Feasibility & Returns
Evaluate projects, read IRR and test assumptions before making an investment decision
- Feasibility Study for property projects: structure and assumptionsThe 5-dimension framework for a Feasibility Study: market, cost and revenue assumptions, and Go/No-Go criteria before buying landLand & Feasibility
- Project IRR vs Equity IRR with a worked exampleThe difference between project-level and equity-level IRR, how to calculate them from cash flow, and the effect of leverage in both directionsLand & Feasibility, Funding & Presale
- How to read NPV, MOIC, payback and cash-on-cashMeaning, formulas, limitations and how to read the main return metrics for property projects, including Profit on Cost and RLVLand & Feasibility
- Sensitivity and stress test: selling price, cost and sales speedTest selling price, cost and sales speed using real figures from the model, and learn how to distinguish a sensitivity scenario from a stress testLand & Feasibility, Funding & Presale
- Investment-grade financial model: data requirements checklistThe 10 categories of data needed to raise a hotel and branded residences project financial model to investment-grade standardLand & Feasibility, Funding & Presale
- SARARN SUK case study: recalculating returns from the modelA hypothetical case study of a 247-unit condominium: recalculating IRR, NPV and MOIC from cash flow and reviewing the investment conclusionsLand & Feasibility, Funding & Presale
- Condotel feasibility example: 64 unitsA condotel feasibility example based on a budget by category, monthly cash flow, Peak Funding and points to watch when reading the resultsLand & Feasibility, Funding & Presale
- JV and sharing of returnsHow investment and profit are split between the developer and the landowner, and an LP/GP waterfall structure with a worked exampleLand & Feasibility, Funding & Presale
- Land bank and phased development: paying for the rope before climbing the mountainComparing a single-phase build with a phased one in terms of profit, IRR, Peak Funding and the right to stop the projectLand & Feasibility, Funding & Presale
- Land held for development: calculate carrying cost before saying the price has risenThe cost of holding land, land and building tax on vacant land, and the price you must sell at for continued holding to be worthwhileLand & Feasibility, Exit & Hold
- Highest and best use: what should this plot of land be used for?Using the 4 tests and Residual Land Value to compare villas, condominiums, hotels and a land saleLand & Feasibility
- Branded residence: is the premium worth the royalty?Analysing the brand premium as an incremental NPV after royalty, specifications, tax and the owner's long-term obligationsLand & Feasibility, Funding & Presale