KURUWITU HOUSING ESTATE DEVELOPMENT 29TH July 2011
DESIGN 1-HIGH DENSITY HOUSING
PROJECT COST BREAKDOWN
The Total Project cost is KES 3,217,371,680.00[construction, consultancy, marketing,bank interest]
NET PROFITS
The total sales are estimated as follows:
Number of Houses:
1 Bedroomed: 164 units @ KES 2,950,000
2 Bedroomed: 164 units @ 3,650,000.00
3 Bedroomed: 164 units @ 5,900,000.00
4 Bedroomed: 164 units @ 7,300,000.00
TOTAL SALES: KES 4,329,600,000.00
TOTAL EXPENDITURE: KES 3,217,371,680.00
NET PROFIT= KES 1,112,228,320.00 [AS OF CURRENT YEAR 2011 PRICES]
NET PROFIT= KES
1,668,342,480.00 [AS OF YEAR 2014 PRICES -assuming a 16% annual increase in prices]
PARTICIPATION IN 2 OPTIONS:
There are 2 Options for PRISM DESIGNS AFRICA www.a4architect.com participation in this project.
OPTION 1.
PRISM DESIGNS AFRICA www.a4architect.com is contracted to offer Architectural services only.
In this case PRISM DESIGNS AFRICA will offer full Architectural services as per CAP 525 of the Laws of Kenya at 6 % of the total construction cost.
FEE CALCULATIONS FOR OPTION 1:
Total construction cost for the project is KES 2,186,448,000.00
6% of KES 2,168,448,000.00 = KES 131,186,880.00 .
TOTAL=KES 131,186,880.00
In this case, the Developer sources for and funds the other components required totalling KES 240,509,280.00 namely:
Quantity Surveying: 3% of KES 2,168,448,000.00 = KES 65,593,440.00
Structural Engineering:2.5% of KES 2,168,448,000.00.=KES 54,661,200.00
Electrical & Mechanical Engineering: 2.5% of KES 2,168,448,000.00.= KES 54,661,200.00
Project Management=2% 0f KES 2,168,448,000.00 =KES 43,728,960.00
Legal fees =1% of KES 2,168,448,000.00 = KES 21,864,480.00
TOTAL:KES 240,509,280.00 .
TOTAL including Architectural fees: =KES 12,802,200.00.
Advantages:
Less workload on the Architect firm[PRISM DESIGNS AFRICA www.a4architect.com].
Disadvantages:
Developer deals with many consultants hence delay in transmission of information within consultants, land owner , bank, sales team and potential buyers.
More expensive since there is no discount .
More expensive since Land owner arranges to meet the balance of 15% Equity contribution required by the Bank before construction works commence without PRISM DESIGNS AFRICA www.a4architect.com’s contribution.
OPTION 2.
PRISM DESIGNS AFRICA www.a4architect.com provides all consultancy services namely:
Architecture: 6% of KES 2,168,448,000.00 = KES 131,186,880.00
Quantity Surveying: 3% of KES 2,168,448,000.00 = KES 65,593,440.00
Structural Engineering:2.5% of KES 2,168,448,000.00.=KES 54,661,200.00
Electrical & Mechanical Engineering: 2.5% of KES 2,168,448,000.00.= KES 54,661,200.00
Project Management=2% 0f KES 2,168,448,000.00 =KES 43,728,960.00
Legal fees/Bank transaction advisory services=1% of KES 2,168,448,000.00 = KES 21,864,480.00
TOTAL INCLUDING Architectural fees: =KES 371,696,160.00
Discount:KES 371,696,160.00 minus KES 284,238,240.00= KES 87,457,920.00 .
TOTAL=KES 284,238,240.00
Advantages:
PRISM DESIGNS AFRICA offers a discount of KES 87,457,920.00 .
PRISM DESIGNS AFRICA offers fees as contribution to total project equity. These fees are structured to be paid once Bank approves the loan and the rest are paid after houses are sold.This will be arranged through a Memorandum of Agreement to be signed by both parties.
A minimal initial percentage is paid out at the signing of the agreement.
Developer is saved from incuring high cash ammounts at the commencement of the project since PRISM DESIGNS AFRICA offers to contribute consultancy fees as equity as per Memorandum of Agreeement.
Disadavantage:
Large workload to PRISM DESIGNS AFRICA www.a4architect.com.
AGREEMENT
Once we are in agreement to the above,
We can commence to draft the Contract Agreement for signing and commencement of works.
The schedule is as follows:
1. Signing of Agreement. August 2011
2. Application for Financing from Bank.-August 2011
3. Production of Drawings and Bills of Quantities/Marketing-. September 2011
4. Approval of Drawings by Kilifi County Council-October 2011
5. Construction & Pre-Sales-October/November 2011
6. Completion of Project.-Phase 1-MARCH 2012
Phase 2-JULY 2012
Phase 3-NOVEMBER 2012
Phase 4-MARCH 2013
Phase 5-AUGUST 2013
Phase 6-DECEMBER 2013
Phase 7-APRIL 2014
Phase 8-AUGUST 2014
Phase 9-DECEMBER 2014
KURUWITU ESTATE DEVELOPMENT 2 29TH July 2011
DESIGN 2-MIDDLE DENSITY HOUSING
PROJECT COST BREAKDOWN
The Total Project cost is KES 871,090,000.00 [construction, consultancy, marketing,bank interest]
NET PROFIT
The total sales are estimated as follows:
Number of Houses:110
SALE PRICE-KES 16,000,000.00[to go higher as demand increases]
TOTAL SALES: KES 1,760,000,000.00
TOTAL EXPENDITURE: KES 871,090,000.00
NET PROFIT= KES 888,910,000.00.
PARTICIPATION IN 2 OPTIONS:
There are 2 Options for PRISM DESIGNS AFRICA www.a4architect.com participation in this project.
OPTION 1.
PRISM DESIGNS AFRICA www.a4architect.com is contracted to offer Architectural services only.
In this case PRISM DESIGNS AFRICA will offer full Architectural services as per CAP 525 of the Laws of Kenya at 6 % of the total construction cost.
FEE CALCULATIONS FOR OPTION 1:
Total construction cost for the project is KES 594,000,000.00
6% of KES 594,000,000.00= KES 35,640,000
TOTAL=KES 35,640,000
In this case, the Developer sources for and funds the other components required totalling KES 50,490,000.00 namely:
Quantity Surveying: 3% of KES 594,000,000.00= KES 17,820,000.00
Structural Engineering:2.5% of KES 594,000,000.00.=KES 14,850,000.00
Electrical & Mechanical Engineering: 2.5% of KES 594,000,000.00=KES 14,850,000.00
Legal fees =0.5% of KES 594,000,000.00 =KES 2,970,000.00
TOTAL:KES 50,490,000.00
TOTAL including Architectural fees: =KES 86,130,000.00
Advantages:
Less workload on the Architect firm[PRISM DESIGNS AFRICA www.a4architect.com].
Disadvantages:
Developer deals with many consultants hence delay in transmission of information within consultants, land owner , bank, sales team and potential buyers.
More expensive since there is no discount .
More expensive since Land owner arranges to meet the balance of 15% Equity contribution required by the Bank before construction works commence without PRISM DESIGNS AFRICA www.a4architect.com’s contribution.
OPTION 2.
PRISM DESIGNS AFRICA www.a4architect.com provides all consultancy services namely:
Architecture: 6% of KES 594,000,000.00= KES 35,640,000
Quantity Surveying: 3% of KES 594,000,000.00= KES 17,820,000.00
Structural Engineering:2.5% of KES 594,000,000.00.=KES 14,850,000.00
Electrical & Mechanical Engineering: 2.5% of KES 594,000,000.00=KES 14,850,000.00
Legal fees =0.5% of KES 594,000,000.00 =KES 2,970,000.00
TOTAL including Architectural fees: =KES 86,130,000.00
Discount:KES 86,130,000.00 minus KES 62,370,000.00= KES 23,760,000.00 .
TOTAL=KES 62,370,000.00.
Advantages:
PRISM DESIGNS AFRICA offers a discount of KES 23,760,000.00.
PRISM DESIGNS AFRICA offers fees as contribution to total project equity. These fees are structured to be paid once Bank approves the loan and the rest are paid after houses are sold.This will be arranged through a Memorandum of Agreement to be signed by both parties.
A minimal initial percentage is paid out at the signing of the agreement.
Developer is saved from incuring high cash ammounts at the commencement of the project since PRISM DESIGNS AFRICA offers to contribute consultancy fees as equity as per Memorandum of Agreeement.
Disadavantage:
Large workload to PRISM DESIGNS AFRICA www.a4architect.com.
AGREEMENT
Once we are in agreement to the above,
We can commence to draft the Contract Agreement for signing and commencement of works.
The schedule is as follows:
1. Signing of Agreement. August 2011
2. Application for Financing from Bank.-August 2011
3. Production of Drawings and Bills of Quantities/Marketing-. September 2011
4. Approval of Drawings by Kilifi County Council-October 2011
5. Construction & Pre-Sales-October/November 2011
6. Completion of Project.-Phase 1-MARCH 2012
Phase 2-JULY 2012
Phase 3-NOVEMBER 2012
KURUWITU ESTATE DEVELOPMENT 31st JULY 2011
DESIGN 3-LOW DENSITY HOUSING
PROJECT COST BREAKDOWN
No. of Houses 174.00
PROFIT 1,140,722,250.00
Profit Margin-excluding land cost 26 per cent
TOTAL PROJECT COST 2,687,277,750.00
TOTAL CONSTRUCTION COST 1,866,150,000.00
CONSULTANCY
OPTION 1-Individual consultants each with own contract
Architectural+ Project Management6% 111,969,000.00
Quantity Surveying3% 55,984,500.00
Structural Eng.2.5% 46,653,750.00
Mech/Elec Eng.2.5% 46,653,750.00
Legal fees0.5% 9,330,750.00
total 270,591,750.00
OPTION 2-www.a4architect.com to handle all consultancy:8% lumpsum 149,292,000.00
Yours faithfully,
Arch. Francis Gichuhi Kamau. B.Arch. Nbi.
Registered Architect. Reg. Number A1085.
www.a4architect.com
PRISM DESIGNS AFRICA
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