BUSINESS AND COMMERCIAL AWARENESS

MODULE CODE: 6WBS0019-0901-2018

DE HAV AIRLINES-REAL ESTATE INVESTMENT

IMPLIMENTATION PLAN
FINANCE DEPARTMENT
GROUP NAME: CHARLIE

PREPARED BY xxxxx (SID: xxxxxx)

WORD COUNT: 1,900
SUBMITTED ON: 17/12/2018
TABLE OF CONTENTS PAGE NO:
1. OVERVIEW………………………………………………………………….3
2. IMPACT ON THE FINANCE DEPARTMENT ……………. ……………3

3. TIME PLAN………………………………………………………………….4 and 5

4. LINKS AND DEPENDENCIES………………………….………………..6

4.1 LINK TO HUMAN RESOURCE…………………………………6
4.2 LINKS TO MARKETING…………………………………………6
4.3 LINKS TO OPERATIONS ……………………………………….6
5. MILESTONES ………………………………………………………………7
6. RISK ASSESSMENT PLAN FOR FINANCE DEPARTMENT ………..8
6.1 RISK PLAN ………………………………………………………...9 and 10
7. RESOURCE REQUIRMENT ………………………………………………11
8.0 FINANCIALPLAN………………………………………………………….11
8.1 LEASING PRICES…………………………………………………11
8.2 PROJECTED NET INCOME FOR FIVE YEARS………………..12
8.3 DEPARTMENTAL EXPENSES………………………………….13
8.3.1 HUMAN RESOURCE …………………………………………..13
8.3.2 OPERATIONS DEPARTMENT………………………………..13
8.3.3 MARKETING DEPARTMENT…………………………………14
8.3.4 FINANCE DEPARTMENT……………………………………...14
9 CONCLUSIONS……………………………………………………………...14
10 REFERENCES……………………………………………………………...15
1. OVERVIEW
This functional implementation plan has been draw for the sole purpose of detailing how
the finance department will take part in implementing the investment plan which is to be
used by one who is interested in it.
De Hav Airlines had set aside $100m to improve its business so that it can expand,
dominate the market and remain steadfast in the airline industry hence syndicate
groups were assigned the role of formulating proposals and my Group Charlie,
recommended investing into real estate as the best solution given the fact that rental
rates in both residential and commercial in Central London have been increasing at
10% per annum for last 3 years. Business and private opportunity rates in the market
are now at 9% and 4% respectively (Matthews, 2018)
Initial focus will be to buy a town house within central London. We will upgrade the
acquired town house to 80 apartments and 10 commercial so as to meet Dev standards
and increase long-term assets and income. Housing units will majorly be located in the
University environs targeting both students and professionals. Dev fosters the ideals of
the importance of tenant needs along with healthy and understanding relationships and
a professional commitment to satisfaction (Qwir, 2016)

2. IMPACT ON THE FINANCE DEPARTMENT

The finance department is in charge of formulating the budget, expenses, financial
reporting, acquiring the real estate, accounting, taxation, legal and risk control hence it’s
the most crucial department which determines how much of the 100$m will be
disbursed to each functional department and the procurement process i.e. finance,
marketing, operations and HR ((Smythe,2014)
 3. TIME PLAN
Our time plan will involve use of a Gantt chart which illustrates the breakdown structure
of the project by showing the start and finish dates as well as various relationships
between project activities, and this helps you track the tasks against their scheduled
time (Svetlana, 2018)

TASK ACTIVITIES START END DURATION

DATE DATE (DAYS)
1 Receiving funds from board of directors by current 3-Jan-19 13-Jan-19 10
Dev Airline Finance Department
2 Disbursement of fund to new Human Resource 19-Jan-19 24-Jan-19 5
Department
3 Disbursement of funds to new Marketing Department 19-Jan-19 24-Jan-19 5
4 Disbursement of funds to new Operations 19-Jan-19 24-Jan-19 5
Department
5 Consultancy with operations department on which 25-Jan-19 11-Apr-19 76
town house to buy
6 Purchasing the town house 15-Apr-19 25-Apr-19 10
7 Upgrade and renovations tender, contracts and 28-Apr-19 14-Dec- 230
completion of Dev Real Estate 19
8 Project launch 15-Dec-19 15-Dec- 0
19
9 Obtaining annual expenditure report from all 16-Dec-19 20-Feb-20 66
departments
10 Financial reporting to the board of directors 21-Feb-20 22-Mar-20 30
 10-Apr-18 19-Jul-18 27-Oct-18 4-Feb-19 15-May-19 23-Aug-19 1-Dec-19 10-Mar-20 18-Jun-20

5 START DATE
DURATION

10

(Grant chart showing the time plan)

4. LINKS AND DEPENDENCIES
Once the contractor has finished constructing the 80 apartments and 10 commercial
premises all departments will be required to work together to ensure operation of the
Dev Real Estate hence the finance department will play the key role of disbursing the
funds to all the respective departments. The finance department shall allocate the funds
to marketing, operation and Human resources to ensure the new rentals are operational
and funds utilized prudently since teamwork is an important critical success factor for
Dev Airline (Projectinsight.net, 2017)
4.1 LINK TO HUMAN RESOURCE
The finance department will disburse funds to Human Resource Department so that
they can recruit the work force required to complete the real estate project. The
department shall recruit chief accounts officer, budget controller, accounts assistants
and accounts auditor whom shall serve in the finance department and the HR will also
submit payroll for all employees to the finance department for payment purposes hence
the interdependence.
4.2 LINKS TO MARKETING
The finance department will disburse funds to the marketing department which deals
with sales and marketing so that they can advertise the rental units using any
communication method they would choose to adopt. They will be required to submit
their financial report to determine whether the cost of communicating the rental unit to
potential tenants was a success or loss which will guide future fund allocation.
4.3 LINKS TO OPERATIONS
The finance department will disburse funds to the operations departments who will be
ensuring the construction works are of good standard as required by supervising the
construction of the rental units and determine the labour force required. Once the rental
are complete, the operations will be running the rental unit maintenance and repair
activities to ensure the buildings are of good standards and operational. At the end of
each financial year, the department will be required to submit their report to the finance
department.
5. MILESTONES
Milestones are tools used to mark specific points along a project timeline (Wikipedia)

Milestone 1

Receiving funds from B.O.D 3RD Jan, 2019)

Milestone 2

Disbursement of fund to all departments (19th Jan 2019)

Milestone 3

Purchasing the town house (15th April 2019)

Milestone 4

Completion of the project and launch (15th Dec 2019)

Milestone 5

Annual expenditure report from 3 departments (16th Dec 2021)

Milestone 6

Financial reporting to the board of directors (21st Feb 2020)

6.0 RISK ASSESSMENT PLAN FOR FINANCE DEPARTMENT
Risk assessment is acknowledged by surveying the likelihood of hazard, occurrence
and the effect of the hazard in the event that it emerges and then classified as: high,
medium or low, in view of a risk analysis (Qwilr 2016)

Risk Description Magnitude Likelihood Foreseeability Total Rank

(A) (B) (C) A×B×C High to

Low
Unqualified 4 2 3 24 High
personnel
Bad weather 2 1 1 2 Low
Delay in 8 3 2 48 High
construction works
completion
diversion of funds 7 2 2 24 High
Poor book keeping 6 2 2 48 High
of records
Fraud in land 9 1 1 9 Low
transactions
Financial system 6 2 3 36 High
breakdown
Law suites 4 1 1 4 Low
Loss of cash 9 2 2 36 High
Delayed financial 3 1 1 3 Low
reporting to board of
director
Increase in cost of 4 2 2 16 Low
insurance
Tenants failing to 6 1 1 6 Low
pay rent
 6.1 RISK PLAN
Risk Priority Advance Warning Action Action
Description Signs
Enter (to Avoid) (to Mitigate,
scores Reduce or Limit
from the impact of the
Task 1 risk)
Unqualified 24  Incompetence  Strong HR policies  Training of staff
personnel
 Low productivity  Signed  Staff motivation
Performance
 Promotions and
contract and
supervision
evaluation of staff
 Review of HR
policies
 Remaining risk removed – another 10 or so existed
  

  
  
  
  
  

  
  
  
  
7. RESOURCE REQUIRMENT
Resources Required Quantity Time Frame

Contract sum for purchasing town house and upgrade $60 million 3rd Jan 2019
Funds to departments $40 million 19th Jan 2019
chief accounts officer 1 Permanent
Budget controller 1 Permanent
Accounts assistant 6 Permanent
Accounts auditor 2 Permanent
Head of Department 1 Permanent
ICT systems with internet and web 10 Permanent
Office space 1 Permanent

8.0 FINANCIALPLAN
ACTIVITY COST
Purchasing a town home $15 million
Contract for upgrade and $45 million
renovation
4 departments funding $40 million
TOTAL EXPENDITURE $100M

8.1 LEASING PRICES

Current Lease pricing: Commercial Current Lease pricing: Apartments

premises
CLASS AMOUNT CLASS AMOUNT
A (4,000 sq.ft) $7,841 A (500 sq.ft) $1,306
B (6,500 sq.ft) $15,032 B (900 sq.ft) $ 2,221
C (10,000 sq.ft) $28,757 C (1,500 sq.ft) $3,790
D (5,000 sq.ft) $12,812
8.2 PROJECTED NET INCOME FOR FIVE YEARS

FY2020 FY2021 FY2022 FINAL

(000s) (000s) (000s) (000s)
INCOME
Residential lease 2,000.00 3,000.00 5,000.00 9,000.00
income
Commercial lease 3,000.00 5,000.00 9,000.00 17,000.00
income
Other income 1,500.00 2,000.00 3,000.00 5,000.00
Total income 6,500.00 10,000.00 17,000.00 31,000.00

Residential lease income

FY2020 (000s)
FY2021 (000s)
FY2022 (000s)
8.3 DEPARTMENTAL BUDGET
8.3.1 HUMAN RESOURCE

Particular Cost incurred ($)

(19th Jan 2019 to 30TH Dec 2019)
Annual payroll 7,000,000
Recruitment exercise 200,000
Compensations and benefits 1,200,000
Staffs entertainment room 200,000
Training facilities 500,000
Reward and recognition program 300,000
HRIS software(Multi-user) 100,000
Contingency fund 2,000,000
TOTAL 11,500,000

8.3.2 OPERATIONS DEPARTMENT

Particular Cost incurred ($)

(19th Jan 2019 to 30th Dec 2019)
Property maintenance and repairs 1,500,000
Advanced security system 300,000
backup generator 990,000
building inspection and compliance to ISO standards 800,000
Consultancy on electrical, structural, civil and building 560,000
works
legal services 450,000
ICT and internet 720,000
emergency fund 2,000,000
Miscellaneous 2,000,000
TOTAL 9,320,000
8.3.3 MARKETING DEPARTMENT

Particular Cost incurred ($)

(19th Jan 2019 to 30TH Dec 2019)
Media Agent 500,000
Direct Marketing 1,000,000
Printing material 800,000
Graphical presentation 1,000,000
Social media advertisement 700,000
Tv and Radio promotion 3,000,000
Marketing Team Payroll wages 3,000,000
TOTAL 10,000,000

8.3.4 FINANCE DEPARTMENT

Particular Cost incurred ($)

(19th Jan 2019 to 30TH Dec 2019)
ICT systems with internet and web 3,000,000
utilities 290,000
seminars and workshops 900,000
emergency fund 3,000,000
audit 350,000
office supplies 840,000
consultancy 800,000
Purchasing a town home 15,000,000
Contract for upgrade and renovation 45,000,000
TOTAL 69,180,000

9 CONCLUSIONS
This project can be implemented if all departments work together to ensure success and
realization of the objectives and goals of De Hav Airlines. All departments must be
regulated with strict compliance to policies and procedure of the Airline to enhance
operations and profitability of the investment fund (Matthews, 2018)

10 REFERENCES
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price of residential properties and time-on-the-market: the impact of price setting.
Journal of Real Estate Finance and Economics 26(1): 95–111
Barzel, Y. (1989). Economic Analysis of Property Rights. Cambridge, Cambridge
University Press.
Buckley, R. (1996). Housing Finance in Developing Countries. London, Macmillan.
Cheusheva, S. (2018) How to make a Gantt chart in Excel 2010, 2013 and Excel 2016
Available online at: https://www.ablebits.com/office-addins-blog/2014/05/23/make-gantt-
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Estimate of the Impact on Firm Returns. Wharton Real Estate Working Paper.
Philadelpia.
Gibson, V., Lizieri, C. (2001). Business change, corporate real estate portfolios and the
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Matthews, W. (2018) ‘The London report-2018’, Available online at:

https://www.knightfrank.co.uk/research/the-london-report-2018-5244.aspx [Accessed
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Projectinsight.net. (2017) Understanding Task Dependencies in Project Management

Available online at: https://www.projectinsight.net/project-management-basics/task-
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Qwilr (2016) ‘Real estate investment proposal’. Available online at:
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Smythe LLP Chartered Professional Accountants. (2014). Roles and Responsibilities of
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insights/roles-and-responsibilites-of-a-finance-department/ [Accessed 13 Dec. 2018].
Trust for London (2018) ‘London’s population by age’. Available from:
https://www.trustforlondon.org.uk/data/londons-population-age/ [Accessed 13 Dec.
2018].
World Population Review (2018) London Population 2018, Available online at:
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Publication, 10th Edition, Year 2004.

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