Financial Appraisal Report Content

Financial Appraisal Report Content

The financial appraisal report should contain 4 sections that cover the initial design concept, initial financial appraisal, design and financial viability analysis, balancing design and profitability. Further detail on each of these sections is provided below.

Section 1. The Initial Development Proposal

This section should provide a brief description of the design concept, comprising of (i) a copy of the design concept drawing; and (ii) the basic details of the design concept in a style similar to that of the example used in class. You should use the table found in the SCHEME NOTES sheet of the spread sheet. You will need to estimate the m2 floor space of each building use (such as office, retail residential), carparking and each site work (grassed areas, hard landscaping, footpath, roads etc). To do this, you will need to make some assumptions about the % proportion of the site area given over to each of these. A general guestimate is perfectly fine. The total ground floor area of all buildings plus the area of all site works should match the site area. You will also need to make some assumptions about how may floors each building has to fully complete the table.

Section 2. Initial Financial Appraisal

The residual valuation of the design concept, including:

1. Cost and value data: A brief explanation of your choice of cost and value data. It is not necessary to go through the cost and value data one by one. Your broad approach should be set out. For example, that if you have designed a high-quality scheme and selected costs and values from the high end of the ranges given, explain why.

1. The appraisal: present the full workings by screen shotting and reproducing the following spreadsheet sheets in the report (each sheet should have its own page) – LAND COSTS, CONSTRUCTION COSTS, VALUATION and APPRAISAL 1.

1. The result: state the rate of developer’s profit achieved and comment (briefly) on the viability of the scheme.

Please note, the purpose of this section of the financial appraisal report is not to prove your design concept achieves a 15-20% profit. You are simply undertaking an initial analysis to determine your design concept’s profitability in order to help you complete the remaining sections of the report.

Section 3. Design and Financial Viability

Undertake a ‘hypothetical’ design analysis on your design concept and analyse the results. This should cover:

1. For each ‘hypothetical’ design change (development density, mix of use and building specification):

0. a brief description of the method, including tables of area changes for density and use changes (as set out on page 1 of the note on ‘Design and Financial Viability’); and a statement of the % increase and / or decrease in construction costs and rents / prices for specification changes (as on page 2 of the note);

0. the resulting developer’s profit.

1. A comparative analysis of the results, including a commentary and tables in the style of those presented in the notes and lecture slides.

Section 4. Balancing Design and Profitability

A consideration, in the light of the foregoing analyses, of the scope for revising the design concept to achieve a better balance between design and profitability, covering:

1. Design changes that either (i) for high profit design concepts, will enhance design and reduce profit without making the design concept financially unviable; or (ii) for low profit design concepts, will enhance profit without making the design concept unacceptable in design terms.

Please note, the purpose of Section 4 is not to prove your revised design concept achieves a 15-20% profit. Rather, you should demonstrate what design changes you will consider that will help to effectively achieve a better balance between design and profitability.

Financial Appraisal Report Format

The report should be A4 size and paginated so that the document is divided into discrete pages and is reproduced in a professional manner. Screenshots of the appraisal workings should be clear and legible. The title page should carry the title of the assessment, your student number, the University, the Department and course details, and the date of submission.

The word guide for the text part of this assessment report (that is, excluding Tables etc) is 750 - 1000 words; the word limit is 1,250 words. You must include a word count of the text on your cover page.

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