Wirral Employment Land and Premises Study
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Wirral Employment Land and Premises Study Final Draft for Consultation, February 2021 APPENDICES Viability Appraisals Small Industrial Development Appraisal Avison Young 06 November 2020 APPRAISAL SUMMARY AVISON YOUNG Small Industrial Summary Appraisal for Phase 1 Currency in £ REVENUE Rental Area Summary Initial Net Rent Initial Units ft² Rent Rate ft² MRV/Unit at Sale MRV Small Industrial 1 5,556 6.00 33,333 33,333 33,333 Investment Valuation Small Industrial Current Rent 33,333 YP @ 7.5000% 13.3333 444,444 NET REALISATION 444,444 OUTLAY ACQUISITION COSTS Fixed Price 20,000 20,000 Purchasers' Costs 5.50% 1,100 Investigation & Planning Fees 10,000 11,100 CONSTRUCTION COSTS Construction ft² Build Rate ft² Cost Small Industrial 5,556 68.38 379,889 379,889 External Works 10.00% 37,989 Developers Contingency 3.00% 12,536 50,525 PROFESSIONAL FEES Professional Fees 10.00% 41,788 41,788 MARKETING & LETTING Letting Agent Fee 10.00% 3,333 Letting Legal Fee 5.00% 1,667 5,000 DISPOSAL FEES Sales Agent Fee 1.00% 4,444 Sales Legal Fee 0.50% 2,222 6,667 FINANCE Debit Rate 6.00%, Credit Rate 0.00% (Nominal) Land 1,973 Construction 13,352 Letting Void 15,677 Total Finance Cost 31,002 TOTAL COSTS 545,970 PROFIT (101,526) Performance Measures Profit on Cost% (18.60)% Profit on GDV% (22.84)% Profit on NDV% (22.84)% Development Yield% (on Rent) 6.11% Equivalent Yield% (Nominal) 7.50% Equivalent Yield% (True) 7.87% Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Small Industrial.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 APPRAISAL SUMMARY AVISON YOUNG Small Industrial IRR (13.11)% Rent Cover -3 yrs -1 mths Profit Erosion (finance rate 6.000) N/A Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Small Industrial.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 Medium Industrial Development Appraisal Avison Young 06 November 2020 APPRAISAL SUMMARY AVISON YOUNG Medium Industrial Summary Appraisal for Phase 1 Currency in £ REVENUE Rental Area Summary Initial Net Rent Initial Units ft² Rent Rate ft² MRV/Unit at Sale MRV Medium Industrial 1 22,222 5.50 122,222 122,222 122,222 Investment Valuation Medium Industrial Current Rent 122,222 YP @ 7.5000% 13.3333 1,629,630 NET REALISATION 1,629,630 OUTLAY ACQUISITION COSTS Fixed Price 92,500 92,500 Purchasers' Costs 5.50% 5,088 Investigation & Planning Fees 20,000 25,088 CONSTRUCTION COSTS Construction ft² Build Rate ft² Cost Medium Industrial 22,222 50.26 1,116,889 1,116,889 External Works 10.00% 111,689 Developers Contingency 3.00% 36,857 148,546 PROFESSIONAL FEES Professional Fees 10.00% 122,858 122,858 MARKETING & LETTING Letting Agent Fee 10.00% 12,222 Letting Legal Fee 5.00% 6,111 18,333 DISPOSAL FEES Sales Agent Fee 1.00% 16,296 Sales Legal Fee 0.50% 8,148 24,444 FINANCE Debit Rate 6.00%, Credit Rate 0.00% (Nominal) Land 9,124 Construction 38,377 Letting Void 46,954 Total Finance Cost 94,455 TOTAL COSTS 1,643,114 PROFIT (13,484) Performance Measures Profit on Cost% (0.82)% Profit on GDV% (0.83)% Profit on NDV% (0.83)% Development Yield% (on Rent) 7.44% Equivalent Yield% (Nominal) 7.50% Equivalent Yield% (True) 7.87% Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Medium Industrial calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 APPRAISAL SUMMARY AVISON YOUNG Medium Industrial IRR 4.86% Rent Cover -1 mths Profit Erosion (finance rate 6.000) N/A Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Medium Industrial calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 Large Industrial Development Appraisal Avison Young 06 November 2020 APPRAISAL SUMMARY AVISON YOUNG Large Industrial Summary Appraisal for Phase 1 Currency in £ REVENUE Rental Area Summary Initial Net Rent Initial Units ft² Rent Rate ft² MRV/Unit at Sale MRV Large Industrial 1 55,556 5.50 305,556 305,556 305,556 Investment Valuation Large Industrial Current Rent 305,556 YP @ 7.5000% 13.3333 4,074,074 NET REALISATION 4,074,074 OUTLAY ACQUISITION COSTS Fixed Price 232,500 232,500 Purchasers' Costs 5.50% 12,788 Investigation & Planning Fees 20,000 32,788 CONSTRUCTION COSTS Construction ft² Build Rate ft² Cost Large Industrial 55,556 50.26 2,792,222 2,792,222 External Works 10.00% 279,222 Developers Contingency 3.00% 92,143 371,366 PROFESSIONAL FEES Professional Fees 10.00% 307,144 307,144 MARKETING & LETTING Letting Agent Fee 10.00% 30,556 Letting Legal Fee 5.00% 15,278 45,833 DISPOSAL FEES Sales Agent Fee 1.00% 40,741 Sales Legal Fee 0.50% 20,370 61,111 FINANCE Debit Rate 6.00%, Credit Rate 0.00% (Nominal) Land 22,934 Construction 93,138 Letting Void 116,437 Total Finance Cost 232,509 TOTAL COSTS 4,075,473 PROFIT (1,399) Performance Measures Profit on Cost% (0.03)% Profit on GDV% (0.03)% Profit on NDV% (0.03)% Development Yield% (on Rent) 7.50% Equivalent Yield% (Nominal) 7.50% Equivalent Yield% (True) 7.87% Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Large Industrial calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 APPRAISAL SUMMARY AVISON YOUNG Large Industrial IRR 5.63% Rent Cover 0 mths Profit Erosion (finance rate 6.000) N/A Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Large Industrial calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 Small Out of Town Office Development Appraisal Avison Young 06 November 2020 APPRAISAL SUMMARY AVISON YOUNG Small Out of Town Office Summary Appraisal for Phase 1 Currency in £ REVENUE Rental Area Summary Initial Net Rent Initial Units ft² Rent Rate ft² MRV/Unit at Sale MRV Small Office 1 2,000 10.00 20,000 20,000 20,000 Investment Valuation Small Office Current Rent 20,000 YP @ 7.5000% 13.3333 266,667 NET REALISATION 266,667 OUTLAY ACQUISITION COSTS Fixed Price 5,000 5,000 Purchasers' Costs 5.50% 275 Investigation & Planning Fees 1,000 1,275 CONSTRUCTION COSTS Construction ft² Build Rate ft² Cost Small Office 2,353 121.14 285,035 285,035 External Works 10.00% 28,504 Developers Contingency 3.00% 9,406 37,910 PROFESSIONAL FEES Professional Fees 10.00% 31,354 31,354 MARKETING & LETTING Letting Agent Fee 10.00% 2,000 Letting Legal Fee 5.00% 1,000 3,000 DISPOSAL FEES Sales Agent Fee 1.00% 2,667 Sales Legal Fee 0.50% 1,333 4,000 FINANCE Debit Rate 6.00%, Credit Rate 0.00% (Nominal) Land 493 Construction 9,410 Letting Void 11,198 Total Finance Cost 21,102 TOTAL COSTS 388,676 PROFIT (122,009) Performance Measures Profit on Cost% (31.39)% Profit on GDV% (45.75)% Profit on NDV% (45.75)% Development Yield% (on Rent) 5.15% Equivalent Yield% (Nominal) 7.50% Equivalent Yield% (True) 7.87% Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Small Office OOT calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 APPRAISAL SUMMARY AVISON YOUNG Small Out of Town Office IRR (27.44)% Rent Cover -6 yrs -1 mths Profit Erosion (finance rate 6.000) N/A Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Small Office OOT calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 Medium Out of Town Office Development Appraisal Avison Young 06 November 2020 APPRAISAL SUMMARY AVISON YOUNG Medium Out of Town Office Summary Appraisal for Phase 1 Currency in £ REVENUE Rental Area Summary Initial Net Rent Initial Units ft² Rent Rate ft² MRV/Unit at Sale MRV Medium Office 1 10,000 10.00 100,000 100,000 100,000 Investment Valuation Medium Office Current Rent 100,000 YP @ 7.5000% 13.3333 1,333,333 NET REALISATION 1,333,333 OUTLAY ACQUISITION COSTS Fixed Price 22,500 22,500 Purchasers' Costs 5.50% 1,238 Investigation & Planning Fees 20,000 21,238 CONSTRUCTION COSTS Construction ft² Build Rate ft² Cost Medium Office 11,765 121.14 1,425,176 1,425,176 External Works 10.00% 142,518 Developers Contingency 3.00% 47,031 189,548 PROFESSIONAL FEES Professional Fees 10.00% 156,769 156,769 MARKETING & LETTING Letting Agent Fee 10.00% 10,000 Letting Legal Fee 5.00% 5,000 15,000 DISPOSAL FEES Sales Agent Fee 1.00% 13,333 Sales Legal Fee 0.50% 6,667 20,000 FINANCE Debit Rate 6.00%, Credit Rate 0.00% (Nominal) Land 2,219 Construction 48,454 Letting Void 56,401 Total Finance Cost 107,074 TOTAL COSTS 1,957,306 PROFIT (623,973) Performance Measures Profit on Cost% (31.88)% Profit on GDV% (46.80)% Profit on NDV% (46.80)% Development Yield% (on Rent) 5.11% Equivalent Yield% (Nominal) 7.50% Equivalent Yield% (True) 7.87% Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Medium Office OOT calculating profit.wcfx ARGUS Developer Version: 7.70.000 Date: 06/11/2020 APPRAISAL SUMMARY AVISON YOUNG Medium Out of Town Office IRR (27.78)% Rent Cover -6 yrs -3 mths Profit Erosion (finance rate 6.000) N/A Project: C:\Users\eb20\Box\61004 - Instructions\04C001287 - Wirral Metropolitan Borough Council - WIRRAL EMPLOYMENT LAND 2020\WELPS Viability\Medium Office OOT calculating profit.wcfx ARGUS Developer