Corporate Construction Finance

Module Title: Corporate Construction Finance
Upon successful completion of the assessment, you will be able to:
Knowledge and Understanding
1. Analyze various financial ratios and identify other techniques associated with the appraisal of developments.
2. Critically evaluate alternative developments through appropriate financial appraisal techniques and cost forecasting techniques.
3. Propose and justify construction and property development budgets.
4. Develop and implement solutions to improve the effectiveness of financial management in the construction industry.
Practical, Professional or Subject Specific Skills
1. Apply finance management techniques and appropriate appraisal tools in the construction management,
2. Establish criteria for utilizing appropriate decision techniques including identifying, formulating and solving problems related to the project financial management,
3. Apply finance management techniques to evaluate various project options and review decisions.
Transferable Skills and other attributes
1. Develop Communication and Presentation Skills by taking part in group discussions writing reports for senior management,
2. Develop IT skills and skills of data and information collect, analyse and record data presentation of the findings of research by using web technology for research and on-line discussion boards in a synchronous and asynchronous way,
3. Develop learning skills by using e-learning through the medium of the Internet and personal development planning,
4. Develop Interactive and group skills by class discussion,
5. Develop thinking skills by critical thinking through argument and peer debate and critical reflection on current practice.
Assignment
Brief and task Details:
Mithra Developments Ltd is a real estate development company located in Manchester. They are currently searching for a large scale housing development opportunity (200+ houses). As the Commercial Manager for Mithra Developments Ltd, you have been tasked to identify a suitable site for development and put forward a development proposal (in a report format) for the board of directors.
You will also need to prepare an outline development plan for the site, considering various combinations of renting and selling the houses. You would need to conduct appropriate research to establish relevant cash flows and sources / cost of finance for the development opportunities and use discounted cash flow methods to select the most suitable development opportunity to take to the next stage. Based on the outcome of your outline development plan, you are required to prepare a detailed development proposal evaluating the financial viability of the proposal using a residual valuation method.
Accordingly, you are required to incorporate the following in your proposal. A comprehensive review of the selected site and the appropriateness. An outline development proposal, critically evaluating the selling and renting options using discounted cash flow techniques and recommending the most suitable combination for further consideration. A critical evaluation and a detailed financial appraisal of the selected investment opportunity (from the outline development proposal) using the residual method
considering at least the following costs: Pre-development costs, Construction costs, Finance costs, Letting and promotion, Profit, Cost of land purchase and interest (use the existing market rate) As a part of the detailed financial appraisal, you should also analyse how fluctuations in variables affect your risk assessment