Development Appraisal Questions Flashcards
What is the difference between a development appraisal and a residual appraisal?
Development appraisal assesses the viability of a development scheme
Residual appraisal is used to find the market value of a site based on market inputs
What headings would I expect to see in a development stack?
Revenue
Costs
Profit
What is NDV?
Net Development Value
GDV - Purchaser’s Costs = NDV
How is the finance rate calculated?
Inflation + Developer’s Risk
What is the difference between sensitivity analysis and scenario analysis?
Sensitivity = Variables such as yield, GDV, build costs and finance rate
Scenario = Development content / timing / costs (phasing / modifying design)
E.g. 1D2D unit configurations or 78 bedroom mix are scenarios
What elements would you test with sensitivity analysis?
Yield
GDV
Build costs
Finance rate
How would you calculate the profit for a commercial office building?
GDV - Costs
What is the difference between an affordable, OMS and BTR appraisal?
What is the timing of revenue for different tenures?
What is key guidance for development appraisals?
What are the key messages in the guidance?
Talk me through the CPD you did for development appraisals?
What are purchaser’s costs?
What is indexation?
What is escalation?
What are void periods?
What would happen to revenue if your yield went from 6.5% to 5%?
What are different types of scenario testing?
How do you choose an affordable housing provider?
Tender unless there is a preferred one stipulated in your S106
What are other development costs in your case study DA?
What is land in your case study DA?
We pay GLA an amount for the land depending on the phase and tenure
What is other revenue in your case study DA?
Why do you get a grant in addition to the value of the AH units? Who is the grant from?
What are retail void assumptions?
