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Question 4 A listed housing developer has been offered a residential site with planning permission for 6 0 houses in the sum of 4 .
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A listed housing developer has been offered a residential site with planning permission for houses in the sum of
It estimates the average sale price to be based on threebedroom units of at a build cost of In addition, road works and drainage will add a further to the costs. The design team will include an architect, engineer, and project manager. The developer usually allows contingencies and for statutory consents.
No presales have yet been agreed and subject to finance the company intends to sell on completion to maximise their returns. Sales fees are likely to be
The development schedule is based on phases of house sales, starting in month after commencement. The final completion is month
The expected interest rate including credit margin is in view of the lack of preselling. The developer wants a IRR before debt.
Setting out and fully explaining all your assumptions and further inputs you think relevant, prepare a cash flow, advising if this scheme is clearly viable the for the developer and if not what actions the developer could take to improve returns?
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