Development Appraisal Flashcards
What is the difference between CIL and Section 106?
CIL is non-negotiable whereas Section 106 is negotiable and site specific
How is the finance calculated?
Assumes 100% debt finance
Finance for borrowing money to purchase land is calculated on a straight-line basis using compound interest over the development period (Rolled-up method)
To calculate, assume the total construction costs over half of the time period using an s-curve calculation
The principle of the S-curve is that the payment of construction costs adopts the shape of an S shaped curve over the length of the project. The purpose of the s-curve is to reflect when monies tend to be drawn down.
What were your build costs for the highgate instruction?
What was the Affordable housing provision?
£225 per square foot
40%
What were your build costs for the Rochester instruction?
What was the Affordable housing provision?
£180 per square foot
25%
What can the developer borrow money for?
Site purchase
Total construction and associated costs
Holding costs to cover voids until the scheme is disposed of
What are the Stamp duty Land tax thresholds for Commercial and Residential property?
Residential:
Up to £250k = 0%
£425k-£925k = 5%
£925-£1.5million = 10%
Above £1.5 million = 12%
Non-residential:
Up to £150k = 0%
£150k-£250k = 2%
Above £250k = 5%
How do you calculate CIL?
CIL is calculated by multiplying the new floorspace that a development will be creating (sqm) by the relevant CIL rate set out in the CIL Charging Schedule provided by each borough. The measurements should include all floors of a building, not just the footprint.
Section 278 Payment
A payment towards highways infrastructure
Which site did you collect your own comparables and data for your inputs?
Wimbledon - House or Flat led scheme
Tell me about your appraisal in Rochester
55 residential units + a church. I believed build costs provided were too low (confirmed by surveyor). Revised the appraisal which reduced profitability. Advised my client against the scheme.
Tell me about your appraisal in Wimbledon
Establishing which was more profitable out of a house or flat led scheme using inputs I had calculated myself for Build costs and sales values. Flats was more profitable due to higher quantum of development
Talk me through your appraisal in Highgate
Block of 5 flats that required the removal of telecoms equipment
What was the affordable housing provision in Wimbledon?
20% for schemes of 2-9 dwellings. 50% if 10 or above
