Land/Development question

[Van Aert]

Hi,

Does anyone have any idea how to calculate a land value based on planning approval for the following please;

Flat/Apartment scheme £16.5m GDV

Built cost circa £7.5m

Flat plot, some single storey buildings to be flatted prior to development starting.

So the developer has costs such as architects fees, planning fees, S106 contributions etc etc.

What’s a fair sale price for the land?

 

[nicholsong]

Stating country and location of the land might get a more definitive answer.

 

[enark]

They say 1/3 for the land, 1/3 for the build price and 1/3 for profit.

But this is rarely true. Ultimately its what can be negotiated, unless a similar piece of land has sold recently with the same permissions etc

 

[Van Aert]

Stating country and location of the land might get a more definitive answer.

Home Counties

 

[gus-lopez]

1/3,1/3,1/3 = 5,5 million for the land based on sales of finished flats value.

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[Van Aert]

They say 1/3 for the land, 1/3 for the build price and 1/3 for profit.

But this is rarely true. Ultimately its what can be negotiated, unless a similar piece of land has sold recently with the same permissions etc

Build cost is 45% of GDV, apparently the old third/third/third rule is well out of date.

 

[peterc10]

Home Counties

Still a lot of variables. How close to a good commuter station and what is the commute

 

[enark]

Build cost is 45% of GDV, apparently the old third/third/third rule is well out of date.

Build cost is variable though. Some used to say £100 a square foot, but inflation has probably made that £150, but could be more depending on spec level.

And as has been suggested, location, location, location?

 

[Van Aert]

Still a lot of variables. How close to a good commuter station and what is the commute

Short walk to station then 30 mins to St Pancreas