Development/Englobo Flashcards
What is Englobo Land?
It refers to land with potential subdivision into smaller allotments
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Can DCF be used in feasibility?
Yes, it would
What are five key areas to consider in englobo land development and their values beacuse of this?
- Development Costs
- Council Levies
- Public open space
- Topography
- Project Timing
Why can feasibility studies be risky?
There can be so many variables that need to be considered. The more there are, the more risky the analysis gets
What is a typical profit and risk percentage?
Anywhere from 10-20% and even higher. The riskier the project, the more you would want your P&R to be. In current market P&R may be closer to 20%
What are the 5 factors affecting profit and risk?
- Time frame for development
- Number of lots
- Sales history
- Competition
- Selling period
What are the factors that should be considered when using direct comparison for development sites?
Whether it was sold with a planning permit or not
Size of the land
Development potential/zoning
Location
What case did the turner method derive from?
Turner & Anor v The Minister of Public Infrastructure -
How can you determine profit and risk for your turner method analysis?
You can try to reverse hypothetical analysis of sales, can ask more experienced valuers, can try to ask developers themselves
Can DCF be used in valuing englobo land?
Yes it can be used as a secondary method
What is one positive and one negative of DCF?
Positive: takes into account the timing and magnitutde
Negative: highly sensitive to gearing
As a general rule what IRR would most developers want to see?
Above 15% usually
What are some considerations/references you would want to see when valuing englobo site?
Drawings, with measurements
Shape and ground contour
Plot ratio and site density evaluation
Access
Ground condition and evidence of contamination
Availability and assessment of services: water, gas, electricity, phone
