A comparison with the April version is below. The revisions reflect a reduction in the number of residential units, an increase in the number of smaller residential units, an increase in the amount of commercial / community spaces. The other design changes have not resulted in any significant change in the construction costs.
The essence of the appraisal is:
- calculate the value of the completed development
- subtract all the costs of development (including the cost of the land)
- = the developer’s profit.
The alternative ‘residual land value’ approach is to calculate the value of the completed development, take away the costs (including the developer’s profit at a % of the development value) with the result being the value of the land.
|April 2015||September 2015|
|Residential – units for sale||110||102|
|Average unit sale value||£248,136||£247,438|
|1.Total residential sales||£27,295,000||£25,238,659|
|Residential shared ownership||8||10|
|Average unit value||£128,227||£105,213|
|2.Total value of shared ownership||£1,025,820||£1,052,130|
|Annual income from residential ground rents||£30,300||£28,200|
|3. Capital value of resi’ ground rents (a)||£497,697||£463,203|
|Commercial rentable area (sq ft)||7,470||10,872|
|Annual rent from commercial units||£74,700||£108,720|
|4. Capital value of commercial rents (b)||£898,501||£1,307,698|
|5. Gross Development Value (1+2+3+4)||£29,717,018||£28,061,690|
|Stamp duty & fees||£82,756||£78,529|
|Construction area (sq ft)||112,235||105,797|
|Construction cost (c)||£17,738,360||£17,306,114|
|CIL & S106 payments (d)||£638,480||£587,000|
|Professional fees 10%||£1,773,836||£1,730,611|
|Marketing & letting||£438,660||£419,128|
|Finance @ 7%||£1,422,108||£1,394,942|
|6. Total Costs||£23,966,775||£23,291,203|
|Profit on GDV||19.35%||17%|
(a) Calculation includes Present Value @ 6% for 3 months
(b) Calculation includes Present Value @ 8% for 6 months
(c) April construction cost = £158.05psf. September construction cost = £163.63psf
(d) April retail space Community Infrastructure Levy (CIL) = £79,080. September appraisal does not show this budget line. Council CIL charging schedule charges retail space at £120psm but B1,B2,B8 (i.e. office and light industrial) space at £0psm.