Development Feasibility: Builder’s Perspective
Feasibility is usually developer-led, but builders should understand the financial logic behind decisions. It helps you negotiate scope, program, and risk allocation intelligently.
1. Key Inputs
- Hard costs: construction, prelims, external works, authority upgrades.
- Soft costs: design fees, planning, survey, certification, legal, marketing.
- Finance costs: interest, establishment fees, drawdown timing.
- Revenue assumptions: sales values or rental yields, absorption/lease-up rates.
2. Sensitivity: What Breaks the Deal
Feasibility outcomes can swing dramatically with small changes. Stress-test:
- +5–10% construction cost (escalation or scope growth),
- +8–12 weeks program extension (holding costs),
- -3–5% revenue (market movement).
3. Builder Insight That Adds Value
- Buildability options: structural grid efficiency, repetition, simpler façade systems.
- Risk visibility: identify cost drivers early (basements, services complexity, fire engineering).
- Program realism: lead times and authority approvals are often under-estimated.
4. Value Engineering (Without Creating Defects)
Value engineering is not “cheaper at any cost”. The safest savings are typically:
- reducing complexity (simpler geometry, fewer bespoke details),
- improving repetition (standardised unit layouts and wet areas),
- optimising structure (efficient spans, rational grids),
- reducing programme risk (design freeze earlier, procurement planned).
5. The Builder’s Feasibility Checklist
- Is the design “frozen enough” to price? If not, what assumptions will govern changes?
- What are the top 3 cost drivers? Basement, façade, services, fire engineering are common.
- What are the top 3 programme drivers? approvals, long-lead items, authority interfaces.
- Where is risk sitting? is it priced, shared, or silently carried?