Thank you for those comments, Colm. 30% is the current norm in South Africa. The project has a yield of more than 75%, due to the low land cost relative to it's prime location....
Hi Anonymous,
You are welcome.
I feel it is necessary to qualify what you mean by a yield of 75%.
In a residential condo development we generally talk about a Profit on Cost as a means of describing a % return and this is is not an "annual return."
In Commercial office or retail development, the next point to make is to distinguish if the return quoted is a "Return on Equity" on a "Return on Total Cost."
All of these points are important when making a financial application to a lender and many new developers do not know what lenders are looking for in a development as a basic minimum or how to present their submission.
However you know, as it is all set out in my e-courses as well as a fully completed Development Finance Application for you to amend as call your own.
