127.341 Assignment 2

Due Monday 12 May 2025

35% of total assessment (25% on written report and 10% on presentation)

A five minute presentation is required, some time in the week following the report being handed in (but final due date is Monday 19 May 2025). The presentation carries a score out of 10% and is your explanation of the development feasibility.

The aim of this assignment is to engage you in the process of investigating the
feasibility of a development project and to write a feasibility report. You will also explain your outcomes in a short oral presentation.

You are required to identify either:

1. A vacant site, or
2. A site suitable for redevelopment, or
3. A building suitable for refurbishment/retrofitting/renovation

You should then identify the highest and best use via establishing that the development or refurbishment is feasible. The development you choose should adopt a future focused philosophy. You should include things like:

1. Environment, locality, market, RMA and site detail
2. A summary of your proposed development
3. Alternate options, their pros and cons
4. Any future-focused building features
5. Financial estimates, feasibility and sensitivity / risk analysis
6. A summary on whether the project is feasible and a recommended way forward

Your client is Massey Developments Ltd.

Describe RMA context, the market conditions, location and site. Gather as much background information as you can to support the development you suggest. Decide the basic design, layout, floor plan, materials, etc. How big will the building/s be and how much space will be rentable? You will source appropriate building costs per sqm and rental income per sqm (check these figures are appropriate for the current period and always support your findings with references). You can vary the base amounts according to the
use and development specifics you suggest. You may need to ask suitable professionals or refer to other sources of information. You will need to establish an end value.

Within your report evaluate the financial aspects of your proposal in the following ways:

1. Undertake a conventional risk/return analysis to determine the Net Development
   Value (NDV); Total Development Costs (TDC); developers’ profit as a percentage of
   TDC; and a yield on development costs. Follow Reed & Sims’s examples.
2. Consider the feasibility of the finished project as an investment compared to
   alternate options. Assume a holding period of 5 years, and make appropriate
   assumptions for interest, inflation rate, capitalisation rate, discount rate, fees etc. You
   can create your own assumptions all together but they must be sensible
3. Complete a DCF and sensitivity analysis and a summary report to account for variations in input assumptions such as costs and rental incomes.

Your report should be professional in appearance and posted on Stream by the due date. Be clear and specific and support conclusions with a thorough market investigation and detailed financial analysis.

Marking

WRITTEN REPORT

Marks will be based on the following:

1. Location and site information, description of the development,
   Including any future-focused features 10%
2. RMA / Zoning information 10%
3. Macro and micro market conditions related to
   the development viability and available options 20%
4. Risk/return and feasibility analysis 20%
5. Sensitivity Analysis 10%
6. Conclusions and recommendations 20%
7. Overall effort, professional report presentation 10%

Total marks for report 100% weighted out of 25%

PRESENTATION

Presentations will be no longer than 5 minutes. This can be recorded and uploaded to Stream, or via Zoom, and should be supported by appropriate written materials.

Marks will be allocated as follows:

• Communication skills 33%
• Summary of assignment, its layout, design and opportunities 33%
• Summary of financials, conclusions and recommendations 34%

You are allowed to use AI in your assignment, using the AI Planning guidance, but please ensure that you follow the procedures for documenting your AI use.