Land Valuationresidual land valuation detailed reports along with sensitivity analysis to help our client understand the options available to them and the implications of each.
Land Valuation for development purpose depends on a number of factors. For example, what can be built there and what likelihood is that planning permission would be granted. Also, there is a myriad of potential costs in development, so assessing these carefully helps determine the costs related to the plans. Similarly, a reasonable expectation for a developer’s profit will vary depending on the scale and location of the development. Also, assessing the costs, the gross development value of the development plot needs to be considered.
A financial viability report combined with Sensitivity analysis and scenario planning modelling will help determine the level of potential profitability.
Residual Method of Land & Site Valuation
Residual valuation method is the process of valuing land with development potential. The residual method calculates the market value of the property in its present form by calculated from the value of the completed development minus the costs of development (including profit). The complexity lies in the calculation of inflation, finance terms, interest and cash flow against a programme timeframe.