The financial appraisal report should contain 4 sections that cover the initial design concept, initial financial appraisal, design, and financial viability analysis, balancing design, and profitabili
Urban Studies and Planning Word Account: 1244 1. The Initial Development Proposal 1.1. Introduction The site studied in this report is in Block I (Figure 1) of Sheffield Neepsend. The shape of the site is a triangular wedge with an east -west trend. The block area is 4676.74m 2, with approximately 160m long of southwest side, 100m long of the north, and 90m long of northeast. It has 18 existing buildings, including one Grade II Listed building, with a total building area of about 4300m 2 (Figure 2). Figure 1. Location of Block I in Neepsend. Source: Digimap Through on -site investigation and network data research, the report summarises the existing building information of Block I (Appendix 1). Most of the existing buildings are used for industry with low building quality. However, it is obviously incompatible with the historical industrial characteristics of Block J (Figure 4). Besides, due to the limitation of functions, the buildings are of high density that leads to no effective public space. Meanwhile, the layout of the building s is disorderly and irregular. - 1 - Thus, the development proposal of only retaining the listed building and demolishing other buildings will be adopted. Figure 2. Existing Buildings and Building Area (m 2 ) in Block I. Source: Digimap - 2 - Source: Group 16 Neepsend AAP. Figure 3. Neepsend Development Vision. - 3 - - 4 - 1.2. Conceptual Design of Block I Development Based on the development proposal of Neepsend Area Action Plan (AAP) made by Group 16, Block I should be an industrial development Area in general (Figure 3). Based on its situation, the site position as a gateway of industrial zone, and its primary functi ons include skills training, Industrial history exhibition, office, and small workshop. (Figure 5). According to the requirements of the heritage strategy (Section 5.3) in AAP, the block shall be consistent with other blocks, especially Block J on the sout hwest side (S.C.C., 2009). Therefore, the floor number of buildings limit in the development plan is three floors. Besides, starting from the public space strategy (Section 5.7), building a systematic public open space becomes another design principle (Fig ure 6). According to the statistics of building and site area indicators in the development proposal (Tabel 1), the final building area is 9068.61m 2, among which the reserved area is 124.50m 2. BUILDINGS AND SITE COVERAGE Site Area 4676.74 (m2) % of site Coverage Land Use Area (m2) by Level 0 1 2 All Levels 24.12% Hardstanding (Paving) 1127.89 1127.89 7.75% Grassed Area 362.28 362.28 5.13% Planted Area 240.00 240.00 5.19% Roads 242.83 242.83 15.83% Car Parking (Undercroft) 740.55 740.55 4.81% Car Parking (Surface) 225.00 225.00 0.89% Industrial Grallery (Refurb) 41.50 41.50 41.50 124.50 2.82% Industrial Grallery (New) 132.02 66.00 198.02 12.11% Offices 566.26 1746.78 1219.25 3532.29 0.00% Skills Training Centre (Offices) 638.42 638.42 1276.84 11.78% Industrial Workshop 550.87 550.87 9.57% Retail 447.54 447.54 100.00% Totals 4676.74 2492.70 1899.17 9068.61 Table 1. Building and Site Coverage of Block I Development Proposal. Made by Author - 5 - - 6 - - 7 - 2. The Initial Financial Appraisal 2.1. Cost and Value Data This scheme follows the principle of high -quality design, so it adopts the highest value in the selection of cost and value data in the financial evaluation. According to the sustainable development strategy (Section 5.1) of AAP and Sheffield City Centre Urban Design Compendium (S.C.C., 2004), the high - quality design requirements should be followed to improve the quality of architectural design and construction and ensure its durability. M oreover, Block I is defined as the industrial exhibition area in this plan, which represents the high -standard and high -quality development principle of the industry in Neepsend. Secondly, in terms of function selection, in addition to filling in specific data according to the existing function types in the evaluation form (Appendix 2), some other functions adopt the principle of approximate function. For example, "Industrial Gallery (New)" cost takes "Art Gallery", while "Refurb" takes "Refurb of Office ty pe, modern to good quality". Furthermore, the report treats "Skill Training Centre" as "Office". 2.2. Appraisal After measuring the area indexes of various building and site in the original proposal and selecting appropriate cost and value data, form the follow ing tables: • Land Costs (Table 2) calculate the land cost in the redevelopment of the whole site; • Construction Costs (Table 3) calculate the cost of building and site on the site; • Valuation (Table 4) calculate the value of buildings and sites; and • Financial Appraisal (Table 5) combines other costs and calculate the final "Developer's Profit". Land Costs Land Value Area Unit cost Total cost m2 £s per m2 £s Market price for redevelopment 4,677 286 £1,337,548 Table 2. Land Costs of Block I Development Proposal. Made by Author Construction Costs Site works Element Unit cost Area Total cost £s per m2 m2 £s - 8 - Abnormals & site preparation 100 4,637 Demolition 60 4,186 Grassed Area 7 362 Planted Area 20 240 High quality paving 50 1,128 Roads 55 243 463,654 251,160 2,536 4,800 56,395 13,356 Total cost of site works £791,900 Buildings Element Unit cost Area Total cost £s per m2 m2 £s Car Parking (Undercroft) 168 741 Car Parking (Surface) 68 225 Industrial Grallery (Refurb) 570 125 Industrial Grallery (New) 1,020 198 Offices 1,100 3,532 Skill Training Centre 1,100 1,277 Industrial Workshop 700 551 Retail (Convenience) 560 448 124,412 15,300 70,965 201,980 3,885,519 1,404,524 385,609 250,622 Total cost of buildings £6,338,932 TOTAL CONSTRUCTION COSTS £7,130,832 Table 3. Construction Costs of Block I Development Proposal. Made by Author - 9 - - 10 - 2.3. Initial Proposal Evaluation Finally, the Profit of Developer of Initial Proposal is 20.22% (Table 5). From the perspective of financial feasibility, its profit slightly exceeds the acceptable profit (15% -20%), which means that there is still some room to improve the design effect of the scheme, and the design standard could be improved by sacrificing some rate of return, to achieve the balance between design and finance. Table 5. Financial Appraisal of Block I Development Proposal. Made by Author - 11 - 3. Design and Financial Viability This section will adopt three design changes to the original design proposal to compare the "Developer's Profit". 3.1. Development Density Adjustment In principle, only the building density is adjusted in this adjustment scheme. As profit has exceeded 20%, a 10 % reduction in building density is considered. It should be emphasised the area of the Listed buildings is not regulated. The area comparison and profit after adjustment (Table 6) are as follows. Table 6. Development Density Comparison of Block I Develop ment Proposal. Made by Author By reducing the area of 10% of the buildings except for the listed buildings, the profit reduces by 2.95%, and the final profit is 17.27%, which is within the range of acceptable profit, indicating that it is feasible to adjus t the development density. 3.2. Mix of Use Adjustment Similarly, this scheme only focuses on the buildings. In order to ensure the same variables, the adjustment amount is the same as the previous plan, namely, 10% of the total building area. By observing the value to value/cost of single -category buildings (Appendix 2), it could find that the return rate of "Re tail" is the highest, followed by "Office" and "Workshop". However, "Retail" only accounts for about 7% of the total floor space in the original proposal, and its influence is limited. Therefore, in the "Mix of use" adjustment scheme, it will reduce "Offic e" area and increase "Workshop" area. The comparison area and profit after adjustment (Table 7) are as follows. 10% of the total building area (613.00m2) will be transferred from "Office" to "Industrial Workshop". "Developer's Profit" decreased by 4.89% to 15.33%, which is within the acceptable range as a feasible solution. - 12 - Table 7. Mix of Use Comparison of Block I Development Proposal. Made by Author 3.3. Building Specification Adjustment In this scheme, the price and cost of the entire development plan will be adjusted. Same as the above schemes, the variable value is 10%. Variable B (C) increases (decreases) construction costs by 10% to reflect higher (lower) building specifications and increases (decreases) price/rent by 10% to reflect willingness by occupi ers to pay proportionately more (lower) quality accommodation. The comparison of the adjusted area profit is as follows (Table 8). Through comparison, it could draw that Variable B adopted high building specifications, with a profit of 21.90%, an increase of 1.68% compared with the original proposal. Variable C adopts the method of reduction, and the profit is 18.23%, which is 1.99% lower. Therefore, Variable C is financially feasible. - 13 - Table 8. Building Specification Comparison of Block I Development Prop osal. Made by Author - 14 - 4. Balancing Design and Profitability Analysis The profit of the current design is 20.22%, which is slightly higher than the acceptable profit. Therefore, in balancing design and profitability analysis, it should consider the appropriate lower profit to improve the design quality (Table 9). For the development density, it is feasible to reduce the gross building area by 10% (profit: 17.27%), appro priately increase the non -value space, such as green space, waterscape and hard landscape, or consider building the underground car parking. It could not only improve the share of public space but also increase the overall comfort of the space. For mix of use, it is also feasible (profit: 15.33%) to build more workshops and reduce the proportion of office (10%) to enhance the industrial atmosphere of the block and highlight the development vision.It highlights the positioning of the original industrial fun ctions of the block and reduces the migration of the initial enterprises. Cost and rent/price reduction (10%) is also acceptable (18.23%), which will make it easier for developers to cope with market changes and reduce investment risk. To sum up, from the perspective of design and financial feasibility, it recommends reducing the development density (17.27%) to improve the design quality and the proportion of public space and to be closer to the median acceptable rate of profit (17.50%). Table 9. Comparat ive Analysis of Block I Development Proposal. Made by Author Reference List Sheffield City Council., (2004). Sheffield City Centre Urban Design Compendium [online]. Sheffield: the City Council [viewed 21 May 2020]. Available from: https://web.archive.org/web/20141103030118/http://sccplugins.sheffield.gov.uk/urban_design/consul tation.htm Sheffield City Council., (2009). Sheffield De velopment Framework Core Strategy [online]. Sheffield: the City Council [viewed 21 Mayl 2020]. Available from: https://www.sheffield.gov.uk/content/dam/sheffield/docs/planning -and - development/core strategy/Core -Strategy --- adopted -Marc h-2009 --pdf --6-55 -MB -.pdf - 15 - Appendix Block I Existing Information Evaluation Site Area Building Height (Max.) Existing Building Area (Total) Building Density Floor Area Ratio Land Use 4676.74 ㎡ 9.7m 4186.00 ㎡ 71.4% 0.9 Industry This parcel is in bad shape (wedge), but it is in a critical position which is a lobby of Neepsend.
There is a vast difference between the east and the west in terms of building conditions and development potential. In the future, it could be seen as a gat eway to the region. Besides, the listed building in the plot should be repaired to protected by making use of it, that will give a proper value of the historic building. Space Utilisation The high building density and functional limitations result in almost no public space. Existing Buildings The quality of the building presents an imbalance between east and west, with the east lower than the west. As can be seen from the satellite image, most of the building roofing in the west has temporary renovation marks, and the quality is not high. Cha racteristics It is located in the industrial style area, especially the adjacent Block J, which is the next major conservation and development area in Sheffield (S.C.C., 2009). However, compared with the south side, the current architecture has the proble m of uncoordinated style. As can be seen from the satellite images, the temporary features of industrial buildings have serious negative effects. The layout of the buildings in the plot is not uniformly planned, and the style is not unified, which causes a great negative impact on the vision. - 16 - Appendix 1. Block I Existing Information Evaluation. Source: Google Map. Appendix 2 (1). Development Costs and Values by Type of Construction (Indicative) - 17 - Source: Neepsend Spreadsheet Appendix 2 (2). Development Costs and Values by Type of Construction (Indicative) Source: Neepsend Spreadsheet
