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Introduction
Development Appraisal Report for Crossway, Crossways Business Park is a strategic location in the central London for the commercial development. The surrounding of the location make it attractive for the commercial purpose nationally and internationally.
The area gives direct access to the London which makes journey to the business clients easier. The mainly purpose of this report is to highlight the development appraisal by providing working cash flows and models. In this report the main features of the appraisal discussed which lead towards the better approach for development.
Development Appraisal
This report contained the information which provides financial viability of the park or site for their assigned resources and the future capacities. The place is already captured by the local empires. From many years development of the surroundings is in the procedure and lots of businessmen buy and rent it for the profit. The location provides solutions to many occupiers and the businessmen.
Demand of the offices in this location is still very strong and because of the shortage of the supply of the offices in this area they are expensive. In terms of renting out the office the good quality office is available with the range from £ 105 per sq mt to £ 120 per sq mt. The commercial value of the land in this area is determined by taking the data from the companies already operated in this area. The findings are:
Site Description Transaction price Price per acre
Dartford 0.6 acres under £100,000 £ 400,000
The above mentioned figures are taken from the small land the profit and the price can be increase if the area increases. The freehold interest in this area increases the fascination of the businessmen which create the stable demand for the land. The further investment can also increase the demand of the land for the purpose of operating business or for the renting out as well.
The Crossway Park is particularly identified for the development because the site is outside of the urban area. This plan is not only important for the structure of the area but it also increases development of the country, improve infrastructure and contribute in the economy.
It also increase the growth of the employment in this area. Major development occurs by adding public transport valuation and policy authorization. Developer also contribute towards office renovations, public libraries and parking areas for the workers.
The basis of the development appraisal can be understood by estimating the cost first. It will enable us to analyze the risk and the cost associated with the project. Firstly we have to look at the restrictions and constraints which may be required some cost to developer.
The cost includes water storage to prevention from the flood, ground improvement by putting some investments, offsite roads and access, renovations of the land also required. After analyzing the cost some of the abnormal factors calculated so that they can be evaluated on the earliest. However, developers factor into the price they bid for land an allowance for which will be acquired as their development scheme.
The main focus of this development Appraisal report is the substructure which is mainly linked with the water storage and the ground.
The different property dealers of the area dealing in the residential and commercial sector. After discussing factors around the site, it can be said that the plots in this location are cheaper as compare to the other places. The commercial side is more benefited if we compare the site to the residential.
The lower cost per office determined that £100,000 per acre to the service land plots. The cost mentioned above is the estimated cost, which is not fixed and can be varied. The development appraisal are created on the below expectations.
Construction costs £50 per sq ft
Contingency 5%
Developer Fees 10%
Acquisition Fees 15%
Disposal Fees 1%
Stamp duty 5%
Development Density 20,000 per sq ft
Net to Gross Building ratio 75%
Sales Rate £200 sq ft
Profit 15% on cost
It is advised that the construction cost might be increases by £5.0 per sq ft. It can be increase in the 15% of the construction cost. The overall cost which includes contingency and other fees it will give the profitable values to the construction business. The plan shows the commercial value will be increase…
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