This report depicts the role of the strategic project management practices and their application in the practical field to gain commercial profit and competitive advantages as well. For this real estate project the chosen location is 33, Englorie Park Drive, New South Wales, Australia. It is possible that, the success of this project will increase the income and the equity. The project defines a real estate business for which cash is reserved for commercial funding development project. The total investment estimated for the successful implementation of the project is $800,000. Besides the funding the total time that has been allotted for the completion of this project is 9 months. A feasibility calculation study details along with a details timeline are also represented in this report for this project.
project constraints
For this specific duplex construction project triple project constraints are chosen in terms of time, budget and scope. It is determined that if three of these constraints are properly chosen by the project manager then the project will meet the success criteria and all other components.
Budget
This is mandatory for the construction project manager to define the project budget accurately to ensure that the planned cost and the actual cost of the project are almost equal. This is the responsibility of the finance manager to allot the budget in such a way so that within estimated time it can accomplish the activities within the estimated budget. It is also determined that if the finance manager fails to estimate the budget then, the project will face different construction level challenges. The total budget estimated for this project is $800,000.
Time
Based on the project requirements it is estimated that, the duplex construction project should be completed within 9 months. If the project time is increased then the cost of the project will also be interrupted. For reducing the project complexity the project manager should divide the large project in small activities. Again, for each of the project activity resources and budget will be allotted accordingly. It is the role of the resources to accomplish their allotted job roles within the estimated timeframe without any kind of extension.
Scope
The project scope is the approved project documentation. The documentation stars with project charter, which demonstrates the details of the project including the project goals, in scope and out scope also. Not only this but also the stakeholders associated to the project are also mentioned in the document. The scope creep, kick off meeting, communication patter, resource management and also risk management approaches considered for this project are also elaborated in the project scope. Whether the estimated budget according to time and activity are feasible are not is calculated for the duplex construction project. In addition to this, representation of the project timeline is another scope of this project.
Project goals
The goal of the project is define and calculate a project feasibility study based on the macro environment and the mocro environment of the project. The macro environment of the project is determined considering the economic, competitive, demographic and resource factors. On the other hand, the micro environment of the project is estimated based on the technical, internal expertise, externals factors etc. The feasibility report of the project is dependent on the timeline that has been allotted as to be 9 months for the project.
Feasibility report
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Project Feasibility Study |
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1. Land Information |
2. Purchase Information |
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Land Address: |
33, Englorie Park Drive, New South Wales, Australia |
Land Price: |
250,000 |
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Suburb/Town: |
Glen Alpine (Subrub) |
Stamp Duty: |
$18,000 |
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Land Size: |
12,000 square feet |
Conveyancing Fees: |
$8,000 |
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3. Local Council Information |
4. Construction Information |
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Local Council Name: |
Campbell town City Council |
Builder Name: |
Silverdale building Pty Limited (Builders an building construction) |
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Minimum Land Allotment Size: |
12,000 square feet |
Duplex Construction Costs: |
$350,000 |
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Development Planning Fees: |
$80,000 |
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Monthly Council Rates: |
$8,000 |
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5. Duplex Information |
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Duplex Estimated Value: |
$800,000 |
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Monthly Rental Income: |
$90,000 |
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Monthly Agent Fees: |
$8,000 |
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Monthly Landlord Insurance: |
$9,000 |
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6. Project Results |
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Equity Value =100,000 |
Duplex Value of $800000 |
less |
Total Outgoings of $706000 |
equals $94000 |
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Net Monthly Rental Income = 70,000 |
Gross Monthly Rent of $90000 |
less |
Holding Costs of $25000 |
equals $65000 |
The feasibility of any project is analyzed considering some important factors. It can evaluate the potential or success of any project thus, for credible study of the potential project investors well as lending institution feasibility is an important factor to be considered (Mir & Pinnington, 2014). Different types of feasibility calculation applications are available such as technical feasibility, economic feasibility, legal, operational and schedule feasibility etc. If any of the result shows negative resultants then the project will be identified as a loss one.
The key benefits that may gained from the successful implementation of the project include the followings:
For the duplex resident building construction project the factors that are considered, demonstrated in the below section:
Conveying fees: This is referred to as a legal act that is applied while selling and buying home (Takey & de Carvalho, 2015). This act is again differentiated in two different parts such as legal fees and disbursements. The cost which the solicitors require to pay to the third party is the solicitor charge. For the duplex building construction project the cost is $8000.
Stamp duty: The stamp duties are different for different countries. In order to avoid frauds it is mandatory for the building owner to have a legal ownership (Ling & Yanti, 2016). During the registration of the building the stamp pay is the particular money amount that needs to be paid by the owners to the government to won the legal ownership For this project the tax amount requires to be paid by the owners are $18,000.
Value for duplex project: For the successful completion of the construction of the duplex project is $800,000.
From the feasibility report it has been found that, the total outgoing and holding cost for the project are respectively $706000 and $25000. The total rental income for the project is $70,000 and the equity value for the construction project is $100,000. In addition to the gross monthly rent is also being calculated which is $90,000 for the duplex construction project.
Gantt Chart
Figure 1: Time schedule developed for the project
(Source: Created by author)
Macro environment is referred to as a condition which exists within the economy as a whole. The estimated project macro environment deals with different trends in the gross domestic products, inflation rate, employment, fiscal policy and other spending. With the general business life cycle of the business is highly related (Martens & Carvalho, 2017). It is found that the business life cycle process opposed to the performance of a complete business sector. In order to drive the duplex residential construction project towards commercial success these macro environmental factors are considered. The factors are demonstrated in the below section:
Economic
In the real estate industry the role of all the economic factors play very crucial role. From the current market analysis it has been analyzed that, for inventory fluctuation both the unstable market situation and tight lending requirements the construction companies have to adjust along with the new economy (Backlund, Chronéer & Sundqvist, 2014). Thus, it can be said that with the help of the proper economic support the health of the construction industries will become much stronger. Apart from the economy can also affect the competition. If the economies are found to get booming then that time the manager need not to worry much about the competition. The economic support acts as a business driver and can easily drive the project towards massive growth and success. As the residents will be ready for rent hi income can be gained from that. Basically with the help of the economic support whether the driving forces are helpful or not can be calculated accordingly.
Competitive
The location that has been chosen for this construction project is in New South Wales (NSW), Australia, where the population is growing simultaneously and currently has a more than around 10,000 residents. Additionally, many similar service providers are also there thus, it is the responsibility of the project head to provide some additional services to grab and attract more number of clients throughout. With quality service, high competitive advantages can be gained by the project owners.
Resource
In order to complete the duplex residential construction project successfully it is mandatory for the project manager to assign accurate resources (physical and human) to the project (Cao et al., 2015). The construction resources for this project include products, materials, plat or location for the duplex building construction, space and facilities, equipments and tools, sub contractors, contractors and financial support. The issues with the traditional resource management can be mitigated if proper automated resource management plan s implemented for the project. The overall construction level efficiency of the business will increase if the automated system is implemented.
Demographic factors
Demographic factor deals with the gender, age, monthly income or status of individuals (Yang et al., 2018). This is mandatory for the project manager to consider these demographic factors accurately so that the issues of the construction project can be minimized accordingly. While promoting advertisement for the building for rent proper promotional activities are to be considered. In addition to this, accurate target audience should be set to make the project possibly successful.
The micro environment for any project deals with business performance, decision making approaches, business strategies etc. It is expected that if these factors are properly managed and adopted by the project manager then the project will surely meet the objectives and other success factors within estimated time period and budget (Fulford & Standing, 2014). These factors are to be analyzed accurately in order to get commercial success and distributive competitive advantages. Before taking proper business level decision, project managers should individually analyze the technical, internal expertise, time pressure and people related factors.
Pressures regarding time
Time management is referred to as one of the most important factor for any project success (Serpella et al., 2014). It is the role of the project manager to design the structure of the project in such a way so that the work pressure gets reduced from the assigned team members. If time for the project completion gets reduced then that will increase the work pressure. Therefore, proper time management is referred to as an important factor to be considered for the successful accomplishment of the duplex building construction project.
Technical expertise
In this current era of technology different technical supportive actions have been designed. In order to design the blueprint of the construction project some of these technologies can be utilized by the project manager (Rowlinso et al., 2014). For operating these technical applications technical experts are required to be hired and assigned by the project manager. If the project manager successfully hires technical experts then it will lead the project towards measurable success.
Other people related considerations
Based on the skills and knowledge of the staffs reward program must be arranged for motivating the project associates.
Conclusion
From the overall discussion it can be concluded that with a structured construction management planning the overall efficiency of the business will increase a lot. From the result of feasibility analysis it has been found that for successful accomplishment of the construction project 9 months and $800,000 cost will be accurate. The location and size selected for the construction, monthly rate of council and other estimated values in terms of monthly rental income, monthly agent fees, insurance of the landlord based on the construction information and the purchase information are positive. Moreover, feasibility resultant shows positive ROI in the income from the duplex building rent and positive equity values as well.
References
Backlund, F., Chronéer, D., & Sundqvist, E. (2014). Project management maturity models–a critical review: a case study within Swedish engineering and construction organizations. Procedia-Social and Behavioral Sciences, 119, 837-846.
Binder, J. (2016). Global project management: communication, collaboration and management across borders. Routledge.
Cao, D., Wang, G., Li, H., Skitmore, M., Huang, T., & Zhang, W. (2015). Practices and effectiveness of building information modelling in construction projects in China. Automation in Construction, 49, 113-122.
Correa, A. (2016). Project management in architectural practices: project success factors in building design processes(Doctoral dissertation, Dublin Business School).
de Carvalho, M. M., Patah, L. A., & de Souza Bido, D. (2015). Project management and its effects on project success: Cross-country and cross-industry comparisons. International Journal of Project Management, 33(7), 1509-1522.
Fulford, R., & Standing, C. (2014). Construction industry productivity and the potential for collaborative practice. International Journal of Project Management, 32(2), 315-326.
Kerzner, H., & Kerzner, H. R. (2017). Project management: a systems approach to planning, scheduling, and controlling. John Wiley & Sons.
Ling, F. Y. Y., & Yanti, I. (2016). Stakeholder Management Practices to Boost Outcomes of Construction Projects. Building up business operations and their logic Shaping materials and technologies, 3, 640.
Martens, M. L., & Carvalho, M. M. (2017). Key factors of sustainability in project management context: A survey exploring the project managers’ perspective. International Journal of Project Management, 35(6), 1084-1102.
Mir, F. A., & Pinnington, A. H. (2014). Exploring the value of project management: linking project management performance and project success. International journal of project management, 32(2), 202-217.
Rowlinson, S., YunyanJia, A., Li, B., & ChuanjingJu, C. (2014). Management of climatic heat stress risk in construction: a review of practices, methodologies, and future research. Accident Analysis & Prevention, 66, 187-198.
Serpella, A. F., Ferrada, X., Howard, R., & Rubio, L. (2014). Risk management in construction projects: a knowledge-based approach. Procedia-Social and Behavioral Sciences, 119, 653-662.
Takey, S. M., & de Carvalho, M. M. (2015). Competency mapping in project management: An action research study in an engineering company. International Journal of Project Management, 33(4), 784-796.
Walker, A. (2015). Project management in construction. John Wiley & Sons.
Yang, R. J., Jayasuriya, S., Gunarathna, C., Arashpour, M., Xue, X., & Zhang, G. (2018). The evolution of stakeholder management practices in Australian mega construction projects. Engineering, Construction and Architectural Management, 25(6), 690-706.
Zheng, X., Le, Y., Chan, A. P., Hu, Y., & Li, Y. (2016). Review of the application of social network analysis (SNA) in construction project management research. International journal of project management, 34(7), 1214-1225.
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