Real Estate Development.
Scenario
You are employed by a real estate development/investment company. Their investment portfolio contains a mix of office, retail and residential assets with a current value of c£150 million. For development, they have been focusing on residential development projects in the inner London area. The development team consists of seven in total. Typically, the company completes one scheme per annum. At any one time, they can have 1-3 schemes under construction/being marketed, another 1-3 schemes being acquired or at the mobilisation stage and 10-15 potential projects where detailed feasibility analysis is underway before potential bidding/negotiation.
Having obtained a new planning consent for the site at Islay Wharf, Lochnagar Street, London, E14 0LA in the London Borough of Tower Hamlets, rather than execute the project themselves, the current site owner is now seeking to sell this development opportunity. Details of the scheme can be obtained on the London Borough of Tower Hamlet’s planning portal. The reference number is PA/19/01760/A1. You’ll get some sense here of the work and cost involved in submitting a planning application.
However, we have made the agent’s brochure available to you via Blackboard – this contains lots of useful information about the proposed development that will assist you.
Task
Produce a memorandum for the Investment Committee providing a preliminary financial appraisal of the development opportunity.