Development Appraisal Flashcards
(24 cards)
What is RICS Valuation of Development Property (2019)?
It is a guidance note provides a framework for valuing land and property with development potential.
It is to help valuers understand how to approach the valuation of property in various stages of development
It supplements the RICS Valuation – Global Standards (Red Book).
What is market evidence?
What is Land Registry?
The Land Registry is a government department responsible for recording and maintaining information about land and property ownership.
Explain the comparable method.
It is used to estimate the market value of a property by comparing it to the sale prices or rents of similar properties in the same area.
How do you prepare sensitivity analysis?
Location
Revenue
Costs
What is a Development Appraisal?
A financial appraisal of development.
Calculates various outputs eg land value, profit, costs.
What is a Residual Appraisal?
It is the value based on deduction of costs = the development profit or land value.
What are the limitations of the Comparable Method?
Relies on good quality, recent comparables—which may not always be available.
What is GDV?
Gross Development Value is the total market value that a development is expected to achieve once it is completed and sold.
What is nutrient neutrality?
Nutrient neutrality means that a development project does not increase the existing nutrient load (especially especially nitrates and phosphates) on protected habitats.
What are the revenues at Wellington?
£360 per sq ft
Why would the costs at Radlett fluctuate due to different planning strategies?
If it was a Grey Belt site the increase in affordable units would have a direct effect on the profit.
Additionally, a spec application would be more risky and increase the likelihood of an appeal which would be a significant cost expenditure.
Why did you think a resi or commercial scheme would be appropriate for Bromley Heath?
I judged that these were the most appropriate forms of development for the size and scale of the site. A mixed use scheme would not be appropriate here for Richborough’s model.
What are construction costs?
Costs for materials and labour.
What are second hand comparables?
Second-hand comparables are properties that have previously been occupied or used, and are now being resold.
Why did you opt for a residential development over a commercial scheme at Bromley Heath?
I consulted with a highways consultant for advice on the access strategy that would have to accommodate HGVs for a commercial scheme. The advice was that significant improvements to the existing access would have to be achieved which would add significant costs to the project.
This could also risk increased highways concerns with the local authority if significant changes had to be made.
What was the consortium’s minimum return hurdle?
£1,000,000 per net developable acre.
What are the revenues at Bromley Heath?
£425 per sqft
Why did you reduce the revenues by £5 at Malmesbury?
The site sat further away from local amenities than comparable schemes.
What is the easement of the HSE exclusion zones for the High Pressure Gas mains at Malmesbury?
The zone was an easement of approx 20m.
What are the revenues of Malmesbury?
£340 per sqft
What was Wiltshire’s affordable housing policy?
40%
What did you advise at Malmesbury following your development appraisal?
I advised the agent that we could not pursue this opportunity.
This was for a variety of reasons:
Much of the site was sterilised due to 2 High Pressure Gas mains.
The revenues for the site were also not that strong following sensitivity analysis on location to local amenities.
And the affordable requirement of 40% in Wiltshire further eroded the sites profitablility.
