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Session 1: An Introduction to Development Appraisal
- Residual Valuation, Development Appraisal or Cost Benefit Analysis?
- How to value Development Land
- Land Speculation and Betterment
- Planning risk vs Development risk – what is the difference?
- Risk Management and the necessity for profit
- Redevelopment Options – from redecoration to retrofitting, refurbishments and redevelopment
- Volatility and interpretation of results
- The lifecycle of a development project and different stages
- Legal, insurance and environmental considerations
- Where to go to get your data
Session 2: Appraisal Methodology & Sensitivity Analysis
- A detailed ‘walk through’ an appraisal from A to Z
- Measurement Standards and Floor Areas
- Assembling your data and reviewing your information sources
- Capitalising income and calculating Capital Value
- Breakdown of Development Costs with cost checklist provided
- Basis for Site Cost in an Appraisal
- How to calculate finance costs.
- Measurement of profit and viability
- Understanding Sensitivity Analysis
- Version tracking, accompanying notes and assumptions
- Worked examples
Session 3: Project Refinement, Ground Rent Derivation, Inflation & Growth
- Right scheme, wrong answer? Interpreting the results
- Scheme refinement – measuring efficiency of design
- Maximising site value, but at what cost?
- Cost Comparison
- Marginal Viability Analysis
- Elemental and Phase Viability Analysis
- Viability for Planning and Community Infrastructure Levy
- Timing, phasing and interim receipts
- Ground Rent Derivation and Joint Ventures
- Cost inflation and value growth
- Tax considerations
Session 4: Cash Flow & Appraisal Software
- Project programming and the importance of timing and phasing
- Finance costs, interest calculations and ‘S’ curves
- Turning an appraisal into a cash flow
- Detailed review of a cash flow model
- Understanding Discounted Cash Flow (DCF)
- Internal Rate of Return (IRR) or Net Present Value (NPV)?
- Review of available appraisal software
- Dynamic appraisal monitoring and budget tracking
- Constructing an appraisal model in Excel – template provided