Development Appraisals Flashcards Preview

APC STUDY > Development Appraisals > Flashcards

Flashcards in Development Appraisals Deck (7):
1

Have you undertaken a sensitivity analysis? What did you do?

Yes

Varied build costs, yield and rental values
Changed phasing options
Could have used software 'Monte Carlo' but no experience

2

What are the benefits / pitfalls of low gearing

Gearing is a measure of a company's long term debt against its equity. Low gearing is less risky but higher gearing offers a better profit on cost.

3

What is an IRR? What is a good example of one?

Measures the profitability of investments

12%

I would look at RICS guidance financial viability in planning

4

What do purchasers costs break down to?

Agency 1%
Legal 0.5%
VAT (on agency fees) 0.2%
SDLT 4%

Total 5.8%

5

What is an example of a dev appraisal you've done recently?

What guidance could you have used?

Project x Manchester city centre

RICS guidance - VIP 12 valuation of development land

6

What are the main headings on a residual appraisal?

Income
Developer profit / site value
Build costs
Professional fees
Finance rate

7

What are the professional fees ?

Typically 10-15%

Architect
M&E
Highways
Environmental
Planning consultant
QS / employers agent
Acoustics
Fire
Services