Why it matters
Every development decision flows from a feasibility, whether it is a five-minute back-of-envelope or a full IC pack. The discipline is the highest-leverage activity in a developer's week, and the difference between good and bad feasibilities is the difference between good and bad deals.
Worked example
A first-pass site feasibility might take 15 minutes and consist of:
- Estimate GFA from the planning controls.
- Apply a market $/m² rate to get GRV.
- Apply a market $/m² construction rate, plus soft costs, finance, and contingency, to get TDC.
- Solve for RLV at a target POC of 20%.
Sites that pass this screen progress to a full feasibility; sites that fail get parked.
Related terms
Connected ideas in the glossary.
- Feasibility modelThe structured calculation that produces a feasibility result.
- Profit on costThe headline ratio for a residential feasibility.
- Residual land value (RLV)What you can pay for the land and still hit target return.
- Total development cost (TDC)Every dollar spent to deliver the project.
- Gross realisation value (GRV)Total revenue from selling every dwelling in the project.
See these numbers in your own feasibility.
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