Property Management

Essay

Nowadays, some developers would like to test full scenario analysis such like Discounted Cash Flow for financial feasibility purpose. They state that it could influence the bottom-line cash flow for their developments and that they are in a better financial position than if they had not completed the exercise. I will discuss this statement before I give my own opinion.

For investment purpose, developers want to decide if a project is feasible or viable with a minimum risk. It can be measured simply through a preliminary feasibility or a more detailed full feasibility study report. A quick method of calculating the essential financial feature with all necessary information is required by a development possibility. A preliminary feasibility is related with calculating to analyse a proposal project is possible to be successful or not (Pope, 2009). There are some issues to consider especially for the preliminary feasibility, such as investigative expense, professional fees for design and supervision, interest on site cost and construction costs, legal fees for site acquisition, rates and ground rent, development consultancy, sale cost, leasing commission, sundry, operating expenses, management fee, vacancies, depreciation of improvements, miscellaneous (Christiansen, 1996).

The full feasibility study reports may require an appropriate team of professionals to participate. The team of professionals may include valuer, architect, structural and building services engineer, quantity surveyor, market researcher, resource manager and contractor. The items of a full feasibility study report should be contained description of site and legal aspects (Town Planning and Title constraints); market research of supply and demand analysis; development proposals with a description of design philosophy, capital costs, timing, rentable areas, services and accommodation; special features such as provision of car parking and relocation of an existing tenant; financial...