Project Report-Residential Building Construction

Construction Consultant Group SAC

info@ccgrworld.com, 00511-4213895 January 2012

CONTENTS
Executive Summary ............................................................................................................. 3 Project Details ...................................................................................................................... 4 3.1 Project Synopsis ......................................................................................................... 4 3.2 Project profit and loss Statement .............................................................................. 4 Market Analysis Summary ................................................................................................... 1

EXECUTIVE SUMMARY
The project report is written to demonstrate that the investment for a residential building, provides substantial profits and these profits can be realized in a short time of typically 1 1/2 years from the date of investment. The residential building is built on a typical land area of 500 sq m which is standard plot area in the district of Miraflores, San Isidro, Surco and San Borja. The permitted number of levels is 4 floors a restriction by the Municipality of the area where the project has to be undertaken. The investment can be of two types: 1. An investment to purchase land where the residential building can be constructed. This is typically USD 0.5 million. Rest of the cost of the project can be financed through bank loans. 2. Investment for the land and the building. This is typically USD 1 million. In both cases the investment is required for a period of 1 years. From the report below the following can be summarized: The profit is of the order of USD 442,000 for an investment of USD 500,000 which is approximately 23% of the project value. The shortfall of supply of the apartments is of the order of 300,000 for Lima and therefore sales of apartments will be easy. The land can be hypothecated to the Bank until the loan is paid. In this case option of the investment type for land only can be chosen.

PROJECT DETAILS
3.1 PROJECT SYNOPSIS
The project report is written for a project to be constructed in the district of Surco. The land admeasures 500 sq m. The plan consists of construction of a residential building of 4 levels. Each level will have two apartments with one of the 4th level flat being a duplex and extending to the 5th level. In consideration of the rules of the Municipality the free space will be approximately 30% of the total area.

3.2 PROJECT PROFIT AND LOSS STATEMENT

The following chart and table show projected costs for the project. As it can be noted from the table that the net profit this project will be approximately US $ 442,000 which is approximately 23% of the project value.

TABLE 1-PROJECTED PROFIT AND LOSS STATEMENT

UNIT COST US $ Area Buildings Number of Floors Cost of Land Alcabala-land tax (2% of the land cost ) Apartment construction Cost Basement Construction cost Common Areas Construction cost (Inside Building) Common Areas Construction cost (Outside Building) Common Areas Construction (Outside Building) UNITS AREA (M2) 500 1 4.5 per sq m per sq m per sq m per sq m per sq m per sq m per sq m AREA (M2) 1395 300 230 150 WITHOUT TAX WITH IGV/ALCABALA

1000.00 NA 500.00 250.00 250.00 250.00 150.00

1000.00 20 595 297.50 297.50 297.50 178.50

CONSTRUCTION COST US $ Apartment construction Basement Construction Common Areas Construction (Inside Building) Common Areas Construction (Outside Building) Total Construction Cost TOTAL EXPENSES US $ Land Cost+Alcabala Construction Cost General Cost Engineering and Licensees Administrative Expenses Financial Cost Project Management Advertising Commission for land lords Sub Total Total Expense 3.00% 8.00% 5.00% 13.00% 20.00% 2.00% 0.00%

US $/M2 500.00 250.00 250.00 250.00

SUBTOTAL % 697,500.00 75,000.00 57,500.00 37,500.00 867,500.00 80.40% 8.65% 6.63% 4.32% 100.00% IGV NA NA 4,944.75 13,186.00 8,241.25 0.00 32,965.00 3,296.50 0.00 62,633.50 62,633.50

US $/M2 595.00 297.50 297.50 297.50

SUBTOTAL 830,025.00 89,250.00 68,425.00 44,625.00 1,032,325.00

% 80.40% 8.65% 6.63% 4.32% 100.00% % 27.09% 46.08% 1.65% 4.39% 2.74% 5.99% 10.97% 1.10% 0.00% 26.83% 100.00%

SUBTOTAL 510,000.00 867,500.00 26,025.00 69,400.00 43,375.00 112,775.00 173,500.00 17,350.00 0.00 442,425.00 1,819,925.00 AREA (M2)

TOTAL 510,000.00 867,500.00 30,969.75 82,586.00 51,616.25 112,775.00 206,465.00 20,646.50 0.00 505,058.50 1,882,558.50

REVENUES US $ Sale Price of Apartments Apartment area/sales

PRICE 1400.00

IGV 266.00

PRICE AFTER TAX 1,666.00

1395

1,953,000.00

371,070.00 2,324,070.00

Total PROFITS US $ REVENUE EXPENSE PROFIT

1,953,000.00 TOTAL 2,324,070.00 1,882,558.50 441,511.50

371,070.00 2,324,070.00 % 100.00% 81.00% 23.00%

MARKET ANALYSIS SUMMARY

The total market demand in the Lima, Peru construction industry sector is huge. It is estimated that the shortfall in apartments was 300,000 for fiscal year 2012.

CHART 1: APARTMENT DEMAND THAT WAS NOT SATISFIED IN LIMA AND CALLAO (IN THOUSANDS)*

Year Demand *Source: CAPECO

2002 206.7

2003 230.5

2004 206

2005 230.7

2006 267.3

2007 283

As can be noticed from the above data that there is no dearth of demand and it will be easy to get customers with minimum advertisement.