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Financial Feasibility Studies for Property Development

Theory and Practice

By Tim Havard

Routledge – 2014 – 256 pages

Purchasing Options:

  • Add to CartPaperback: $54.95
    978-0-415-65917-8
    September 10th 2013
  • Add to CartHardback: $175.00
    978-0-415-65916-1
    September 18th 2013

Description

Essential for any real estate professional or student performing feasibility studies for property development using Microsoft Excel and two of the most commonly used proprietary software systems, Argus Developer and Estate Master DF.

This is the first book to not only review the place of financial feasibility studies in the property development process, but to examine both the theory and mechanics of feasibility studies through the construction of user friendly examples using these software systems. The development process has seen considerable changes in practice in recent years as developers and advisors have adopted modern spread sheets and software models to carry out feasibility studies and appraisals. This has greatly extended their ability to model more complex developments and more sophisticated funding arrangements, saving time and improving accuracy.

Tim Havard brings over 25 years of industry and software experience to guide students and practitioners through the theory of development appraisals and feasibility studies before providing internationally applicable worked examples and potential pitfalls using Excel, Argus Developer and Estates Master DF.

Contents

1. The background to development appraisal

a. Definition of Property Development

b. The property markets

c. The property development process in outline

2. The theory of development financial feasibility studies

a. Purposes of development appraisal and its role in the development process

b. The basic development appraisal equation

c. Market investigations and its role in shaping the scheme and determining demand

d. Financing development schemes

e. Different procurement methods and their influence on the development appraisal

f. The financial appraisal of development schemes

i. Determining Building dimensions

ii. Determining the timing of the development and its stages and phases

iii. Estimating development costs

1. Build costs

a. Estimating approaches – Superficial Area, Elemental and Detailed breakdown

b. Sources of cost information

2. The professional Team

a. The construction professionals

b. Other professionals

3. Estimating other development costs – Marketing, disposal, statutory costs, road works etc.

4. Dealing with intangible or uncertain costs

iv. Estimating development values

1. Residential projects or elements

2. Commercial property – non-specialised

a. Rental value

b. Yield and capital value

3. Commercial property – specialised

a. Hotels

b. Other income producing properties

v. Modelling different financial arrangements

vi. Sensitivity analysis

vii. The development appraisal outcome – assessing the results

3. The practice of development financial feasibility studies

a. An over view of the development of practice – from tables to proprietary software systems

b. Tools available to the practitioner – Excel and other spread sheet models and the main proprietary models ; Argus Developer and Estate Master DF

c. Worked examples

i. Modelling development financial feasibility in Excel

1. Traditional Residual models

2. Cash Flow models

3. Advantages and potential pitfalls of Excel

ii. Modelling development financial feasibility in Argus Developer

1. Simple commercial scheme

a. Land Residual

b. Project profitability

2. Modelling more complex mixed and phased schemes

a. Land residual

b. Project profitability

3. Modelling complex funding in Argus Developer

4. Modelling operated assets

a. Hotel developments

b. Golf courses

5. Overview – advantages and potential pitfalls of Argus Developer

iii. Modelling development financial feasibility in Estate Master DF

1. Simple commercial scheme

a. Land Residual

b. Project profitability

2. Modelling more complex mixed and phased schemes

a. Land residual

b. Project profitability

3. Modelling complex funding in Estate Master DF

4. Overview – advantages and potential pitfalls of Estate Master DF

Conclusions – Potential future developments

Author Bio

Dr Tim Havard is the author of two books, Investment Property Valuation Today and Contemporary Property Development, now in its 2nd edition. He has been in the property industry for more than 25 years as a surveyor and academic.

Name: Financial Feasibility Studies for Property Development: Theory and Practice (Paperback)Routledge 
Description: By Tim Havard. Essential for any real estate professional or student performing feasibility studies for property development using Microsoft Excel and two of the most commonly used proprietary software systems, Argus Developer and Estate Master DF. This is the first...
Categories: Property Development, Property, Property & Real Estate Finance, Information Technology