Cost Planning and Management Report: Nest Apartments Project

This report presents a comprehensive cost planning and management analysis for the proposed Nest Apartments residential development in Adelaide, Australia. It begins with an executive summary and proceeds to detail the total measurement of the Gross Floor Area (GFA), estimated construction costs based on square foot estimation and regional variations, and the functional areas of the development. The report reviews the design elements and proposes value management options, including function analysis, target costing, and building information modeling, to enhance project delivery. It recommends a fixed price contract and outlines essential tender documentation for better pricing. The analysis considers project objectives, constraints, and the current economic climate, offering a detailed assessment to aid the client's investment decision.

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COST PLANNING & MANAGEMENT
Name
Course
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University
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Cost Planning & Management
Executive Summary
This report presents a summary of various elements that will enable successful
completion of the proposed Nest Apartments to be built in Adelaide, Australia. The total GFA of
this three-level residential development is 895.49 m2. Based on historical data, the estimated
cost of the project will vary from $1,844,758.70 to $2,254,705.05 (average of $2,049,731.85 –
$2,288.95/m2). All the functional areas of the building are similar to those of similar
developments. The design elements of the development are also adequate to perform the
intended function and achieve the objectives of the project. The management options that the
client can use to enhance successful delivery of the project are: function analysis, FAST,
cost/worth, SMART, value drivers, creative techniques, target costing, lean construction,
building information modelling, prefabrication, automation, nanotechnology. Considering the
project objectives, constraints and delivery method, the suitable contract type for this
development is fixed price or lump sum contract. To get better pricing, the client should provide
the following documentation to the tenderers: general conditions, special conditions, bill of
quantities, drawings and specifications.

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Table of Contents
Executive Summary...................................................................................................................................2
1. Introduction.......................................................................................................................................4
2. Total Measurement of GFA..............................................................................................................4
3. Expected Order of the Cost of the Development.............................................................................6
4. Functional Areas of the Development..............................................................................................8
5. Design Review....................................................................................................................................9
6. Value Management Options...........................................................................................................11
7. Type of Contract..............................................................................................................................14
7.1. Advantages...............................................................................................................................15
7.2. Disadvantages...........................................................................................................................15
8. Tender Documentation....................................................................................................................15
References................................................................................................................................................17

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1. Introduction
This report presents a wholesome review of the proposed residential property
development project. The project is a three-storey residential building, called Nest Apartments,
that is to be built along Tucker Street in Adelaide, SA. The project has to be completed within a
specified timeframe so that the University students can start using the building immediately. The
client is concerned about several issues including uncertainty of the immediate global economy
growth and the heavy reliance of the Australian residential market on the Chinese investor
market. As a result, the client has requested a review of several elements of the project including:
total measurement of the ground floor area (GFA), expected order cost of the development,
functional areas of the development, design value of the project, value management option,
suitable type of contract, and required tender documentation. Findings from this report will help
the client make a decision on whether to invest in the project or not.
2. Total Measurement of GFA
Ground floor area (GFA) is a building’s total amount of floor space (square footage). It is
determined by measuring the length and width of internal walls of the building and multiplying
the two measurements. In this scenario, GFA is determined as the sum of fully enclosed covered
area (FECA) and unenclosed covered area (UCA) (Australian Property Institute, (n.d.)). FECA
refers to the sum of the building’s fully enclosed covered areas including basements, penthouses,
garages, floored attics and roof spaces, enclosed porches, staircases, lift shafts, equipment rooms,
vertical ducts, and the building’s usable areas (Branson, 2014); (International Code Council,
2015). UCA refers to the sum of all unenclosed building floor covered areas including open
verandahs, roofed balconies, open covered ways, porticos and porches, unenclosed access

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galleries, usable space that is under the building, and other trafficable covered areas (James Cook
University, 2014).
The car park is on the ground level of the main building hence included in the GFA
The balconies in this project are roofed hence included in the GFA
Ground level:
= [(2400 + 2300 + 2300 + 2400)] x [(2180 + 3170 + 3040 + 2320 + 2350 + 4100 + 4100)] –
[(2300 + 2400) x 1637]
= [9400 x 21260] – [4700 x 1637]
= [9.4m x 21.26m] – [4.7m x 1.637m]
= 199.844m2 – 7.6939m2 = 192.1501m2 = 192.15m2
Level 1:
= [4260 + 5050] x [(3640 + 2180 + 3170 + 3040 + 2320 + 2350 + 4100 + 4100)]
= [9310] x [24900]
= 9.31m x 24.9m = 231.819m2 = 231.82m2
Level 2:
= [8992] x [(3640 + 2180 + 3170 + 3040 + 2320 + 2350 + 4100 + 4100)] + [½ x 4823 x (1456 +
1820)]
= [8992] x [24900] + [½ x 4823 x 3276]
The last part is the area of trapezoidal balcony on level 2

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= [8.992m x12.9m] + [½ x 4.823m x 3.276m]
= [223.9008m2] + [7.9m2]
= 231.8m2 = 231.80m2
Level 3:
= [(4260 + 5050)] x [(3640 + 2180 + 3170 + 3040 + 2320 + 2350 + 4100 + 4100] + [½ x 4823 x
(1456 + 1820)]
The last part is the area of trapezoidal balcony on level 3
= [9310] x [24900] + [½ x 4823 x 3276]
= [9.31m x 24.9m] + [½ x 4.823m x 3.276m]
= [231.819m2] + [7.9m2]
= 239.719m2 = 239.72m2
Total GFA = GFA of ground level + GFA of level 1 + GFA of level 2 + GFA of level 3
= 192.15m2 + 231.82m2 + 231.80m2 + 239.72m2 = 895.49m2
Therefore the GFA of the proposed residential development in this project is 895.49m2.
3. Expected Order of the Cost of the Development
There are different methods of estimating the cost of a residential building. Accurate
estimation of construction cost of a building requires data including the building’s plans and
sections, specifications of different elements of the building, and rates of each elements
(Misronet.com, (n.d.)). The cost of the development in this project is determined by multiplying
the total GFA with the estimated construction cost of a residential development in Adelaide,

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Australia. This method is referred to as square foot estimation method. In this, dimensions in
design drawings of the building are used to estimate GFA that is then multiplied by the unit cost
(cost per square foot) obtained from historical data (Cullen, 2016). This is a quick method of
estimating cost of a building project. The historical data is mainly obtained from previous
experiences of similar projects (Bettini, et al., 2016). The level of finish of the building also
affects the cost per square meter (Mortgage House, 2018). The finish levels are classified as: low
or basic, medium or standard and high or luxury (Kempthorne, 2018). Each region is also unique
and therefore has different construction cost per square meter. Hence it is important to consider
regional variations when estimating the cost of construction. In this scenario, the regional
variation of Adelaide is applied. The level of finish for this project is medium/standard. The
estimate cost per square meter of a three-level unit with a ground floor parking and concrete
structure with medium/standard finish in Sydney is $2,255. The regional variation of Adelaide is
95% - 108% (MBT Quantity Surveyors, 2018). This means that the construction cost per square
meter of the same unit in Adelaide costs between $2,142.25 and $2,435.40. The average of these
two is $2,288.95, which is used as the cost per square meter of the proposed residential
development in this project.
Thus the construction cost of the proposed project is: 895.49m2 x $2,288.95/m2 = $2,049,731.85
Considering the ± 10 %, the cost can vary from $1,844,758.70 and $2,254,705.05. It is important
to note that the price is exclusive of GST.
The costs have been determined by considering the GFA of the proposed residential
development, number of levels of the building, the structure and type of materials of the
building, type of finish of the building, estimated construction cost per square meter of a similar
project based on historical data, and regional variation (Adelaide region).

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4. Functional Areas of the Development
Sample calculations of areas of the various elements of the building on level 3 are as follows:
Living areas:
Living/dining = 4.26m x 4.823m = 20.55m2
Amenity (bathroom) areas:
Bath = 1.82m x 1.82m = 3.31m2
Bath2 = 0.728m x 2.73m = 1.99m2
Kitchens:
Kitchen1 = 3.64m x 2.548m = 9.27m2
Kitchen2 = 4.26m x 0.819m = 3.49m2
Bedrooms:
Master bedroom = (3.276m x 4.55m) + (1.82m x 2.73m) = 14.91m2 + 4.97m2 = 19.88m2
Bedroom1 = (3.185 x 2.73m) + (1.729m x 0.728m) = 8.70m2 + 1.26m2 = 9.96m2
Bedroom2 = (3.276m x 3.276m) + (0.728m x 1.638m) = 10.73m2 + 1.19m2 = 11.92m2
Outdoor space
Balcony = 9.31m x 0.819m = 7.62m2
From the calculations above, the areas of different elements of the building are similar with other
new developments. This is because the sizes of different elements of the building are within
reasonable range to the typical sizes of similar developments.

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5. Design Review
Since the client is keen in providing superior quality to the street frontage and improved
interiors, the elements that should remain because of their value to the client include the
following:
Balustrades: all the types of balustrades provided (aluminium, stainless steel and
galvanized steel balustrades) should remain because they have the capacity to perform the
intended function of enhancing safety of the occupants and also provide adequate aesthetic value
to the client.
Screens and finishes: the provided screens and finishes on the elevations of the building
(both internal and external) should remain because they are of high quality and provide high
aesthetic value to the client.
Balconies: the balconies provide great aesthetic value and are also designed to provide
occupants with an outdoor space to relax or store their items. Therefore the balconies should
remain.
Exposed block walls: these walls should remain because they provide high aesthetic
value to the client besides performing their intended function adequately.
Compressed fibrous cement (CFC) sheeting: all the CFC sheeting types provided for the
stairs element should remain because besides increasing the sustainability of the building, it
provides value to the client.
Stairs: the stairs should remain as they are because they will facilitate movement of
occupants from one floor to another. Their sizes are adequate and are made of suitable materials.
They are also have high aesthetic value.

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Columns and beams: the columns and beams of the building should remain because of
their role in structural integrity of the building.
Fire rated ceiling: the ceiling should remain because its properties are adequate to protect
the indoor of the building against fire and also provide the required aesthetic value.
Ceiling plasterboard: this should remain because it is able to provide the required
aesthetic value by the client and also help regulate indoor air temperature and sound.
Roof sheeting: the roof sheeting should remain because it has a strong metal cover and
insulation blanket that provides the required cover for the building and also helps in improving
indoor environment by reducing entry of excess heat and light into the building.
Eaves and box gutters, and downpipes: they should remain because they are effective in
collecting rainwater hence will enable the client harvest adequate rainwater and manage it easily.
Joints: the various joint types or systems used should also remain because they provide
the required supports and connections for various components of the building to make it a
continuous integrated system.
Internal shelving, doors and other interior elements: these elements should remain
(together with their finishes) because they have the capacity to perform their intended functions
and also provide high aesthetic value to the client.
Hot water unit: t should remain because it will provide the required heated water for
consumption by the students occupying the building.
Air conditioning unit: it should remain because it has the capacity to regulate the indoor
air temperature and thermal comfort.

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Parapet wall: this wall has to remain because besides acting as a security barrier and
providing privacy to the occupants, it also increases the aesthetic value of the development.
6. Value Management Options
Value management plays a very key role in maximizing value for money in all types of
construction projects (Oke & Ogunsemi, 2009). Some of the main benefits of value management
are: encourages creativity and innovation; improves common knowledge and communication
among stakeholders involved in the project; improves the quality of final products or services
provided; results to better decision making; saves time; enhances competitiveness in the
construction industry; and increases value for money; among others (Oke, 2017); (Zhao & Moh,
2016). In general, the concept of value management is to select designs and materials that
provides high quality at the lowest cost possible (Oke & Aigbavboa, 2017). Some of the value
management solutions that can help the client increase the value or reduce the cost of the project
include the following:
Function analysis: the client should involve professionals to analyze the functions of the
development and clearly state the target objectives. This involves comprehensive analysis and
definition of the main objectives to be achieved, the things that must be done right so as to
achieve the target objectives, the things that should be considered when designing the project,
and the impact of the chosen designs in achieving these targets. The cost of each function has to
be determined so as to establish appropriate ways of reducing it as much as possible.
Function analysis system technique (FAST): this is the technique where all stakeholders
(from different professions) involved in the project communicate effectively so as to give their

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views on how the cost of the project can be minimized. This mainly involves answering the
how/why questions.
Cost/worth: this is where the client analyzes the lowest cost possible that can be incurred
to achieve a particular function of various elements of the building. This helps in determining
alternative designs, materials or construction processes for each element of the building.
Simple multi-attribute rating technique (SMART): this is the process of identifying
various objectives of the project and their respective attributes on how to achieve then objectives
followed by ranking them based on their importance to the project.
Value drivers: some of the applicable value drivers in this project are: achieve or enhance
the desired financial performance; comply with necessary constraints of the third party; project
the right image of the project; minimize operational costs and maximize operational efficiency;
ensure effective management of procurement process; attract and retain occupants; improve the
environment; reduce maintenance costs; and ensure safety and health during project lifecycle.
Value engineering entails establishing the functions of a service or product, identifying the
functions’ worth, and identifying suitable functions that will meet the desired performance of the
structure being built at the lowest cost possible (Mahadik, 2015).
Creative techniques: this is where innovation is applied to reduce the cost of the project
or increase its value. There are numerous creative techniques that can be used such as use of
nanomaterials, modern construction methods, etc.
Target costing: this is where the cost of the project is determined based on what the client
is ready to pay. This means that the designs of the building have to be developed by considering