Project Management (Alternative Assessment) - Proposed development in Taylor's University

PROJECT MANAGEMENT
School of Architecture, Building and Design
Bachelor of Quantity Surveying (Honours)
Alternative Assessment
Proposed 2-storey of “TheCollabGround”at Taylor’s University
Semester 6
April
2020
0330764
WAN YEE LEN

CONTENTS
Project Background 1
Project Justiﬁcation 4
Project Information 5
Project Merits 6
Project Cost Estimation 8
Project Operation Expenses Estimation 10
Project Proﬁtability 11
Project Summary 15
References 16
Appendices 17

PROJECT
BACKGROUND
Taylor’s University is located in the suburban
setting of the medium-sized city of Subang Jaya,
Selangor. Establishment of the campus
commenced in early 2007 and was completed
three years after in 2010. On a 27 acres land, there
lies five building blocks dedicated for education
and administration, as well as a commercial
annexe, Syopz, with restaurants and shops. Apart
from its surrounding lush greenery, there is also a
trademark 5.5-acre man-made lake, which grants
the name of ‘Lakeside Campus’. Significantly, its
artistic impression accentuates modernity and
functionality in design with state-of-the-art
facilities, in which Taylor’s University, ultimately,
as the first and only property development in
Malaysia, awards in all three building categories:
About Taylor’s
Pertubuhan Arkitek Malaysia (PAM)
Gold Award in Category 5 (Education)
Landscape Design and Planning by The Institute of
Landscape Architects Malaysia (ILAM)
Special Honor Award in Category 3: Professional Awards
Global Interior Design Award 2011
1

Over and above these outstanding achievements
in the ﬁeld of architecture, Taylor’s University, too,
excels academically and further thrives to being
recognized as a world class international
university. Committance of the mission is reﬂected
through maintained teaching excellence, quality
student experience, and even towards
engagement of campus sustainability. Thus in line
with such accomplishment and dedication, a
development plan is proposed as to complement
Taylor University’s existing facilities. The project is
schemed to be a Build, Operate and Transfer
(BOT) agreement wherein a vacant land of Taylor’s
is rented at RM15,000 monthly for a duration of
20 years. Accordingly, the premises are to be
returned at no cost when said rental contract is
due.
Land size
Location
Project scheme
Monthly rental
Rental period
800m2
- 1200m2
Vicinity of Taylor’s University Lakeside Campus
Build, Operate and Transfer (BOT)
RM15,000
20 years
2

Taylor’s University evidently made its name among the industry as the number of students
enrolled increases each year, in addition to the relocation of Taylor’s College to the university
campus. Such a vibrant student population eventually leads to greater demand of academic
facilities, particularly the learning spaces. Accordingly, existing library offers limited capacity
considering the downsizing of Open Collaboration Room for the accommodation of Library
Cafe; fully occupied or pre-booked Discussion Rooms at all times; and students flocking during
examination weeks. Further, X-space classrooms serving the intended function of collaborative
learning are inadequate when mainly being taken up for lectures or tutorial sessions.
Notwithstanding the insufficiency of learning facilities, global pandemic of COVID-19 has
affected general lifestyle, specifically to human interactions, in correspondence with the
number of students permitted for entry and usage of such spaces to avoid clustering.
Regardless if the outbreak is tamed, possibilities of infection still exist and social distancing is
needed to be practiced continuously, even so expected to last. The Malaysian government
viewed strictly on the pandemic and made great emphasis on the significance of compliance
with Standard Operating Procedure (SOP) and Guidelines taken into account the impacts of
COVID-19.
3

Considering the increased demand of learning facilities while reflecting on new normal as a
consequence of COVID-19, the proposed development is decided upon a double-storey collaborative
space—‘TheCollabGround’—incorporated with pandemic preparedness planning. The building is
positioned adjacent to Syopz as it is a strategic location for easy accessibility to students as well as
relevant users without compromising tranquility and privateness of the campus ground.
In the aspects of building patrons, prioritization is made towards students and
staff of Taylor’s University whereby it caters to the foremost intention of
fulfilling their needs. Besides the added units of collaborative learning rooms,
there is also the establishment of coworking spaces particularly for startup
businesses usage. Through the alliance with Taylor’s Career Service Centre, it
serves as enterprise platforms for graduates venturing out into entrepreneurial
career paths. The development plan further takes a daring approach with the
outreach to business entrepreneurs in pursuit of temporary office for
operations or as an alternative work arrangement. Proposition thereof
correspondingly brings forth a myriad of opportunities, essentially in terms of
brand reputation where Taylor’s does more than just education.
PROJECT JUSTIFICATION
Back in 2006, a National Influenza Pandemic Preparedness Plan was established as a guidance to
prepare and respond against emergence of the said catastrophic infectious disease. However,
cruciality of the issue was long-forgotten as its virulence toned down over the years and people
continued to live on normally afterwards. Not for a long time yet in 2020, the world is hit by the
sudden strike of COVID-19 which significantly affected all segments of population. As pointed out by
United Nations Secretary-General Antonio Guterres, “mankind is so unprepared for COVID-19”.
Evidently, over the span of 16 years, the world is faced with one of the most dangerous challenges.
Thus, it cannot be guaranteed what may arise in the future, specifically for the upcoming years of this
development plan, and even after the end of rental period. With such uncertainties, strategic planning
is incorporated into layout design as well as various processes whereby the maintenance of social
distancing rules and initiation of contactless operations. It is wise to learn the lesson early that
prevention is better than cure.
4

PROJECT INFORMATION
TheCollabGround is allowable at the building area of 830m2
. Demarcated in ﬁgure above, the
construction is positioned at Zone K, taking up a quarter of the area which has been allocated for
parking spaces.
Key plan
Not to scale
5

PROJECT MERITS
Demand
The development decision-making process is primarily driven by the needs of
end users, particularly in respect to students’ demand for adequate
collaborative learning spaces; furthering the provision of a platform for
entrepreneurs who require such facilities. As such, the proposed development
contributes to fulﬁll the requirements of targeted users.
User experience
Design of the proposed development engages a key element of connection
with nature and the outdoors by having large windows throughout, which in
turn creates an impression of openness instead of captivity. It invites an
optimal setting of natural sunlight and views outside which makes the
workspace an ideal environment for its intended purpose, hence achieving
user satisfaction.
Service quality
Operation of the proposed development incorporates user interfaces where
they are intuitive and clear that little effort is required for comprehension.
The newly introduced concept brings upon a one of a kind experience which
demonstrates the improved standards of Taylor’s University. Besides,
necessary network and other facilities are taken into consideration as to offer
an optimal environment.
Revenue
Following the demand of targeted users as provided, the development plan is
projected to generate sufﬁcient revenue through fees allowable for utilization
of services delivered. The strategy is in line with the scheme of Build, Operate
and Transfer as incorporated in the development plan.
6

Cost
Initiation of a collaborative workspace generally requires less employees for
its main operational procedures besides clerical duties that involve making
reservations and payments; moreover with the inclusion of cafe requiring
baristas conventionally. With the replacement of face-to-face service
interactions through utilization of self-service technologies, it greatly reduces
labour costs in general.
Brand awareness
The courageous decision of outreaching to business entrepreneurs as target
end users signiﬁcantly puts Taylor’s name in the limelight, correspondingly
generating publicity for its contribution to the said community.
Brand identity
Accordingly with the increased awareness, it is reasonable for the public to
perceive Taylor’s as more than just an educational institution, following its
appreciation towards respective graduates from the aspects of offering
entrepreneurial platformas as well as community inclusion.
7

PROJECT COST ESTIMATION
Costs associated with the proposed development include both the initial
capital cost and subsequent operation and maintenance costs. For this project
in particular, agreement with Taylor’s provided for the rental of land at
RM15,000 thus the development procedure of acquisition and obtaining
permissions generally are facilitated. Accordingly, cost data applied for
approximation are in reference to the JUBM & Arcadis Construction Cost
Handbook 2020 as to achieve an up-to-date and accurate estimate. Relevant
construction costs fit for this proposed development include the collaborative
work spaces and cafe. Whereas development costs comprise of administration
fees, professional fees, legal fees, planning fees and contingencies on the basis
of total construction cost in terms of percentage.
Cost information
Under the JUBM & Arcadis Construction Cost
Handbook 2020, collaborative workspace is
categorized as ‘medium/high rise offices’ with
average standard including reinforced concrete
structure, curtain wall, public area fit-out, carpeted
flooring, painted wall and false ceiling. Meanwhile,
the cafe incorporated into proposed design is
referred to as ‘general dining restaurant’, following
its cost with the inclusion of furniture, floor, wall and
ceiling finishes, minor alteration to air-conditioning
and fire services installation to suit layout, exhaust
for kitchen but excluding exhaust flue and
operational items.
Construction cost
Collaborative workspace RM2,740/m2
Cafe RM3,060/m2
Above prices take into consideration the impacts of COVID-19 on construction costs.
Development cost
Administration fees : 2%
Professional fees : 10%
Legal fees : 2%
Planning fees : 2%
Contingencies : 5%
of total construction cost
8

Gross Development Cost
Construction Cost
Cafe
RM165,000.00
Collaborative
workspace
RM4,400,000.00
Total RM4,600,000.00
Development Cost
4%
96%
Total RM960,000.00
Contingencies
RM230,000.00
Planning fees
RM91,000.00
Legal fees
RM91,000.00
Professional fees
RM460,000.00
Administration fees
RM91,000.00
Total Gross Development Cost RM5,500,000.00
9

Annual cost
Total operation and maintenance cost factoring inflation rate
In accordance to the agreement with Taylor’s, a monthly rental of RM15,000.00 for land use is covered
as operation cost. Given that self-service technologies are incorporated within operational procedures,
employees are not required for such relevant duties, hence reducing a significant amount of costs in the
respect. Simultaneously, the use of advanced technology admittedly requires regular maintenance and
such investment is taken into consideration and to be beared by the client over the period of 20 years.
In addition, the magnitude of inflation—inflation rate—is factored into the annual operation and
maintenance cost computed at the rate of 5% for every 6 years of contract period.
60%
25%
15%
Electricity and water expenses
RM720,000.00
Maintenance cost
RM300,000.00
Land rental
RM180,000.00
Total RM1,200,000.00
RM’000’000
Total Operation and Maintenance Cost RM23,000,000.00
10
PROJECT OPERATION EXPENSES ESTIMATION

Market research is undertaken to determine the pricing trend in Klang Valley, speciﬁcally with regards to
the operation of a co-working space. Rates are categorized into two parts whereas fees associated with
individual daily access and monthly rental of virtual ofﬁces to professionals. Accordingly, the prices made
inclusion of necessary amenities and facilities such as pantry, high speed internet, printing services and
more.
Individual daily access
Prices are based on
general entry, regardless
of discounts and offers
applied for students.
Monthly rental
Prices are referred on
the basis of 4 persons at
minimum.
PROJECT PROFITABILITY
Rate(RM)Rate(RM’000)
11

Rate (RM)
3 hours/pax Monthly
Student Adult Professionals
10.00 15.00
3,600.00
3,300.00
2,700.00
2,400.00
The source of profit derives from the students and staffs admission as well as rental of virtual offices
to professionals. Fees applied for the operations are based on market research with regards to
equivalent business of undertaking a co-working space. Specifically, rate rationalisation is practiced
on account of the extensive usage of students and staff of Taylor’s University, as well as the
consideration of accessibility up to 3 hours maximum each in order to accommodate heightened
demands. Further, rates established for professionals are on the basis of monthly rental and type of
units opted, under the arrangement of flexi-lease.
Unit A
12 pax
Unit B
10 pax
Unit C
6 pax
Unit D
4 pax
12

Profit Estimates
Based upon the rates as established, projected monthly, annual and total profit generated from operation of
the proposed development over the period of 20 years are calculated as shown:
Total estimated profit factoring inflation rate
RM’000’000
Total Profit Estimates RM65,000,000.00
70% Students
5% Adults
25% Professionals
Monthly
RM290,000.00
Annual
RM3,500,000.00
13

As demonstrated from the chart above, first two years of said contract period encountered negative
cash flow considering it is where stages of planning and construction take place. Subsequently, the
following years projected optimistic cash flow whereby operation of the development has the tendency
of generating sufficient profit to offset indispensable expenditure of land rental, maintenance cost as
well as utilization of electricity and water services. On account of the time value for money over 20
years, value as such presents positivity of RM19.3 million. Outcome thereof can be interpreted that the
proposed development is viable.
Net present value represents current value of all future cash flows generated from the proposed
development, as well as to analyze profitability thereof.
RM’000’000
Net Present Value of 2020-2039
Total Cash Inflow RM65,000,000.00
Total Cash Outflow RM29,000,000.00
Net Cash Flow RM37,000,000.00
NPV RM19,400,000.00
14

PROJECT SUMMARY
The proposed development centralized on creating a productive shared learning and
working place, speciﬁcally to accommodate demands of said spaces by students of
Taylor’s University as well as business professionals seeking for alternative working
arrangement. Remarkably, the estimated cost of development amounts to RM29
million that includes the cost of construction, operation and maintenance. It is
viewed as a viable project considering the optimistic Net Present Value of RM19.4
million throughout contract period of 20 years. Given that the business strategy is
projected to generate sufﬁcient income in offsetting necessary expenditure, payback
period is expected at ~2.7 years which further validates the proposed development
an attractive investment.
15

REFERENCES
AccountingInfo. (n.d.). Present Value Factor for a Single Future Amount. Retrieved from
AccountingInfo Web site: https://accountinginfo.com/study/pv/table-pv-s-01.pdf
ARCADIS. (2020). JUBM & Arcadis Construction Cost Handbook MALAYSIA 2020.
CGTN. (2020, May 15). UN chief says mankind 'so unprepared' for COVID-19, world lacks solidarity.
Retrieved from CGTN Web site:
https://news.cgtn.com/news/2020-05-15/UN-chief-says-mankind-so-unprepared-for-C
OVID-19-Qvi8tVla2k/index.html
Coworker. (2015). Coworking Space in Malaysia. Retrieved from Coworker Web site:
https://www.coworker.com/malaysia
Hopwood, D. (2013, May 1). The rise of the graduate entrepreneur. Retrieved from Independent
Web site:
https://www.independent.co.uk/student/career-planning/getting-job/the-rise-of-the-gra
duate-entrepreneur-8598949.html
16

APPENDICES
Calculation of costs shown in this proposal.
17

Gross Development Cost
Floor Item Area (m2
) Rate (RM/m2
) Total
1F Collaborative workspace 772 2,740 2,115,280.00
2F 825 2,260,500.00
1F Cafe 53 3,060 162,180.00
Total 4,537,960.00
Construction Cost
Development Cost
No. Item % Construction cost Total
i Administration fees 2
4,537,960.00
90,759.20
ii Professional fees 10 453,796.00
iii Legal fees 2 90,759.20
iv Planning fees 2 90,759.20
v Contingencies 5 226,898.00
Total 952,971.60
Construction Cost 4,537,960.00
Development Cost 952,971.60
Gross Development Cost 5,490,931.60
18

No. Item Rate (RM/month) Annual cost (RM)
i Land rental 15,000.00 180,000.00
ii Maintenance cost 25,000.00 300,000.00
iii Electricity and water expenses 60,000.00 720,000.00
Total 1,200,000.00
Annual cost
Annual cost factoring inﬂation rate
No. Period Inﬂation rate (%) Annual cost (RM) Total (RM)
i Year 1-2 Planning and construction stage 15,000.00 30,000.00
ii Year 3-8 1st maintenance 1,200,000.00 7,200,000.00
iii Year 9-14 5 1,260,000.00 7,560,000.00
iv Year 15-20 5 1,323,000.00 7,938,000.00
Total 22,728,000.00
Gross Development Cost 5,490,931.60
Operation and Maintenance Cost 22,728,000.00
Total Estimated Project Cost 28,218,931.60
Operation and Maintenance Costs
19

No. End user Estimate use (%) Rate (RM) Profit (RM)
Daily
12 hours
Monthly
30 days
Annual
i Students 70 10.00 7,840.00 235,200.00 2,822,400.00
ii Adults 5 15.00 840.00 25,200.00 302,400.00
iii Professionals 25 2,400.00
Base fare
24,000.00 288,000.00
Total 3,142,800.00
No. Period Inflation rate (%) Annual profit (RM) Total (RM)
Year 1-2 Planning and Construction Stage
Year 3-8 - 3,412,800.00 20,476,800.00
Year 9-14 5 3,583,440.00 21,500,640.00
Year 15-20 5 3,762,612.00 22,575,672.00
Total 64,553,112.00
Total estimated profit factoring inflation rate
Profit Estimates
Annual profit
20

Net present value of 2020-2039
Year Cash Inflow Cash Outflow Net Cash Flow PV Factor (5%) NPV (RM)
2020 1,647,279.48 (1,647,279.48) 0.9524 (1,568,868.98)
2021 3,843,652.12 (3,843,652.12) 0.9070 (3,486,192.47)
2022 3,412,800.00 1,200,000.00 2,212,800.00 0.8638 1,911,416.64
2023 3,412,800.00 1,200,000.00 2,212,800.00 0.8227 1,820,470.56
2024 3,412,800.00 1,200,000.00 2,212800.00 0.7835 1,733,728.80
2025 3,412,800.00 1,200,000.00 2,212800.00 0.7462 1,651,191.36
2026 3,412,800.00 1,200,000.00 2,212800.00 0.7107 1,572,636.96
2027 3,412,800.00 1,200,000.00 2,212800.00 0.6768 1,497,623.04
2028 3,583,440.00 1,260,000.00 2,323,440.00 0.6446 1,497,689.42
2029 3,583,440.00 1,260,000.00 2,323,440.00 0.6139 1,426,359.82
2030 3,583,440.00 1,260,000.00 2,323,440.00 0.5847 1,358,515.37
2031 3,583,440.00 1,260,000.00 2,323,440.00 0.5568 1,293,691.39
2032 3,583,440.00 1,260,000.00 2,323,440.00 0.5303 1,232,120.23
2033 3,583,440.00 1,260,000.00 2,323,440.00 0.5051 1,173,569.54
2034 3,762,612.00 1,323,000.00 2,439,612.00 0.4810 1,173,453.37
2035 3,762,612.00 1,323,000.00 2,439,612.00 0.4581 1,117,586.26
2036 3,762,612.00 1,323,000.00 2,439,612.00 0.4363 1,064,402.72
2037 3,762,612.00 1,323,000.00 2,439,612.00 0.4155 1,013,658.79
2038 3,762,612.00 1,323,000.00 2,439,612.00 0.3957 965,354.47
2039 3,762,612.00 1,323,000.00 2,439,612.00 0.3769 919,489.76
Total 64,553,112.00 28,188,931.60 36,364,180.40 19,367,897.05
Gross development cost RM5,490,931.60
Average profit RM2,020,232.24
Payback period 2.7 years 21

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