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Essay / Research Paper Abstract
This 20 page paper considers the way in which the financing of building in Malaysia, with a move towards utilising the value in the finished buildings to contra pay the subcontracts and meet debts. The writer looks at why this has come about, the alternatives and uses a case study of South Malaysia Industries Bhd (SMI). The bibliography cites 10 sources.
Page Count:
20 pages (~225 words per page)
File: TS14_TEbuldfn.rtf
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Unformatted sample text from the term paper:
assess the performance of the overall economy. The need for new building and the demand for them will be higher when economic conditions are good, and when they are lower
the property market will be more stagnant, with the new constructions being at the top of the industry pyramid. When we look at the lifecycle of a construction project it
is apparent that there are many capital requirements that require funding. The value of the project will only be released once the constriction is finished and disposed of with the
construction company receiving the revenue. This can be a lengthy process, and when the development industry is slow then the realisation of profits may also be slower. This creates problems
in terms of cash flow. If we consider a building project there is the need for initial outlay to purchase the land. There are the development costs such as
professional fees as well as the costs of materials and subcontractors, and finally the costs of selling. The majority of these costs are incurred before any revenue is realised. In
a housing market that is stagnating this makes the construction more difficult as there is a greater problem with the cash flow, and many options are available. One of which
may be seen in the use of the developed property being used, once built, as a contra payment in order fund the costs of development and pay for the sub
contractors and the materials used in the building of the finished product. To consider if this may be the case we can
consider the way that developments take place, the background to the construction industry in Malaysia, and an example case of how the value created in the property once finished may
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