Development Appraisals Flashcards
What RICS material do you refer to when valuing development land?
RICS Professional Statement: Valuation of development land 2019
What does RICS Professional Statement: Valuation of development land 2019 state?
Read inline with the red book.
- Always conduct sensitivity
- Try and find direct land comparable
- Report as a single figure
Difference between a development appraisal and residual appraisal?
Development appraisal is a assessment of a developments profitability or viability based on given assumptions.
Residual appraisal is a estimation of land value based on market facing assumptions
Talk Me through Illford?
Residual Appraisal to indicate land value of site with planning for 9 homes. BC given
Talk Me through Westminster?
Appraisal to establish guide price of home to be developed. No planning
Talk me through Chadwick Street
Appraisal run for 4 scenarios. PD+2 yielded highest value. But there was planning risk associated to this.
Talk me through Barking Road?
Appraisal to establish guide price for extant scheme of 6 flats and proposed scheme of 9 flats. Advice was a slight uplift for more risk .
Why did you use profit on cost?
More realistic, market accepted and what’s developers use, profit based on outlay
How did you calculate CIL for Westminster example?
Net uplift on floor area multiplied by charging schedule.
Why is profit on cost used?
More realistic, market accepted and what’s developers use, profit based on outlay
Did you use a sensitivity for Chadwick Street and Barking Road?
Yes it was helpful to use in current economic climate. Residual only shows one moment in time
What was the extra expenditure used in Barking road?
Expense to date of getting the consent
What’s a standard loan to value ratio?
60:40
Why is 100% debt assumed?
industry standard because you don’t know what people will use
What is the difference between BCIS and QS?
QS may have other costs included e.g professional fees
