Planning and Development Site Appraisal - Assignment Example

 Planning and Development Site Appraisal Summary of Site Appraisal The site appraisal involves an analysis and examination of the nature of the site, including factors like proximity to infrastructural services, close developments, assets and properties. The results of this examination will be used to determine two development options available, as well as their suitability to this particular site. The site is located on gravel and sand ground with silt and clay deposits in some parts of the site (The Foundation 1994, pg. 27). The site has a good infrastructural services network including both over and underground. It also has a good road network and public transport. Projects are also underway to develop high speed train links between London and Europe to the midland and northern cities of England. There is a rich and diverse presence of flora and fauna around but there are currently no tree preservation orders at the site. The site has also been used for cement works (currently), tourism (currently), agricultural purposes (1800s), canal warehouses (1935s), and canals and railways (1840s). There site also the boasts the presence of historical sites (museums and galleries), entertainment and leisure facilities, a shopping complex and hotels. All these amenities are within close proximity to one another and also in the city centre where the main attractions are located. The site is in a flood warning area and therefore due caution must be taken when putting up structures on the site. It is however, very accessible through the excellent public transport links which include bus, train and even cycling routes. The highest traffic volume is recorded by commercial vans and lorries. There is also a short supply of off-street parking as evidenced by fully parked spots at both sides in the surrounding roads. The site also enjoys legal access to the nearby warehouse, Fazeley street properties and also into the cement works. The site also enjoys the public right of way on the canal towpath. The objective is to use the site as a yardstick for the development options it provides. After this, those options will also be appraised financially by using appropriate financial methods. The financial appraisal method selected for this exercise is the traditional residue site value (RSV) budget (Guy 2002, pg. 43). Although financial data has not been provided, this will not be a hindrance to a recommendation on which development option is the best for Mr. Brown’s estate. Financial appraisal will be based on factors like finance charges, design period, rental fees, yield, plot ratio, letting period, construction costs, inflation rate, construction period, and developer's contribution (Ratcliffe & Stubbs 2004, pg. 37). Suggested options (2) for Developing the Site I have identified some factors that must be considered regardless of the option I settle on. The key factor ,however, is to create a sustainable model that is friendly to the environment and profitable in the long run. This is vital to achieving a balance with existing local businesses, and accurate market analysis on the current economic conditions (Isaac 1996, pg. 12). Option 1: Mixed Development consisting of Office Space and Retail This would be based on consideration of the site’s strategic location, prime rents, take-up, and investment yields. It would be located next at the same place the front buildings are located (106-110 and 122 Fazeley Street). It would consist of a 6 storey building with office and retail. Ground and first floors will house the retail space, while second to fifth floors will house excellent (Grade A) office setup. Option 2: Large Mall with Supermarket and other Retail Outlets This would be based on serious consideration of the site’s strategic location, prime rents, take-up, and investment yields (Byrne 1996, pg. 39). It would also be located next at the same place the front buildings are located (106-110 and 122 Fazeley Street). It will consist of a large retail mall that will house a supermarket, wide range of new retail outlets, and office space. Financial Appraisal for both Options For the purposes of this report, I will use the traditional residual site value for the financial evaluation of the selected options (Dubben & Williams 2009, pg. 47). This method is usually used to determine the maximum amount a developer could be willing to part with in order to acquire a potential development site, when profit margins are also taken into account (Wilkinson, Reed & Cadman 2008, pg. 21). Using RSV-specific research data, I have managed to figure out the following: net development value (NDV), total development cost (excluding land). This is a total summation of finance costs on letting delay, finance costs on construction, inflated cost of construction, finance costs on professional fees, sales and letting charges, and professional charges on inflated construction costs, profit, risk and overhead costs, and additional expenses like road upgrading cost, decontamination charges, and demolition charges (Parnham & Rispin 2001, pg. 45). Option 1: Mixed Development consisting of Office Space and Retail a) Net development value (NDV) -£143,081,388. b) Total development cost (excluding land) -£40,715. c) Profit, risk and overhead costs -£28,616,278. d) Additional expenses like road upgrading cost, decontamination charges, and demolition charges -£90,000. Option 2: Large Mall with Supermarket and other Retail Outlets a) Net Development Value (NDV) -£138,102,204. b) Total development cost (excluding land) -£30,715. c) Profit, risk and overheads -£17,616,278. d) Additional expenses like road upgrading cost, decontamination charges, and demolition charges -£50,000. As per the above figures, it is apparent that a large retail warehouse development is cheaper compared to a mixed development consisting of office and rental space (Bonbright 2007, pg. 58). I will, however, look at the possible long term benefits to determine the better alternative. Evaluation of Suitability of Proposed Options and justification of Preferred Option The mixed development is ideal for hedging against market risks. This is because it offers diversity in terms of activities to be undertaken at the site. There will be a large variety of potential client base available for leasing, sale or other contractual agreements. This is, nevertheless, not my preferred option. The site is in the city centre and is therefore host to many and diverse visitors on a regular basis as evidenced by the many hotels, historical sites and leisure and entertainment joints. I will, after due consideration, settle for the development of a large mall with a supermarket and other retail outlets. This will be large enough to accommodate large numbers of people. It will also promise a unique experience for the city’s shoppers. It will attract and also lead to supplier convergence. Additionally, there is also a latent demand for good leisure outlets that would better the ‘canal experience' for people living in, working in, and visiting the area. However, this is likely to be a future area of expansion due to the rigorous legal requirements as this will likely affect current existing businesses. This, however, presents sustainable prospects for the future. The area is perfectly suited for retail business and this can be justified by the huge population. This will also create a one stop for shoppers which can as a result encourage higher leasing rates. Higher rates, in the end, would mean higher returns to investor. Hence, this is the highly viable option. Design/Access Statement This statement has been drafted in support of the proposal to build a large supermarket with other retail stores property on Mr. Brown’s estate in Warwick, following a request by its managing trustees. The site is presently a flat field with a few buildings. It has legal access via three public access and feeder roads. Overally, this proposal aims to set high design standards as well as the following considerations: highway considerations (there are no relevant highway considerations; trees and hedges (all trees and hedges are to be left as they are and more landscaping is not deemed necessary); flooding (the site is a flood warning area); policies (this proposal has been created in line with all the relevant regulations and policies); and access, (the site is in a sustainable location, that is surrounded by prime properties and therefore, the proposed development will not look out of place). In summary, as suggested by Baum and Crosby (2008) this application/proposal presents a plan suitable for the setting of the site, and seeks to provide a proposal characterized by a proportionate scale, utilization of appropriate materials, massing, and form. References Wilkinson, S., Reed, R., & Cadman, D. 2008, Property Development, Taylor & Francis, Hoboken. Read More