Proposal Financial Appraisal

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SCHEME NOTES

Scheme Notes
Site Area:
EXISTING USES BUILDINGS AND SITE COVERAGE
Site Area (m2) 7368
Area (m2) by Level
% of site Coverage Land Use 0 1 2 3 All Levels
20.00% Hardstanding (paving) 1473.6 1,474
3.00% Footpaths 221.04 221
8.00% Roads 589.44 589
6.00% Soft Landscaping (grassed areas) 442.08 442
10.00% Offices 736.8 730 630 530 2,627
DEVELOPMENT PROPOSALS 18.00% Residential 1326.24 1326.2 100 100 2,852
35.00% Retail 2578.8 1578.8 578.8 4,736
Demolition? 100.00% Totals 7,368 3,635 1,309 630 12,942
Retain and refurbish?

COST AND VALUE DATA

DEVELOPMENT COSTS AND VALUES BY TYPE OF CONSTRUCTION (INDICATIVE)
Land Cost: £s per m2 Cost: £s per ha Cost: other basis
Low High Low High Low High
Site
Market price for redevelopment 286.00 286.00 2,871,774 2,871,774
Site acquisition fees 5.25% 5.25%
Site Works Cost: £s per m2
Low High
Demolition 35 60
Abnormals and Site Preparation 50 100
Soft landscaping
Grassed Areas 4 7
Planted Areas 10 20
Hard landscaping
Grey Concrete Paving 15 19
High Quality Paving 25 50
Roads and Footpaths 40 55
Buildings Other Misc. Data
Cost: £s per m2 Prices: £s per m2 Rents: £s per m2 pa Yields: % Cost: £s per unit Prices: £s per m2
Low High Low High Low High Low High Notes Low High Low High Notes
Water feature 10,000 50,000
Parking spaces Public art 5,000 25,000
Surface 44 68 40 50 10 10 20-22m2 per car Footbridge 800 1,220
Undercroft 144 192 50 60 10 10 22-24m2 per car Petrol Filling Station 848 1,650 1,600 3,100 100% net/gross
Basement 536 656 50 60 10 10 22-24m2 per car Sheffield Winter Garden 3,500 4,000
Multi-storey 144 192 50 60 10 10 22-24m2 per car 3 storey town houses 450 650 1,440 1,620 97.5% net/gross
Offices 2 storey town houses 520 680 1,340 1,520 97.5% net/gross
Old, unimproved 30 35 10 10 80.0% net/gross General Purpose Hall 650 1,000 1,000 1,150 97.5% net/gross
Old, reasonable repair 65 90 9 9 80.0% net/gross
Modern, reasonable repair 85 95 9 9 85.0% net/gross
New build, good quality 880 1100 140 160 6 7 85.0% net/gross
Refurb, old to good quality 1000 1480 110 140 7 8 80.0% net/gross
Refurb, modern to good quality 200 570 110 140 7 8 85.0% net/gross
Industrial/Workshops
Old, unimproved 15 20 12 12 90.0% net/gross
Old, reasonable repair 20 35 10 10 90.0% net/gross
Modern, reasonable repair 40 55 9 9 97.5% net/gross
New build, good basic 360 700 60 60 7 8 97.5% net/gross
Refurb, old to good basic 400 875 55 60 7 8 97.5% net/gross
Live-Work Accommodation
New build, good basic 725 950 1,400 1,600 90.0% net/gross
Residential
New build apartments 650 880 1,600 1,800 90.0% net/gross
Warehouse conversions 735 1,100 1,600 1,800 85.0% net/gross
Retail
Shops (shell), high street 440 560 150 200 6 6 97.5% net/gross
Shops (shell), convenience stores 440 560 80 100 8 9 97.5% net/gross
Retail warehouse, modern 190 380 100 150 7 8 97.5% net/gross
Retail warehouse, new build 280 410 150 200 6 7 97.5% net/gross
Other
Hotels (mid-range) 1,030 1,350 100 120 6 6 85.0% net/gross
Pubs and bars 850 1,100 130 180 7 9 97.5% net/gross
Restaurants and cafes 900 1,250 130 180 7 9 97.5% net/gross
Leisure centre (dry) 1,040 1,560 150 150 7 7 97.5% net/gross
Leisure centre (wet and dry) 1,720 2,400 225 225 7 7 97.5% net/gross
Student Accommodation 960 1,250 1,800 2,000 90% net/gross
Bank, existing 125 150 5.5 6 97.5% net/gross
Bank, new build 1,020 1,265 150 200 5 5.5 97.5% net/gross
Art Gallery, new build 875 1,020 150 200 7 8 97.5% net/gross
Public Toilets 600 800 97.5% net/gross
Cinema 920 1,680 1,000 1,150 97.5% net/gross
Other Development Data
Low High Notes
Professional fees: % building costs 10% 10% Standard industry fee
Pre contract period: months 3 6 Varies with site size; Recommended as 6 months (0.5 years)
Building contract: months 9 18 Varies with site size; Recommended as 15 months (1.25 years)
Disposal period: months 6 12 Varies with site size; Recommended as 9 months (0.75 years)
Finance rate 7% 7% Standard industry fee
Letting fee (% ERV) 10% 10% Standard industry fee
Investment sales fee (% GDV) 3% 3% Standard industry fee
Occupier sales fee (% CV) 2% 2% Standard industry fee

LAND COSTS

Land Costs
Land Value
Area Unit cost Total cost
m2 £s per m2 £s
Market price for redevelopment 286 £0
Exisiting Use Value (EUV)
Gross Net/Gross Net Price Rent Rental value Estimated
Element Flsp m2 Ratio Flsp m2 per m2 per m2 £s pa Yield Value (£s)
Owner-occupied
0 0
0 0
0 0
0 0
0 0
Sub-total 0
Tenanted
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
Sub-total 0
EUV £0
LAND COSTS £0

CONSTRUCTION COSTS

Construction Costs
Site works
Unit cost Area Total cost
Element £s per m2 m2 £s
Abnormals & site preparation 75 0
0
0
0
0
0
0
0
0
0
0
0
Total cost of site works £0
Buildings
Unit cost Area Total cost
Element £s per m2 m2 £s
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
Total cost of buildings £0
TOTAL CONSTRUCTION COSTS £0

VALUATION

Valuation
Gross Net/Gross Net Price Rent Rental value Estimated
Element Flsp m2 Ratio Flsp m2 per m2 per m2 £s pa Yield Value (£s)
For sale
Apartments 90% 0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
0 0
Sub-total (for sales fees) £0
For rent
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
0 0 0
Sub-total (for letting & investment sales fees) £0 £0
GROSS DEVELOPMENT VALUE £0

APPRAISAL 1

FINANCIAL APPRAISAL 1
Scheme Valuation A
GROSS DEVELOPMENT VALUE £0
LAND COSTS £0
CONSTRUCTION COSTS £0
FINANCE COSTS £0
PROFESSIONAL FEES £0
RESIDUAL PROFIT £0
DEVELOPMENT PERIOD (YEARS)
Pre-contract Period (years) 0.50
Building Contract Period (years) 1.25
Period to Physical Completion (years) 1.75
Disposal Period (years) 0.75
Development Period (years) 2.50
FEES AND FINANCE RATES
Finance rate (% p.a.) 4.5%
Professional fees (% building costs) 10%
Land acquisition fees (% land costs) 5.25%
Letting fee (% ERV) 10%
Investment sales fee (% GDV) 3%
Occupier sales fee (% CV) 2%
RESIDUAL VALUATION
Gross Development Value £0
Construction costs £0
Finance on construction costs (to completion) £0
Professional fees £0
Finance on professional fees (to completion) £0
Land costs £0
Land acquisition costs £0
Land cost finance (to completion) £0
Costs at physical completion £0
Holding costs £0
Letting fee £0
Investment sales fee £0
Occupier sales fee £0
Total costs £0
RESIDUAL £0
DEVELOPER'S PROFIT (% ON COSTS) ERROR:#DIV/0!

ANALYSIS

ANALYSING CHANGE (SENSITIVITY AND SCENARIO TESTING)
% Change Notes
Variable B C To enter a negative number you must use a minus before the number
Rent/Price 0% 0%
Yield 0% 0% Red indicates a negative number should be added (see explanation below)
Construction Costs 0% 0% Green indicates a positive number should be added (see explanation below)
Finance Rate 0% 0%
Disposal Period 0% 0%
B is an Optimistic Scenario: Economic Growth / Boom Economic activity grows faster than its current rate. The demand for accommodation increases and, consequently, rents/prices increase. The risk of property developments and investments being unsuccessful is reduced, so yields fall. Contractors increase building tender prices in the face of increased demand for their services from developers so construction costs rise. Interest rates are raised to dampen potential inflation. Property can be let/sold more quickly in the face of increased occupier demand so the disposal period falls.
C is a Pessimistic Scenario: Recession / Crash Economic activity slows and then contracts. The demand for accommodation decreases and, consequently, rents/prices stabilise and then fall. Property development and investment becomes more risky, so yields rise. Contractors decrease building tender prices in the face of decreased demand for their services from developers so construction costs fal. Interest rates are lowered to encourage investment and economic growth. Property takes longer to let/sell in the face of decreased occupier demand so the disposal period increases.
AUTOMATIC WORKINGS
Valuation A
Gross Net/Gross Net Price Rent Rental value Estimated
Element Flsp m2 Ratio Flsp m2 per m2 per m2 £s pa Yield Value (£s)
For sale
Apartments 0 90% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
Sub-total (for sales fees) £0
For rent
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
Sub-total (for letting & investment sales fees) 0 £0
GROSS DEVELOPMENT VALUE £0
Valuation B
Gross Net/Gross Net Price Rent Rental value Estimated
Element Flsp m2 Ratio Flsp m2 per m2 per m2 £s pa Yield Value (£s)
For sale
Apartments 0 90% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
0 0 0% 0 0 0 0 0 0
Sub-total (for sales fees) £0
For rent
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
Sub-total (for letting & investment sales fees) 0 £0
GROSS DEVELOPMENT VALUE £0
Valuation C
Gross Net/Gross Net Price Rent Rental value Estimated
Element Flsp m2 Ratio Flsp m2 per m2 per m2 £s pa Yield Value (£s)
For sale
Apartments 0 90% 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
0 0 0 0 0 0 0 0 0
Sub-total (for sales fees) £0
For rent
0 0 0% 0 0 0 0 0% 0
0 0 0% 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
0 0 0 0 0 0 0 0% 0
Sub-total (for letting & investment sales fees) 0 £0
GROSS DEVELOPMENT VALUE £0

APPRAISAL 2

FINANCIAL APPRAISAL 2: RESULTS FROM ANALYSING CHANGE
Scheme Valuation A Scheme Valuation B Scheme Valuation C
GROSS DEVELOPMENT VALUE £0 £0 £0
LAND COSTS £0 £0 £0
CONSTRUCTION COSTS £0 £0 £0
FINANCE COSTS £0 £0 £0
PROFESSIONAL FEES £0 £0 £0
RESIDUAL £0 £0 £0
DEVELOPMENT PERIOD (YEARS)
Pre-contract Period (years) 0.5 0.5 0.5
Building Contract Period (years) 1.25 1.25 1.25
Period to Physical Completion (years) 1.75 1.75 1.75
Disposal Period (years) 0.75 0.75 0.75
Development Period (years) 2.50 2.5 2.5
FEES AND FINANCE RATES
Finance rate (% p.a.) 4.5% 4.50% 4.5%
Professional fees (% building costs) 10% 10% 10%
Land acquisition fees (% land costs) 5.25% 5.25% 5.25%
Letting fee (% ERV) 10% 10% 10%
Investment sales fee (% GDV) 3% 3% 3%
Occupier sales fee (% CV) 2% 2% 2%
RESIDUAL VALUATION
Gross Development Value £0 £0 £0
Construction costs £0 £0 £0
Finance on construction costs (to completion) £0 £0 £0
Professional fees £0 £0 £0
Finance on professional fees (to completion) £0 £0 £0
Land costs £0 £0 £0
Land acquisition costs £0 £0 £0
Land cost finance (to completion) £0 £0 £0
Costs at physical completion £0 £0 £0
Holding costs £0 £0 £0
Letting fee £0 £0 £0
Investment sales fee £0 £0 £0
Occupier sales fee £0 £0 £0
Total Costs £0 £0 £0
RESIDUAL £0 £0 £0
DEVELOPER'S PROFIT (ON COSTS) ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
A B C
Developer's profit £0 £0 £0
Land costs £0 £0 £0
Finance costs £0 £0 £0
Professional fees £0 £0 £0
Construction costs £0 £0 £0
£0 £0 £0

FIGURES

FINANCIAL STRUCTURE OF SCHEMES (ABSOLUTE)

Developer's profit

A B C 0 0 0 Land costs

A B C 0 0 0 Finance costs

A B C 0 0 0 Professional fees

A B C 0 0 0 Construction costs

A B C 0 0 0

A B C

SCHEME

£s

FINANCIAL STRUCTURE OF SCHEMES (PROPORTIONATE)

Developer's profit

A B C 0 0 0 Land costs

A B C 0 0 0 Finance costs

A B C 0 0 0 Professional fees

A B C 0 0 0 Construction costs

A B C 0 0 0

A B C

SCHEME

£s

TABLES

TABLES: FOR RECORDING THE RESULTS OF ANALYSIS
Table 1: Sensitivity Analysis (Proportionate Change) Table 2: Sensitivity Analysis (Break-even)
Original New Change in Profit Proportionate change required
Variable Change Profit Profit Absolute % Variable to reduce the developer's profit to 0%
Rent/Price 10% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! Rent/Price
Yield 10% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! Yield
Construction Costs 10% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! Construction Costs
Finance Rate 10% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! Finance Rate
Disposal Period 10% ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0! Disposal Period
Table 3: Scenario Analysis Table 4: Comparative Analysis of Design Change
Scenario Original New Change in Profit
Variable B C Nature of Change (10%) Profit Profit Absolute %
Rent/Price 25% -5% Higher density ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Yield -5% 15% Different mix of uses ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Construction Costs 26% -10% Increased specification ERROR:#DIV/0! ERROR:#DIV/0! ERROR:#DIV/0!
Finance Rate 15% -20%
Disposal Period -50% 100%
Orignal profit
New profit
Change in profit Absolute 0.00% 0.00%
% ERROR:#DIV/0! ERROR:#DIV/0!