Reference no: EM133558746 , Length: word count:3600
Principles of Cost Planning & Cost Control
Cost Planning the Design Stages
Early Estimating & Cost Planning
Learning Outcome 1: Apply and critically analyse standard cost planning techniques during the design process and in early stage feasibility studies.
Learning Outcome 2: Demonstrate the process of construction cost forecasting in theory and practice as it applies to complex construction projects.
Learning Outcome 3: Integrate and synthesise cost plans into a developer's feasibility study to test and assess the viability of a complex construction project.
Learning Outcome 4: Demonstrate the importance of whole life costing, value management and sustainability in the design economics of a complex construction project.
Stimulus:
This assessment provides students with the opportunity to demonstrate their understanding, knowledge, and skills in feasibility study and development appraisal. It allows students to demonstrate on ‘real life' project and subsequently, students are capable in forecasting the feasibility for the project and offer relevant recommendation to the client.
Task description:
Your cost consultancy has been instructed to determine the budget that your developer should bid at a forthcoming auction sale for the site noted earlier. In effect, you will prepare a ‘residual analysis' to determine the maximum cost that should be paid for the land by assessing all the given variables on the development. In assignment 1 your team calculated the capital cost of the project. Now you have to include this building cost and all the other costs associated with completing the development until the last sale has taken place. The developer's equation will give you the headings of cost and value (sales income). Calculating the sales income will require you to undertake some market research to provide the sales values to include in the appraisal to complete the study. This will involve checking the internet (realestate.com; domain.com; rpdata/core logic etc) and speaking to real estate agents and others as well as pursuing the property press over the past month or two. The proposed project is going to sell all the units and you will need market figures on sales values. It will also be necessary to establish a market allowance for developer's profit and risk.
Structure:
Prepare a feasibility study and development appraisal (as a guide approximately 15 pages advised). The iLearn notes for lectures and tutorials may be consulted for a guide to presenting the study. Show your assumptions regarding the components of residual valuation and any other information you have used to complete the study. The assessment sheet included here may be used as a guide to the sections of your study.
Formatting Guidelines:
GENERAL
The assignment should be in a report format (to include, proper table of contents, headings, writing, calculations, references and citations). The assessment will be made to the entire formatting and structure and hence, both theoretical and calculations explanation are crucial. The presentation of the report, standardization of font, color, easy to read report, justification of all facts used will provide advantage to the report.
1. Introduction
Background of report; background of project; project information etc.
2. Market Overview
Inclusion of market overview of the project location; can include growth of market; demand of market;interest rate; migration and etc.; price overview of market; investor market; household income population
3. Development Assumption
Sale value of property (Core logic RP data, Gold Coast real estate); Building Value (based on Assignment 1); Finance; Profit/Risk; Marketing; Government charges
• Sale value of property (Core logic RP data, Gold Coast real estate)
Comparative analysis; consideration of increment
• Gross Realisation Value
• Building Value/Cost
Based on outline proposal recommendation (Assignment 1)
• Finance
Percentage of funding; interest rate and etc.
• Marketing
Allowance for marketing costs
• Profit/Risk
Allowance for Profit/Risk
• Government charges
Infrastructure charges; other charges
4. Cost Summary
Provision of total costs calculation including the calculation of Land Cost; include any adjustments where necessary
5. Development Proposal
Summary of project information and proposal
6. Sensitivity Analysis
Consideration of risks and uncertainties
7. Results and Conclusion
Summary and conclusion of feasibility of the project development
8. Recommendation
Recommendation to client, for instance, for cost reduction and etc.; revision of cost Summary
9. Assumption list
Any assumption made needs to be listed appropriately.
10. Appendices
Appendices to be submitted together with the report but the page numbers wouldn't be counted. Less than 15 pages are only for the main content of the report.
11. References
List of references to be provided. Follow the University's policy on referencing.