Intali are property development & investment consultants providing strategic advice based on the analysis of property performance through viability appraisals. Commercial property specialists based in Leicestershire within the East Midlands offering a range of services from agency sales / lets, property management, lease renewals / rent reviews, site identification & assembly, section 106 & affordable housing reduction / negotiation, viability appraisals / negotiation. ... ...

Commercial Property Development Viability ..........Why It Matters by Intali

Intali were originally established as a development agency and have been involved in development viability appraisals since 2001. At first these appraisals were carried out for developers to asses land value for purchase decisions, but with the increasing burden of Affordable Housing and Section 106 Contributions our viability appraisals have been refined to assess the level of Affordable Housing and Section 106 Contributions that any particular development can support. During the past 18 months profitability from development has plummeted. Development schemes already underway were committed to provide levels of Section 106 and Affordable Housing Contributions in an economy completely unrelated to market conditions when the contribution agreements were reached. Continuing with these schemes crystallized substantial development losses and understandably developers have mothballed schemes wherever possible, causing housing completions to shrink to a fifty year low. The recovery of house prices is critical to making existing land holdings viable for development and in present circumstances it is unlikely that housing supply will increase significantly for many years. We won’t even mention the government target of 240,000 new homes a year. The importance of viability appraisals in this climate cannot be over estimated. From the developer’s point of view it is essential that any scheme commenced shows sufficient profit to justify the risk of investing in the current market, and the key to this is negotiating Section 106 and Affordable Housing Contributions in relation to scheme viability. While this sounds logical, anyone connected with recent planning applications will realise how reluctant some local authorities can be to deviate from current policy targets in respect of developer contributions. Cleary the Government has no intention of reducing the burden of contributions on developers, although fortunately Affordable Housing policy is now subject to viability testing and as result local authorities will become progressively familiar with viability arguments put forward. We therefore believe that viability testing is to become an essential part of the planning application process. We have had many successes in limiting Affordable Housing and Section 106 Contributions, some of which are listed on our website http://www.intali.com/development-appraisals-app.html If you have a scheme that is not currently viable, or if you have shelved development proposals because of Section 106 or Affordable Housing contributions that render your scheme unviable, we would be pleased to discuss how we might be able to help.

Professional Scrutiny of Development Appraisal Section 106 Affordable Housing Contribution Reduc

Intali often receive instructions from local authorities to provide an independent assessment of viability arguments put forward by developers. In current market conditions, where land and end use values are falling, it is natural for developers to try and protect their profit margin, but unless a local authority has the requisite in-house expertise and experience to scrutinize viability arguments submitted, it is difficult for them to provide advice to their planning committee. We have carried out work for various local authorities in providing independent assessments and reports for committee on viability arguments submitted by developers. These reports are provided in the joint names of the local authority and the developer, and as a minimum deal with:- An overall assessment of the viability appraisal submitted by the applicant.An interrogation of the key inputs such as sales values, build costs, etc.Where we do not agree with evidence put forward, a revised appraisal based on our assessments of the proposed development.A sensitivity analysis of the existing and/or revised appraisal to calculate the key financial targets as they relate to planning obligations. This service provides local authorities with an independent assessment and critique of the viability case being put forward to assist both officers with their recommendations and committee members with their planning decisions. We also endeavor to make positive proposals to improve the viability and therefore contributions of the scheme being assessed. Please contact Emma Vincent to discuss how we can help.

Specialist Services

Development and Investment viability appraisals and cash flows offered via Argus Developer and Argus Investor specialist software.

Trade Bodies / Associations

RICS BCIS

Trading Since

2002