Strategic Development and Investment Analysis for Residential Housing in Nottingham City

The real estate industry calls for objective and strategic planning of the actions with regards to the viability of the project, meeting the regulations, and other necessities. Often, real estate companies focus on the returns they will get from the business venture as the driving force for their involvement in the business. As a visionary real estate investors, we intend to conduct a feasibility study of the target location, explore the legal requirements for the development project and analyze the financial implications of the whole project before taking up the project. We will undertake a project in Nottingham City, which is a residential project that will host 110 units. The project will be a five-floor building with a parking and a 24. hours security and alarm system.

Section A: 9-10 Short Hill and 54-56 High Pavement, Nottingham

Property and planning report

The proposed residential plan has been submitted for approval. The project intends to develop an existing residential housing unit to meet the modern specifications and standards for affordable apartments with all the social amenities. The project will develop new five-story buildings, with all swimming pools, a central parking area, and a common entrance.

The site has been a residential housing unit. However, the previous planner and developer failed to meet the legal requirement for a residential housing unit, and therefore, it requires a complete overhaul and proper development. The location of the site is suitable because it is served with a network of roads that lead to the main highways. To the Northern side is the Main Hill and to the eastern part of the site is the Trivez Square. The accessibility of the site is one of the key factors that informed the decision to choose the site.

The project will be constructed next to Short Hill, Lace Market. Other residential structures will surround it in the area, including the Grade II Listed Buildings, 9-10 Short Hill, and 54-56 High Pavement, among others. The actual location of the area is shown in the physical map below;

The physical location of the site is near Lace Market Escarpment, North of London Road, and frames landmark view of St. The proposed land will consist of 110 housing units that can host a family. The units will be made up of one and two-bedroom apartments, each apartment with a common area facing the backside. There will be a swimming pool that serves each apartment and a common playground.

The access to the residence on foot will be from the main entrance through the common playground into the entrance to the apartment. We will demolish the existing building to give way for the construction of the new structure, which will occupy a space of 1 by 1.5 acres.

The proposed residential housing units have to be approved by the Nottingham City Planning Policy, which provides a framework for physical land use, including the development of residential units. He proposed the site for development does not fall under the protected area and land designated for a particular public use. We have submitted to Nottingham City Planning for approval. The demolition and development of the new residential flats were approved according to the Nottingham City Aligned Core Strategy of 2014.

Nottingham City policy maps

The site is set to be developed for the purpose of residential functions. It will serve the population around the city, especially the people around St. Mary's Church. One of the neighboring residential units is shown in the following figure;

The role of Nottingham City Council is to approve the proposed plan to enable the property owner to access the land and start a profitable venture. Nottingham City Local Plan approves and makes the framework for making critical decisions about the developments in the city. We have submitted the proposed development plan to be approved according to the Nottingham City Aligned Core Strategy of 2014, which spells out the standards for constructing new buildings within the city. After the approval, the construction company will undertake to complete the project within the time allocated.

Tenure and tenancies

The land will be owned under individual land tenure system. The property will be managed by the individual that purchases and develops it for residential use. The property is registered under individual land to enable the owner to develop it to the standards regulated by the law.

Planning obligations under section 106 agreements

The proposal for the development of the housing units has been submitted to the local authorities at Nottingham to allow the development of the units. According to the Planning Obligation or Section 106 of the 1990 Town and County Planning Act, there must be a private agreement between the local authorities and the private property developer before the developer can be permitted to commence the construction. We have fulfilled the requirements of the Planning Obligations through the submission of the comprehensive plan of the building for approval.

Similarly, private developers in Nottingham City are obliged to adhere to the updated planning obligation strategy guide of September 2019, which requires states 'Securing Developer Contributions for Education.' We have also submitted the proposal to the Education Department for approval and further direction on the same.

The building will aim at improving the quality of life of the people within the area. To achieve this, the construction of the flats will include improving the access roads to the residence, providing quality and clean water to the residents as well as providing security in the area. Our team will ensure that the construction site is a secure area by constructing perimeter walls around the residential flat.

In line with the updated planning obligation strategy guide of September 2019, we undertake to be obliged to the contributions as set in the Department for Education's Guideline Note, 'Securing Developer Contributions for Education.' Achieving this will require the guidelines from the local authorities and the mechanisms for contributing to the education sector within the areas affected by the construction of residential flats.

Section B: 9-10 Short Hill and 54-56 High Pavement, Nottingham

9-10 Short Hill and 54-56 High Pavement, Nottingham City, will be developed opposite an ongoing residential construction on the Lace Market Escarpment, on the upper side of London Road, framing the landmark view of St. Mary's Church. The decision to take up this project at the site was arrived at after a feasibility study, as well as impact assessment, was done. Similarly, the decision was arrived at after a financial overview of the cost of housing in Nottingham City, which was projected to be on the upward trend at 2.18%, which is likely to improve in the near future.

Moreover, there are almost similar residential buildings underway in the neighborhood, which are likely to attract more people to the area. The existing developments will reduce the cost of construction of access roads, installing pipes and other necessities for housing unit development.

Valuation of the property

The value of the property included the cost of acquiring the land, legal fees, construction cost, and labor-related costs. The Gross Property value of Brenda and Johns’ Apartments, Nottingham City, was estimated as follows:

Duration in 2 year

Source: https://www.zoopla.co.uk/house-prices/browse/nottingham-city-centre/?q=nottingham%20city%20centre

Development cost

Demolition and clearance of the site Brenda and Johns’ Apartments

For the construction of the new residential units = £210,000

Construction of 110 housing units of 6070 sq. at £1,200 per square meter= £7,284, 000

Contingency cost at 5% of the total cost of construction = £365,250

Ancillary cost at 5% of the total cost of construction = £365,250

Professional fees and labor at 12% of the building cost= £876,600

The Community Infrastructure Levy (CIL) £250,000

Legal disposal fees, marketing of the property and other related costs at the fee of 4% of the GDV= £ 840,000

The cost of acquiring land is Nottingham was estimated at £560, 000, inclusive of the legal fees and transfer costs. To calculate the total value of the land in the city, it is imperative to consider the cost of acquiring the property plus other costs as may be land surveyor. Residential housing units was the most favored choice for the development project because it offers flexible returns to the owner. For instance, the property can be managed by a professional body and the rent earnings channeled to other profitable projects. Similarly, the property can be sold to the third party at a relatively higher profit. The projected cost of construction is based on the current costs at Nottingham City, including the approximate cost of acquiring the land. The approximated costs are within the range of -+10%. According to the cost that would be incurred in the acquisition and development of the site, the following would be the projected profit after the completion of the project;

When the housing units are sold out at the average cost of £191,000 per unit, the property cost to the next 2 years will have gone up by about £21,001,000. In this regard, the cost of constructing and acquiring the land will significantly be lower than the approximate value of the property in the next two years. This means the property is a feasible and profitable venture for the organization to undertake.

References

1. https://www.maber.co.uk/projects/short-hill/
2. https://geoserver.nottinghamcity.gov.uk/live/opendata-maps/?service=OpenData&layer=59&identify=true
3. https://www.zoopla.co.uk/house-prices/browse/nottingham-city-centre/?q=nottingham%20city%20centre