What Is The Purpose Of Conducting A Feasibility Study? Charles Berry at PAI member Vickery Holman considers this question.
If you are a land or property owner, whether that be residential, commercial or agricultural and think your land or property has development potential then a feasibility study can be undertaken at the earliest stage of the project to outline the land/properties development potential.
What Is A Feasibility Study?
The main purpose of a feasibility study is to assess the financial viability of developed land and whether it will be a success or failure. The study aims to highlight problems and risks that a potential plot will face such as gaining planning, local authority, assessing current development supply and demand and the suitability of a site, neighbours and so forth.
What Type Of Properties/Land Require A Feasibility Study?
Examples of a property with development potential include: –
- Tired/dilapidated/vacant buildings,
- Parcels of land with current use or former use, eg builders’ yard, parking area etc,
- Existing residential dwelling with substantial gardens,
- Old barns or other agricultural buildings,
- Fields/agricultural lands near city/town/village.
What Are The Benefits Of A Development Feasibility?
The conclusion of a development feasibility study is to access whether you are going to benefit from the development process before investing time and money in the planning process.
A feasibility study is an instrument to:-
- Understand the opportunity and limitations to a development.
- Financial viability determines how best to financially structure and plan the development process to maximise value.
- Gross Development Value (GDV) assessment.
- Planning restrictions, requirements and obligations.
- Type of planning applications such a full or detail consent, outline, reserved matters, conservation areas, listed, prior notification, tree preservation orders, material amendments etc.
- S106, affordable housing and CIL contributions assessments.
- Supply and demand assessment for a potential unit mix.
- Recommendations for appropriate further surveys including, ecology, drainage, arboricultural, contamination, archaeological etc.
- Sensitivity testing on cashflows and concepts where potential costs and sales values can damage a scheme’s viability.
- Construction costs assessment including fees, utility, sales/marketing, contingency etc.
Vickery Holman has a track record providing comprehensive feasibility studies for a range of private and public bodies on a range of land and existing buildings.
If you have any further questions or which to discuss an opportunity please get in touch here.