NEEPSEND SHEFFIELD SITE C FINANCIAL APPRAISAL ‘BREWERS YARD’
THE UNIVERSITY OF SHEFFIELD URBAN STUDIES AND PLANNING TRP6405 INTEGRATED PROJECT
190219855 MSC URBAN AND REGIONAL PLANNING
WORD COUNT: 1248 (EXCLUDING COVER)
SECTION ONE
INITIAL DEVELOPMENT PROPOSAL
INITIAL DEVELOPMENT PROPOSAL
Table 1: Scheme notes and floorspaces
53.3m
SITE PLAN AND CONCEPT DIAGRAM
Be
TRP6405 INTEGRATED PROJECT
ss
on
Pa
rk
(In d
ust ria
BUILDING AREAS - BLOCKS A, B, & C lE
sta te
)
Graham House
BLOCK BOUNDARY POLYGON AREA
BLOCK A
BLOCK B
16.3m²
52.1m
BL
BARDWELL ROAD
4,077.5m²
O C
K
B
Hallamshire Works
Kingfisher Works
Riverside
Works
2,562.3m²
12.5m² 144
MA
NN
1,756.5m²
4,914.9m ²
ER
S
ST
11,988.4m²
51.2m
BLOCK B
BOYLAND STREET
BLOCK C
NEEP
SEND
53.6m
LA
NE
50.9m
A
n
171.5m² 19.6m²
Radiac Works
7,
5
² 7m
14.1m²
10
5.
PH
BL
157.5m²
C O
31.8m²
207m² 252m²
K
Warehouse
25.5m²
² 2m
10
3
7.
34m²
Rutland Business Park
93
98.7m²
50
38
9.3m²
762.1m²
43
C LO
K
C 6
2,
Figure 1: Concept Diagram
2,499.1m²
B
1 to
Do
9
Riv er
669.9m²
10
OC K
BLOCK A
BL
C
728.8m²
15.2m²
10
1
52.4m
227.9m² 6 11
73
to
758.8m² B
K
ND
AD RO
A TL RU
42
LO C
A
71
21
Canon House
El Sub Sta
52.1m
1:1000*
26.4m² 30m²
Works
Building A
Building B
Building C
48
Works
Warehouse
0 TCB
10
20
30
40
50m
N
Figure 2: Site Plan *PRINT ON A3 SIZE - SELECT 'NO SCALING' OPTION OR SCALE TO 100%
SECTION TWO
INITIAL FINANCIAL APPRAISAL
High costing for demolition due to the current state of the buildings and issues which may arise such as asbestos.
High site preparation costings due to the history of industry on site and the resulting contamination of this. The site has also become overgrown with plantation since it was abandoned. High quality paving and plantation to compliment high quality construction. The plantation will act as drainage and mitigate against flooding. This will ensure a premium quality public space which the development will focus around.
Cost and value data for the development is ‘high’ to ensure: • A high quality scheme is delivered; • The quality is in line with the existing redevelopment in Kelham Island and with the redevelopment of Neepsend proposed in the Area Action Plan; • A profit is secured for developers; • High quality, secure underground parking.
Table 2: Costings
Industry standard net/ gross ratio used.
Bars and Restaurants achieve the highest value due to having the largest floorspace and high rental price per m2. The size of these two uses will aid the success of the leisure aspect of the site.
Table 3: Gross Development Value
High rental costs reflect the high quality of construction as well as the quality of the redeveloped Neepsend area. High rent allows for profit in the case of a decline in rental prices.
A high yield due to the risk of a high specification site in Neepsend.
Workshops have the same floor space as offices but a significantly lower value due to a lower rent per m2. The workshops are key to the success of independent businesses and the development still retains a high profit.
Basement parking receives a low rental return but is needed for the local workforce and will increase the appeal of the development to tenants.
The initial high profit shows the scheme to be viable as the project will react well to unforeseen changes to costs/fees/ markets and still be able to deliver a profit to the developer.
A high 32.57% profit from the initial financial appraisal. Tables 4 & 5: Appraisal One
SECTION THREE
DESIGN AND FINANCIAL VIABILITY
DESIGN CHANGES CHANGE TO DENSITY
C
Due to the initial high profit, building density was reduced by 15%. A 10% reduction did not produce a significant change to profit. The gross floorspace of each building was reduced in both the construction and valuation equations. This did not include basement parking, paving and green spaces.
This caused an absolute profit change of -3.13%, from 32.57% to 29.44%. The proportional change was -9.6%. This is because decreasing floorspace consequently decreases rental value. This change allows for the development to be viable and density could be reduced further if needed, with caution.


Table 6: Floor spaces before reducing density.


Table 7: Floor spaces after a 15% reduction in density.
DESIGN CHANGES CHANGE TO MIX OF USES
S
A 15% change was made to the gross floor space of offices and workshops. These were chosen due to the high rental value of offices and low value of workshops.
The absolute profit change was -0.67%, from 32.57% to 31.9%. The proportional change was -2.04% due to the lower rental value of workshops compared to offices. This change allows the development to still be viable with a high profit. More office space could be changed to workshops without a significant impact to the profit, if this was preferred by tenants.


Workshops have a higher net/gross ratio than offices, meaning more floor space would be gained from this change.
Table 8: Before changing uses.


Table 9: After changing uses.
DESIGN CHANGES CHANGE TO BUILDING SPECIFICATION 

The high specification of the site returned high profit. Therefore, building specification was reduced by 15%. Construction costs were reduced by 15%, with rental prices reduced by 15% in response to the lower quality design. The change to rental prices will result in a decrease in profit gained. The absolute change to profit was -1.94%, from 32.57% to 30.63%. The proportional change was -5.94%. The development is still viable and the specification could be reduced further if needed, without a significant impact to the profit. However, the aim of the site is to create a high quality leisure destination for Neepsend.
Table 11: Comparison of all changes


Table 11 shows that a -15% change to the density of the development has the largest impact to profit, followed by decreasing specification and finally a change to the mix of uses. All changes keep profit above the 15-20% industry standard, meaning the scheme is viable and further changes could occur. Decreasing density results in the largest change to profit because it impacts a larger proportion of the site compared to the latter modifications. Changing mixes only alters two components of construction, whilst decreasing specification would not reduce the rental value to the same proportion as decreasing density.
Table 10: +/-15% to construction and rent
SECTION FOUR
BALANCING DESIGN AND PROFITABILITY
REVISES TO THE DESIGN CONCEPT ENHANCING THE DESIGN
Due to the large profit margin from this scheme, before and after the above changes, there is scope to make alterations to the scheme to enhance the design whilst the development can remain viable. Options include: • The inclusion of public art and water features; • Surveying local independent retailers to establish whether office or workshop space would be preferable, altering the design to meet these needs; • Larger basement parking which can be used by the site and surrounding uses to eradicate on-street parking; • A wider access passage to the site on the ground floor of Building B to increase the view of the streetscape and openness of the site; • The scope to provide enhancements such as pedestrian crossings, street lighting and taxi ranks to the area surrounding the site through a community infrastructure levy. These changes would allow for a higher quality scheme to be delivered which would better meet the needs of Neepsned’s residents and workers, whilst still producing a profit.
SECTION FIVE
SENSITIVITY AND SCENARIO ANALYSIS
SENSITIVITY ANALYSIS
SCENARIO ANALYSIS
+10% was added to the below components to determine what aspect the development is most sensitive to. The scheme is most sensitive to increased rent, increasing profit by 12.52% with a +38.46% proportional change.
An economic ‘boom’ and ‘crash’ analysis was used to determine the impact these scenarios would have on profit. A ‘crash’ made the largest change (-13.23%), with a large -40.62% proportional change.
Table 12: Sensitivity Analysis
Table 13: Scenario Analysis
THE UNIVERSITY OF SHEFFIELD

DEPARTMENT OF URBAN STUDIES AND PLANNING