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Site value for commercial development

Carnmore · 2016-11-11 14:02:57

Is there a formula to assess the site value for a proposed commercial development based upon the proposed floor area and lease cost per square metre?

11-11-2016 2:02pm

#1

Carnmore

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Is there a formula to assess the site value for a proposed commercial development based upon the proposed floor area and lease cost per square metre?

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#2 18-11-2016 10:15pm

Gandalph

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Let's assume the local developers like to make a 15% profit margin and that commercial property is yielding 8% in the area.

(m2 x rent psm) / 8% = Gross Development Value (GDV)

GDV / (1+15%) = Gross Development Cost (GDC)

GDC - Build Cost = Residual Land Value.

Hope this helps.

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