Valuation Level Three

Question 1

Tell me about how you have used a sensitivity analysis to produce a reasoned analysis of risk.

Question 2

Tell me about a development appraisal you have used to advise on the acquisition/disposal of a development site.

Question 3

Tell me about an example of when you have provided reasoned advice on an appropriate source of development finance.

Question 4

And what measurement basis do you calculate your bill costs?

Answer 4

GIA basis

Question 5

How do you work out your contingency rate?

Answer 5

Typically this range is between five and 10% dependent on risk.

Question 6

Where does the information provided by BCIS come from?

Answer 6

This is an RICS service. Updates are obtained monthly from recent contract prices/tenders agreed.

Question 7

What are three levels of debt?

Answer 7

Senior debt

Secondary funding

Mezzanine funding

Question 8

What is a profit erosion period?

Answer 8

The length of time it takes for the development profit to be eroded by holding charges following completion.

Question 9

What is included in the preconstruction period?

Answer 9

This could be:

Site assembly
Obtaining vacant possession
Planning
Agreeing architectural designs
Soil investigations

Question 10

What is included in the construction period?

Answer 10

Decontamination
Demolition
The main build