NG4S702 conclusions and recommendations to all potential pitfalls as well as corresponding upsides by way of a sensitivity analysis exercise.

Assessment 1-Case Study

Your client has requested detailed advice on an appropriate bid for a development site currently on the market. You have the flexibility to select a suitable development site from the South Wales commercial property agents` availability schedule, considering planning use and site specifications based on sensible assumptions.

Using the residual method of valuation, provide a detailed residual site valuation with annotations and commentary on each component of your computation. Highlight potential pitfalls and upsides in your conclusions and recommendations by conducting a sensitivity analysis exercise.

Briefing Document

This document offers suggested guidance for the assignment. It emphasizes best practices and recommendations that align with professional standards (RICS regulations). Your report aims to reflect quality advice in a concise and understandable format, akin to real-world consultancy reports.

The 2,000-word limit necessitates clarity and conciseness, with supplementary material included in an appendix.

Key Considerations:

  • Selection of an appropriate development site (0.5 to 4/5 acres) within Wales or nearby regions.
  • Research of potential sites through commercial property agents` listings, noting cautious optimism in their descriptions.
  • Justification of assumptions regarding land use, planning regulations, and likely competition.
  • Incorporation of relevant planning considerations (site density, coverage, height) and assumption explanations.
  • Focus on independent analysis for valuation, considering rental values and building costs.
  • Inclusion of sensitivity analysis to assess project elasticity and potential risks (e.g., interest rate fluctuations, construction cost increases).

The report format should be professional, following a structured template while allowing room for individual creativity.

Required Sections:

  1. Nature of the Instruction/Brief/Purpose of the report.
  2. Valuation date and extent of investigations.
  3. Property details including site configuration, access, services, legal title, and planning status.
  4. Commentary on adopted building costs and gross development value.
  5. Sensitivity analysis highlighting risks related to the property.
  6. Conclusions and recommendations, presenting the recommended bid or a suitable range.

The report`s tone and content should align with RICS valuation standards, emphasizing the advisory nature of the document while maintaining professional integrity and clarity in recommendations.