Development appraisals (lvl 1)

Question 1

What is CIL?

Question 2

What is S106?

Question 3

What are the differences between CIL and S106?

Question 4

How would you estimate likely S106 and CIL contributions?

Question 5

How can a development appraisal be used in valuing developments?

Question 6

Tell me about planning/costs/GDV/individual site elements in relation to a development appraisal?

Question 7

What is a Monte Carlo simulation?

Question 8

What is a sensitivity analysis?

Question 9

How do you carry out a sensitivity analysis? What variables might you change and why?

Question 10

What factors affect sensitivity of a development appraisal?

Question 11

Tell me about your understanding of RICS Financial Viability in
Planning/Valuation of Development Property.

Question 12

Tell me about your understanding of incorporating affordable housing
into development appraisals.

Question 13

What is an S curve?

Question 14

What sources of information do you use when undertaking a development appraisal?

Question 14

Tell me about your due diligence when undertaking a development appraisal.

Question 15

How do you calculate GDV/NDV/finance costs/project costs/project
timescales etc?

Question 16

How do you calculate developer’s profit?

Question 17

What other metrics can you produce from a development appraisal?

Question 18

What is the difference between a residual valuation and a development
appraisal?

Question 19

What are the procedural similarities between a residual valuation and a
development appraisal?

Question 20

What is a development appraisal seeking to measure?

Question 21

What are the common output metrics?

Question 22

Talk me through the key inputs when undertaking a development
appraisal.

Question 23

If you do not have site specific figures, how would you account for
professional, legal and marketing fees?

Question 24

How is an indicative scheme used in a development appraisal?

Question 25

How can a planning appraisal inform a development appraisal?

Question 26

How can a development appraisal help inform a site acquisition
decision?

Question 27

What do we mean by special assumptions?

Question 28

How would you estimate build costs?

Question 29

Which construction industry inflation indices can you use?

Question 30

Where would you source reliable sales and value information?

Question 31

How can you use comparable sales information to inform a
development appraisal?

Question 32

What is GDV?

Question 33

What is IRR?

Question 34

What is profit on cost?

Question 35

What’s the difference between a DCF development appraisal and a ‘normal’ development appraisal?

Question 36

How can you ensure your cash flow shape is accurate?

Question 37

What is a discount rate?

Question 38

How do you account for affordable housing commitments in a
development appraisal?

Question 39

What do we mean by project viability versus project feasibility?

Question 40

What do we mean by risk appetite?

Question 41

On one site, which inputs might change if we are conducting a
development appraisal for a specific client versus a generic
development appraisal without a specific client in mind?

Question 42

How would you decide what land value to input in your development appraisal?

Question 43

When inputting build costs, what measurement basis do you use?

Question 44

When inputting sales values, what measurement basis do you use?

Question 45

What is a typical contingency rate?

Question 46

How would you reflect the additional costs involved in building on
contaminated and/or brownfield land?

Question 47

Tell me about software you have used.
What are the differences between these and when may one be more
suitable than another?

Question 48

Give me a limitation of a piece of software you have used.

Question 49

What is profit on cost/profit on GDV? When would you use one/both of these?

Question 50

What is internal rate of return? How does this differ according to your client’s requirements?

Question 51

What is viability?

Question 52

What is a Financial Viability Assessment (FVA)? Why would one be carried out?

Question 53

What are the key viability benchmarks?

Question 54

What are the key inputs and outputs?

Question 55

What is site value for a scheme-specific FVA?

Question 56

When undertaking a Local Plan or CIL FVA, how is site value defined?

Question 57

What happens if a scheme is deemed financially unviable for a
developer?

Question 58

What are the main forms of finance available to developers?

Question 59

How do you decide what financing rate to use?

Question 60

What usually impacts a client’s financing rate?

Question 61

How do you make sensible assumptions about the development
programme? Who might you consult?

Question 62

What are lenders’ current requirements in relation to gearing?

Question 63

What is mezzanine finance and how is it priced?

Question 64

What information do lenders generally require regarding a property
before agreeing to lend?

Question 65

What is the difference between senior debt and equity finance?

Question 66

What is a charge?

Question 67

Tell me about an external factor which influences the appraisal process.

Question 68

Explain what the Golden Brick means in relation to VAT.

Question 69

What tools do Natural England provide to help developments achieve
biodiversity net gain (BNG)?

Question 70

What is BNG?

Question 71

What % improvement in biodiversity value should development deliver? What sets out this requirement?

Question 72

Explain how the Residential Property Developer Tax works. What rate is the tax at?

Question 73

What other software could be used to produce development appraisals?

Question 74

What are the negatives of a residual valuation?

Question 75

What impact can issues have on your appraisal?

Question 76

What external factors affect the viability of a scheme?