Development Appraisals

Development Appraisals

1. What are the main components of a development appraisal?

   • Construction Cost
   • section 106
     • What is section 106
       • Planning consent
       • Section 106 of the 1990 Town & Country planning act
   • TAX
   • Land Aquisition
   • Stamp Duty
   • Professional Fees/costs
   • Planning costs
   • Agency Fees
   • Profit

2. What is the RED BOOK

   • RICS Appraisal and Valuation Standards
   • Contains mandatory rules and best practice, guidance and related commentary

3. How do capital allowances influence a development appraisal

   • Capital allowances give you money back off the tax paid
   • There are discounts for tax such as M&E incentives, having BREEAM, building in enterprise areas and land remediation

4. How would you carry our a development appraisal

   • Location and size of land
   • Get as much info on the plot, history, conditions, plans etc
   • BUDGET
   • Rough cost of similar projects in that area, adjust to present using TPI
   • Cost of fees as per a % of construction cost
   • when every cost is accounted for, work out potential revenue of the property
   • convert to net present value
     • or cost today, no calc is required
     • for future cost/rev, calcs need to be made using discount rate to the start date