EPISODE 255 - Project Feasibility

Show Notes

In this episode, Minh, Debbie and Denise from our Research/Feasibility team discuss a new service offering for which we are seeing an increasing demand.

Property owners and developers are coming to us to get advice on what is the most feasible SDA development to do on a site they're considering.

Property feasibility and financial feasibility are related concepts often considered during the assessment of a real estate or business project.

Property Feasibility

Property feasibility refers to the analysis conducted to determine whether a specific piece of land or property is suitable for development or a particular use. This involves evaluating various factors such as:

• Zoning regulations: Are the legal land uses allowed on the property aligned with the intended project?
• Physical attributes: Can the property physically accommodate the proposed development (e.g., size, shape, topography)?
• Environmental constraints: Are there any environmental issues such as flood risk, soil conditions, or protected species that would limit development?
• Access and infrastructure: Does the property have sufficient access to roads, utilities (water, electricity, sewage), and other necessary infrastructure?

Financial Feasibility

Financial feasibility refers to whether a project or investment is financially viable, i.e., whether it will generate enough income or returns to justify the costs. It involves:

• Cost analysis: Estimating the costs of development, including land acquisition, construction, labour, materials, permits, and other expenses.
• Revenue projections: Estimating the potential income from the project, such as rental income, sales revenue, or returns on investment.
• Profitability analysis: Determining if the project will be profitable by comparing costs with projected income or returns (e.g., through financial metrics such as net present value (NPV), internal rate of return (IRR), or payback period).
• Financing considerations: Assessing the ability to secure financing (e.g., loans, investors) and the cost of that financing (interest rates, repayment terms).

Combined Feasibility Study

In practice, both property and financial feasibility are often evaluated together as part of a larger feasibility study. This study helps investors, developers, or businesses decide whether to proceed with a project, modify the proposal, or abandon it altogether.

The team talk about what is involved in the project feasibility advice we provide and how important it is for anyone looking at developing an SDA project on a site they have, or are looking to acquire, to understand all the potential options and to have a detailed analysis on the pros and cons, costs and ROIs of the many options likely available.

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