1: Feasibility, Valuation, P Types, P Development Flashcards
Define feasibility according to Graaskamp, explain its 5 components
A property project is feasible when there is reasonable LIKELIHOOD to SATISFY objectives when A COURSE OF ACTION has been TESTED FOR FIT to specific constraints and LIMITED RESOURCES
Market value definition, valuation limitations, 4 valuation approaches (and its uses)
- Exchange value agreed between willing buyer&seller at a specific transaction time, knowledgeable, no compulsion, prudently
- Only for professional purposes: Valuer’s Professional Institute Rules and Guidelines
- Direct comparison (residential, method), cost/summation approach (old prop, destruction=development expense), income approach (income generating; rent, years purchase, sales price), hypothetical development/residual land (ripe for development, backward)
Differ feasibility and valuation
- Answer question - determine value
- Many factors - price & value (NPV)
- Critical limiting conditions (No-Yes)
- Particular client - fictional client (no objectives, capacities, skills, bus. limitations)
Decision making process (and implications to feasibility process)
- Define objectives (define problem)
- Identify course of action (Site-market analysis, alternative uses)
- Forecast consequences of alternatives (financial analysis)
- Prioritising consequences (risk analysis)
- Choose one course of action (conclusion, recommendation)
7-step framework of total feasibility analysis, and preliminary financial feasibility models
- Objectives (problem)
(Market)
- Market trends
- Market segmentation to identify potential customers
(Site)
- Legal-political
- Aesthetic-ethical
- Physical-technical
- Financial synthesis
As full-scale feasibility analysis is expensive ($, time), simplify process to eliminate projects, depends on pov
5 property types/market sectors and its subdivisions
COMMERCIAL (CBD high-rise, secondary BD - St Kilda Rd, district centres - Box Hill, suburban offices - Hawthorn, office parks - Port Melbourne)
RESIDENTIAL (low-housing estates, flats, med-infill(often townhouse groups)-inner city(med-rise), hi-CBD -density)
RETAIL (CBD, super-regional-sub, neighbourhood, strip shopping, markets, homemaker centres-peripheral-single&carpark)
INDUSTRIAL (warehouse, manufacturing, hi-tech, industrial estates)
OTHERS/TOURISM (
Mention 5 things that describe what property development is about, and 3 examples of its reasons (benefit-based)!
P Development is about (1) space creation, (2) achieving set of outcomes, (3) profits made-lost, (4) capitalising on opportunity, (5) knowing product-market-marketing
Reasons examples: (1) For profit, (2) building space for owner occupation, (3) building space for rent (portfolio development)
Define real estate/property and mention the 8 major players:
- Describes land, improvements that support current use of the land (TO land) and improvement that add uses of land through new structures (ON land)
- Developer (initiator, raising capital), regulator (building and planning), consultant (specific fields), builder, agent (developer: -occupier to purchase, -investor to sell), occupier, investor (enjoy capital gain/growth and lease), speculator (wait the price to increase w/o add value to prop.)
Explain the concept of real estate tenure, and mention 4 factors and influence it!
- The right to use RE and excluding other people from using it, including rights to improve, benefit, dispose it and refuse to exercise the stated, all with accordance to CONVENTION and the LAW
- Factors: Legal system, political aspects, town planning, environmental factors
Define improvements to and on land, differentiate them using examples!
ON:
structural/construction/additional insertions type things onto the land like fencing structures, radio masts, radios, trees and buildings.
TO:
things that are done in (within) the (physical) land like drainage, filling, addition of trace elements to the soil, as well as clearing of the soil and levelling the soil
