- BRIEF
A site is required for the proposed development:
- Minimum of 40 residential units of suitable type for the site and location you have chosen. The size of each unit must be a minimum of 60m2.
- Freestanding retail unit suitable for a supermarket (Tesco Express or Sainsbury Local) etc. This unit requires a minimum gross floor area of 180m2.
- A Public Library. This building can be single or two storey comprising a minimum of 200m2. This building is to be transferred to the Local Authority on completion.
A Section 106 agreement (Town and Country Planning Act 1990) requires that 20% of the residential units are to be affordable.
Community Infrastructure Levy will be required in accordance with the Local Planning Authority’s Policy.
The supermarket will be pre-let on five year FRI lease and then sold once the development is completed to an investor.
You must assume that your site has a definitive footpath crossing.
The developer requires a 20% return on the Gross Development Value
Cost of borrowing is fixed at 8% per annum.
You are instructed by High Developments Limited who are keen to take the proposed development forward. You have been asked you to prepare TWO Reports.
Report 1- To advise the client on the process of acquiring the site, obtaining planning permission, dealing with statutory obligations and based upon the content of Report 2, what the developer should offer to acquire the site.
Report 2- A fully populated Development Appraisal in the format of a Excel Spreadsheet that shows the financial viability of the proposed scheme and identifies through the financial modelling the price that might be offered for the site.
You are to select any site in any location that is suitable for the above proposal. For your chosen area you will be required to research the local planning policy requirements in connection with the proposed development and advise the client of these (in Report 1).
Other than the costs identified you are to research appropriate costings for the development or make sensible, justified assumptions as to costs (as applicable). You should also assess the suitable Gross Development Value, i.e. Gross Receipts from the sale(s) of the completed development.
The recommendation for the price to be paid should be set out in Report 1 backed by evidence provided in Report 2 (The spreadsheet).
- ASSESSMENT CRITERIA
- Development Appraisal (applicable to Report 2) – (40%) The appraisal should be presented to show all the relevant cost components set out in a logical order and with a cost spread that replicates the order of events during a construction project.
- Development Report (applicable to Report 1) – (30%) The Report should set the scene of the development process and the planning process and then provide an overview of how the development should proceed and provide explanations to all the costs assumptions and cost spread.
- Depth of understanding – (20%) of how funding issues and the development timetable can influence the profitability as well as appreciating the sensitivity of development appraisal.
- Presentation – (10%) The Report and Spreadsheet should be neatly presented to aid understanding and clarity for the reader.
