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Flashcards in Develpment Appraisal Deck (4)
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1

What is a development appraisal?

A series of calculations to establish the value/ viability/ profitability/ sustainability or a scheme

Based on clients inputs

2

What is a residual valuation?

Most common purpose is to find the market value of a site

Based on market inputs (the rics building cost information service/ QS)

3

What goes into a development appraisal?

GDV - Total Development Costs - site value

GDV = (MR x NIA) / Y

Net Development Value = GDV - Purchasers Cost

Build Costs =
Site Prep
Construction Costs (GIA)
Professional Fees (10-15%)
Contingency (5-10%)
Marketing (agents 1%, letting 10%, marketing)
Planning (CIL + S106)
Cost of finance (LIBOR)

Developers profit = 15-20%

4

What is an S Curve

An S curve represents money being drawn down in a development

Low costs at start
High construction cost in middle
Low costs at end

Assumes 100% debt