Financial Analysis of City Highrise Development Project

The report provides a financial analysis of the City Highrise Development Project. It includes a detailed evaluation of the project's development cost, revenue forecast, cash flow outlay, profit evaluation, financing cost, and risks associated with the project. The report also outlines the assumptions, methodology, and recommendations for the management and developer of the project.

Running head: PROJECT ANALYSIS
PROJECT ANALYSIS
Name of the Student:
Name of the University:
Author’s Note:

1CITY HIGHRISE DEVELOPMENT PROJECT
City Highrise Development Project

2CITY HIGHRISE DEVELOPMENT PROJECT
Serial Particulars Yes No
1 Initial Development Cost Outflow Evaluation Yes -
2 City Highrise Project Outlay Yes -
3 Forecasting Cash Flow Outlay from the Project Yes -
4 Total Profit Evaluation with financial tools Yes -
5 Total Outflow for the project Yes -
6 Financing Cost of the Project Yes -
7 Rise in Expenses Yes -
8 Return generated from the Project Yes -
9 Evaluation and Forecasting Earnings of the Project Yes -
10 Exit Route/Sale of City Highrise Yes -
11 Cash Inflow for the Developers Yes -
12 Profit generated for the John Willey Pty Ltd Yes -
13 Yield generated by the company under different scenario Yes -
14 Leveraging Effect Yes -
15 Types of Risks Associated with the Project Yes -
16 Sensitivity Analysis Yes -
Checklist for the Assignment

3CITY HIGHRISE DEVELOPMENT PROJECT
Project Evaluation Letter
184/A Wall Street,
Brisbane, VIII 3000
Telephone [phone]
8620
www.financialadvisoryservice.com.
16th October 2018
Mr Mellon Mark
The Managing Director
City Highrise Complex Project Development Option.
Floor 8, Park Avenue Street
Brisbane SA 78520.
Dear Mr Mellon,
Sir, we are delighted to inform you that as per the guidelines provided by you for the
evaluation of the City Highrise Development project the same was evaluated and the findings
of the project has been described brief in the report attached. We would like to inform you
that the financial evaluation for the project City Highrise Development Complex was done by
incorporating several developments cost and revenue forecast for the same was evaluated
under different set of scenarios. The key assumptions taken in the project are highlighted
according to the business and macro-environmental analysis.

4CITY HIGHRISE DEVELOPMENT PROJECT
The project was grouped according to the different phase of the development and the
same was analysed for the project. The key risk involved in the project like the market risk,
business risk and macro-economic risks like demand and supply of the real estate and
inflation were accounted for the forecast. Sensitivity analysis performed gave us the brief
idea of the different possible scenario analysis from the project. The project analysis under
different scenario though has some aspects of risks involved but the same should be accepted
by the project.
Please note in case of any query and information needed for the analysis portion of the report
you contact us at our official email address.
Yours Sincerely
Financial Advisor
Financial Advisory Services
Enclosure: Investor Advisory Service
Cc: Harvard Paul

5CITY HIGHRISE DEVELOPMENT PROJECT
Executive Summary
The aim of the project is to conduct a financial analysis on the City Highrise Development
project. A financial analysis was done on the project to check the financial viability of the
project for the purpose of the investment. The various aspect of the project like the
development cost and the revenue analysis was done on a forecasting basis in order to get the
financial viability of the project. The key analysis of the project when the different
components were analysed and a sensitivity analysis was performed on the basis of the
different component of the project. The project scenario was evaluated under different
scenario under optimistic and pessimistic scenario to get the outcome of the project as the
business and macro-environment factors changes. The project from the developer’s point of
view does not deliver better returns an negative net present value for the developer of the
project was evacuated du to changing business and macro-economic conditions of the project.
However it is crucial to note that the project from the John Wiley Pty Ltd was a successful
one where the terminal value was forecasted an exit route of the project could potentially
turnout differences in the project.

6CITY HIGHRISE DEVELOPMENT PROJECT
Table of Contents
Project Evaluation Letter............................................................................................................3
Introduction................................................................................................................................8
Assumptions...............................................................................................................................9
Methodology............................................................................................................................11
Spreadsheet Computations and Graphs....................................................................................11
Part A...................................................................................................................................11
Part B....................................................................................................................................15
Discussion and Recommendations...........................................................................................17
Part C....................................................................................................................................17
Financial Leverage...........................................................................................................17
Part D...................................................................................................................................18
Risk and Sensitivity Analysis...........................................................................................18
Three Key Risk Evaluation..............................................................................................18
Sensitivity Analysis..........................................................................................................19
Conclusion................................................................................................................................19
Reference..................................................................................................................................21

7CITY HIGHRISE DEVELOPMENT PROJECT

8CITY HIGHRISE DEVELOPMENT PROJECT
Introduction
The City Highrise Development project Evaluation was based on the real
estate valuation approaches. The development project taken under consideration depends
upon the cost approach of real estate valuation of the City Highrise Project. The project has
different key components involved from the development of the project were the components
involved in the time frame like land acquisition costs and legal work are carried on for the
project. The development of the planned project begins after the demolition of the existing
old building/project taken under scenario (Agarwal, Ben-David and Yao 2015).
The first part of the project deals with the demolition and the settlement period. The
planning and designing cost is the other phase of the project that will start in the second phase
of the project where the project will take approximately take around 6 month of time for the
planning of how the construction will go on and the relevant designing of the City Highrise
Development project (Aizenman and Jinjarak 2014). The construction phase will soon after
the planning and designing period and after the demolition of the existing building. The
landscaping and the external work will start after the construction period of the City High rise
project. Thus an estimated all total of 36 month is the total time period analysed for the
development of the City Highrise project (An et al. 2016).
Demolition
Phase
Planning and
Designing
Phase
Construction
Phase
Landscapping
and External
Workings

9CITY HIGHRISE DEVELOPMENT PROJECT
Four Phase of the City Highrise Development Project
The key financial evaluation of the project helped us review when we performed an
sensitivity analysis on the same and forecasted the different scenario with the expected cash
outflow and inflow under optimistic and pessimistic scenario. The Assumption, Methodology
and the recommendations for the management and developer of the City Highrise Project
were outlined in the project (Bora 2015).
Assumptions
The key assumptions involved in the analysis of the City Highrise Project has helped
us evaluate the financial viability for the project. The key assumption in the Development
project was that the demolition of the existing building, planning and designing phase of the
project will be independent of each other while the construction period and the planning and
designing phase will go on hand by hand that is will be dependent (Cucchiella, D’Adamo and
Gastaldi 2015). The landscaping and the external working of the project will be completed
after the construction phase of the project which will be an independent phase of the project.
The total construction cost will be taken as a debt financing cost for the company where the
company will be going for financial leverage at the rate of 12% on the total development cost
of the project (Cupal 2014). The inflation forecast for the project is taken as 4% per year and
the same is expected to increase the development cost of the project by the forecasted
inflation. The increase or the escalation of the revenue is forecasted from the first year itself
which will help the company earn better results and result in increased earnings from
forecasted rental income (Del Giudice, De Paola and Cantisani 2017). The development costs
accounted in the project outlay will be accounted on an annual basis which will be compiled
with the development cost of the project the same was also accounted with inflation forecast.
The Cash flows generated from the project was taken as a final return generated from the

10CITY HIGHRISE DEVELOPMENT PROJECT
project as annual expected cash flow from the City Highrise project which was then mapped
with the discount rate or the required rate of the project to get the Net Present Value of the
Firm (Del Giudice, De Paola and Forte 2017). The Assumption used in determining the
developers profit and the cost at which the John Willey Pty Ltd will acquire the City Highrise
project is at a cost approach of valuation. The premium was calculated at the yield of 5%
premium over the total development expense after accounting of all expenses and all cash
outflows.
Construction Scheduled/Project Dispersion/Gant Chart
Components
Total
Time Year 2018 Year 2019 Year 2020 Year 2021
Relevant Activities
36
Month
s
30.06.
18
31.12.
18
30.06.
19
31.12.
19
30.06.
20
31.12.
20
30.06.
21
31.12.
18
Demolition Phase 3
Planning and Designing
Phase 6
Construction Phase 20
Landscaping and External
Working 6
9%
17%
57%
17%
Construction Scheduled/Project
Dispersion/Gant Chart
Demolition Phase
Planning and Designing
Phase
Construction Phase
Landscapping and External
Working

11CITY HIGHRISE DEVELOPMENT PROJECT
Methodology
The City Highrise Project was first divided into four key component phase of the
project from the development stage to the Landscaping stage that gave us a crucial idea for
about distributing the key costs and variable costs and components involved with the same
(Dziadosz and Meszek 2015). The Project outlay prepared acted as a key plan and was the
proper content for us to develop a methodology for proceeding with the financial evaluation
and analysis of the same (Gabriel et al. 2016). The financing cost for the company and the
development cost for the company and the other inflation forecast were incorporated into the
project outlay section of the report. The total cost of development was calculated at first then
the cash expenditure analysis was done in order to get an overview of the project (Glaeser et
al. 2017).
Demolition Phase
Planning and Designing Phase
Construction Phase
Landscapping and External
Working
0 5 10 15 20 25
Construction Scheduled/Project
Dispersion/Gant Chart
Spreadsheet Computations and Graphs
Part A
1) Total Development Cost as at 1st July 2018.
Part A
Cost Outflow for Development of the Project as at 1st July 2018

12CITY HIGHRISE DEVELOPMENT PROJECT
Particulars Amount
Land Acquisition Cost 7,00,00,000
Amount Payable on Deposit 10%
Initial Amount Payable for Land 70,00,000
Expenses for Demolishing of Existing Building 8,00,000
Designing and Planning of New Project 35,00,000
Exterior Working on Project 5,00,000
Total Cost of Development at 1st July 2018. 1,13,00,000
Land Acquistion Cost
Initial Amount Payable for Land
Expenses for Demolishing of Existing Building
Designing and Planning of New Project
Exterior Working on Project
0
20,000,000
40,000,000
60,000,000
80,000,000
Cost Outflow for Development of the
Project as at 1st July 2018

13CITY HIGHRISE DEVELOPMENT PROJECT
2) Project Outlay for the City Highrise Project Plan
59%
7%
30%
4%
Cost Outflow for Development of the
Project as at 1st July 2018
Initial Amount Payable for
Land
Expenses for Demolishing of
Existing Building
Designing and Planning of
New Project
Exterior Working on Project
Date Components Expenses Assumptions and Notes
1st July 2018 Land Acquistion expenses 7,00,00,000 Initial Phase of Construction
Amount Payable on Deposit 10%
Initial Amount Payable for Land 70,00,000
Expenses for Demolishing of Existing Building 8,00,000
Designing and Planning of New Project 35,00,000
Exterior Working on Project 5,00,000
Forecasted expenses of Development at 1st July 2018. 1,13,00,000 Outflow of Cash
30th Sept 2018 Total Vesting Period from 1.07.18-30.09.18 Demolition time for the Old Place
Building demolition Work from (1.07.18-30.09.18) 8,00,000 Incureed expenses Accounted Above
1st Oct 2018 Date of Final Settlement and Fresh Start of Construction Project Commencement
Calculation of Total expenses to be paid
1st Phase Remaining 90% Amount of Land and Building 6,30,00,000
Development expenses (Per Annum Provision) 5,00,000
Total Development expenses (Without Forecasted Inflation)7,48,00,000
Forceasted Forecasted Inflation of 4% on total capital deployed 4% Forcasted Forecasted Inflation of 4% of 40% Invested Capital
Total 40% of the Development expensess 2,99,20,000 Total Development expenses (Without Forecasted Inflation)
Provisions For Forecasted Inflation 11,96,800
Total Forecasted Development expenses (With Forecasted Inflation)7,59,96,800 Total expenses Accounted till 31.12.18
1st Jan 2019 Planning and Designing from (1.10.19-31.03.19) 35,00,000 Reamining Utilisation of expenses over the year
2nd Phase Designing and Planning Expenses/expensess 5,00,00,000 Time for Planning and Designing 6 Month
1st July 2019 Construction Period (1.04.19-31.12.20) 20 Months
Construction expenses 30,00,00,000
3rd Phase Development expenses (Per Annum Provision) 5,00,000 expensess During Development Period Per Annum
Forecasted Inflation Assumption 6% of 60% Invested Capital 6%
60% of the Total Development expenses 4,48,80,000 Total Development expenses taken was 74800000
Provisions For Forecasted Inflation 26,92,800
Total Forecasted Development expenses (With Forecasted Inflation)42,86,89,600 Total expenses Accounted till 31.12.19
1st Jan 2020 Construction Period (20 months) Construction Period (1.04.19-31.12.20)
Development expenses (Per Annum Provision) 5,00,000 expensess During Development Period Per Annum
Total Forecasted Development expenses (With Forecasted Inflation)42,91,89,600 Total expenses Accounted till 31.12.20
1st Jan 2021 Landscaping and External Work (1.01.21-31.06.21) 6 Months of Time Frame
4th Phase Development expenses (Per Annum Provision) 5,00,000 expensess During Development Period Per Annum
Total Forecasted Development expenses (With Forecasted Inflation)42,96,89,600 Total expenses Accounted till 31.06.21
1st July 2021 City Highrise Complex Development Project Expected Outcome Costs and Date
Project Outlay of City Highrise Development Project
Particulars Square Feet Rate Amount
Total Offi ce Area 75,000M^2 550/m2 4,12,50,000
Total Retail Area 5,000M^2 500/m2 25,00,000
Total 80,000 4,37,50,000
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Income from Rents/Sale 4,37,50,000 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892
Expected Escalation 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Total Cash Inflow 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892 6,47,60,687
Less: Cost Of Sales@10% -45,50,000 - - - - - - - - -
Net Outgoings 1,24,00,000 1,28,96,000 1,34,11,840 1,39,48,314 1,45,06,246 1,50,86,496 1,56,89,956 1,63,17,554 1,69,70,256 1,76,49,066
Net Income from Project 3,76,50,000 3,44,24,000 3,58,00,960 3,72,32,998 3,87,22,318 4,02,71,211 4,18,82,060 4,35,57,342 4,52,99,636 4,71,11,621
AssumptionEarnings Analaysis
Outgoing will be calculated on the basis of 155/m2(160-5 Recoverable Amount)*80,000m2
The Discount Rate taken for the project is around 12% which will be the required return
Escalation of Revenue will be from 1st Year Itself
Revenue Escalation will be at 4% p.a.
Outgoing Escalation is assumed from the second year itself @4%

14CITY HIGHRISE DEVELOPMENT PROJECT
3) Cash Flow Schedule for the Project
4) Net Income
Required Return/Discount Rate 12%
Net Present Value -29,52,00,316
Yield Generated -5%
5) Evaluation of Total Development Cost, Project Finance Costs and Escalation Costs.
Part B
1) The price at which John Willey Pty Ltd will purchase the Project:
Total Development Expenses
Components Amount Assumptions and Notes
Development Expenses Incurred
42,96,89,60
0 Calculated as per the Outlay Sheet
Add: Cash Expenses
42,35,54,40
0 Calculated as per the Cash Exp. Sheet
Components Expnses Assumptions and Notes Sheet
Development Expenses Incurred42,96,89,600 Calculated as per the Outlay Sheet Outlay Sheet
Add: Cash Expenses 42,35,54,400 Calculated as per the Cash Exp. Sheet Cash Exp. Sheet
less: Construction Expenses -30,00,00,000 Constructin Expenses Already Accounted 300 mn Cash Exp. Sheet
Less: Development Expenses -20,00,000 Development Expenses Already Accounted 0.5mn*4 Years Cash Exp. Sheet
Total Development Expenses 55,12,44,000 Total Expenses to be Incurred on Project
Components Amount Assumptions and Notes Sheet
Financing Charges @ 12% 30,000 Interest Expenses calculated for 6 months (01.06.18-31.12.18) Cash Exp. Sheet
Financing Charges @ 12% 3,60,60,000 Interest Expenses calculated from 01.1.19-31.12.19
Financing Charges @ 12% 3,60,60,000 (300 million*12% Interest Rate+ 0.5 million*12%) From 01.01.20-31.12.20)
Financing Charges @ 12% 1,80,30,000 (300 million*12% Interest Rate+ 0.5 million*12%)/2 (From 01.01.21-31.06.21)
Net Financing Charges 9,01,80,000 Total Interest Expenses @ 12%
Components Amount Assumptions and Notes Sheet
Total Cash Expense 39,21,80,000 Cash Exp. Sheet
Overhead Expenses @ 3% 1,17,65,400 3%*39,21,80,000
Contingency Provision @ 5% 1,96,09,000 5%*39,21,80,000
Total Expected Cash Expenses 42,35,54,400 Includes Provision and Overhead Expensess
Escalation Expenses
Total Development Expenses
Project Financing Expenses

15CITY HIGHRISE DEVELOPMENT PROJECT
Deduct: Construction Expenses
-
30,00,00,000 Constructing Expenses Already Accounted 300 mn
Deduct: Development Expenses -20,00,000
Development Expenses Already Accounted 0.5mn*4
Years
Total Development Expenses
55,12,44,00
0 Total Expenses to be Incurred on Project
Premium/Yield of 5%
2,75,62,20
0
Expenses Approach will be used for selling and sale price
is 5% Premium of Expenses Price (551.12mn*5%)
Total Selling/Acquisition
Expenses
57,88,06,20
0 Acquisition Price for John Willey Pty Ltd
2) Original developers profit/Loss
Original Developers Earnings
2,75,62,2
00 5% Premium over Expenses Price
3) Annual Cash Flow for John Willey Pty Ltd
4) Net Present Value
Required Return/Discount Rate 9%
Net Present Value -29,95,97,625
Yield Generated -6%
Particulars Square Feet Rate Amount
Offi ce Lettable Area 75,000M^2 550/m2 4,12,50,000
Retail Lettable Area 5,000M^2 500/m2 25,00,000
Total 80,000 4,37,50,000
Particulars Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Income from Rents/Sale 4,37,50,000 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892
Expected Escalation 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Total Cash Inflow 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892 6,47,60,687
Less: Cost Of Sales@10% -45,50,000 - - - - - - - - -
Net Outgoings 1,24,00,000 1,28,96,000 1,34,11,840 1,39,48,314 1,45,06,246 1,50,86,496 1,56,89,956 1,63,17,554 1,69,70,256 1,76,49,066
Net Income from Project 3,76,50,000 3,44,24,000 3,58,00,960 3,72,32,998 3,87,22,318 4,02,71,211 4,18,82,060 4,35,57,342 4,52,99,636 4,71,11,621
Earnings Analaysis Assumption
Escalation of Revenue will be from 1st Year Itself
Revenue Escalation will be at 4% p.a.
Outgoing will be calculated on the basis of 155/m2(160-5 Recoverable Amount)*80,000m2
Outgoing Escalation is assumed from the second year itself @4%
The Discount Rate taken for the project is around 12% which will be the required return
ANALYSIS OF PROJECT FROM JOHN WILEY PTY LTD. (Scenario 1)

16CITY HIGHRISE DEVELOPMENT PROJECT

17CITY HIGHRISE DEVELOPMENT PROJECT
5) Analysis of Cash Flow under the given Scenario
Required Return/Discount Rate 9%
Net Present Value 4,91,81,940
Yield Generated 10%
6) Profit and Yield Generated
Discussion and Recommendations
Part C
Financial Leverage
The impact of changing financial leverage or the debt equity ratio of the project from
80:20 ratio to 50:50 ratio is that the finance cost which is a major cost for the company will
get significantly reduced and the overall development cost for the project will be somewhat
reduced (Hartzell, Sun and Titman 2014). The project operates under scenarios where both
the financial and leverage risk of the company is high the company change of debt to equity
ratio from 80:20 ratio to 50:50 ratio could significantly reduce the financial leverage of the
Component Square Feet Rate Income
Offi ce Lettable Area 75,000M^2 550/m2 4,12,50,000
Retail Lettable Area 5,000M^2 500/m2 25,00,000
Total 80,000 4,37,50,000
Component Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Income from Rents/Sale 4,37,50,000 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892
Expected Escalation 4% 4% 4% 4% 4% 4% 4% 4% 4% 4%
Total Cash Inflow 4,55,00,000 4,73,20,000 4,92,12,800 5,11,81,312 5,32,28,564 5,53,57,707 5,75,72,015 5,98,74,896 6,22,69,892 6,47,60,687
Less: Cost Of Sales@10% -45,50,000 - - - - - - - - -
Net Outgoings 1,24,00,000 1,28,96,000 1,34,11,840 1,39,48,314 1,45,06,246 1,50,86,496 1,56,89,956 1,63,17,554 1,69,70,256 1,76,49,066
CashInflow from Exit Route - - - - - - - - - 90,00,00,000
Net Cash Inflow 3,76,50,000 3,44,24,000 3,58,00,960 3,72,32,998 3,87,22,318 4,02,71,211 4,18,82,060 4,35,57,342 4,52,99,636 94,71,11,621
Outgoing will be calculated on the basis of 155/m2(160-5 Recoverable Amount)*80,000m2
The Discount Rate taken for the project is around 12% which will be the required return
ANALYSIS OF PROJECT FROM JOHN WILEY PTY LTD. (Scenario 2)
Earnings Analaysis Assumption
Escalation of Revenue will be from 1st Year Itself
Revenue Escalation will be at 4% p.a.
Outgoing Escalation is assumed from the second year itself @4%

18CITY HIGHRISE DEVELOPMENT PROJECT
company (Johnson et al. 2015). The overall debt cost and the financial leverage of the
company should also be judged with other important key accounting aspects such as tax
benefits and all but for the project equity financing and mix approach if equity and debt
financing on an overall would reduce the financial leverage of the company.
Part D
Risk and Sensitivity Analysis
The risks associated with the project is that of the several business and market and
macro environmental risks under which the real estate project operates (Kettani and Oral
2015). The business risk associated with City High rise project is the tenancy risk, improper
management of the development of the project which leads to rise in cost and escalation in
time and effort of money. Fixed Financing Expenses for the company and the financial
leverage role it plays in the overall workings of the project in the long term. Political and
technological changes are some of the common risk associated with the real estate project
which leads to overhauling of development projects (Stone et al. 2016.).
Three Key Risk Evaluation
The three key risk that needs further evaluation in terms of the above key risks recognised
are the:
 Inflation Risk: Rising Inflation may increase the input cost associated with the project
which would reduce the overall profitability of the project. Thus inflation forecast
should be well evaluated on the terms of macro-economic factors evaluated (Maina
and Sakwa 2017).
 Tenancy Risk: Business factor risk and changes in the tenancy structure of the Project
may increase the risk of the company by the volatile rentals income from the project.

19CITY HIGHRISE DEVELOPMENT PROJECT
Thus it is crucial to analyse the key business factor for he development of the project
in the long term success (Yeh and Hsu 2018).
 Fixed Financing Charges: The financing charges for the company can increase the
company’s exposure towards the financial leverage and increase the financial as well
as business risk of the company. Thus the company should develop an optimal
develop an optimal debt to equity ratio for the company to remain solvent and
increase credibility and goodwill in the long term (Zhang et al. 2015).
Sensitivity Analysis
The sensitivity analysis was performed on the project in order to get an overview of the
performance of the project under various scenarios. The output will help in business decision
and analysis purpose (Zheng et al. 2014.).
Net Earnings Breakdown
Components Square Feet Average Rate Expenses
Total
80,0
00
5
47
4,37,50,0
00
Components Expected
Optimistic
(+10%)
Pessimistic (-
10%) Remarks and Notes
Net Rental Income
4,37,50,0
00
4,81,25,00
0
3,93,75,0
00 Scenario of Revenue on Market Factor
Increase in Rental
Structure
17,50,0
00
19,25,00
0
15,75,0
00
Positive and Negative Tenant
Structure
Gross Cash Flow
4,37,50,0
00
5,00,50,00
0
4,09,50,0
00 Gross Earnings
Less: Sales Cost@10%
-
43,75,000
-
50,05,000
-
40,95,000 Sales Cost of Gross Earnings
Finance Cost
1,24,00,0
00
1,11,60,00
0
1,22,76,0
00 Positive and Negative Costs Spending
Net Cash Inflow
3,57,25,0
00
3,88,90,00
0
2,86,74,0
00 Scenario

20CITY HIGHRISE DEVELOPMENT PROJECT
Conclusion
The project scenario was evaluated under different scenario under optimistic and pessimistic
scenario to get the outcome of the project as the business and macro-environment factors
changes. The project from the developer’s point of view does not deliver better returns an
negative net present value for the developer of the project was evacuated du to changing
business and macro-economic conditions of the project. However it is crucial to note that the
project from the John Wiley Pty Ltd was a successful one where the terminal value was
forecasted an exit route of the project could potentially turnout differences in the project

21CITY HIGHRISE DEVELOPMENT PROJECT
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