Why it matters
The feasibility model is the unit of analysis on a development project. Whether it is an Excel workbook or software, every site goes through one. The quality of the model sets the ceiling on the quality of every decision downstream.
Worked example
A residential feasibility model typically chains six layers of calculation:
- Site (zoning, GFA, NSA, unit mix)
- Revenue (unit pricing, ancillary income, selling costs, GST)
- Cost (land, construction, soft costs, contingency)
- Timing (program by month, drawdown profile, settlement waterfall)
- Finance (senior debt, equity, interest, fees)
- Return (profit on cost, margin, IRR, peak debt, peak equity)
Change any input; the model recomputes every output.
Related terms
Connected ideas in the glossary.
- Development feasibilityThe exercise of testing whether a project meets its target return.
- Development cashflowPeriod-by-period schedule of every project inflow and outflow.
- Total development cost (TDC)Every dollar spent to deliver the project.
- Gross realisation value (GRV)Total revenue from selling every dwelling in the project.
- Profit on costThe headline ratio for a residential feasibility.
See it in action
Use this term in a real feasibility.
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