentage element of affordable commercial housing provision within all mixed use
and residential apartment and residential developments over a certain threshold number of units was a
contentious issue but has been accepted in most areas and situations by the private house building
industry. However, private developers are motivated by profit and so what is the rationale for them to
provide what is essentially a welfare service? The argument is that there are good economic and
business justifications for the private sector to be involved in the provision of affordable commercial
housing.
Private developers, however, have failed to deliver affordable commercial housing units even for best
paid professionals such as Engineers and Doctors. So far, their main target has been building high-
value, high-end homes for the few high income groups in and outside the country.
2.1 General Background

Ethiopia construction industry update
The current fast and dynamic economic growth of Ethiopia especially in Addis Ababa town
necessitates equivalent growth of building and construction sector. The sector should expand rapidly
to support the overall economic development sustainable.
Ethiopia is undergoing a transformation. The East African state is prioritizing a wealth of

construction projects in order to stimulate its economy, reinvigorate its infrastructure and supply
affordable housing and power to its population of close to 110 million.
Construction is a huge part of Ethiopia’s economic recovery. The building sector has seen double
digit growth, expanding by 37% annually, and is ushering in a new phase of development for the
country.
So what is new in Ethiopia’s construction industry? Major activity is ongoing throughout the nation,
in both residential and infrastructure sectors, as well commercial areas.
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Affordable housing construction keeps pace with Ethiopian demand
Addis Ababa, Ethiopia’s capital city is expanding at a rate of 3.3% each year, creating a housing
void that needs to be filled. In fact, affordable housing is something of a nationwide priority for the
Ethiopian government, although at present much of the house building activity is centered on the
capital.
Condominium construction is the main focus and a collection of ongoing developments are
scattered across the capital – all with different price points but each with affordability in mind. The
40/60 program, where tenants pay for 40% of an apartment’s cost and the government contributing
the remaining 60% is making solid progress. More than 1,290 apartment blocks, standing between 7-
9 story tall have been completed in various locations throughout Addis Ababa. 38,790 total
condominium units are being built in 13 different sites in the city. 80,000 further apartment blocks
are planned under the 40/60 scheme over the next five years.
Outside the affordable housing sector, more high-end developments are planned. China’s Sin mark
Real Estate is developing a 21-tower residential complex in Addis Ababa. The Chinese developers
have stated this will be “the biggest mixed use mall project in Ethiopia”, and will feature swimming
pools, a commercial zone and sports centers. Costs are expected to reach over $194 million.
Ethiopian infrastructure construction remains robust
Huge sums are being invested in infrastructure. Take the Grand Renaissance Dam (GERD) for
example. Ethiopia’s flagship infrastructure project, the $4.8 billion dam is one of the nation’s most
expensive developments.
Despite delays, thanks to political wrangling due to the GERD’s location spanning the Blue Nile
which flows into Egypt and Sudan, construction is well underway. Overseen by Italian firm Salini
Imperil, building work on the dam is expected to finish in 2017, although the dam itself was stated to
be 70% complete in May 2016. It is estimated that the GERD will generate 6,000 megawatts of
electricity.
Five new road-related projects kicked off in June 2016, three focused on building new links while
the remaining two are centered around repair and maintenance. A total of 347 kilometers of new
highway will be put into action after this project is finished at a cost of some $245 million. Local,
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state-owned construction companies will be handling the building work. The longest individual
stretch of road, Route Number One, measures 60 kilometers, connecting Adama and Awash in
eastern Addis Ababa.
Commercial building work underway in Ethiopia
It is not just the residential or infrastructure sectors that are powering Ethiopia’s construction boom.
Commercial construction activity is playing no small role in changing the face of the Ethiopian
building industry.
The headquarters of the Commercial Bank of Ethiopia (CBE) are being constructed at present by the
China State Construction & Engineering Corporation. Once completed, the CBE’s head office will
be East Africa’s tallest building at an impressive 198 meters tall. Foundations have been laid, so
construction on the super structure is now beginning in earnest.
Africa’s largest terminal for fresh produce is also being built at the rapidly expanding Bole
International Airport. The 17,000 square meter facilities will enable Ethiopia to offer Africa’s
biggest logistics hub to a variety of international customers, meaning trade levels could rise
substantially. The new facility is expected to handle 600,000 tons of cargo at full capacity.
Ethiopia’s building projects keep on rolling
This is just a snapshot of the construction activity underway across Ethiopia. For a more in depth
look at the nation’s building sector, why not download ITE Build & Interiors’ free guide today? The
report goes in detail about Ethiopia’s construction sector, the scale of imports of key building
materials and the opportunities for foreign companies East Africa’s fastest growing economy holds.
In the building sector of the economy, the multipurpose in the one becoming rapidly expanding in
Addis Ababa City since dynamic economic development of urban economy requires the construction
of these buildings in the city to support the growing of business service sectors like supermarkets,
Beauty salon, shops, offices cinemas, Computer Center, Cafeterias, restaurant, assembly hall,
apartments and other activities. In this regard, mixed use and residential apartment building expands
in the all parts of the city.
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Construction in Addis Ababa Infrastructure development and housing projects generously cover
the landscape of modern Ethiopia. The rise of the country’s economic standards has gone beyond the
expectation of analyzed country data, surveys, and opinions of many investors worldwide.
Aside from its rapid economic growth and the current progress in the country’s dairy production
sector, Ethiopia’s construction sector has turned the country’s financial needs into massive
opportunities for foreign businesses – especially those from the European nations. Numerous
projects have turned around Ethiopia’s economic decline, particularly in the city of Addis Ababa.
Currently, the country forms the heart of Africa’s economic evolution due to high demands in the
construction sub-sectors. The wave of construction in Addis Ababa has spilled into other Ethiopian
cities, causing investors to take serious measures in expanding their business in the country.
Inefficiencies of construction projects
Ethiopia’s growing number of construction projects has inefficiencies that need careful management. These
inefficiencies are:
 Construction inputs are costly due to import fees.

 High rates of foreign exchange require further funding in Ethiopia’s private and public sectors.
 Ethiopia’s project managers are not as adept as other European or Chinese managers; thus, making
project management a hassle.
Despite these inefficiencies, business opportunities in the Ethiopian construction sector have been emerging
for some time now. The country has opened its doors to more foreign investors. In turn, opening opportunities
for European, Chinese and other companies all over the globe, to expand their businesses and increasing the
country’s employment rate.
Opportunities in the Ethiopian construction industry
The Ethiopian government has paved the way for European and Chinese entrepreneurs to get involved with
the innovation of the country’s infrastructural development and industrial growth. Despite the risks of
bringing in foreign companies, the Ethiopians are quite grateful for the assistance and business potential
offered by global players.
Investment and property development play an important role in any emerging markets or economies. Property
generally comprises residential 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
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GDP of 5.5% 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 and commercial property 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, Tesfaye Alemu that consisting members of
Ethiopians domestic investor established private company, planned to construct in Sheger 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, they expect to get the necessary
support from the city administration to make the project to be operational.
Besides, the government policies and incentives for the private sector investment are very promising that
motivates the promoter to engaged in mixed use and residential apartment building business.
When there exists rapid economic growth, the demand for the tertiary/service sector is very high that result
from the change of people lifestyle, consumption pattern and income growth. Hence, the development and
market linkage of this sector with other sectors like agriculture and industry is very vital. Furthermore, the
tourism growth has a potential to develop the sector more.
As one part of tertiary (service) sector for trade center facilities are generating most of their business from
domestic and local tourists, business persons, business men, guests and leisure travelers etc. The services
given by these centers should be better quality and facilitates to their customers. Besides, the development of
trade sector further necessity the development of entire economy, trade center facilities. Nevertheless, the
development of this sector is not enough compare with the demand and potential of Ethiopia.
In addition to the above facts, the following points taken by the promoters for the project justifications;
 The government of Ethiopia promising five-year growth and transformation development plan
(2010/11-2014/15), the will bring prosperity to its citizens with collaboration with private sector
investment actions.
 The Municipality government (Addis Ababa) has conducive investment packages for development
and poverty reduction.
 Industrial zone and Service sectors are demarcated in the capital city
 Availability of transportation, social and economic infrastructure.
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2 The Organization Objectives
2.1 General Objective
All business organizations are established with objectives of ensuring their indefinite existence by
choosing promising businesses, operating profitably, owning assets and securing capable human
resources while simultaneously discharging their social responsibilities. Selecting a business sector
that provides shelter for human kind, on the other hand, is response to the moral, religious and
business calls because of the drastic population increase in the world in which Ethiopia is the one.
In addition to meeting the above mentioned justifications, now a days, such Mixed Use Building
development project is one of the few business ventures that is believed to have significant
economic, social & demographic spill-over effects to the society.
The promoters are Ethiopian Domestic investor living in Addis Ababa and involved in multiples of
business activities. So he has a deep knowledge of the investment opportunity and potential of thee
zone and country and therefore has a cumulative experience of wide trade transaction, rental
building. On top of the already existing high demand for scares, to establishing mixed use building
in Sheger City, Koye Feche sub city. The major goal of this project is to contribute towards the
growth of the trade sector due to recent favorable political & economic situations in Ethiopia, huge
numbers of domestic are also very keen to come together and have its own Assets, particularly the
‘business. ‘Its specific objectives include the following.
2.1.1 Specific objective
Commercial Mixed Use Building
 To construct and develop 2B+G+10 modern Mixed use on 4,000 square feet for facilities of
rental residential rooms, shops, offices, and restaurant & cafeteria, bed rooms, conferences hall
facilities that enable to provide standard services to customers.
 To undertake trading and other refuted business activities that enable to generate a reasonable to
the invested capital.
 To develop modern business center that would provide full services on city standard.
 To create employment opportunities.
 Contribute towards the beautification of the city through the construction of modern building
infrastructure and facilities.
Specific objective of Commercial Shopping Mall
o A typical mall has four anchor stores, each with three floors, and on 4,000 square feet.
Naturally, mall sizes and costs vary greatly according to size, site conditions, construction
techniques, tenants, amenities, and location.
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o Mall construction requires the participation of an owner/developer, architects, general contractor, and
subcontractors. Typically, malls use “best” quality building techniques and materials in order to
minimize bonding and insurance costs.
o This company is intended to Serves as an interface between farmers and consumers with the finest quality
grains for in our location. The business is primarily wholesale to retailers, area restaurants and people
who want to buy in large quantity.
o To provide opportunities for increasing net incomes in the horticulture / agriculture sector and creating a
prosperous, progressive and proud farmer by setting up efficient and knowledge based marketing systems
and services”.
o We will create market chain and opportunity of purchase our grains directly from local farmers and sole
distributors. This allows us to buy from the farmers with the finest output available anywhere. We plan to
sell for countless numbers of customers who are always in need of wholesale price of the grain we sell
and as to reduce the current increasing rate of inflation in our country as well of world by playing major
role in market stabilizing.
o Platform for buying and selling of fruits, vegetables, crops, seeds, agricultural machineries and tools.
o Form association, Partnerships and collaboration arrangements with the national, regional and
international department of agriculture institutions.
o Form Co-operatives as a tool to negotiate the interest of farmers. Local private limited companies, small
scale enterprises, cooperatives and unions engaged in agro commodities trading.
Floor facilities /service

 2nd floor facilities: offices, assembly halls, reception and customer guests
 1st floor facilities: fruits, vegetables, crops and other food items, and improved Seeds 
 Ground floor: machineries and tools, 
 Ample parking facilities
 Crops are collected from the nearby farmers and societies.
 Facilities like grading cleaning, packaging and weighing
 Food items at affordable pricing
Operations
 Our operations will be on 2 blocks with each having 3 floors excluding the ground floor.
 We will be having our own shops as well as shops for rent in each Area.
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 Te emphasize on energy saving and environment protection. So we will try to use solar
energy as much as possible.
 The sewage water will be recycled and used for gardening and similar purposes.
Corporate social responsibilities
 Besides, the envisaged investment project has been designed in very attractive & modern style to add
ecstatic value to the Addis Ababa City Administration. The Project owners are promised to contribute
a major share fund raising during construction of various social services providing centers that are
believed to ease life of local residents. Those important service providing centers are:
 Primary & secondary level schools,
 Bank services
 Hospital (higher Clinics) with standardized Pharmacy
 Public Library with average size Youth recreational sites;
 Various Prayer sites & Play grounds
 Supermarkets & other facilities that may be required by the ‘would be residents’
 To establish economically viable, socially acceptable and environmentally friendly mixed use and
residential apartment.
2.3 Project description
The long-term goal of the project is become the best choice trade center in the city. The proposed
project will have a total area of 5,000m2, designed to reader a multipurpose giving business, which
will in turn plays significant role towards solving shortage of business center in Sheger city, koye
Feche sub city.
The historical nature of the city as business unique location in one of the most attractive centering
Ethiopian (100% urban center). The owners plan the project to render banking and insurance,
shopping facility, offices 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 apartments, restaurant and café.
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2.4 Project Rationale
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 not
enough. 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 privatized and free market economy; good governance creates a favorable
environment for the development of investment for private investors.
2.5 The significance of the project
The envisaged project deemed to add to the economic development of the city in general 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 city.
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 243 individuals and more than 204individual during construction.
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2.6 Project Location
The envisaged projects is planned to be located in Sheger City, Koye Feche Sub city. Addis
Ababa's 2021 population is now estimated at 5,005,524. In 1950, the population of Addis
Ababa was 392,000. Addis Ababa has grown by 211,825 since 2015, which represents a 4.42% annual change.
These population estimates and projections come from the latest revision of the UN World Urbanization
Prospects. These estimates represent the Urban agglomeration of Addis Ababa, which typically
includes Addis Ababa's population in addition to adjacent suburban areas. Addis Ababa is the capital city
of Ethiopia. It is also the largest city in the country by population, with a total population of 3,384,569
according to the 2007 census. However, it is believed that this number was inaccurate when recorded and
underestimated the city’s population. The city has through recent years seen a robust annual growth rate, and
population counts as of 2017 are growing closer to 4 million. The most recent census was scheduled for the
2018 to 2019 fiscal year, as security concerns between 2017 and 2018 delayed it. Addis Ababa is a chartered
city and as such, is considered both a city and a state. It is the largest city in the world located in a landlocked
country.
Addis Ababa Size

This capital city holds 527 square kilometers of area in Ethiopia. The population density is estimated to be
near 5,165 individuals per square kilometer available.
Addis Ababa Demographics

Per the population recorded at the last census, the city of Addis Ababa has a higher population of female
residents than male residents. Almost one-quarter of all people in Ethiopia that live in urban areas live in the
capital city. Close to half of the population is of the ethnic group Amhara, while the majority of the
remaining population is split among the groups Oromo, Gurage, and Tigray. 71% of the population use
Amharic, Oromo is in use with just over 10% of the people, with four additional languages ranking more than
1% use among the population. Approximately 82% of the population is of the Orthodox Christian religion.
12.7% of residents are Muslim, 3.9% Protestant, less than 1% Catholic, and a smaller percentage following
other faiths. Adult literacy in the capital city is the highest among all of the country’s cities, at over 93% for
males and almost 80% for females. The city has a lower rate of infant mortality than the national average, and
over 98% of homes in the city have access to clean drinking water.
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Addis Ababa History

It is thought that the land that is the current site of Addis Ababa was first occupied and made a settlement in
the early to mid-15th century, although the city as it is known today was not founded until 1886. It’s
interesting to note that evidence of humans living in the area up to 100,000 years ago has been discovered.
Emperor Menelik II founded the city. When Menelik II was named as the emperor of Ethiopia, the first
capital area of Entoto was wrought with extreme cold and a scarcity of firewood - the empress pushed to have
the city moved to a warmer area nearby, and the city that developed was designated as the capital city. In
1936, the city was invaded by Italian troops and was liberated again five years later in 1941. The Organization
of African Unity was headquartered in Addis Ababa upon its creation in 1963. When it was replaced by
the African Union in 2002, the headquarters remained in the city. Today, the city’s government is headed by
the mayor and the city council. The city is considered to be one of the safest in Ethiopia. In terms of the
economy, Addis Ababa is very diverse. Trade and commerce are the most popular industries, followed by
manufacturing and production, homemaking, and civil administration. Tourism is a growing industry in the
area as more shopping centers, restaurants and attractions are built.
Addis Ababa Population Growth

Population in the near future is expected to grow to exceed 6.5 million residents. The annual growth rate of
the city has been estimated in recent years to be 3.8%. In prior years, growth has been as much as 8%. The
city is a thriving urban area in Ethiopia, and the jobs available in Addis Ababa, the availability of clean
drinking water and plumbing, and the many shops and businesses ensure that growth will continue to be
steady in this capital city well into the future. Addis Ababa's decentralization process is an example of a good
policy lost in implementation. The city of Addis Ababa implemented a new administrative structure in
2012, consolidating 190 Kebeles into 116 Woredas
Decentralization from Kebele to Woreda
Sub city No.of kebeles No.of Woredas
Addis Ketema 21 10
Akaki-Kaliti 19 11
Arada 16 10
Bole 22 14
Gulele 21 10
Kirkos 19 11
Kolfe 16 15
Lideta 17 10
Nifas Silk Lafto 18 12
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Yeka 21 13
Total 190 116
Source: Current Administrative map for Addis Ababa (For more detailed information, please
see Annex 7 & 8)
3. The market Study
3.1 Market Analysis
There are a number of factors which affects the demand of standardized mixed use and residential
apartment building. Of these factors, the most important to have influence is population growth and
the level of income. The currently expanding service industry in Sheger City and from every corner
of the country the city has been inviting skilled and unskilled labor forces to the center; in addition,
the number of both national and international offices has been increasing. Above all the increase in
the number of population 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 in the center or close to the road. As
clearly indicated in the introductory part of this proposal, Sheger City is the dynamically growing
urban center of Ethiopia. Though the market demand gap for mixed use and residential apartment
building is not clearly understanding 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 and residential apartment building is very high and hence the demand and the supply gap
is very wide. Rapid urbanization, one of the greatest socio-economic changes during the last five
decades or so, has caused the growth of squatter and informal housing all around the rapidly
expanding cities of the developing world (UN-Habitat, 2010).
Despite having one of the lowest proportions of urban population in the world at only 16.7 per
cent, Ethiopia is rapidly urbanizing at a high annual growth rate of 3.5 per cent. Addis Ababa,
the capital city, dominates the urban hierarchy with a population of 2,739,551 holding 23 per
cent of the total urban population in the country (CSA, 2007).Addis Ababa is the capital city
of Ethiopia which occupies an area of 522 square kilometers has an estimated 3 million
18
inhabitants. The city is sub-divided into ten sub- cities, each of which has an average
population of around 300,000 people.
The three largest sub-cities by population are Kolfe Keranio (with 463,417
inhabitants), Yeka (374,583) and Nefas Silk Lafto (341,743). In terms of land area, the
largest sub-cities are Akaki Kality, Bole, and Yeka each of which covers an area exceeding
80 square kilometers. Population densities vary considerably among the sub-cities, with
Addis Ketema and Arada showing the most densely populated neighborhoods while Bole
and Akaki Kality are the least densely populated sections of the city. Figure 1.1: Sub cities
of Addis Ababa and their respective size in
KM2
One of the continuing challenges posed by unprecedented urbanization in the developing

countries is the provision of adequate housing. Although population growth shows the
demand for housing, the rate of increase in households is believed to provide a direct
measure of potential housing demand. The 2007 census showed that the total number of
urban households in Addis Ababa exceeded the total number of housing units by
approximately 26,134, or about 4 per cent of the total urban households in the city.
Given this increase, the city's housing demand is increasing. Accommodating this
increased demand will require additional housing development and construction in the
city.
19
3.2 The Demand-Supply Gap
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 Addis Ababa City. Since Addis
Ababa City is an important commercial center in addition there is a significant increase in business
activates and hence increasing the number of traders. Even though there is a lack of quantitative
estimates that depict the actual demand and also the annual growth rate commercial facilities are
scarce in the city. As a result, there is a large gap between the developed and that of the supply for
modern Bank and cafeteria accommodation hence this project would not face any problem of
demand scarcity for it business center and it would provide good service to customers.
Supply of Premises
Through the creation of the cluster development program, the government has begun to address
the problem of the shortage of space for business operations. With the launch of the program,
businesses have had the opportunity to acquire spacious premises at affordable rents. The premises
have typically been used for production and operations activities. The table below shows the
number of working premises constructed and transferred from 2004 to 2011 in Addis Ababa:
Table 11: Working Premises Constructed and Transferred from 2004 to 2011 in Addis Ababa
Working Premise Beneficiaries

Constructed Transferred Male Female Total
Textile and Garment 47 39 4208 2042 6250
Construction 566 517 4283 1344 5627
Wood and Metal Work 966 938 3307 824 4131
Urban Agriculture 127 127 1201 553 1754
Food Processing 508 454 734 5291 6025
Total 2214 2075 13733 10054 23783
Source: Addis Ababa Micro and Small Scale Enterprise Development Agency
3.3 Current supply of mixed use and residential apartment 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
20
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 Sheger City in 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 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.
3.4 Future market or Demand of Ccommercial Building
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 or national
economy. Following our survey of office space users in several areas are mainly firms providing
banking, offices, cafeteria and restaurants, supermarkets, computer center service. 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. 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
21
3.5 Target customers
The target customers of this envisaged project include: -
1. Business Community
2. Business organization
3. The government bureau
4. Non-governmental organizations
3.6 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.
3.7 Competition
There are different forms of competition that may face the envisaged mixed use and residential
apartment 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 and
residential apartment building under discussion has diversified marketing strategies that could enable
it Cope 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’
22
strategies, the techniques they use in rendering the service, their customer handling methods, and
others. 0+.00000000000000000000000000Generally, the project has many other projects all over
Addis Ababa City villages which compete with it.
3.8 The project facilities and Services plan
In order to provide mixed use and residential apartment 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 rental Bed rooms, shops, offices,
restaurant and café service as well as Residential apartments at 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 Measure Unit price Total Benefit

in Birr
2 Basement Parking Service Cars 15/per hour 15*100*365=547,500
Ground Beauty salon, shop, M2 1250 1250*4000*12= 120,000,000.00

Computer Center,
Cafeteria and Restaurant
1st floor and Supermarket, Pharmacy, M2 950 950*4000*12= 91,200,000.00
4rd floor Banking & Insurance
5th floor -7th Different governmental M2 850 850*4000*12= 81,600,000.00

floor /other offices and Bed
rooms
8 floor-10
th th
Apartments M2 500 500*4000*12=48,000,000.00
floor
Total 341,347,500.00
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 and restaurant,
apartments and mall. Therefore, the sources of revenue have been classified in to one category
23
namely the rental of banking and supermarket, offices, shops, bedrooms restaurant and café based on
these classifications. Based on the market price of similar mixed use and residential apartment
building in the area, the envisioned buildings set the 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 341,347,500.00.
4 Technical Studies
4.1 Description of the project Service
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 twelve floors.
The purpose of the building explained as follows;
 The ground floor to fourth floor designed for different commercial business centers like banks,
supermarket, beauty salon(man and women), Computer center, pharmacy, internet café,
boutiques, different shops, bed rooms and other business activities,
 5-7floors designed for Offices.,8-10 floors designed for Bred rooms and residential Apartments.
4.1.1 Land Use Plan
The total land required for the envisioned project is estimated to be 5,000m2. The total area for the
construction of the building will be 4,000 M2, as revealed below.
Table 3: land utilization Plan
No Description Land M2
Basement Ground First floor-ten floor
1 Building 2 basement and (G+10)
1.1 2 Basement 1,000
1.2 Ground 1,000
1.3 First floor-Ten floor
Sub Total 1,000 1,000
24
1.3 Agro shopping Mall 4 blocks of G+3 3,000

1.3 shopping Mall blocks 1, 2, 3 and 4 3,000
1.3 Parking, up and down loading, walking 1,000
roads, Greenery and free spaces….
Total area 5,000M2
4.2 Construction work and Technology
4.2.1 Construction schedule
The construction project is proposed to be started on July 2023 and is expected to be finished on
February 2025. 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 and
Electrical install. Concrete activities include processes such as placing foundations and slab on deck.
The Building 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 will 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.
4.2.2 Architectural Design & Layout
Although functional spaces for the project were laid out in significant detail, the rest of the building
had designated spaces but 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
25
executive office spaces. The walls and partitions throughout the floor will congruent with the
structural frame and column locations.
4.2.3 Structural design
One of principle deliverables of the project is the structural design of the building. The structural
bays were coordinated with the layout of the building adjustments will be made to the bays if
specific layouts are necessary. The frame will be 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 will have completed for two frames; one of structural steel and one of
reinforced concrete. The structural steel frame will choose for further design based on cost per
square foot, local availability of material and constructability considerations, such as erection and
fabrication. The steel system will then have designed for lateral loading with necessary adjustment
being made to framing.
4.2.4 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 8 pounds per
square foot will be 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 1000 pounds per square was assumed. Loads will be calculated based on the
requirements of the minimum Design loads for Buildings and other Structures.
4.2.5 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
26
foundation plan was designed based upon maximum load carried from the 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.
4.2.6 Construction Plan and 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 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.
4.3 Utilities
A number of utilities world be put in place in order to ensure smooth functioning of the project.
These utilities include:
Table 4: Utilities
No Description Qty. Unit cost Cost (Birr)

1 Electricity supply, kWh 1,000,000 2.3*1000,000 2,300,000
2 Water Supplym3 134,000 10*134,000 1,340,000
3
Telephone and Internet Broadband 50,000
27
4
Fuel, Oil and lubricant 40,000 54*40,000 1,080,000
Total 6,860,000.00
5. Engineering and civil works
5.1 Land, Building and Civil Works
The Mixed use and residential apartment building has a total site area of 5,000 m 2. The open space
area has covered 1,000 m2 and the remaining 4,000 m2 is left for construction. The type of buildings
and its corresponding civil construction cost is given on Table 5.
Table 5: List of Building and Civil Works and Their Costs

No Description Total price
A. SUB-STRACTURE
No Description
Total price
A. SUB-STRACTURE
1 excavation and earth works
12,279,570.67
2 concrete work 15,436,546.34
Sub total 27,716,117.01
B. SUPER STRACTURE

1 Concrete work
20,753,358.45
2 Block work 11,997,401.40
3 Roofing 12,171,108.00
4 Carpentry and joinery
13,323,760.00
5 Metal works 24,820,860.00
6 Finishing 23,111,379.44
7 Painting 12,275,798.88
8 Electrical installation 20,236,330.00
9 Sanitary installation 22,151,022.00
Subtotal 160,841,018.17
A+B 188,557,135.18
Vat (15%) 27,983,570.277
28
Grand total
215,598,825.00
As shown on Table 5, the total cost of building and civil work is estimated at Birr 215,598,825 and
out of which the proponent has worked more than birr 160.8 million.
5.2 Manpower and training requirement
5.2.1 Manpower requirement
Table 6: MANPOWER REQUIREMENT & LABROUR COST
Sr. Position Req. No. Salary

Monthl Annual
No.
1. General manager 1 y
15,000 180000
2. Secretary 1 4,000 24,000
3. Head, finance & administration 1 10,500 126000
4. Production operator 30 30,000 360,000
5. Salesman 2 4,000 48,000
6. Ticket attendant 4 2,800 33,600
7. Receptionist 4 3,600 43,200
8. Mechanic 4 3,600 43,200
9. Financial clerk 1 800 9,600
10. Security officer 1 2,000 24,000
11. Snr. Technician 2 2,200 26,400
12. Chemist 2 2,400 28,800
13. Electrician 12 10,800 129,600
14. Restaurant attendant 20 16,000 192,000
15 Machinery service attendant 4 2,800 33,600
16 Accommodation attendant 20 16,000 192,000
17 Maintenance technicians 5 3,750 45,000
18 Purchaser 1 900 10,800
19 Security guards 7 4,900 58,800
20 Driver 5 3,500 42,000
21 Cashers 2 1,500 18,000
22 Cleaner 30 18,000 216,000
23 Messenger 20 13,000 156,000
24 Store keeper 2 1,400 16,800
25 Guard 40 28,000 336,000
26 File Attendant 10 6,800 81,600
27 Gardener 6 3,300 39,600
28 Laborer 10 4,500 54,000
Total 235 2,352,600
29
Workers benefit (25% of BS) 588,150

Grand total 2,940,750.00
5.2.2 Labor Availability
Workers for this type of plant are available throughout the year. No foreseeable problems are
expected as most of the work requires no previous skills.
5.3 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 and start rendering services. The time schedule for major activities is presented
below:Table 7: project Implementation schedule
SN Activities Date
1 Preparation Project Proposal October 2022
2 Land acquisition November 2022
3 Land requisition/approval November- December 2022
4 Bank loan processing January – June 2023
5 Site Development January 2023

6 Building and construction work February 2023 - November 2024
6 Preparation for service December, 2024
6 Service execution February, 2025
5.4. Organizational Structure
5.4.1 Organization and management
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 the owners. As clearly shown in the
30
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
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
31
 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
 Works in collaboration with general service to make sure tenants are well served
Owners
General Manager
Building Maintenance Marketing

administration Department Department
Personnel Promotion
Finance
&Property
Officers
32
IT, Supervisors
Electricit
y
Figure 1.organizational structure
5.6 Financial Requirement and Analysis
The financial resource is a prime resource for undertaking any activities. Hence for implementing
this mixed use and residential apartment building a total of 500,000,000.00 ETB is required. From
this 30% 150,000,000.00 birr will be covered by the promoter of the project while the rest 70 %
( 350,000,000.00) 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
S.N Description of works Total Cost in birr
1 Building materials and construction inputs 271,052,758.4
2 Site Development 50,050,000
3 Design and supervision 1,120,000.00
4 Vehicles 15,000,000.00
1 Year land lease
st
2,422,640
Total 339,645,398.4
Building Machineries and Equipment
SN Description Measure Qty Unit cost in Total cost in

ment Birr Birr.
1 Generator Unit 1 300,000.00 300,000.00
2 Carpentry tool box Set 1 27,000.00 27,000.00
3 Electrician tools box Set 1 18,500.00 18,500.00
4 Plumber tools kit Set 1 12,300.00 12,300.00
5 Fire extinguisher Unit 12 16,000.00 192,000.00
(Security Equipment)
6 Elevator Unit 1 750,000 750,000
Total 1,123,800 1,299,800
33
B. Vehicle
SN Description UOM Qty Unit Cost in Total cost in Birr Remark
Fr.
1 Mini-Bus Unit 2 6,000,000.00 6,000,000.00 Duty Free

2 Isuzuk track Unit 2 2,500,000.00 5,000,000.00 Duty Free
3 Pick up Unit 1 4,000,000.00 4,000,000.00 Duty Free
Total 15,000,000.00
C. Office Equipment
SN Description Measurement Qty Unit cost in Total cost in

birr Birr
1 Managerial tables Unit 1 12,600.00 12,600.00

2 Managerial chairs Unit 1 19,500.00 19,500.00
3 Office table with chair Unit 7 12,000.00 12,000.00
4 Secretarial table with chairs Unit 1 8,500.00 8,500.00
5 Computer with chairs Unit 1 15,000.00 15,000.00
6 Shelf Unit 3,500.00 3,500.00
7 Filing cabinets Unit 1 1,500.00 1,500.00
8 Guest chairs Unit 1 4900 4900
9 Fax & Telephone machine Unit 1 1,300.00 1,300.00
10 Carpet and Curtain LS 1 23,000.00
Total 101,800.00
Working Capital
Operating Expenses
SN List of Items Annual cost in birr Assumptions Used
1 Audit and legal fee 48,000.00 4000 br/per ,month
2 Stationery supplies 12,000.00 1000 br/month
3 Promotional Cost 40,000.00 Lump sum annual cost
4 Property Insurance 4,311,976.5 2% of the building
5 Cleaning Supplies 12,000.00 1000 br. Per month
6 Uniforms 12,000.00
34
7 Water consumption 5,000.00 2500 m3 by 3.15 br

8 Electric consumption 230,000.00 100,000KWH By Br.2.30
9 Fuel 38,000.00 2000 lit per year by Br.19
11 Telephone & fax 20,000.00 1800 per month
12 Repair expense 4,311,976.5.00 2% of building cost
13 Miscellaneous costs 40,000.00 6000 per month
Total 8,980,953.00
Pre-service Expenses
SN Description Cost in birr
1 Project proposal 100,000.00
2 Licensing fee and others
Total 100,000.00
Summary of Total initial investment cost
SN Description Cost in Birr Percentage Share

1 Land, building & civil works construction 215,598,825.00 43.11%
2 Building materials, machines & Equipment 227,745,598.00 45.55%
3 Vehicle 15,000,000.00 3.00%
4 Office Equipment 101,800.00 0.02%
5 Total fixed investment cost 458,446,223 91.68%
6 Salary expense 2,940,750.00 0.58%
7 Operation Expense 8,980,953.00 0.10%
8 Pre service Expense 100,000.00 0.02%
9 Total Working capital 41,553,777.00 8.31%
10 Sub total 500,000,000.00
Total initial investment capital 500,000,000.00 100%
35
6 Financial analysis
The financial analysis of this mixed use and residential apartment project is based on the data
presented in the previous chapters and the following assumptions: -
Finishing period 2 years

Source of finance 30 % equity
Debt finance 70 % loan
Bank interest 13%
Discount cash flow 10%
Accounts receivable 30 days
Raw material (perishable) 3 days
Raw Material (nonperishable) 30 days
Cash in hand 5 days
Accounts payable 30 days
Repair and maintenance 5% of equipment cost
6.1 Repair and Maintenance Cost
The annual repair and maintenance cost of the plant is estimated based on the following rates.
Table 8: Repair and Maintenance Cost

Item Rate
Machinery and equipment 5% of the total cost or Book value
Building and civil works 2% of the total cost or Book value

Utilities 5% of the total cost or Book value
6.2 Depreciation and Amortization
The following depreciation rates are applied to depreciate the assets of the project:
 Buildings and associated Civil works 5%, linear to scrap Value

 Machinery and Equipment’s 10%, linear to scrap Value
36
6.3 Total Revenue
Based on the projected profit and loss statement, the project will generate a profit throughout its
operation life. Annual net profit before tax increases from Birr 163,810,480 at the beginning of the
project to Birr 168,215163 during the last year of operation year. The detail is presented in Annex.
6.4 Discounted Payback Period
The payback period, also called pay–off period is defined as the period required recovering the
original investment outlay through the accumulated net cash flows earned by the project.
Accordingly, based on the projected cash flow it is estimated that the project’s initial investment
will be fully recovered within 3 year 9 months.
6.5 Cash flow
The projected cash flow of the envisaged project shows that the project would generate positive net
cash flows throughout the operation years. Cumulative cash flow generated by the project towards
the end of the first operation year will amount to Birr 168,091,250. At the end of the project life, this
amount will rise to Birr 1,680,912,500.00 the detail is presented in Annex.
6.6 Benefit cost ratio
The BCR is defined as the ratio of the sum of the project’s discounted benefits to the sum of its
discounted investment and operating costs.
When BCR > 1, accept the project
When BCR < 1, reject the project
When BCR = 1, be indifferent
n
Bt
 (1  r) t
t 0
BCR  n
Ct
 (1  r ) t
t 0
BCR is 5 and positive this indicates this project would return 5 birr in benefits for each birr spent.
37
6.7 Internal Rate of Return
The internal rate of return (IRR) is an indicator of the efficiency or quality of an investment. A
project is a good investment proposition if its IRR is greater than the rate of return that could be
earned by alternate investments or putting the money in a bank account. Accordingly, the IRR of the
project after tax is computed to be 34.13% indicating the viability of the project.
6.8 Net present value
Net present value (NPV) is defined as the total present (discounted) value of a time series of cash
flows. NPV aggregates cash flows that occur during different periods of time during the life of a
project into a common measuring unit i.e. present value. It is a standard method for using the time
value of money to asses’ long-term projects. NPV is an indicator of how much value an investment
or project adds to the capital invested. In principle a project is accepted if the NPV is non-negative.
Accordingly, the net present value of the project at 10% discount rate is found to be Birr
554,439,417which is acceptable.
7. Conclusions and Recommendations.
The objective of this proposed feasibility study is primarily to facilitate the entrepreneur with the
investment information and provide an overview about project. The proposed feasibility may form
the basis of an important investment decision and in order to serve this objective, the document
covers various aspects of Concept Development, Start-up, Production, Marketing, Finance and
Business Management. The feasibility is based on the information obtained from various
agricultural sources as well as discussions with businessmen. For financial model, since the
forecast/projections relate to the future periods, actual results are likely to differ because of the
events and circumstances that don’t occur frequently as expected. Whilst due care and attention
has been taken in performing the exercise, no liability can be inferred for any in-accuracy or
omissions reported from the results thereof. It is essential that our report be read in its entirety with
financial model in order to fully comprehend the impact of key assumptions on the range of values
determined.
The project is accessible and has the necessary infrastructure such as road, telephone, water and
electric power. The proposed project clearly identifies all the necessary equipment, inputs,
38
management of the company and the required man power. The highest authority in the project will
be vested in the hand of the owner. He will control the overall activities of the proposed project.
Demand projection divulges that there is high demand for feed production in the country.
Accordingly, the planned project is set to provide quality products in the area.
The proposed project possesses wide range of economic and social benefits such as increasing the
level of investment, tax revenue and employment creation for both women and youths. It will have
also environmental concerns to protect it by planting trees around its working area and by utilizing
environmental friendly raw materials. Generally, the project is technically feasible, financially and
commercially viable as well as socially and economically acceptable. Hence the project is worth
implementing.
Recommendations
Financial sensitivity analysis shows that the project is highly sensitive to decrease in sales revenue
but relatively less sensitive to increase in raw material and investment costs. Therefore, it is
recommended that the company should give a great attention for the possible reasons for sales
reduction. In this case, different mechanisms should be selected and implemented to increase sales.
In addition to this, the company should decrease its cost that lowers profitability. The project must
utilize modern promotional styles to capture the planned market share. To do so, it has to design
effective strategy to achieve this plan.
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. In this case, any delaying to implement the
project creates some problem on its profitability as there is always change like change in price of
services and goods, cost of raw materials, customers preference and purchasing power etc.….So, it is
recommended that investors should implement the project as soon as possible before any change
occurred.
39
Annex 1. Sales Revenue

Description Project year
1 2 3 4 5 6 7 8 9 10
Ground floor Rent
2100000 2310000 2544000 2796000 3072000 3384000 3720000 4092000 4500000 4950000
Size m 2
6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
unit price
350 385 424 466 512 564 620 682 750 825
Rent for shop and office 1-4
floor 2100000 2310000 2544000 2796000 3072000 3384000 3720000 4092000 4500000 4950000
Size
6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
unit price
350 385 424 466 512 564 620 682 750 825
Rent for shop and office 5-7
floor 2100000 2310000 2544000 2796000 3072000 3384000 3720000 4092000 4500000 4950000
Size
6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
unit price
350 385 424 466 512 564 620 682 750 825
Rent for residence Apartments
8-10 floor 2100000 2310000 2544000 2796000 3072000 3384000 3720000 4092000 4500000 4950000
Size
6000 6000 6000 6000 6000 6000 6000 6000 6000 6000
unit price
350 385 424 466 512 564 620 682 750 825
40
Parking Basement area

91,250 100,375 110,413 121,454 133,599 146,959 161,655 177,820 195,602 215,163
Size
3000 3000 3000 3000 3000 3000 3000 3000 3000 3000
unit price
5 5.50 6.05 6.66 7.32 8.05 8.86 9.74 10.72 11.79
Total Sale
168,091,250 168,100,375 168,110413 168,121454 168,133599 168,146959 168,161655 168,177820 168,195602 168,215163
Annex 2.
operating cost
Operating years of the project
Description 1 2 3 4 5 6 7 8 9 10
A. Direct cost

Raw Material
Cost
227,745,598 227,745,598 227,745,598 227,745,598 227,745,598 227,745,598 227,745,598 227,745,598 227,745,598 227,745,598
Sub-total
Total Direct cost

B. Indirect cost
 Wages and 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750 2,940,750
Salary
 Repair and 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50
Maintenance
 Property 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50 4,311,976.50
Insurance
 Utility 1,188,000 1,247,400 1,309,770 1,375,259 1,444,021 1,516,222 1,592,034 1,671,635 1,755,217 1,842,978
 Land lease 422,640 422,641 422,642 422,643 422,644 422,645 422,646 422,647 422,648 422,649
 Advertising 50,000. 50,001.0 50,002.00 50,003.00 50,004.00 50,005.00 50,006.00 50,007.00 50,008.00 50,009.0
and Promotion 00 0 0
 40,000. 40,001.0 40,002.00 40,003.00 44,003.30 48,403.63 53,243.99 58,568.39 64,425.23 70,867.7
Miscellaneous 00 0 5
41
Expense
Total operating 13,265,343 13,324,746 13,387,119 13,452,611 13,525,375.3 13,601,978.63 13,682,632.99 13,767,560.39 13,857,001.23 13,951,206.75
cost
Annex.3 income statement
Operating years of the project
Description 1 2 3 4 5 6 7 8 9 10
Sales Revenue
168,091,250 168,100,375 168,110413 168,121454 168,133599 168,146959 168,161655 168,177820 168,195602 168,215163
Less: Operating 13,265,343 13,324,746 13,387,119 13,452,611 13,525,375. 13,601,978.6 13,682,632. 13,767,560. 13,857,001.2 13,951,206.75
3 3 99 39 3
cost
Income before
Depreciation and
interest 155,091,250 155,100,375 155,110413 155,121454 155,133599 155,146959 155,161655 155,177820 155,195602 155,215163
Less: interest 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00 00.00
Income before
Depreciation 155,091,250 155,100,375 155,110413 155,121454 155,133599 155,146959 155,161655 155,177820 155,195602 155,215163
Less: 0.00 0.00 667,449 667,450 667,451 667,452 667,453 667,454 667,455 667,455
Depreciation
Profit /Loss
Before Tax 155,091,250 155,100,375 155,110413 155,121454 155,133599 155,146959 155,161655 155,177820 155,195602 155,215163
Less: Tax (35%) 54288644. 54288644 54288644 54288644. 54288644 54288644 54288644. 54288644.5
55 .55 .55 55 .55 .55 55 5
42
Net Profit or 100821768.4 100821768. 100821768. 100821768.4 100821768. 100821768. 100821768.4 100821768.45
Loss After Tax 5 45 45 5 45 45 5
155,091,250 155,100,375
Annex. 4 loan disturbance
Installment Periods (in years )
Item 0 1 2 3 4 5 6 7 8 9 10
Loan
disbursed 350,000,000,.00
Principal
35,000,000.0 35,000,00 35,000,00 35,000,00 35,000,000.0 35,000,000. 35,000,000.0 35,000,00 35,000,00 35,000,00
35,000,000.00 0 0.00 0.00 0.00 0 00 0 0.00 0.00 0.00
Interest
(13%) 4,550,000.00 4,550,000.00 4,550,000. 4,550,000. 4,550,000. 4,550,000.00 4,550,000.0 4,550,000.00 4,550,000. 4,550,000. 4,550,000
00 00 00 0 00 00 .00
Total 39,550,000.00 39,550,000.0 39,550,00 39,550,00 39,550,00 39,550,000.0 39,550,000. 39,550,000.0 39,550,00 39,550,00 39,550,00
0 0.00 0.00 0.00 0 00 0 0.00 0.00 0.00
Outstandin
g Balance
395,500,000
43
Annex. 5 Man power
Sr. No. Position Req. No. Salary (Birr)

Monthly Annual
1. General manager 1 15,000 180000
2. Secretary 1 4,000 24,000
3. Head, finance & administration 1 10,500 126000
4. Production operator 30 30,000 360,000
5. Salesman 2 4,000 48,000
6. Ticket attendant 4 2,800 33,600
7. Receptionist 4 3,600 43,200
8. Mechanic 4 3,600 43,200
9. Financial clerk 1 800 9,600
10. Security officer 1 2,000 24,000
11. Snr. Technician 2 2,200 26,400
12. Chemist 2 2,400 28,800
13. Electrician 12 10,800 129,600
14. Restaurant attendant 20 16,000 192,000
15 Machinery service attendant 4 2,800 33,600
16 Accommodation attendant 20 16,000 192,000
17 Maintenance technicians 5 3,750 45,000
18 Purchaser 1 900 10,800
19 Security guards 7 4,900 58,800
20 Driver 5 3,500 42,000
21 Cashers 2 1,500 18,000
22 Cleaner 30 18,000 216,000
23 Messenger 20 13,000 156,000
24 Store keeper 2 1,400 16,800
25 Guard 36 28,000 336,000
44
26 File Attendant 10 6,800 81,600

27 Gardener 6 3,300 39,600
28 Laborer 10 4,500 54,000
Total 243 2,352,600
Workers benefit (25% of BS) 588,150
Grand total 2,940,750.00
Annex 6. discounted cash flow

Investment
Descriptio Project Life years
Year
n
0 1 2 3 4 5 6 7 8 9 10
INFLOW
Net sales
0
revenue 168,091,250 168,100,375 168,110413 168,121454 168,133599 168,146959 168,161655 168,177820 168,195602 168,215163
TOTAL
0
INFLOWS 168,091,250 168,100,375 168,110413 168,121454 168,133599 168,146959 168,161655 168,177820 168,195602 168,215163
OUTFLO

WS
Investment 500,000,00
cost 0.00 - - - - - - - - - -
Operating 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343
0
cost
Income tax 54,288,644. 54288644.5 54288644. 54288644. 54288644.5 54288644.5 54288644. 54288644. 54288644. 54288644.55
0 55 5 55 55 5 5 55 55 55
TOTAL 67,553,987. 67,553,987. 67,553,98 67,553,98 67,553,987. 67,553,987. 67,553,98 67,553,98 67,553,98 67,553,987.5
45
OUTFLO 500,000,00 55 7.55 7.55 55 55 7.55 7.55 7.55 5

55
WS 0.00
NET
CASH 500,000,00 101,091,25 101,091,25 101,091,25 101,091,25 101,091,25
FLOW 0.00 101,091,250 101,091,250 0 0 101,091,250 101,091,250 0 0 0 101,091,250
NET PRESENT VALUE (NPV) 101,091,250
INTERNAL RATE OF RETURN (IRR) 34.13%
DISCOUNTED PAYBACK PERIOD (DPBP) 8.9 years
Annex 7 undiscounted cash flow

Project Years
Investment
Description Operating years
Year
0 1 2 3 4 5 6 7 8 9 10
INFLFOWS
Inflow Funds
Own Equity
150,000,000,.00
Long-term Loan 350,000,000.00 0 0
Inflow Operations 168,12145 168,13359 168,14695 168,16165 168,17782 168,19560 168,21516

168,091,250 168,100,375 168,110413 4 9 9 5 0 2 3
Sales revenue 0 168,091,250 168,100,375 168,110413 168,12145 168,13359 168,14695 168,16165 168,17782 168,19560 168,21516
TOTAL INFLOWS 168,12145 168,13359 168,14695 168,16165 168,17782 168,19560 168,21516
168,091,250 168,100,375 168,110413 4 9 9 5 0 2 3
500,000,000.00
OUTFLOWS
Investment cost 500,000,000.00
Operating cost 0 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343 13,265,343
Financing Cost
· Principal 35,000,000. 35,000,000. 35,000,000. 35,000,000 35,000,000 35,000,000 35,000,000 35,000,000 35,000,000 35,000,000
0
00 00 00 .00 .00 .00 .00 .00 .00 .00
·Interest
0
4,550,000.0 4,550,000.0 4,550,000.0 4,550,000. 4,550,000. 4,550,000. 4,550,000. 4,550,000. 4,550,000. 4,550,000.
46
Income Tax 54,288,644. 54288644.5 54288644.5 54288644. 54288644. 54288644. 54288644. 54288644. 54288644. 54288644.
0
TOTAL 93,838,644. 93,838,644. 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644
OUTFLOWS 93,838,644.
500,000,000.00
NET CASH FLOW 74,252,605.. 74,252,605.. 74,252,605.. 74,252,605 74,252,605 74,252,605 74,252,605 74,252,605 74,252,605 74,252,605
0
45 45 45 ..45 ..45 ..45 ..45 ..45 ..45 ..45
BEGINNING CASH 93,838,644. 93,838,644. 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644 93,838,644
BALANCE 93,838,644.
0 55 55 .55 .55 .55 .55 .55 .55 .55
55
ENDING CASH 168,091,250 168,100,375 168,110413 168,12145 168,13359 168,14695 168,16165 168,17782 168,19560 168,21516
BALANCE
0
47

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BUSINESS PLAN FOR TESFAYE ALEMU MIXED USE BUILDING

PROJECT PROPOSAL FOR THE DEVELOPMENT OF 2

THE PROJECT TO BE IMPLIMENTED IN SHEGER CITY,

PROJECT OWNER: -TESFAYE ALEMU

ETHIOPIA, ADDIS ABABA

Table 1: Office Space Demand Forecast…………………………………………. 12

Table 3: land utilization Plan ………………………………………….……….…..16

Table 6: Manpower Requirement and Annual Labor Cost………………………22

Table 7: project Implementation schedule………………………………………. 23

Table 8: Repair and Maintenance Cost ……………………………………………3

PROJECT TITLE Tesfaye Alemu Mixed Use Building

PROJECT OWNER Tesfaye Alemu

LAND REQUIREMENT 0.5 Hectares (5,000 M2)

PROJECT AREA Shegr City, Koye Feche sub-city

PRODUCTION CAPACITY 2 B+ G+10 Building and 2 blocks of G+3 Malls

EMPLOYMENT 243 PERMANENT SKILLED AND 204 LABOURERS

PROJECT LIFE 10 YEARS

NUMBER OF WORKING 365 DAYS

FINANCIAL VIABILITY ( AT 10% DISCOUNT RATE )

NPV (NET PRESENT VALUE) 554,439,417.00 BIRR

IRR (INTERNAL RATE OF RETURN) 34.13%

PBP ( PAY BACK PERIOD) 8 year and 9 month

2.1 General Background

Ethiopia is undergoing a transformation. The East African state is prioritizing a wealth of

Affordable housing construction keeps pace with Ethiopian demand

Ethiopian infrastructure construction remains robust

Commercial building work underway in Ethiopia

Ethiopia’s building projects keep on rolling

Inefficiencies of construction projects

 Construction inputs are costly due to import fees.

Opportunities in the Ethiopian construction industry

2 The Organization Objectives

2.1 General Objective

2.1.1 Specific objective

Commercial Mixed Use Building

Floor facilities /service

2.3 Project description

2.4 Project Rationale

2.5 The significance of the project

2.6 Project Location

Addis Ababa Size

Addis Ababa Demographics

Addis Ababa History

Addis Ababa Population Growth

Decentralization from Kebele to Woreda

Sub city No.of kebeles No.of Woredas

Nifas Silk Lafto 18 12

Total 190 116

3. The market Study

3.1 Market Analysis

One of the continuing challenges posed by unprecedented urbanization in the developing

3.2 The Demand-Supply Gap

Working Premise Beneficiaries

3.3 Current supply of mixed use and residential apartment building

3.4 Future market or Demand of Ccommercial Building

Table 1: Office Space Demand Forecast

3.5 Target customers

The target customers of this envisaged project include: -

3.6 Marketing promotion and strategy

3.8 The project facilities and Services plan

2 Basement Parking Service Cars 15/per hour 15100365=547,500

Ground Beauty salon, shop, M2 1250 1250400012= 120,000,000.00

5th floor -7th Different governmental M2 850 850400012= 81,600,000.00