Construct a robust real estate financial model to assess the financial risk and return profile of development, re-development and refurbishment projects.

This course is aimed at banking and lending analysts for real estate, investment surveyors,  real estate finance professionals and property consultants seeking to build robust real estate development models free of errors.

Delegates will learn to construct a financial model for viability analysis in development, re-development of commercial and residential properties. Delegates will also learn how to produce sensitivity and scenario analysis, which will enhance their real estate financial analysis,  error checking skills and improve their underwriting processes.

Who should attend this course:

The Real Estate Development and Financial Modelling in Excel courses are suitable for the beginner or intermediate financial modeller, who is seeking to develop their modelling skills and become an expert financial modelling for real estate development.

Details

Duration: 2 days
Location: London
CPD Hours: 12
Level: Basic / Intermediate
Maximum number of delegates: 8

Next Dates: 20 & 21 August, 2018

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Content

Day 1

Residual Valuation Appraisal

Property Yields

Land Value

Profit Appraisal

Gross and Net Development Values

Return on GDV, Cost and Equity

Pro-forma development cash flow 

Inputs:

  • Timings: purchase date, works start date, planning, lead in, construction and refurbishment, void period, lease start, sale date
  • Revenue: sales proceeds, estimated rental value per sqf, net internal areas, rental growth and target returns
  • Development Costs: construction and refurbishment, site purchase and vacant possession value, contingency, professional fees, statutory costs, allowances and rights
    • S-Curve vs. Straight Line

Outputs:

  • Internal Rate of Return (IRR)
  • Net Present Value (NPV)
  • Maximum Bidding Price
  • Total profit, profit on cost and equity multiple

Financial viability testing & risk analysis

Data tables & sensitivity analysis

Risk visualisation techniques

Case study: un-geared office redevelopment in the UK

Day 2

Development finance

  • Debt & Equity Structures
  • Senior Debt
  • Mezzanine Loan

Geared cash flow

Debt Types

  • Rolled-up interest senior debt
  • Equity first, mezzanine second, senior debt

Joint-venture structures

  • Waterfall structure
  • Preferred returns
  • Promote Cash Flow

Capitalised interest & circularities

Case study: geared office redevelopment in the UK

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