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You should identify a real site in England and Wales (Scotland has a different legal system which makes the development process mo

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  • Post Date 2018-11-09T12:13:57+00:00
  • Post Category Research Paper Queries

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You should identify a real site in England and Wales (Scotland has a different legal system which makes the development process more complicated) (and preferably in London), identified by address, of a minimum land area (not the sum of the floor areas of

APRO708 Development Finance and Funding 2017

Coursework  initial work; Individual

You should identify a real site in England and Wales (Scotland has a different legal system which makes the development process more complicated) (and preferably in London), identified by address, of a minimum land area (not the sum of the floor areas of an existing building on the site) of 1 acre (43,560 square feet) for which, acting as a property development company, you will put forward proposals to acquire and develop. The site will not be one which you (or to your knowledge anyone else in the class) have used in connection with any other module:  if it is, then your work will not be accepted. It is preferable if no-one else in the class is also using your site but if the same site is found to be used by two or more students, so long as they present different development proposals the work will be accepted.

Your site does not have to be currently on the market for sale and can contain existing buildings which you can assume will be cleared away. The site should be capable of being developed, if it is not already developed, so should not, for instance, comprise part of a green belt or a garden square. The site should front directly onto a road which is publicly maintained and should not rely upon access rights over any third party land.

Having identified your proposed site, you should investigate the broad planning position and develop a strategy for developing the site. Your development should contain at least three planning user classes, which are to be submitted, with the site address, to the module leader by email, before 11th February 2017, for approval. No proposed planning use at your site should occupy less than 12% of the net floor area of the whole development. You should draw up a rough plan of the proposed development with an indication of the intended number of floors, showing how it relates to its surroundings.

Note that houses and flats are both considered for the above purpose to be in the same planning user. Social housing is not regarded as a different planning user from open market housing. Student housing is a different use. Your development should not include any elements which you propose will be operated as a going concern by the developer. Nursing home and private hospital uses should be avoided. You need to choose uses for which you will be able to find comparable evidence of rental values for use in your appraisals. Please note that more obscure uses such as doctor’s surgeries, nurseries, public houses, sports and fitness clubs and educational establishments may prove very difficult to value, so might be best avoided. Ground rents and parking spaces will not be permitted as main user classes. Hotels should ideally be valued without recourse to the profits method. A3 use should be regarded as part of high street retail.

If you would like to confer with the module leader about anything in your proposals, and in particular the planning uses you are proposing to include in your development, you should contact him in room M134.

A: Individual

Having identified your proposed development and reported the address and outline details to the module leader, you will now produce an outline development appraisal to assess broadly how much the market considers it can afford to pay for the site. The concept of development appraisal will by now have been demonstrated in class and you will have an outline computer programme on an Excel spreadsheet on which to base your appraisal. A development cash-flow (required only for Coursework 2) will also have been demonstrated in class. The appraisal must demonstrate that the proposed development is profitable.

You will now need to have an idea, based on the information you have gathered to date, of how much your development will be worth when completed and a proposal for its disposal. Your idea of end value is important as it will be a fundamental part of the development appraisal, but it may change when you further investigate comparables.

Again if you have any issues with the mathematics of the appraisal or operating Excel spreadsheets, contact the module leader. Feel free to discuss the appraisal with the module leader at any time. At this stage the format of the appraisal and your procedure is more important than the precision of the purchase price for the site.

Submission date: Thursday April 6th 2017 at 1.00.

This part of the coursework carries 35% of the module marks.

Marks for Coursework 1 will be allocated in accordance with the following breakdown (adding up to 100% of the mark for this part):

Locality (10%): A description the location of the site in the wider context. What are the use classes which are predominant in the locality? What are the heights of buildings generally? What type or style of buildings are near the site and what are their rough ages? When was the area first developed and how much regeneration has occurred since? Has regeneration been of single buildings or more extensive?  What are the access and communications? Are there any predominant land owners or occupiers? Is there local public open space? What is the general feel of the area? Is the location improving or in need of general upgrading? How accessible is the location, i.e. road, public transport?

Site description (12%): A description of the site itself. Is the site flat or sloping? Is it a convenient shape which makes development relatively simple? (rectangular sites are much easier to deal with). What currently occupies the site – by use and building description? Is the site currently actively occupied or is it vacant? Think about tunnels under the site, flood risk, access into the site, ease of construction. Is it a site which is going to be relatively difficult to build upon? You should note the tenure of the site – is it freehold or leasehold? Ideally the freehold interest in the site will be owned by the developer during the development period. If the property is to be developed with leasehold ownership, give details of the proposed leasehold terms and state why the freehold is not available. Note that if the freehold interest is not to be purchased, then the development will require consent of the freeholder, who may have ideas/restrictions on what can be built on the site and may require some form of ground rent/equity participation (and see later in these instructions the need to provide a commercial ground rent calculation whether or not your site is actually available on a freehold or leasehold basis).

You will need to examine the state of the site as far as environmental matters are concerned. You may want to comment on the historic uses of the site, as far as you are able to establish; and an initial indication may be found by reference to historic maps. If you feel that an environmental remediation will be required, then you should estimate how long this might take and adjust the development period to allow for this. You would also need to allow for an estimated cost of remediation in your appraisal of the site.

It may be relevant to comment upon the issue of the archaeology of the site. Is it a site which may be subject to a local authority requirement for an archaeological dig before development takes place (probably with the developer paying for the dig)? Again if a dig proceeds, then it will take time and could impact the development period. If anything material is found then it may be a requirement to bridge over the archaeological remains in order to leave them undisturbed.

Acquisition of the site (10%): A description of your ideas on the methodology of acquiring the site permitting time for you to obtain planning consent. Comment on the risk of acquisition and risk mitigation or passing the risk to another party. Will you buy the site in stages, how and why? Remember that if you intend to borrow money to fund the development, then the site will need to be owned at the time that development finance is actually advanced. A lecture covers the relevant issues here in detail.

The Proposal and fit with the site (12%):  A description of your proposed development and planning uses. You may want to include rough plans and elevations or sections. You certainly may find it useful to relate the development to a plan of the whole site showing access and possibly the position of adjacent buildings. You are not restricted to fitting the whole of your development into one building and you may find it easier and more acceptable to end purchasers if the development is built as more than one building. If you have more than one building, you should state how many buildings you intend to build, what uses they have, how the buildings relate to each other, and the rationale for breaking the development into more than one building. You should give a broad description of adjacent buildings and say how your proposed development fits with these or contrasts with them. You may want to comment on how you arrived at your proposal and why it is appropriate to the site. You should discuss any proposed phasing of the development.

Planning (14%):   Provide a summary of the planning policies which are relevant to the locality and specifically to your site. Does your proposed development fit in with these policies? Are you likely to be granted consent for your development?  What case will you make in your submission to the planners? Do not include a copy of the local authority planning summary/ instructions/ policy document unless there is a specific brief in respect of your site. Note that if there is a specific planning brief in respect of your site, you may choose to challenge that brief so long as you state why. Remember that the provision of planning consent and in particular the related Judicial Review Period may impact upon your proposals regarding acquisition of the site. You should note any conditions which might be attached to the planning consent insofar as they have a financial implication; examples include a social housing requirement, a need to pay for access works whether to be undertaken by the developer of the local highways authority and any likely payments to the local authority such as Community Infrastructure Levy.

Risk Analysis (10%): Comment on risks and volatility as they impact on your development proposal. What risks (not including construction risks unless they are unusually relevant to your site) do you face in carrying out your development, based on the broad information you have at this stage?  This section may require you to consider what you have written to date in the specific context of risk.

Appraisal (20%):  Your initial “open market” development appraisal based upon the information you have to hand at this stage. You may like to base this appraisal on the format provided in the computer workshop. This appraisal is to establish how much you, or anyone else, can afford to pay for your site, so you will need to allow a suitable profit margin on cost (and see the comment below in this regard).

Approach (8%):  Your general approach to the project, including comments on the suitability of the development to the site and your attention to detail shown in the analysis and the instructions herein. Your style of presentation of the report. [This is not a section of your coursework so needs attention but no specific comment]

Summary (4%):  Your summary, round-up and conclusions of this stage of the Coursework.

Word Count:

As with any business report there is no specific word count requirement. Content will be whatever is required to fully make your case and will include your selection of any figures, maps, photographs and sketched diagrams which you feel are necessary to adequately describe your proposed development.

 


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