Project Feasibility Study of Residential Duplex Development

This document is a project feasibility study of residential duplex development in Mount Barker, South Australia. It includes information about the goals, objectives, time and budget constraints, construction company, project execution, site location analysis, market analysis, and project timeline.

Running Head: STRATEGIC PROJECT MANAGEMENT
Project Feasibility Study of Residential Duplex Development
Name of the Student
Name of the University

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Table of Contents
Introduction......................................................................................................................................2
The Project Proposal........................................................................................................................2
Time Constraint...............................................................................................................................2
Budget Constraint............................................................................................................................3
Construction Company....................................................................................................................3
The Project.......................................................................................................................................3
Construction Based on Phased Characteristics................................................................................4
Budget..............................................................................................................................................4
Sales Projections..............................................................................................................................5
Project Execution.............................................................................................................................5
Site Location Analysis.....................................................................................................................5
The Market.......................................................................................................................................5
Competitive Factors.........................................................................................................................6
Project Timeline...............................................................................................................................6
Structure of Fees..............................................................................................................................8
Conclusion.......................................................................................................................................9
References......................................................................................................................................10

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Introduction
Australian Government has recently taken a new initiative of increasing the population of
some regional areas that are sparsely populated in order to make balance for the overly populated
large cities in the country. As a part of the initiative, the government has sent instructions to the
local district councils to appoint construction companies for building residential duplexes so that
more people can move in to the selected areas. One such chosen site is Mount Barker, a small
town near Adelaide, South Australia, which is home to around 17,000 people. Mount Barker
District Council has selected a piece of property on the northernmost point of Whittaker Terrace
(Area 10,000 sq. ft.) on which the proposed residential duplex will be constructed. The budget
allocated for the project is $800,000 that cannot be further exceeded.
The Project Proposal
As per the requirement of the project, the following goals and objectives are proposed.
 To purchase piece of property for construction work
 To construct a residential duplex with 20 apartments
 To rent out apartments for the new residents
 To promote growth of population in Mount Barker
Time Constraint
Time is a major constraint for the project as the time frame has been strictly set for 9
months only (Walker 2015). As per the given conditions, the given timeframe cannot be

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exceeded or the construction company will face penalty depending on the number of days
exceeded from the deadline.
Budget Constraint
Budget is also a constraint factor in the project since it is fixed at $800,000 without any
extra funding (Fewings and Henjewele 2019). As per the terms and conditions, this budget
cannot be exceeded and in case of cost overrun, the construction company will have to pay for
extra themselves.
Construction Company
The chosen construction company is Schiavello Group, an Australia based construction
company. The selection of the company has been done through a detailed tender process in his
the tender terms and conditions were released and companies were called for bidding (Sears et
al. 2015). Schiavello Group was the one with the best bid – they have agreed to contract in which
they will complete the construction for $250,000 in addition to the land price of $400,000. The
construction company will also have the ownership over the duplex in which, the rooms will be
rented out for new residents.
The Project
The project involves construction of a residential duplex on the selected property at
Whittaker Terrace, Mount Barker, South Australia. Schiavello Group will own and construct the
residential duplex on the 10,000 sq. ft. of land within the total allocated budget of $800,000. The
duplex will cover 9000 sq. ft. of area and will have rooms for 20 families. Moreover, Schiavello

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Group will have 9 months of time to execute the entire project after which, the rooms will be
made available for rent. The company also needs to ensure sufficient quality is provided during
the construction so that the people are more interested in renting the rooms and staying.
Construction Based on Phased Characteristics
The entire project will comprise of four main phases – planning, initiation, execution and
closing. During the entire planning phase, the project roadmap will be developed along with the
definition of various attributes like scope, objective, schedule, budget and others. During the
initiation phase, the preparations for the project will be undertake including deployment of the
human resources, purchase of resources, hiring heavy machineries and vehicles and others
(Harrison and Lock 2017). By the end of the initiation phase, the property should be ready for
construction work. During the entire execution phase, the construction work will be done that
includes excavation of the ground for foundation building, infrastructure development, structural
development, plumbing works, electrical works and others.
Budget
The overall project budget breakdown is shown as follows.
Budget Element Estimated Budget
Land Price $400,000
Construction Materials and Vehicles $125,000
Wages of the Workers $125,000
Stamp Duty $15,000
Conveyancing Fees $20,000

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Development Planning Fees $25,000
TOTAL $710,000
Sales Projections
As per the initial sales projection, it has been found that all the apartments will be rented
out soon after the construction is complete. Since, there are 20 apartments and the rent for each
apartment is decided at $7500 per month, the total expected monthly rent is about $150,000.
Considering all monthly expenditures, the gross monthly income from the duplex is estimated to
be $147,250.
Project Execution
During the entire execution phase, the construction work will be done that includes
excavation of the ground for foundation building, infrastructure development, structural
development, plumbing works, electrical works and others (Demirkesen and Ozorhon 2017).
Further breakdown of activities are shown in the Gantt chart posted later in the document.
Site Location Analysis
The chosen site is just about 34 km away from Adelaide City Centre and hence, it is very
convenient to visit the nearby large city in case of requirements. Moreover, Mount Barker is fast
growing and soon will be very much habitable for the urban population with all modern facilities
and amenities available.

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The Market
Currently, there are a number of construction companies operating in Australia and
hence, Schiavello needs to be aware of the market before construction and renting out of the
apartments. Moreover, the market will also affect the land price as well as the prices of materials
required for the project.
Demographics can also have impact on the market as the interests of the people in
moving to a regional location needs to be grown in order to rent out the apartments (Saunders et
al. 2017). Sufficient marketing is required for the same and also the prices of the apartment rent
should be kept as reasonable as possible.
Competitive Factors
If there is a rush of new residents in the chosen area, market competition will increase
significantly as other companies will also start purchasing properties and thus, the property
values will increase significantly.
Project Timeline
The project timeline is shown in the following table along with a Gantt Chart as shown.
WBS Task Name Duration Start Finish Predecessors
0 Residential Duplex Construction 162 days Mon 02-09-19 Tue 14-04-20
1 Project Planning Phase 24 days Mon 02-09-19 Thu 03-10-19
1.1 Reach Agreements for the Project 1 day Mon 02-09-19 Mon 02-09-19
1.2 Receive Approval for the Project 1 day Tue 03-09-19 Tue 03-09-19 2
1.3 Determine the Scope of the Project 2 days Wed 04-09-19 Thu 05-09-19 3
1.4 Define the Scope Specific Objectives for the 2 days Fri 06-09-19 Mon 09-09-19 4

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Project
1.5 Determine the Total Costs to be Encountered 4 days Tue 10-09-19 Fri 13-09-19 5
1.6 Develop Specific Schedule for the Project 3 days Mon 16-09-19 Wed 18-09-19 6
1.7 Identify the Risks Associated with the Project 5 days Thu 19-09-19 Wed 25-09-19 7
1.8 Develop Suitable Risk Management Plan 3 days Thu 26-09-19 Mon 30-09-19 8
1.9 Develop Quality Plan for the Project 3 days Tue 01-10-19 Thu 03-10-19 9
1.10 Proceed to the Project 0 days Thu 03-10-19 Thu 03-10-19 10
2 Project Initiation Phase 19 days Fri 04-10-19 Wed 30-10-19
2.1 Recruit Workers for Construction Work 6 days Fri 04-10-19 Fri 11-10-19 11
2.2 Divide Teams for the Construction Work 2 days Mon 14-10-19 Tue 15-10-19 13
2.3 Hire Heavy Machineries and Vehicles 3 days Wed 16-10-19 Fri 18-10-19 14
2.4 Purchase Construction Vehicles 3 days Mon 21-10-19 Wed 23-10-19 15
2.5 Clear the Property for Construction Work 5 days Thu 24-10-19 Wed 30-10-19 16
3 Project Execution Phase 98 days Thu 31-10-19 Mon 16-03-20
3.1 Land Excavation for Foundation Building 5 days Thu 31-10-19 Wed 06-11-19 17
3.2 Construction of Building Foundation 5 days Thu 07-11-19 Wed 13-11-19 19
3.3 Fill Remaining Area of Land 5 days Thu 14-11-19 Wed 20-11-19 20
3.4 Setting Up Building Infrastructure Using
TMT Rods 25 days Thu 21-11-19 Wed 25-12-19 21
3.5 Construction of the Walls with Bricks 10 days Thu 26-12-19 Wed 08-01-20 22
3.6 Application of Mortar and Concrete 3 days Thu 09-01-20 Mon 13-01-20 23
3.7 Windows Cut Out 2 days Tue 14-01-20 Wed 15-01-20 24
3.8 Doors Cut Out 2 days Thu 16-01-20 Fri 17-01-20 25
3.9 Electrical Wiring Works 10 days Mon 20-01-20 Fri 31-01-20 26
3.10 Water Connection Works 10 days Mon 20-01-20 Fri 31-01-20 27FF
3.11 Plastering of Walls 10 days Mon 03-02-20 Fri 14-02-20 28
3.12 Electrical Outlet Installation 3 days Mon 17-02-20 Wed 19-02-20 29
3.13 Water Outlet Installation 4 days Thu 20-02-20 Tue 25-02-20 30
3.14 Interior Colour 4 days Wed 26-02-20 Mon 02-03-20 31

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3.15 Exterior Colour 4 days Tue 03-03-20 Fri 06-03-20 32
3.16 Safety Systems Installation 6 days Mon 09-03-20 Mon 16-03-20 33
3.17 Hand Over the Duplex 0 days Mon 16-03-20 Mon 16-03-20 34
4 Project Closing Phase 21 days Tue 17-03-20 Tue 14-04-20
4.1 Review the Entire Project 5 days Tue 17-03-20 Mon 23-03-20 35
4.2 Review the Duplex Rooms and Amenities 4 days Tue 24-03-20 Fri 27-03-20 37
4.3 Validation of the Project 3 days Mon 30-03-20 Wed 01-04-20 38
4.4 Release Advertisement for Room Rent 3 days Thu 02-04-20 Mon 06-04-20 39
4.5 Finish All Payments 4 days Tue 07-04-20 Fri 10-04-20 40
4.6 Stakeholder Sign Off 2 days Mon 13-04-20 Tue 14-04-20 41
4.7 Closing of the Project 0 days Tue 14-04-20 Tue 14-04-20 42
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38
Project Planning Phase
Project Initiation Phase
Project Execution Phase
Project Closing Phase
Weeks
Project Timeline
Structure of Fees
The fees structure is shown in the following table along with the feasibility study results.
Project Feasibility Study
1. Land Information 2. Purchase Information
Land Address: Whittaker Terrace, Mount Barker, SA Land Price: $4,00,000
Suburb/Town: Mount Barker Stamp Duty: $15,000

9STRATEGIC PROJECT MANAGEMENT
Land Size: 9000 sq. ft. Conveyancing Fees: $20,000
3. Local Council Information 4. Construction Information
Local Council Name: Mount Barker District Council Builder Name: Schiavello Construction
Minimum Land Allotment Size: 10000 sq. ft. Duplex Construction Costs: $2,50,000
Development Planning Fees: $25,000
Monthly Council Rates: $2,500
5. Duplex Information
Duplex Estimated Value: $10,00,000
Monthly Rental Income: $1,50,000
Monthly Agent Fees: $1,000
Monthly Landlord Insurance: $1,750
6. Project Results
Equity Value = $1000000 Duplex Value of $1000000 les
s Total Outgoings of $710000 equals $290000
Net Monthly Rental Income = $147250 Gross Monthly Rent of $150000 les
s Holding Costs of $5250 equals $144750
Conclusion
Finally, as a result of the feasibility study, it can be concluded that as per the financial
estimations, the project is feasible economically and considering other external factors like

10STRATEGIC PROJECT MANAGEMENT
demographics and the market, the project has high chance of success once it is implemented and
the construction work is completed.
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