RESIDUAL LAND VALUATION

Subjetc Site : West Coast Road
Proposed Development : Low-rise Condominium Development
Site Information : sf sm
Site Area 215,280 20,000
Proposed DGP Plot Ratio (Max.-Gross) 1.4 1.4
Approved Built-up Area (Gross) 301,392 28,000.0
Proposed Efficiency of Site Utilisation (%) 85.0% 80.0%
Proposed Net Floor Area 256,183 22,400.0
Planning Application Period (Year) 0.75 0.75
Construction Period (Year) 2.00 2.00
Marketing / Letting Period (Year) - -
Assumptions :
Gross Development Value :
Estimated Current Sale Price ($psf) $1,500
Estimated Current Monthly Rental ($psf/mth) -
Current Prime Investment Yield -
Marketing Fees (% of GDV) 1.0%
Development Costs :
Ancillary Costs (Demolition, landscaping, etc.) $0
Building Costs ($psf) $450
Contingencies (% of total Building costs) 5.0%
Professional Fees (% of total bldg. costs + Contcs.) 8.0%
Interest on total Construction Costs 7.0%
Developer's Return for Risk and Profit (% of NDV) 15.0%
Land Costs :
Cost of land purchase (Stamp Duty & Legal costs) (%) 3.00%
Property Tax (% of 5% of Land Value) 10.0%
Holding Cost on Land (% for 2.75 years) 7.0%
The Valuation :
VALUE OF PROPOSED DEVELOPMENT
Gross Development Value $384,274,800
Less: Marketing Fees $3,842,748
Net Development Value $380,432,052
COST OF PROPOSED DEVELOPMENT
Ancillary Cost $0
Building Cost $135,626,400
Contingencies $6,781,320
Professional Fees & site salaries $11,392,618
Interest on construction cost $21,532,047
(on 50% of Bldg & Ancillary Costs & Prof. fees for 1.25 yrs)
Total Development Costs $175,332,385
Developer's Return for Risk & Profit $57,064,808
Total Expected Costs (incurred on completion) $232,397,193
III. LAND COST
Residual Land Cost (in 2.75 years' time) $148,034,859
Less : Holding Cost on Land (PV $1 for 2.75 yrs @ 7%) $13,362,635
$134,672,224
Less : Acquisition Cost $3,870,818
Less : Property Tax $1,774,125
(AV=5% of land value @ 13% tax rate for 2.75 yrs)
Land Value (Before DP) $129,027,281
Differential Premium $81,770,833
Current Land Value $47,256,448
say $47,257,000
Before DP
UNIT VALUE OF LAND: psf $599
psf/Plot Ratio $428
Computation of Differential Premium for Change of Use
Case fact:
Location West Coast
Land Area 20,000 sqm
Tenure 30-year lease commencing from 1 Feb 2013
Unexpired term of lease 25 year
(25 years as at 2017)
Restriction in title:
Existing Use Group Group D Industry
Gross Plot Ratio 2.5
Proposed Development:
Proposed Use Group B2 Residential
Proposed GPR 1.4
Differential premium computation:
Prevailing DC Table Sep-16
Sector 112
Residual Tenure 25 year
Leasehold value as % of freehold value 54.6%
Development Baseline:
Use Group Group D
DC Rate $1,050 psm
Base GFA 50,000 sqm
Development Baseline value $28,665,000
Development Ceiling:
Use Group Group B2
DC Rate $4,340 psm
Proposed GFA 28,000 sqm
Development ceiling value $66,349,920
Differential Premium $37,684,920
Step2: Computation of UP (extension of lease to 99 years)
Chief Valuer's Assessment of market value of 99-year lease
Based on Residential Use at GPR of 1.4
Market Value $250,000,000 $8,928.57
Leasehold Year 99
Value of 99 years as percentage of freehold value 96.0%
Remaining lease 953
Valueof 50 year lease as a percentage of freehold value 64.6%
Premium for 50-year tenure $168,229,167
Upgrading Premium $81,770,833
Total DP + UP $81,770,833