Fifth Capital have released their revised viability appraisal. You can download the full appraisal from this site or find it on the Council’s planning website.
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 |
| Yield | 6% | 6% |
| 3. Capital value of resi’ ground rents (a) | £497,697 | £463,203 |
| Commercial rentable area (sq ft) | 7,470 | 10,872 |
| Rent psf | £10.00 | £10.00 |
| Annual rent from commercial units | £74,700 | £108,720 |
| Yield | 8% | 8% |
| 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 |
| LESS | ||
| Site value | £1,426,820 | £1,353,953 |
| 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 |
| Sales fees | £445,755 | £420,925 |
| Finance @ 7% | £1,422,108 | £1,394,942 |
| 6. Total Costs | £23,966,775 | £23,291,203 |
| Profit (5-6) | £5,750,243 | £4,770,487 |
| 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.