The unredacted reports have been released – here they are:
Economic Viability Appraisal Report
Viability Review
Headlines
Commercial units.
Rent = £10psf (£107psm) per annum for a shell unit (so services, rates etc will all be additional). “The values attached to these units reflect the likely tenants of the accomodation, being local occupiers”. Really affordable for locals? By comparison Co-Exist charge £12-14psf for Enterprise Space and £10-12psf for artist studios, but that’s inclusive of all services. Meanwhile the old Princes Trust unit on Stokes Croft (4,815sq ft on 3 floors) is on the market at £5.20psf and another recently refurbished 547sqft unit on Stokes Croft is on the market for £8.20psf. However, 32 Stokes Croft is on the market at £13.50psf.
Freehold of the commercial units will be sold to an investor for £900,000. YP=8%.
Residential Units.
- 1 x bed flat = £215,000.
- 2 x bed flat = £250,000.
- 3 x bed flat = £300,000.
- 3 x bed house = £375,000.
- Affordable units (which comprise all the units in the Carriageworks building) will be shared ownership with 40% sold to the occupier and 60% to a RSL. So the three 2 bed duplex units, which each have a value of £265,000, would be bought on shared ownership for £66,000.
Freehold of the residential units will be sold to an investor for £500,000 (ground rent of £300/unit with 6% YP).
Development costs
Construction cost of all types of unit = £158psf (£1700sqm).
Costs are based on the fourth quarter 2014 but Fifth Capital won’t be on site until third quarter 2015 at the earliest; this could add 4-5% to costs (BCIS estimate). This inflationary increase will have to be covered either from the developer’s profit, the contingency fund or by an increase in sale values.
Costs assume that works will be procured by a national housebuilder – which Fifth Capital is not!
Development cost (construction cost + fees + marketing + agents + legals + finance) = £24m or £213psf (£2,300psm)
The difference between net and gross floor areas is 26%.
There is no allowance for the cost of archaeological works, works in relation to flora and fauna, bats, pvs, artwork, any works to adjoining properties (e.g. underpinning), Japanese knot weed, asbestos etc. The assumption must be that these will be picked up by the 5% contingency fund or from the developer’s profit.
Developer’s Profit
£5,750,000 (19% of gross development value).
Land Value
£1.4m. The benchmark landvalue used to justify this land value is Huller House & Cheese Warehouse. This is a Victorian and early 20th Century warehouse block fronting the harbour in Redcliffe – some of the most expensive real estate in Bristol. Questionable if that’s a good comparable.
Total cost
Total cost of development (£29.5m) equates to £2,800psm (assuming 10,430 sqm gross area developed).