Voluntary Action Camden Open Book Presentation

The Proposal – Open Book Policy

• To sell land owned by Camden Local Authority to generate funds to reinvest in Community Investment Programme.• Funds will be used to rebuild the Edith Neville Primary School and St Aloysius Nursery plus funds for the refurbishment of the Ossulston Estate and Godwin & Crowndale Estate.• There are other projects that may be allocated funds out of this sale.• By understanding how much the council might make from the sale you can appreciate how much might realistically be available for reinvestment in the Somers Town local community.

Valuation of Development Land

There are two approaches to the valuation of development land:comparison with the sale price of land for comparable development; orassessment of the value of the scheme as completed and deduction ofthe costs of development (including developer’s profit) to arrive at theunderlying land value. This is known as the residual method.

In practice it is likely that a valuation would utilise both approaches,and the degree to which either, or both, are relevant depends upon thenature of the development being considered, and the complexity of theissues.

Valuation Information Paper 12 Valuation of development landRICS (2008)

Residual Appraisal

Having established the development potential a residual valuation can be expressed as a simple equation:

(value of completed development) – (development costs + developers profit) = land value

Valuation Information Paper No. 12Valuation of development

The Site

Residential sale prices

Retail/leisure comparable

Savills Research on developmentviability of Private Rented Stock

Assumptions and main input variables

• Site area of 1,100 m2 or 0.27 acres• Building footprint of 730 m2 or 7,860 sq ft• One level of commercial space and 8 levels of residential• 63 residential units (average 890 sq ft)

Income• Residential sale price - £950psf• Affordable housing – 45% ofMarket Value• Retail rent - £25 psf pa.• Retail yield – 7%• Net to Gross of 90% used forboth retail and residential

Costs• Site surveys - £500,000• Build costs• Retail - £160 psf• Residential - £300 psf• Marketing - £150,000• Professional fees – 13%

Sensitivity on scheme with 15% ofunits being affordable

Sensitivity on scheme with 30% ofunits being affordable