StudentShare solutions
Triangle menu

Construction Economics - Essay Example

Extract of sample
Construction Economics

2.0 Basis of the Report and Assumptions The report is based on the relevance of cost benefit analysis in determining the feasibility of a project. It is assumed that the developer is aware of the prevailing market rates but is not conversant with the costing strategy that can match the rates. The essence of this report is therefore to recommend the actions on whether the project is viable or not depending on the cost benefit analysis results (Schmitt, B., 2007). 3.0 Site Location Information The construction site is located in London, towards the south east of England. It has a conglomeration of retail constructions, residential and commercial properties. The environment is well developed and the area has easy accessibility to the center of London City. The plan is to have the ground floor as a shell for tenants who intend to rent to fit them out to their suitability. The rest of the floors will be for multipurpose businesses. Figure 1: Rental Units in the Commercial area Figure 2: Rental Units in the Residential Area 4.0. Market Conditions Affecting Value The construction site is in a prime area. The demand in the area for real estate properties is so high in the area pushing the cost of acquisition and development of the plot to go up. ...
assessment, the competition from other developers in the area could be a challenge however setting competitive rates will be advantageous to the business (Schmitt, B., 2007). Also the inflation rates in the real estate property market could be a challenge however with the stability in the market the rates could be manageable to the stakeholders. Using the same assumptions, the future demand may be unbearable but the value of the project may be a great advantage to the stakeholders in the future. The high demand for land in the area and the continued rising rates is propelling the already high costs. 5.0 Developers Budget 5.1. Development Cost The cost of development at the present market value covers the cost of acquisition of the site together with the cost of labor and construction materials. The budget for the development is as follows: Demolition: ? 150,000 Planning costs and fees, including s.106 agreement – upgrading infrastructure: ? 250,000 Site surveys: ? 25,000 Construction costs: Infrastructure: ? 273,000 Landscaping: ? 15,000 Structure: ?1,100/m2 Extra for office floors: ? 550/m2 Extra for residential floors: ? 650/m2 5.2. Expected return Out of the budget, the return from the rental units will determine whether the expenses are higher than the earnings or less. The present market rates for residential property units will earn about ?500 per month, coming to about ?6000 per unit per month. For the 7 rental units available, the total earning will be ?42000 per year. For every office unit, the project will earn about twice that of residential units, which is about ?84, 000 per year. Parking will be expected to earn about ?10000 per year, making the total annual revenue a consolidated estimate of about ?136000 per year. With the continuous growth in market ...Show more

Summary

CONSTRUCTION ECONOMICS (Course No.) (Lecturer) (University) 1.0 Introduction This is a report on the feasibility of the commercial block development project in Basingstoke, Hampshire UK. The development is to take place on a piece of land measuring 60 Meters by 60 Meters…
Author : ygleason
Construction Economics essay example
Read Text Preview
Save Your Time for More Important Things
Let us write or edit the essay on your topic
"Construction Economics"
with a personal 20% discount.
Grab the best paper

Related Essays

A basic outline of economic considerations that come to play in construction management
Throughout the report, an attempt will be made to define the economic concerns of construction and engineering management in such a way that proactive steps can be outlined for UK construction management stakeholders to successfully navigate the difficult economic environment of modern construction management.
10 pages (2500 words) Essay
Regulations Influencing The UK Construction Industry
Regulations Influencing the UK Construction Industry. Globally, there has been a mounting concern focusing on the diverse environmental effects associated with the construction sector. Since the Rio de Janeiro’s Earth Summit held back in 1992, both sustainable development and sustainability have captured substantial attention in all global industries, particularly the construction industry.
3 pages (750 words) Essay
Construction Economics Assignment
House prices doubled in just four and a half years. In their rush to buy a house before prices were raised any further, many people in this period borrowed as much as they were able. Building societies and banks at that time had plenty of money to lend and were only too willing to do so.
8 pages (2000 words) Essay
The UK Construction Industry
According to the paper builders and craftsperson’s still confront the age-old problems posed in the aboriginal search for dwellings. Issues of ventilation, illumination, and structural support, which challenged their historical predecessors, are confronted daily by engineers, architects, and tradespersons. Cave dwellers would no more be apt to build a wintry fire in a low-domed cliff aperture than would a twentieth-century architect design a sealed office structure without air-conditioning.
12 pages (3000 words) Essay
Economics Essay, applying Porter's Diamond to the construction industry
Moreover, they are providing international technologies in infrastructure building of developing nations. This in turn creates a globalized business environment in their countries. The construction industry is usually urban-based industry as the major
10 pages (2500 words) Essay
Economics of Construction is the class... i need a 3 page paper on Describe the federal reserve system and the various ways it effects the market economy
This can be better understood in the framework of quantity theory of money, which is expressed as M * V = P * Q where M is money supply; V is the velocity of money; P is price
4 pages (1000 words) Essay
Construction Economics
There is no single entity that is large enough to control or dictate price, demand or supply. The behaviour and decisions of any competitor or customer does not affect the market. The market carries a homogeneous
12 pages (3000 words) Essay
What are the most important economic concepts that determine the structure of the construction industry
Economics has been integrated in the construction sector through what is referred as construction economics that does not deviate much from the study of pure economics. The first concept introduced is the distribution of scarce resources amongst the competing needs. In the
4 pages (1000 words) Essay
CONSTRUCTION ECONOMICS - preparing BUDGET FORECAST and a ELEMENTAL COST PLAN (all info will be attached)
In the business and economics world forecast include the future expectation of costs or sales to be made or incurred with comparison of the previous costs. They, therefore, entails a significant factor in profit
5 pages (1250 words) Essay
Get a custom paper written
by a pro under your requirements!
Win a special DISCOUNT!
Put in your e-mail and click the button with your lucky finger
Your email
YOUR PRIZE:
Apply my DISCOUNT
Comments (0)
Rate this paper:
Thank you! Your comment has been sent and will be posted after moderation