Abstract/Summary

The aim of the research was to improve understanding of the form, extent and variability in financial returns sought by developers in the residential and commercial real estate sectors. Existing information on the returns that developers want and the returns that they achieve is fragmented. The findings from surveys and interviews reveal that simple, traditional appraisal models and profit metrics are still very prevalent in UK market practice, despite the availability of more sophisticated cash-flow based models for development appraisal. However, appraisal practices vary according to the size of developer, type and length of scheme and stage of the development process.