How to quickly appraise a development project

Introduction

This tutorial covers the development Appraisal tool in BOOM!, focusing on how to create, edit, and utilise Appraisal effectively for project analysis, cost estimation, and collaboration.

Key Features of Appraisal

1. Create a new Appraisal

   1. Access via the top toolbar.

   2. Select “Create New” > “Appraisal”.

   3. Choose a country (e.g., England) as Use Class classifications vary by region.

   4. Start options:

      1. From Scratch: Define Use Classes manually.

      2. Clone an Existing Appraisal: Copy a prior Appraisal template.

2. GDV and Accommodation Schedule

   1. Input the Gross Development Value (GDV) through an accommodation schedule.

   2. Adjust Use Classes or add new ones as needed.

Detailed Cost Components

1. Planning Costs

   1. Includes:

      1. Option fees.

      2. Legal costs (landowner and developer).

      3. Planning application and consultant fees.

      4. Development contributions (e.g., Section 106 fees).

2. Building Works

   1. Choose between:

      1. Square Meter Appraisal: Broad estimates.

      2. Detailed Appraisal: Drill into granular details.

   2. Components:

      1. Building work and external work.

      2. Preliminaries.

      3. Contractors overheads and profit.

      4. Consultants and contingencies.

3. Disposal Costs

   1. Estate agent fees.

   2. Legal and marketing costs.

4. Finance and Strike Price

   1. Input:

      1. Land acquisition costs, including sourcing fees and taxes.

      2. Development finance (equity, loan-to-GDV ratios, interest rates).

   2. Strike Price Analysis:

      1. Determine the maximum offer price based on GDV and associated costs.

      2. Highlight funding gaps or shortfalls (e.g., mezzanine financing needs).

Collaborative Tools and Reporting

1. Collaboration

   1. Invite team members, architects, builders, or colleagues.

   2. Assign permissions and roles.

   3. Track changes with version history.

2. Summary Reports

   1. Generate detailed breakdowns of all costs and sensitivities.

   2. Export appraisals as a PDF.

   3. Useful for owner presentations or funding applications.

Practical Applications

1. For Developers

   1. Streamline cost analysis.

   2. Ensure all cost categories are accounted for (e.g., planning, construction, finance, and disposal).

2. For Funders

   1. Provide high-level, detailed costing to support funding decisions.

   2. Visualise project profitability and risks with sensitivity analysis.

3. For Teams

   1. Centralised collaboration across stakeholders.

   2. Maintain transparency and accountability.

Conclusion

BOOM! Appraisal is a powerful and versatile platform for planning, cost estimation, and collaboration, aligning with industry standards like RICS NRM1. It simplifies project analysis, enhances decision-making, and ensures thorough cost management for successful developments.