Development Appraisals L2 and L3

Question 1

• Can you explain the property for development in York?

Answer 1

• Development Appraisal
• Supported living scheme
• Brownfield site £1M house
• Permission for 25 beds (1 and 2 bedroom apartments)
• 50% of property saleable space - lots of communal
• Information provided by client (three tender prices)
• Development profit £1M (same as Homes England Grant)

Question 2

• How did you gather the GDV for the York development?

Answer 2

• Collected comparable evidence of supported living accommodation – McCarthy and Stone apartments
• Adopted a capital rate to each apartment - £250,000 to £350,000
• Total = £7M

Question 3

What were the figures for the York development?

Answer 3

• GDV £7M
• TDC £6M - medium tender price
• Developer’s Profit £1M (15% GDV)
• Homes England Grant = profit

(Sensitivity Analysis - all tender prices viable)

Question 4

• What do you know about supported living accommodation?

Answer 4

• Understand the fundamentals of the varying care and support facilities
• Similar to a normal apartment development however has communal space
• Care attribute wasn’t to be valued

Question 5

• Can you explain the property for development in Manchester?

Answer 5

• Development Appraisal
• Council and not-for-profit developer
• 91 residential apartments (1 and 2 bedrooms)
• Build to rent

Question 6

• How did you gather the GDV for the Manchester development?

Answer 6

• Collected comparable evidence retirement apartments rental evidence
• Expanded to Greater Manchester area
• Adopted circa £1,000 pcm
• ARY of 6%
• Total = £18M

Question 7

What were the figures for the Manchester development?

Answer 7

• GDV £18M
• TDC £20M
• Site investigation costs £4M
• Negative £2M Developer’s Profit
• Not for profit (only needed to break even)
• Advised that development not viable with such high site preparation costs
• Development did not proceed
• Undertook sensitivity analysis

Question 8

• Can you explain the property for development in Harrogate?

Answer 8

• Residual Valuation
• Council and affordable housing developer
• Brownfield site (former railway sidings)
• 1.5-acres
• Permission for 20 townhouses (2-4 bedrooms)

Question 9

What were the figures for the Harrogate development?

Answer 9

• GDV £5.5M (houses £250k - £400K and 4 properties set at £75k)
• TDC £4.5M
• Developer’s Profit 15% GDV
• Remaining Land Value £800,000
• In-line with comparable land at £500k per acre

Question 10

How did you identify the affordable housing provision?

Answer 10

• Information provided by client
• Contacted Local Authority for information (set rate)
• Often a % below MV