Real Estate Feasibility Studies
A feasibility study turns a concept into numbers you can rely on. We build the financial model of your project, test it against the market and show you whether it works, under which conditions and with what risk. The study supports your investment decision, your board and your financing.
We prepare feasibility studies for every asset type: office, retail, residential, hospitality, mixed use, land and staff accommodation, for development projects and for assets that are already operating.
01
The physical programme
Every model starts with what can be built. From the plot area, the permitted building ratio and the coverage, we derive the built-up area, the gross and net lettable areas, the parking and, where relevant, the number of units, keys or beds. For specialist assets, the programme follows the sector’s own standards.
02
Development cost
We build the full cost of the project: land, construction for each component, infrastructure and utility connections, design and consultants, permits and legal costs, furniture and equipment, marketing, financing costs, developer overhead and contingency. Each line is set against market rates.
03
Revenue and operating income
We set out the product and unit mix with sizes and prices, and the revenue it produces: sales, rents, room revenue or bed income, with occupancy and absorption drawn from the market study. For income-producing assets, we model the operating costs line by line: staffing, utilities, maintenance, services, insurance and administration.
Cash flow and returns
The model produces the annual profit and loss and the cash flow over the investment horizon, with phased revenue and cost loading by stage. It reports the measures your board and your bank ask for:
- Project IRR and equity IRR.
- Net present value.
- Payback period and break-even timing.
- Profit on cost, margin and equity multiple.
- Break-even selling price or break-even occupancy.
04
Financing
We model the capital structure: equity, debt drawdown and repayment, and debt service cover. Where land is contributed into a partnership, we show the returns to the landowner and to the development partner, and compare partnering with selling the land.
05
Scenarios and sensitivity
We test the project under base, upside and downside scenarios, and measure its sensitivity to the variables that matter most: demand, selling prices or rents, land cost, construction cost and occupancy. A combined downside case shows how much pressure the project can take, and what it would need to stay viable.
06
Exit strategy
We compare the exit routes: sale of the asset, transfer into a real estate fund, or holding it for income. Each route is set out with its financial effect and timing, in line with your investment goals.
07
The recommendation
The study closes with a clear verdict: go, go on conditions, or rethink. Conditions are specific, such as the land price to target, the phasing, or the pre-sales to secure before construction.
What’s included
01
Programme
built-up and lettable areas, units, keys or beds.
02
Cost
land, construction, soft costs, financing and contingency.
03
Revenue
unit mix, pricing, rents, occupancy and operating costs.
04
Returns
profit and loss, cash flow, IRR, NPV, payback and break-even.
05
Finance
capital structure, debt and partnership returns.
06
Risk
scenarios, sensitivity and exit options.
Frequently asked questions
Do you prepare feasibility studies for existing buildings?
Yes. We model the income, operating costs and returns of operating assets, and test repositioning or refurbishment against keeping the building as it is.
Will the study support a financing application?
The study sets out the cost, the revenue, the cash flow, the returns and the debt service cover in the form lenders and boards expect.
Do we need a market study first?
The feasibility study draws its prices, rents and occupancy from the market. If no recent market study exists, we prepare one as part of the engagement. See our real estate market studies.
What about industrial projects?
Our industrial advisory team prepares feasibility studies for warehouses and industrial land, and our build-to-suit team can take the project forward.