Development Appraisal and Cost Forecasting Research Paper

Development Appraisal and Cost Forecasting - Research Paper Example The rent that can be acquired on the site will be 3190 per square meter. This makes the developer to get the capital back in 8.6 years. The profits start from 9 the year. According to the third unit the developing, investment and rental activities are not feasible. The developer can choose between the above two options and can decide on it. As per the competition he cannot get the bid less than the 22353.84 GBP per square metre. By calculating the profit the investment can be compared with the A out of the comparables given to compare the rental activity. This is because the rent is higher in that case and the developer is using steel and dress stones to clad externals. The maximum bid that can be offered to get the bid can be decided by taking into account that the pension fund is offering 610 basis points above LIBOR. This will make the investment of 27500 GBP per square meter increased by 2612.5 GBP per square meter. The maximum investment the developer can offer per square meter to get the bid is 30112.5 GBP. To this the other charges should be added. They are architect costs, solicitor costs, VAT, valuation fee stamp duty and LIBOR and they amount to 19.35 percent. This increases the amount to be invested per square meter to 35984.4375 GBP per square meter. The developer cannot invest or bid more than this per square meter. Any customer can invest 2.5 times the disposal price to buy a flat. ... Any customer can invest 2.5 times the disposal price to buy a flat. This gives 1,25,000 GBP for each flat and the revenue on selling the total 6 flats will be 7,50,000 GBP. The cost of land is 3,88,000 GBP. The profit of the company if the flats are sold for 7,50,000 GBP should be 165000 GBP. The cost of the flats for the company should be 585000 GBP. The cost of built ceiling shouldbe 585000 - 388000 = 197000 GBP. The company should built the flats at the cost not more than 1,97,000 GBP. 3. Anticipated Profit from Scheme Cost of site = 470000 + charges = 470000+11750+ 7050+82250 + 2500 = 573550 GBP The cost of interest rate 10 percent per annum. This makes the total cost of site = 659582.5 GBP. The expected rentals on each office space developed by client = 7500 x 25 x 12 + 500 = 2250500 GBP per year. 1 acre = 4046.9 square metre 2 acres = 8093.8 square metres. The developer is anticipating 7.5 percent of profit. In the coming 3 years of time. The cost of land is 573550 GBP The rentals can be acquired in 3 years = 6751500 GBP. The cost f built should be not more than 6751500 - 573550 = 6177950 GBP. The anticipated profit of the developer will be 573550 GBP in a three years period. Section B The wall area of the building I = 2x22/7x 11.25 x 2.3 = 162.64 Square metres The floor area of the building I = 22/7x 11.25 x 11.25 = 397.76 Square metres. The wall to floor ratio = 0.40. This implies that the building is stable regarding the wall to floor ratio. The wall area of the building ii = 80 x 2.3 = 184 square metres The floor area of the building ii = 20 x 20 = 400 square metres. The wall to floor area ratio is = 0.46. though this is substantially stable and efficient, the stability is les than the i building. The wall area of