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Site value for commercial development

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  • 11-11-2016 3:02pm
    #1
    Carnmore
    Registered Users Posts: 407 ✭✭


    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
    Gandalph
    Registered Users Posts: 1,792 ✭✭✭Gandalph


    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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