Appendix 5: Financial Feasibility Summaries
Draft Feasibility for Option 3: Cooperative Rental Development Model Low Density Design
5/24/2020
Development Costs
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Consultants
($ (2,819,137)
Permits
($ (1,155,560)
Holding Costs (council rates & insurance)
($ (76,039)
Leasing & marketing
($ (178,143)
Establishment finance costs
($ (265,489)
Construction phase interest
($ (1,486,633)
Project Contingency
($ (1,237,190)
Construction
($ (14,938,650)
Construction Contingency (5%)
($
-
)
Total Perm Debt Required (65% of Dev Costs)
($ 16,562,239)
Annual Operating Incomes and Expenses
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Residential Rental Income (2% annual increase)
90%
of market
($ 1,447,935) ($ 1,476,893) ($ 1,506,431) ($ 1,536,560) ($ 1,567,291) ($ 1,598,637) ($ 1,630,609) ($ 1,663,222) ($ 1,696,486) ($ 1,730,416)
Less vacancy allowance (1.5%)
($ (21,719) ($ (22,153) ($ (22,596) ($ (23,048) ($ (23,509) ($ (23,980) ($ (24,459) ($ (24,948) ($ (25,447) ($ (25,956)
Coworking (2% annual increase)
($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - )
Guest House (2% annual increase)
($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - )
Retail (2% annual increase)
($ 29,400) ($ 29,988) ($ 30,588) ($ 31,200) ($ 31,824) ($ 32,460) ($ 33,109) ($ 33,771) ($ 34,447) ($ 35,136)
Childcare (2% annual increase)
($ 186,276) ($ 190,002) ($ 193,802) ($ 197,678) ($ 201,631) ($ 205,664) ($ 209,777) ($ 213,973) ($ 218,252) ($ 222,617)
Car Park (2% annual increase)
($ 6,240) ($ 6,365) ($ 6,492) ($ 6,622) ($ 6,754) ($ 6,889) ($ 7,027) ($ 7,168) ($ 7,311) ($ 7,457)
Total Recoveries
($ 43,200) ($ 44,064) ($ 44,945) ($ 45,844) ($ 46,761) ($ 47,696) ($ 48,650) ($ 49,623) ($ 50,616) ($ 51,628)
Net Rental Income
($ 1,691,332) ($ 1,725,158) ($ 1,759,661) ($ 1,794,855) ($ 1,830,752) ($ 1,867,367) ($ 1,904,714) ($ 1,942,808) ($ 1,981,664) ($ 2,021,298) ($ -
)
Operating Expenses: building and tenancies
($ (216,000) ($ (220,320) ($ (224,726) ($ (229,221) ($ (233,805) ($ (238,481) ($ (243,251) ($ (248,116) ($ (253,078) ($ (258,140)
Annual Ground Rent
($ (80,000) ($ (90,000) ($ (100,000) ($ (110,000) ($ (112,200) ($ (114,444) ($ (116,733) ($ (119,068) ($ (121,449) ($ (123,878)
Net Operating Income:
($ 1,395,332) ($ 1,414,838) ($ 1,434,935) ($ 1,455,634) ($ 1,484,746) ($ 1,514,441) ($ 1,544,730) ($ 1,575,625) ($ 1,607,137) ($ 1,639,280) ($ -
)
GST
($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
)
Capital Expenses / Replacement Maintenance
($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
)
Capital Works (sinking) Fund
($ (75,000) ($ (76,500) ($ (75,000) ($ (76,500) ($ (78,030) ($ (79,591) ($ (81,182) ($ (82,806) ($ (84,462) ($ (86,151)
Total GST & Capital Works Expense
($ (75,000) ($ (76,500) ($ (75,000) ($ (76,500) ($ (78,030) ($ (79,591) ($ (81,182) ($ (82,806) ($ (84,462) ($ (86,151) ($ -
)
Interest (30 years 3.0%)
($ (542,707) ($ (534,137) ($ (525,278) ($ (516,122) ($ (506,659) ($ (496,880) ($ (486,774) ($ (476,328) ($ (465,536) ($ (454,376)
Payments on principal
($ (255,832) ($ (264,402) ($ (273,261) ($ (282,417) ($ (291,880) ($ (301,659) ($ (311,765) ($ (322,211) ($ (333,003) ($ (344,163)
Total Finance Payments
($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ (798,539) ($ -
)
Debt cover ratio (interest & principal)
1.65
1.68
1.70
1.73
1.76
1.80
1.83
1.87
1.91
1.94
Net Annual Income
($ 521,793) ($ 539,800) ($ 561,396) ($ 580,595) ($ 608,178) ($ 636,312) ($ 665,009) ($ 694,280) ($ 724,136) ($ 754,590) ($ -
)
Impact Investor Returns
($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906) ($ (445,906)
Dividend to Coop Shareholders
($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961) ($ (50,961)
Net Cash Flow to CLT
($ 24,926) ($ 42,932) ($ 64,529) ($ 83,728) ($ 111,311) ($ 139,445) ($ 168,142) ($ 197,413) ($ 227,269) ($ 257,723)
Proceeds for hypothetical sale in yr. 10
5.75%
cap rate
($ 27,625,430)
Mortgage payoff balance
($ (13,581,650)
($ 14,043,780)
Market
Affordable
Rents
Weekly
(% of mrkt)
Market Rate:sqm
# of Units
Rent
90.00%
Annual/Unit
Total
Studio
27
14 ($ 360.33) ($ 324.30) ($ 16,863.60) ($ 236,090)
One Bedroom
50
10 ($ 554.36) ($ 498.92) ($ 25,944.00) ($ 259,440)
Two Bedroom/One Bath
70
17 ($ 654.14) ($ 588.73) ($ 30,613.92) ($ 520,437)
Two Bedroom/Two Bath
78
9 ($ 748.38) ($ 673.55) ($ 35,024.40) ($ 315,220)
Three Bedroom
90
3 ($ 831.54) ($ 748.38) ($ 38,916.00) ($ 116,748)
($ 1,447,935)
Market Comp (Tenancy Services March Q 2020 Avondale)
2019
2020
2021
2022
Esc
Studio
($ 325) ($ 336) ($ 348) ($ 360)
3.50%
One-Bed
($ 500) ($ 518) ($ 536) ($
554)
Two Bedroom / One Bath
($ 590) ($
611) ($
632) ($
654)
Two Bedroom / Two Bath
($ 675) ($
699) ($
723) ($
748)
Three Bedroom
($ 750) ($
776) ($
803) ($
832)
Appendix 5: Financial Feasibility Summaries
Draft Feasibility for Option 2: Cooperative Rental Development Model Tower Design
5/24/2020
Development Costs
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Consultants
($ (2,972,508)
Permits
($ (1,223,646)
Holding Costs (council rates & insurance)
($ (76,039)
Leasing & marketing
($ (174,092)
Establishment finance costs
($ (276,315)
Construction phase interest
($ (1,488,782)
Project Contingency
($ (1,215,441)
Construction
($ (16,989,254)
Construction Contingency (5%)
($
-
)
Total Perm Debt Required (65% of Dev Costs)
($ 18,251,017)
Annual Operating Incomes and Expenses
Year 0
Year 1
Year 2
Year 3
Year 4
Year 5
Year 6
Year 7
Year 8
Year 9
Year 10
Year 11
Residential Rental Income (2% annual increase)
95%
of market
($ 1,551,653) ($ 1,582,686) ($ 1,614,340) ($ 1,646,626) ($ 1,679,559) ($ 1,713,150) ($ 1,747,413) ($ 1,782,361) ($ 1,818,009) ($ 1,854,369)
Less vacancy allowance (1.5%)
($ (23,275) ($ (23,740) ($ (24,215) ($ (24,699) ($ (25,193) ($ (25,697) ($ (26,211) ($ (26,735) ($ (27,270) ($ (27,816)
Coworking (2% annual increase)
($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - )
Guest House (2% annual increase)
($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - ) ($ - )
Retail (2% annual increase)
($ 29,400) ($ 29,988) ($ 30,588) ($ 31,200) ($ 31,824) ($ 32,460) ($ 33,109) ($ 33,771) ($ 34,447) ($ 35,136)
Childcare (2% annual increase)
($ 186,276) ($ 190,002) ($ 193,802) ($ 197,678) ($ 201,631) ($ 205,664) ($ 209,777) ($ 213,973) ($ 218,252) ($ 222,617)
Car Park (2% annual increase)
($ 6,240) ($ 6,365) ($ 6,492) ($ 6,622) ($ 6,754) ($ 6,889) ($ 7,027) ($ 7,168) ($ 7,311) ($ 7,457)
Total Recoveries
($ 43,200) ($ 44,064) ($ 44,945) ($ 45,844) ($ 46,761) ($ 47,696) ($ 48,650) ($ 49,623) ($ 50,616) ($ 51,628)
Net Rental Income
($ 1,793,494) ($ 1,829,364) ($ 1,865,951) ($ 1,903,270) ($ 1,941,336) ($ 1,980,162) ($ 2,019,766) ($ 2,060,161) ($ 2,101,364) ($ 2,143,391) ($ -
)
Operating Expenses: building and tenancies
($ (216,000) ($ (220,320) ($ (224,726) ($ (229,221) ($ (233,805) ($ (238,481) ($ (243,251) ($ (248,116) ($ (253,078) ($ (258,140)
Annual Ground Rent
($ (26,500) ($ (35,000) ($ (45,000) ($ (55,000) ($ (57,750) ($ (60,638) ($ (63,669) ($ (66,853) ($ (70,195) ($ (73,705)
Net Operating Income:
($ 1,550,994) ($ 1,574,044) ($ 1,596,225) ($ 1,619,049) ($ 1,649,780) ($ 1,681,043) ($ 1,712,845) ($ 1,745,192) ($ 1,778,090) ($ 1,811,546) ($ -
)
GST
($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
)
Capital Expenses / Replacement Maintenance
($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
) ($
-
)
Capital Works (sinking) Fund
($ (75,000) ($ (76,500) ($ (75,000) ($ (76,500) ($ (78,030) ($ (79,591) ($ (81,182) ($ (82,806) ($ (84,462) ($ (86,151)
Total GST & Capital Works Expense
($ (75,000) ($ (76,500) ($ (75,000) ($ (76,500) ($ (78,030) ($ (79,591) ($ (81,182) ($ (82,806) ($ (84,462) ($ (86,151) ($ -
)
Interest (30 years 3.0%)
($ (598,045) ($ (588,600) ($ (578,839) ($ (568,748) ($ (558,320) ($ (547,547) ($ (536,410) ($ (524,898) ($ (513,002) ($ (500,707)
Payments on principal
($ (281,917) ($ (291,362) ($ (301,123) ($ (311,214) ($ (321,642) ($ (332,415) ($ (343,552) ($ (355,064) ($ (366,960) ($ (379,255)
Total Finance Payments
($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ (879,962) ($ -
)
Debt cover ratio (interest & principal)
1.68
1.70
1.73
1.75
1.79
1.82
1.85
1.89
1.92
1.96
Net Annual Income
($ 596,032) ($ 617,582) ($ 641,263) ($ 662,587) ($ 691,788) ($ 721,491) ($ 751,701) ($ 782,424) ($ 813,666) ($ 845,433) ($ -
)
Impact Investor Returns
($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374) ($ (491,374)
Dividend to Coop Shareholders
($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157) ($ (56,157)
Net Cash Flow to CLT
($ 104,659) ($ 126,208) ($ 149,889) ($ 171,214) ($ 200,415) ($ 230,117) ($ 260,327) ($ 291,050) ($ 322,292) ($ 354,059)
Proceeds for hypothetical sale in yr. 10
5.75%
cap rate
($ 31,063,440)
Mortgage payoff balance
($ (14,966,513)
($ 16,096,927)
Market
Affordable
Rents
Weekly
(% of mrkt)
Market Rate:sqm
# of Units
Rent
95.00%
Annual/Unit
Total
Studio
27
13 ($ 360.33) ($ 342.32) ($ 17,800.47) ($ 231,406)
One Bedroom
50
10 ($ 554.36) ($ 526.64) ($ 27,385.33) ($ 273,853)
Two Bedroom/One Bath
70
17 ($ 654.14) ($ 621.44) ($ 32,314.69) ($ 549,350)
Two Bedroom/Two Bath
78
9 ($ 748.38) ($ 710.97) ($ 36,970.20) ($ 332,732)
Three Bedroom
90
4 ($ 831.54) ($ 789.96) ($ 41,078.00) ($ 164,312)
($ 1,551,653)
Market Comp (Tenancy Services March Q 2020 Avondale)
2019
2020
2021
2022
Esc
Studio
($ 325) ($
336) ($
348) ($
360)
3.50%
One-Bed
($ 500) ($
518) ($
536) ($
554)
Two Bedroom / One Bath
($ 590) ($
611) ($
632) ($
654)
Two Bedroom / Two Bath
($ 675) ($
699) ($
723) ($
748)
Three Bedroom
($ 750) ($
776) ($
803) ($
832)
Total Finance Payments
-$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962- -$ 879,962-
DEVELOPMENT SUMMARY
BUILD TO SELL
Appendix 5: Financial Feasibility Summaries
[email address]
8/4 Racecourse Parade, Avondale
Head-lines:
% Total Development Cost Total # of units
53
Nov-19
3
Owner Equity (land)
1
,327,200
5% Total Project GFA
existing units above
Project Costs Funded from Revenue
4 2,400
57% attributed to SDF Total Project NSA
3,409
Tower
Mezz / Equity Loan Value
5
,992,324
23% Equity interest rate
10.0%
Senior Debt Loan Value
18,599,350
71% Interest rate
4.50%
Summary & Inputs
Pre-sales cover (100% cover+portion
21,417,046
100.0% Loan to Value Ratio
71.3%
<60%
settlement costs+gst)
EXPENSES
% Project Cost
% Construction Cost
1 ACQUISITION COSTS
Area (m2)
$m-2
Govt. Value
Land Purchase Price
948
1,400
1,327,200
1,327,200
Valuation
0
5,000
0
Buyers Commission
0
Legals on Land Purchase / Transfer
0
Due Diligence & Feasibility
0
0
0
0
TOTAL LAND ACQUISITION COSTS
5.09%
7.8%
1,327,200
2 PLANNING & DESIGN COSTS
Construction Cost
16,989,254
1,791,133
% Al ocation
Planning Consultants
0.15%
25,000
Development Management fee to FC
0.00%
0
Architects
3.50%
594,000
Geotech & Contamination
0.45%
76,452
Structural Engineers
1.35%
229,355
Electrical
0.30%
50,968
Mechanical (in D&B Price section 8.0)
0.30%
50,968
Hydraulics
0.30%
50,968
Engineers Rep
1.00%
169,893
Quantity Surveyor
0.50%
84,946
Acoustic Engineer
0.11%
19,141
Surveyor (boundary adjustments / unit title)
0.17%
29,605
Fire Engineering & Protection + Peer Review
0.40%
67,957
Infrastructure (Power, water, gas, telecoms)
0.25%
42,473
Specialist Consultants / Peer Reviews
1.76%
299,408
TOTAL PLANNING AND DESIGN
6.87%
10.5%
1,791,133
3 STATUTORY AUTHORITIES
Rate / Unit
Number of Units
% Construction Cost / Value
Apportioned
Resource Consent Lodgement and Processing
1.00%
25.00%
42,473
Resource Consent for subdivision (incl. 223 & 224 certification)
169,893
7.50%
12,742
Building Consent Fees and Inspections
67.50%
114,677
Electricity Supply Infrasture & permanent tansformer (Vector)
120,000
Provision of temporary transformer (Vector) - incl in builders price
0
Rebate from Vector for permanent transformer on connection
0
53
0
Provision of telecommunications infrastructure
32,277
Provision of gas services infrastructure
5,097
Development Contributions - Residential
9,500
50
475,000
Development Contributions - commercial
12,174
0
0
Watercare Infrastructure growth (IGC's) - Residential
11,860
53
391,380
Watercare Infrastructure growth (IGC's) - Commercial
0
0
0
Watercare disconnection services and new meter
30,000
Sub-soil Leese costs
0
TOTAL STATUTORY AUTHORITIES
4.69%
7.2%
1,223,646
4 HOLDING COSTS
Per annum
Per annum
Per month
No. Months
Rates
Rate
Incl. GST
Excl. GST
Rates - Preconstruction
100%
$17,275
$15,022
1,252
8
10,015
Rates - Post Demolition / construction
60%
$10,365
$9,013
751
22
16,524
Insurance
Insurance - Construction (existing buildings)
0
Insurance - Show suite - building & contents
100%
$2,300
$2,000
$167
12
2,000
Insurance - Insurance - Show suite re-location insurance
100%
$0
$0
$0
0
0
Project Construction Insurances
Value insured
Rate
Premium / one off payment
Consequential loss insurance
5,500,000
0.70%
$38,500
38,500
Public liability insurance
-
-
-
-
-
9,000
Contract works insurance
16,989,254
0.00%
$0
0
Fire Service Levy
16,989,254
0.00%
$0
0
Other - Statutory Liability
-
-
-
-
-
0
TOTAL HOLDING COSTS
0.29%
0.45%
76,039
5 SALES, LEASING & MARKETING COSTS
Procure Show Suite
119,092
Show Suite Fitout
0
PR (incl. launch events & speaker series)
0
Advertising Design & Production incl model
0
Marketing Placements
0
Marketing Contingency (Post Settlement Sales)
At FC (50%)
Settlement (50%)
0
Office Leasing Commission
0
0
0
Retail Sales Commission
0
0
0
Incentives office and retail
0
0
0
Apartment Sales Commissions: FC
2.00%
427,785
0
427,785
Apartment Sales Commissions post FC
2.00%
81,941
0
81,941
Legal on AfL / Retail S&P
0
Legal on apartment S&P contracts: FC
15,900
0
15,900
Legal on apartment S&P contracts: post FC
0
Legal fees - Unit Titling (incl. LINZ fees)
(inlcuded in legal fees and Terra Fees in section 2)
0
TOTAL SALES, LEASING & MARKETING COSTS
2.47%
3.79%
644,718
Page 1
DEVELOPMENT SUMMARY
BUILD TO SELL
Appendix 5: Financial Feasibility Summaries
[email address]
8/4 Racecourse Parade, Avondale
Head-lines:
% Total Development Cost Total # of units
53
Nov-19
3
Owner Equity (land)
1
,327,200
5% Total Project GFA
existing units above
Project Costs Funded from Revenue
4 2,400
57% attributed to SDF Total Project NSA
3,409
Tower
Mezz / Equity Loan Value
5
,992,324
23% Equity interest rate
10.0%
Senior Debt Loan Value
18,599,350
71% Interest rate
4.50%
Summary & Inputs
Pre-sales cover (100% cover+portion
21,417,046
100.0% Loan to Value Ratio
71.3%
<60%
settlement costs+gst)
EXPENSES
% Project Cost
% Construction Cost
6 FINANCE COSTS
Debt
Term / No
Legal Fees - Land Finance
6
63,600
0.00%
1
0
Establishment Fee - Land Finance
6
63,600
6
63,600
0.00%
0
0
Interest - Land Finance - equity
6
63,600
10.00%
28
154,840
Interest - Land Finance - equity
6
63,600
10.00%
28
154,840
Legal Fees - Working Capital Funding
5
,992,324
0.10%
0
0
Establishment Fee - Working Capital Funding
5
,992,324
5
,992,324
0.50%
0
0
Line Fees - Working Capital Funding
5
,992,324
0.00%
0
0
IRR - Working Capital Funding
10.00%
24
898,849
Legal Fees - Senior Debt (incl below)
1
8,599,350
0.10%
1
18,599
Establishment Fee - Senior Debt
1
8,599,350
1 8,599,350
1.00%
1
185,994
BG and Line Fees - Senior Debt
1
8,599,350
1.00%
16
247,991
Interest - Senior Debt
4.50%
18
402,240
Bank Quantity Surveyor (initial Report and Monthly Drawdown)
18
69,000
Valuation
1
30,000
TOTAL FINANCE COSTS
8.29%
12.73%
2,162,353
7 DEVELOPMENT COSTS & PROJECT OVERHEADS
% / Rate month-1
No. Months
Cost month-1
Development Management Fees (excl eng. Rep work)
509,726
1
509,726
509,726
Development Company Overhead
0
1
0
0
Development Company internal costs
0
24
0
0
Accounting & Tax / Other Overheads
1,000
40
1,000
40,000
Legal advisory services
0.50%
30
3,454
103,624
Development Contingency (From FC to PC) as a % of Senior Debt Loan
6.50%
21
57,569
1,208,958
TOTAL DEVELOPMENT MANAGEMENT AND LEGAL COSTS
7.14%
10.96%
1,862,308
8 CONSTRUCTION COSTS
Measurement Unit
Benchmark $ / m2
$ / m2
subtotal
Enabling Works: Infrastructure / Demo / Road
0
0
0
Contingency
0
incl.
incl.
Escalation
years
0
0
Total Demolition
0
0
Basement
1,000
0
0
Upper basement (open 1 side)
2,600
0
0
Apartments (Excluding Penthouses)
3,950
12,221,300
12,221,300
Extra specifications for Apartments
4,000
0
0
Penthouses
6,990
0
0
Common areas / services
3,500
4,371,500
4,371,500
Landscaping
300
111,454
111,454
child care fitout
1,250
285,000
285,000
Subtotal
0
0
0
16,989,254
Contingency
0.00%
0
0
0
Total Construction Cost
16,989,254
Legal on Construction Contract
0
TOTAL CONSTRUCTION COSTS (incl construction contin)
65.15%
16,989,254
TOTAL PROJECT COSTS
100.00%
26,076,651
REVENUE
9 REVENUE
No of Units
NSA (nternal)
NSA (external)
Rate average ($m2) / unit
On Sale of 21c Godden ($1.65M less gst)
Apartments Sale
53
3,409
0.0
$
2
5,486,290
GST on sales
-$
3,324,299
Rebate from Vector for permanent transformer on connection
$
-
Apartment Sales Commissions: FC
$
-
Apartment Sales Commissions post FC
$
-
Legal on apartment S&P contracts: post FC
-$
4
2,400
Commercial
3,964,364
TOTAL PROJECT REVENUE (net of settlement cost, ex GST)
26,083,955
Project Profit
7,304
RETURN ON COST (Profit/Risk Factor)
0.03%
Page 2
DEVELOPMENT SUMMARY
BUILD TO SELL
Appendix 5: Financial Feasibility Summaries
[email address]
8/4 Racecourse Parade, Avondale
Head-lines:
% Total Development Cost Total # of units
53
May-20
3
Owner Equity (land)
4
,002,600
15% Total Project GFA
existing units above
Project Costs Funded from Revenue
4 2,400
57% attributed to SDF Total Project NSA
3,415
3 Storey and 3 Buildings
Mezz / Equity Loan Value
3
,625,249
14% Equity interest rate
10.0%
Senior Debt Loan Value
19,033,693
71% Interest rate
4.50%
Summary & Inputs
Pre-sales cover (100% cover+portion
21,916,540
100.0% Loan to Value Ratio
70.6%
<60%
settlement costs+gst)
EXPENSES
% Project Cost
% Construction Cost
1 ACQUISITION COSTS
Area (m2)
$m-2
Govt. Value
Land Purchase Price
2,859
1,400
4,002,600
4,002,600
Valuation
0
5,000
0
Buyers Commission
0
Legals on Land Purchase / Transfer
0
Due Diligence & Feasibility
0
0
0
0
TOTAL LAND ACQUISITION COSTS
14.93%
26.8%
4,002,600
2 PLANNING & DESIGN COSTS
Construction Cost
14,938,650
1,574,656
% Al ocation
Planning Consultants
0.15%
22,000
Development Management fee to FC
0.00%
0
Architects
3.50%
522,000
Geotech & Contamination
0.45%
67,224
Structural Engineers
1.35%
201,672
Electrical
0.30%
44,816
Mechanical (in D&B Price section 8.0)
0.30%
44,816
Hydraulics
0.30%
44,816
Engineers Rep
1.00%
149,387
Quantity Surveyor
0.50%
74,693
Acoustic Engineer
0.11%
16,831
Surveyor (boundary adjustments / unit title)
0.17%
26,031
Fire Engineering & Protection + Peer Review
0.40%
59,755
Infrastructure (Power, water, gas, telecoms)
0.25%
37,347
Specialist Consultants / Peer Reviews
1.76%
263,269
TOTAL PLANNING AND DESIGN
5.87%
10.5%
1,574,656
3 STATUTORY AUTHORITIES
Rate / Unit
Number of Units
% Construction Cost / Value
Apportioned
Resource Consent Lodgement and Processing
1.00%
25.00%
37,347
Resource Consent for subdivision (incl. 223 & 224 certification)
149,387
7.50%
11,204
Building Consent Fees and Inspections
67.50%
100,836
Electricity Supply Infrasture & permanent tansformer (Vector)
120,000
Provision of temporary transformer (Vector) - incl in builders price
0
Rebate from Vector for permanent transformer on connection
0
53
0
Provision of telecommunications infrastructure
32,277
Provision of gas services infrastructure
4,482
Development Contributions - Residential
9,500
50
475,000
Development Contributions - commercial
12,174
0
0
Watercare Infrastructure growth (IGC's) - Residential
11,860
47
344,414
Watercare Infrastructure growth (IGC's) - Commercial
0
0
0
Watercare disconnection services and new meter
30,000
Sub-soil Leese costs
0
TOTAL STATUTORY AUTHORITIES
4.31%
7.7%
1,155,559
4 HOLDING COSTS
Per annum
Per annum
Per month
No. Months
Rates
Rate
Incl. GST
Excl. GST
Rates - Preconstruction
100%
$17,275
$15,022
1,252
8
10,015
Rates - Post Demolition / construction
60%
$10,365
$9,013
751
22
16,524
Insurance
Insurance - Construction (existing buildings)
0
Insurance - Show suite - building & contents
100%
$2,300
$2,000
$167
12
2,000
Insurance - Insurance - Show suite re-location insurance
100%
$0
$0
$0
0
0
Project Construction Insurances
Value insured
Rate
Premium / one off payment
Consequential loss insurance
5,500,000
0.70%
$38,500
38,500
Public liability insurance
-
-
-
-
-
9,000
Contract works insurance
14,938,650
0.00%
$0
0
Fire Service Levy
14,938,650
0.00%
$0
0
Other - Statutory Liability
-
-
-
-
-
0
TOTAL HOLDING COSTS
0.28%
0.51%
76,039
5 SALES, LEASING & MARKETING COSTS
Procure Show Suite
123,143
Show Suite Fitout
0
PR (incl. launch events & speaker series)
0
Advertising Design & Production incl model
0
Marketing Placements
0
Marketing Contingency (Post Settlement Sales)
At FC (50%)
Settlement (50%)
0
Office Leasing Commission
0
0
0
Retail Sales Commission
0
0
0
Incentives office and retail
0
0
0
Apartment Sales Commissions: FC
2.00%
437,775
0
437,775
Apartment Sales Commissions post FC
2.00%
89,288
0
89,288
Legal on AfL / Retail S&P
0
Legal on apartment S&P contracts: FC
15,900
0
15,900
Legal on apartment S&P contracts: post FC
0
Legal fees - Unit Titling (incl. LINZ fees)
(inlcuded in legal fees and Terra Fees in section 2)
0
TOTAL SALES, LEASING & MARKETING COSTS
2.48%
4.46%
666,106
Page 1
DEVELOPMENT SUMMARY
BUILD TO SELL
Appendix 5: Financial Feasibility Summaries
[email address]
8/4 Racecourse Parade, Avondale
Head-lines:
% Total Development Cost Total # of units
53
May-20
3
Owner Equity (land)
4
,002,600
15% Total Project GFA
existing units above
Project Costs Funded from Revenue
4 2,400
57% attributed to SDF Total Project NSA
3,415
3 Storey and 3 Buildings
Mezz / Equity Loan Value
3
,625,249
14% Equity interest rate
10.0%
Senior Debt Loan Value
19,033,693
71% Interest rate
4.50%
Summary & Inputs
Pre-sales cover (100% cover+portion
21,916,540
100.0% Loan to Value Ratio
70.6%
<60%
settlement costs+gst)
EXPENSES
% Project Cost
% Construction Cost
6 FINANCE COSTS
Debt
Term / No
Legal Fees - Land Finance
2
,001,300
0.00%
1
0
Establishment Fee - Land Finance
2
,001,300
2
,001,300
0.00%
0
0
Interest - Land Finance - equity
2
,001,300
10.00%
28
466,970
Interest - Land Finance - equity
2
,001,300
10.00%
28
466,970
Legal Fees - Working Capital Funding
3
,625,249
0.10%
0
0
Establishment Fee - Working Capital Funding
3
,625,249
3
,625,249
0.50%
0
0
Line Fees - Working Capital Funding
3
,625,249
0.00%
0
0
IRR - Working Capital Funding
10.00%
24
543,787
Legal Fees - Senior Debt (incl below)
1
9,033,693
0.10%
1
19,034
Establishment Fee - Senior Debt
1
9,033,692
1 9,033,693
1.00%
1
190,337
BG and Line Fees - Senior Debt
1
9,033,692
1.00%
16
253,783
Interest - Senior Debt
4.50%
18
466,148
Bank Quantity Surveyor (initial Report and Monthly Drawdown)
18
69,000
Valuation
1
30,000
TOTAL FINANCE COSTS
9.35%
16.78%
2,506,029
7 DEVELOPMENT COSTS & PROJECT OVERHEADS
% / Rate month-1
No. Months
Cost month-1
Development Management Fees (excl eng. Rep work)
527,063
1
527,063
527,063
Development Company Overhead
0
1
0
0
Development Company internal costs
0
24
0
0
Accounting & Tax / Other Overheads
1,000
40
1,000
40,000
Legal advisory services
0.50%
30
3,069
92,055
Development Contingency (From FC to PC) as a % of Senior Debt Loan
6.50%
21
58,914
1,237,190
TOTAL DEVELOPMENT MANAGEMENT AND LEGAL COSTS
7.07%
12.69%
1,896,308
8 CONSTRUCTION COSTS
Measurement Unit
Benchmark $ / m2
$ / m2
subtotal
Enabling Works: Infrastructure / Demo / Road
0
0
0
Contingency
0
incl.
incl.
Escalation
years
0
0
Total Demolition
0
0
Basement
1,000
0
0
Upper basement (open 1 side)
2,600
0
0
Apartments (Excluding Penthouses)
3,450
10,691,550
10,691,550
Extra specifications for Apartments
4,000
0
0
Penthouses
6,990
0
0
Common areas / services
3,450
3,512,100
3,512,100
Landscaping
300
450,000
450,000
childcare fitout
1,250
285,000
285,000
Subtotal
0
0
0
14,938,650
Contingency
0.00%
0
0
0
Total Construction Cost
14,938,650
Legal on Construction Contract
0
TOTAL CONSTRUCTION COSTS (incl construction contin)
55.71%
14,938,650
TOTAL PROJECT COSTS
100.00%
26,815,948
REVENUE
9 REVENUE
No of Units
NSA (nternal)
NSA (external)
Rate average ($m2) / unit
On Sale of 21c Godden ($1.65M less gst)
Apartments Sale
53
3,415
0.0
$
2
6,353,160
GST on sales
-$
3,437,369
Rebate from Vector for permanent transformer on connection
$
-
Apartment Sales Commissions: FC
$
-
Apartment Sales Commissions post FC
$
-
Legal on apartment S&P contracts: post FC
-$
4
2,400
Commercial
4,072,655
TOTAL PROJECT REVENUE (net of settlement cost, ex GST)
26,946,046
Project Profit
130,098
RETURN ON COST (Profit/Risk Factor)
0.49%
Page 2
Document Outline
