【正文】 340,000 / 163。67,250 On site costs over total dev’t period 163。4,593,043 30 Site Costs: Site price 163。2,917,128 x 20% = 163。1,311,473 163。479,341 163。267,540 + 163。4,593,043 Building costs = building cost / m2 x GIA = 163。 /m2) x 130 Estimated annual market rent (163。 ) 650,000 Capitalised 8% x 8,125,000 Less Development costs (DC): Construction costs (5,000m2 163。969/ m2 x 2,000 m2 = 163。80,000) x = 163。1,209,920 163。2,622,945 Over void period: = (163。583,426 On land costs = future residual balance – [future residual balance / (1 + 20%)] = 163。711,492 Acquisition costs % site price 163。158,005 Total Interest Payable : 163。3,993,950 = % per annum Payback (years) ? indicates number of years to pay back costs to break even point ? Inverse of ine yield (cf YP) ? cost/rent = years to payback ? 163。 765,507 *equal to profit on land and development costs in residual site valuation Profit appraisal: snapshot methods of expressing developer’s profit Profit as % of development costs (return on costs) ? Useful for trader developers 32 Profit as a % of development value ? Remember profit as % costs or value are related Ine yield ? Rent as % of development costs ? Useful for investor developers as it reports the annual profit ? must be higher than interest payments in the long run ? 163。165,934 Over void period 163。711,492 Maximum amount that should be paid for the site if the proposed development was to proceed and all of the valuation assumptions held true *If site was purchased at the start of the development, interest on site costs must be paid over the total development period. To do this the figure calculated thus far must be discounted to determine its present value at the shortterm finance rate of 7% over the total development period. Even if money is not borrowed to fund site purchase or construction the opportunity cost of funds used should be reflected in the valuation and the lending rate is a good proxy for the opportunity cost of capital. **Usually include legal costs, tax (Stamp Duty and VAT), valuation and agents’ fees plus any precontract investigations such as soil surveys, environmental impact assessments and contamination reports Key Inputs ? Gross and internal area and efficiency ratio ? Rent and yield ? Gross and development value and disposal costs ? Building costs, external and ancillary costs ? Professional fees ? Contingency ? Marketing costs and letting fee ? Developer’s profit ? Interest / finance costs ? Acquisition costs ? Development period 29 Residual profit valuation* ? Also known as profit appraisal or viability statement ? Assume – Development retained as an investment so no sale fees Development value: Net Development Value 163。 the entrepreneurial return for taking the risks ? Dependent upon state of the market, the size, length and type of development, the degree of petition for the site and whether it is prelet or forward sold ? More risky