1. 3.0 Financial Appraisal
In this section, financial appraisal approach adopted is Residue Method of Valuation, laid out as below.
(RM) (RM)
Double Storey Shop/Office
Intermediate 14 units RM850,000 / units 11,900,000
Corner 2 units RM1,600,000 / units 3,200,000
End 2 units RM1,000,000 / units 2,000,000
17,100,000
-359,100.00
16,740,900
Double Storey Terrace
Intermediate 69 units RM400,000 / units 27,600,000
Corner 7 units RM650,000 / units 4,550,000
End 7 units RM500,000 / units 3,500,000
35,650,000
less 7% bumiputra 30% registration -748,650.00
Double Storey Low Cost 34,901,350
Intermediate 54 units RM45,000 / units 2,430,000
Corner 5 units RM45,000 / units 225,000
End 5 units RM45,000 / units 225,000
2,880,000
less 7% bumiputra 30% registration -60,480.00
2,819,520
Total Gross Development Value 54,461,770
A) Gross Development Value
2. Land size 449,212.5 sq. ft.
Cost RM 15 / sq. ft.
Total Land Cost 449,212.5 sq.ft.x RM 15 6,738,187.5
Nos. of units Build-up Area Building Cost
Double Storey Shop/Office (sq. ft.) (RM / sq. ft.)
Intermediate 14 3,600 70 3,528,000
Corner 2 6,500 80 1,040,000
End 2 3,600 80 576,000
5,144,000
Double Storey Terrace
Intermediate 69 1,500 75 7,762,500
Corner 7 1,500 85 892,500
End 7 1,500 85 892,500
9,547,500
Double Storey Low Cost
Intermediate 54 900 35 1,701,000
Corner 5 900 40 180,000
End 5 900 40 180,000
2,061,000
Total Building Cost 16,752,500
Earth works (5% of building costs) 16,752,500 x 5% 837,625
Infrastructure costs (10% of building costs) 16,752,500 x 10% 1,675,250
Total Construction Cost 19,265,375
2) Construction Cost
B) Gross Development Cost
1) Land Cost
3. i Professional fees (9% of construction costs) 19,265,375 x 9% 1,733,883.75
ii Administrative fees (2% of GDV) 54,461,770 x 2% 1,089,235.40
iii Plan fees (RM 2,000 per unit) RM2,000 x 165 units 330,000.00
iv Contributions & fees (2% of construction costs) 19,265,375 x 2% 385,307.50
v Advertisement & marketing (1% of GDV) 54,461,770 x 1% 544,617.70
vi Conversion premium
Commercial (20% of land value of commercial lots)
Double Storey Shop/Office
(Nos. of units = 18 units)
(Land size = 2,240 sq. ft.)
(Land cost = RM 15 / sq. ft.) RM 15 x 2,240 x 18 x 20% 120,960.00
Residential (15% of land value of residential lots)
Double Storey Terrace
(Nos. of units = 83 units)
(Land size = 1,775 sq. ft.)
(Land cost = RM 15 / sq. ft.) RM 15 x 1,775 x 83 x 15% 331,481.25
Double Storey Low Cost
(Nos. of units = 64 units)
(Land size = 1,260 sq. ft.)
(Land cost = RM 15 / sq. ft.) RM 15 x 1,260 x 64 x 15% 181,440.00
vii Subdivision (RM 1,500 per unit) RM1,500 x 165 units 247,500.00
viii Legal fees (RM 2,500 per unit) RM2,500 x 165 units 412,500.00
Total Administrative Cost 5,376,925.60
3) Administrative Cost
4. i Financing Cost for Land
(Loan = RM 6,500,000)
(Interest = 2.5% p.a. + 6.5% BLR)
(Compound interest = [(1 + i)ⁿ - 1]) [(1+0.09)⁵-1] x RM 6,500,000 3,501,055.71
ii Cost of finance
(Construction cost = RM 19,265,375)
(Interest = 5.5% p.a. + 6.5% BLR)
(Assuming loan of 50%) (RM 19,265,375 x 50%) x 12% x 2 2,311,845.00
Total Finance Cost 5,812,900.71
Contigencies (5% of construction costs) 19,265,375 x 5% 963,268.75
TOTAL GROSS DEVELOPMENT COST 38,156,657.56
5) Contigencies
4) Finance Cost
5. Summary of Gross Development Cost (RM)
1 Land cost 6,738,187.50
2 Construction cost 19,265,375.00
3 Administrative cost 5,376,925.60
4 Finance cost 5,812,900.71
5 Contigencies 963,268.75
38,156,657.56
GROSS DEVELOPER'S PROFITS EXCLUDING TAXATION
Gross Development Value 54,461,770.00
(Less)
Gross Development Cost (38,156,657.56)
TOTAL GROSS PROFIT 16,305,112.44
% of Gross Profit (Profit / GDV) (RM 16,305,112.44 / RM54,461,770) x100% = 29.94%
