Asset and Portfolio management carried out in real estate construction industry

  A  PROJECT REPORT ON

“ASSET & PORTFOLIO MANAGEMENT IN REAL ESTATE CONSTRUCTION INDUSTRY ’’

 SUBMITTED TO

SAVITRIBAI PHULE PUNE UNIVERSITY

  In Partial Fulfillment of the Requirement for Degree of

MASTER OF ENGINEERING (CONSTRUCTION & MANAGEMENT)

 BY

                 Mr. DHIRAJ GURSALE                         

                

 UNDER THE GUIDANCE OF

PROF. S.S.  DESHMUKH

 

                                                                                

DEPARTMENT OF CIVIL ENGINEERING

TRINITY ACADEMY OF ENGINEERING

KONDHWA-SASWAD ROAD, BOPDEV GHAT, PUNE-48

     2015-2016

                                 

“ Perseverance , inspiration  and  motivation  have  always  played  a  key  role  in  the   success  of  any venture”

ACKNOWLEDGEMENT

Acknowledging in itself is a continuous process. I would have never succeeded in

Completing my thesis work without the co-operation, encouragement and help provided to me by various personalities.

I take  great  pleasure  in  expressing  my sincere  gratitude ,  which  I owe  to  many  people  in making  this  project  a  success.

I would  like  to  take  this  opportunity  to  express thanks to  my project guide Prof. S. S. DESHMUKH , without whose  expertise  and  advice  this  project  would  not  have been  in  its  present  form.

I  would  like  to  express  my sincere  thanks  to   Prof. S. S. DESHMUKH ,  Head  of  Civil Department ,  Trinity Academy of Engineering, Pune & all Staff members  for  permitting  me  to  work  on  this  project  topic.

I would also like to express my gratitude to Panama Sun Arch Developer’s for their valuable guidance and help.

Working under all was a pleasure and an unforgettable experience.

They were always helpful and always greeted me with a smile.

DHIRAJ GURSALE

(M.E. CONSTRUCTION & MANAGEMENT)

                                             

                                           CERTIFICATE

                                                                   This to certify that

Mr. DHIRAJ GURSALE

Of

M.E. Construction & Management

Has satisfactorily completed a project on

“ASSET & PORTFOLIO MANAGEMENT IN REAL ESTATE CONSTRUCTION INDUSTRY ’’

In the partial fulfillment of Degree of Master of Engineering

In Construction Management of University of Pune

For the year 2015-2016

Prof. S. S. DESHMUKH                                                                  Prof. S. S. DESHMUKH

Project guide                                                                            Head of Dept. Civil Engineering

T.A.E Pune                                                                                                  T.A.E Pune 

                                                                Dr. P. M. Patil

                                                                Principal

                                                                T.A.E Pune

EXAMINATION APPROVAL SHEET

The Dissertation Report entitled

“ASSET & PORTFOLIO MANAGEMENT IN REAL ESTATE CONSTRUCTION INDUSTRY ’’

BY

                                         DHIRAJ ANIL GURSALE

University Exam Seat No- 7857

Has been approved In Partial Fulfillment of the Requirement for Degree of

MASTER OF ENGINEERING (CONSTRUCTION & MANAGEMENT)

In Savitribai Phule Pune University at Trinity Academy of Engineering, Pune.

EXAMINERS:

1)      External Examiner: ……………………………………..

2)      Internal Examiner: ………………………………………                

Date: ………..

Place: ……….

ABSTRACT

This Project is going to be formed in between two parts asset management & Portfolio management independently. In asset management a land owned by a company i.e. asset is to be taken in to consideration & an analysis including the land details, locality & neighborhood, area surrounding to it is taken in to consideration. For construction cost analysis planning & estimating details are to be carried out & valuation is to be made for cost analysis. Studying of surrounding locality rate/ Square feet with amenities provided in the project for carrying out actual cost analysis is an important procedure to be done. Once all things are planned the entries should be made in BOQ i.e. Bill of Quantities in ERP Software. Portfolio management includes decision making process whether to invest in the particular property/land after knowing the valuation of the same. In asset allocation to particular individual proper planning according to flow chart i.e. work structure is allotted to each individual & work on site should be carried out according to the same. In this project portfolio management is done by decision making, matching investments against objectives, asset allocation for individuals & institutions and balancing risk against performance i.e. by taking suitable & required decisions on time in order to avoid project delays & failure. In portfolio management also earned value analysis is carried out at suitable time interval for the cross checking of costs spent against the work done. After all the result which will be shown in this project is the valuation done of asset in terms of cost using different skills, its value in terms of marketing, its execution along with portfolio management and the profitability of entire project. Research papers which are in this project format or based on asset or portfolio management are being useful in this project preparation. Use of sustainable construction theory GRIHA- Green Ratings for Integrated habitat assessment is being used to attract the clients in our project. Project Valuation is made using different techniques.

 INDEX

Sr. no.	Description	Page no.
CHAPTER 1
1.0	Introduction
1.1	General	1
1.2	Aim	3
1.3	Objectives	3
1.4	Problem statement	4
1.4.1	Energy conservation and carbon dioxide emissions	6
1.4.2	Design life and flexibility	7
1.4.3	Cost analysis	7
1.4.4	Demolition & contamination	7
1.4.5	Recycling	7
1.4.6	Healthy building	7
1.4.7	CFCS, HCFCS and Halon’s	8
1.4.8	Noise & wind	8
1.4.9	Water conservation	8
1.4.10	Legionnaire’s disease	8
1.4.11	Timber	8
1.4.12	Lead and solvent based paints	9
1.4.13	Asbestos/formaldehyde	9
1.4.14	Thermal comfort & ventilation	9
1.4.15	Lighting	9
1.4.16	Landscaping	9
1.4.17	Contractor and supplier selection	9
1.5	What is asset & portfolio management?	10
1.6	Historical background	13
1.7	Potential applications	14
1.8	Limitations of the study	14
1.9	Organization of thesis	15
CHAPTER 2
2.0	Literature review
2.1	Challenges before construction industry in India	16
2.2	Direct and indirect real estate in a mixed-asset portfolio - is direct or indirect preferable?	17
2.3	A modern portfolio theory approach to asset management in the listed south African property market	18
2.4	Value management in the construction industry: What does it entail and is it a worthwhile practice?	19
2.5	Active portfolio management and portfolio construction - implementing an investment strategy	20
2.6	Practical risk analysis for portfolio managers and traders	21
2.7	The impact of residential property investment on portfolio performance	22

CHAPTER 3
3.0	Research methodology
3.1	Asset management	23
3.2	Different valuation techniques	24
3.2.1	Life cycle costs	25
3.2.2	Income or investment method	26
3.2.3	Residual method	26
3.2.4	Contractors or cost method	26
3.2.5	The profits method	26
3.3	Methodology	27
CHAPTER 4
4.0	Case study carried out in locality
4.1	Collection of project data Inora park	28
4.2	Collection of project data Godrej Prana	29
4.3	Fortune Siddhipriya a project by fortune group	31
4.4	Locality of project silver stone Handewadi, Pune. Project by panama sun arch developers	32

CHAPTER 5
5.0	Planning & construction cost analysis carried out on ERP software
5.1	Budget summary of d-building with its total activity cost & its percentage	36
5.2	Planning & annual bar-chart for d building	43
5.3	Activity estimated rate, amount & billing rate work out	53
5.4	Development (amenity) cost	61
5.5	Landscape details	71
5.6	Total road calculations for the project	78
5.7	GI pre-coated sheets parking shade	78
5.8	Paving blocks work on project	79
5.9	Entrance gate details	79
5.10	CCTV installation work	84
5.11	Other costs included in the project	85
5.12	Summary for cost included in development & other	85
5.13	Cash flow forecasting	87
5.14	Bar charts of monthly construction cost	88
CHAPTER 6
6.0	Real estate sales & marketing
6.1	Yearly cash inflow details	90
6.2	Sales cost summary	91
6.3	Monthly cash inflow out flow	92
6.4	Total project cash flow	93

CHAPTER 7
7.0	Discussions & conclusions	94
	REFERENCES	95

                                    ANNEXURE                                                                      97

LIST OF TABLES

Table no.	Description	Page no.
1	Collection of project data Inora park	28
2	Collection of project data Godrej Prana	29
3	Collection of project data fortune Siddhipriya a project by fortune group	31
4	Details of panama sun arch developers	33
5	Development (amenity) cost	61
6	UGWT RCC & Excavation details	62
7	UGWT Excavation work out	64
8	UGWT Concreting work out	65
9	Work in pump room near UGWT	65
10	Sewage treatment plant details	66
11	Swimming pool - excavation, RCC & backfilling details	67
12	Swimming pool - water proofing details	68
13	Swimming pool - details of light, plumbing and ladder & filtration equipments	69
14	Landscape details - labor charges	71
15	Tree plantation	72
16	Electrical work in landscape	72
17	BBM, plaster & paint details in landscape	73
18	Irrigation details	74
19	Play equipments	75
20	Golden river sand in play area	75
21	Gazebo in landscape	76
22	Tiles on Gazebo	77
23	Total road calculations for the project	78
24	GI pre-coated sheets parking shade	78
25	Paving blocks work on project	79
26	Entrance gate details- RCC & excavation details	79
27	Pergola work details	81
28	Painting work	82
29	Toughened glass work	82
30	Electrical work	83
31	CCTV installation work	84
32	Other costs included in the project	85
33	Summary for cost included in development & other	85
34	Yearly cash inflow details	90
35	Sales cost summary	91

LIST OF FIGURES

Figure No.	Description	Page no.
1	Asset diagram	24
2	Valuation diagram	25
3	Budget summary of d-building with its total activity cost & its percentage	36
4	Planning & annual bar-chart for d building	43
5	Activity estimated rate, amount & billing rate work out	53
6	Cash flow forecasting	87
7	Bar charts of monthly construction cost for year 2016	88
8	Bar charts of monthly construction cost for year 2017	88
9	Bar charts of monthly construction cost for year 2018	89
10	Monthly cash inflow out flow	92
11	Total project cash flow	93