Building Project Evaluation Report Analysis: SRQ764, Trimester 3

This report presents a comprehensive building project evaluation, focusing on the valuation and suitability analysis of a site for a retail project. The evaluation employs both secondary and primary data sources, including sales prices, market trends, and physical site inspections. The methodology includes an examination of location characteristics, legal considerations, and sensitivity analysis to assess uncertainties. The report details the application of multi-criteria decision-making techniques and GIS for site suitability assessment, considering factors such as soil, climate, erosion, and flood risks. The study also incorporates residual figures, market condition adjustments, and price predictions. Sensitivity analysis is used to determine the impact of various criteria weights on the project's feasibility. The report provides a detailed discussion of the results, highlighting the sensitivity of the retail project's profitability to changes in the weighting of different parameters.

BUILDING PROJECT EVALUATION SRQ764
By Name
Course
Instructor
Institution
Location
Date

Executive Summary
There was use of the both Secondary as well as primary data sources. The use of the secondary
data was meant to assist in the collection of information related to sales prices, market demands,
trends and demographics. The subject site acted as the primary data sources and this was carried
out through relevant documentation and physical inspection.
Address of the site North Hamilton
Property type Commercial retail space
Ownership Private
Date of Value 17/12/2019
Legal characteristics Title has no restrictions
Locational characteristics Close to certain amenities
Psychological Attributes High demand in terms of market
Probable Buyer Developer
Probable use “AS is”
Transaction zone initial price : R1,300,000 – 2,500,000
Adjustments The possible adjustments to be made on the
size of land which involves improvements on
the characteristics of the site.
Transaction zone and adjusted price Value in the market: 2000,000 Zone of
transaction : R2000,000 – 2,800,000.
Physical Attributes Size of land 780m2

Contents
Executive Summary.....................................................................................................................................2
Introduction.................................................................................................................................................3
Methodology...............................................................................................................................................4
Location Characteristics of the site..........................................................................................................4
Criteria and Materials..........................................................................................................................5
Legal characteristics................................................................................................................................5
Sensitivity Analysis...................................................................................................................................7
Residual Figures.......................................................................................................................................8
Prediction of the Price of the site........................................................................................................9
Adjustments............................................................................................................................................9
Conditions of the market.....................................................................................................................9
Results and Discussions.............................................................................................................................10
Conclusion.................................................................................................................................................12
REFERENCES..............................................................................................................................................13

Introduction
The processes of land valuation have seriously changed through the time. These changes
have been in terms of its purpose as well as scope, from solving several issues of the
development of land to the broad based land use planning for the projects including
development. These includes technical, socio economic and as well as environmental parameters.
Site evaluation is very important considering the demand for land to facilitate projects of
different types has been on the increase (Abidoye and Chan 2016). The demand is basically on
the information regarding suitability. Land use could be with regards to agribusiness, building,
ranger service, or diversion.
Retail projects are viewed as one of the most significant inexhaustible and dynamic
regular assets. Consequently, construction gets one of the most well- known territories where
land reasonableness is applied as of late, pros have been turning to figure construction land
reasonableness appraisal as a Multi-Criteria Decision Making (MCDM) issue in a GIS domain.
Assurance of ideal land use type for a territory includes coordination of information from
different sources like soil, geology and meteorology. All these are considered as criteria in
MCDM. Anyway every one of the criteria is not similarly significant; each model will contribute
towards the reasonableness with various extents (Crosby and Henneberry 2016). Relative
significance of these parameters ought to be well assessed to decide the reasonableness by multi
criteria assessment procedures.
Sensitivity Analysis which is commonly known as SA is one of the techniques which is
used in addressing the uncertainties in the estimations of the viability of the site for the
construction activities. The most frequently used sensitivity analysis is based on the variation of

the weights and this is what this particular study employed. A comprehensive case study
focusing on the suitability of the site in regard to the retail project has been procedurally
described in this paper. To create the standard values for every assessment unit, each factor is
weighted by the evaluated criticalness for specific venture. One of the well-known multi criteria
techniques is positioning.
Methodology
Location Characteristics of the site
The selected site for the retail project development is relatively large. The land has been in the
state of under usage since the facilities close to it just small car parks. The remaining extra land
will thus be used to facilitate the development of the retail projects. The selected area of the
study was basically in Hamilton in Australia. The site is basically located in between latitudes
05°51′ 06″ N and 03°55′ 37″ N and longitudes 102° 21′ 11″ E and 103° 31′ 28″ E. The selected
site was accessible in terms of the available information hence considered appropriate for this
particular study.
Figure 1: Selected site for valuation in Hamilton Australia (Kucharska and Olbińska 2018)

Criteria and Materials
Various sources of data were used in the analysis of the suitability of the site. The data used in
this particular case have been summarized as shown in the table below.
Table 1: Summary of the considered features of the site
There was use of at least three criteria in the selection of the qualities of land
including the impacts of the quality of land or site upon its use for the retail project, critical value
occurrences within the area of the study as well as practicality of acquiring the information.
These three criteria were examined by the use of the spreadsheet. The land quality was chosen
just on the off chance that it was important or decently significant, while less significant land
quality was excluded from land reasonableness appraisal.
Legal characteristics
Considering that the title was never made available, the processes of valuation made title as
being unrestricted by covenants, encumbrances or other forms of the planning restrictions that
can potentially affect the value of land or sites. Accordingly, a lot of required land
characteristics and their related land qualities have been chosen. These land attributes contain

yearly precipitation, length of the dry season, incline, surface and structure, base immersion,
profundity to sulphuric skyline, soil profundity, soil response (pH), soil natural issue, cation
trade limit, coarse piece (rock and stones), seepage class, soil disintegration and flood hazard
(Small, Vail and Akbar 2016.). The premise, whereupon such limit esteems were chosen, was
information and data and preliminaries accessible from the nearby study area.
It is important to note that floods, erosion hazards among other are very crucial factors
which affect the establishment of the retail project in any site hence they were to be considered.
The past investigations considered examination of geo-natural factors and delivered two layers
for disintegration and flood that are renamed into five classes to create appropriateness input
layers. The Universal Soil Loss Condition (USLE) was applied in the GIS to decide the normal
yearly soil variation in the examination site. The flood hazard map was made utilizing the GIS
and AHP strategy to determine chances of the area being affected by the floods. Five layers (soil,
atmosphere, disintegration danger, flood and geology) were overlaid and positioned dependent
on the appropriateness of site for retail project. All the spatial criteria were redesigned to match
the appropriateness of retail project, which were further arranged to make it perfect with GIS
condition.

Figure 1: Erosion risk map of the site and flood risk map (Kucharska and Olbińska 2018)
Sensitivity Analysis
The use of Sensitivity Analysis which is commonly known as SA was meant to find
out the impacts which various weights of the identified criteria had on the suitability of the site
for retail project. This was very important particularly in cases where there is existence of
uncertainties regarding definition of different procedures (Small, Vail and Akbar 2016). The
applications of the sensitivity analysis were meant to identify the level of importance of every
criteria used besides reducing the weights of subjectivity. Taking that R5 is the five dimensional
space, the suitability of classification for retail project was taken as the function S and its
definition is anchored on R5. Hence;
S = f(so; sl; c; f; e); In which c is climate ;so is soil, sl is slope, f is flood and e is erosion. The
function’s argument will satisfy the condition: R5 = W1so + W2sl + W3c + W4f + W5e = S (S1,
S2, S3, S4, S5) W1+W2+W3+…+Wn= 1. Also W has been used as the level of importance of
any criteria employed. The scheme for weighing is as indicated in the table below:
Table 2: The scheme for weighing.

Residual Figures
Taking income per bay as R530 x 3 500 bays R1 855 000 per month x 12 months R22
260 000 per annum Less: Vacancies at 10% R2 226 000 Less: Outgoings at 20% R4 452 000 Net
income: R15 582 000 *Capitalised at 12% R129 850 000. Traditional technique was utilized for
further approval of the parameter loads. Distinctive scope of loads was utilized for every
situation and forty plans were applied. The variety of capacity was determined again and the
outcomes were contrasted and the outcomes from first weighting plan. The aftereffects of the

traditional weighting plans for every situation shown a similar degree of significance for each
parameter. The dirt parameter is the most significant factor, trailed by flood, disintegration, slope
and flood. The estimation of variety can be changed from one strategy to another, contingent
upon the quantity of weighting plans (model runs) (Hoque 2019). The variety expanded when
test number expanded. The general reasonableness map for mango was created in view of five
layers of information: slope, soil, climate, flood and disintegration.
Prediction of the Price of the site
The primary goal of the project valuation was to provide an analysis which is well supported for
the selected or proposed site. During the process of the valuation to determine the possible price
of the site, the following factors were considered:
 Inspection of the proposed site alongside the neighborhood.
 Collection of the sales as well as inspecting each and every comparable while focusing on
the rental values before making the necessary adjustment.

Adjustments
Conditions of the market
It is expected that the conditions of the market will change between the dates of sales as well as
the valuation date. Such kind of the conditions will be expected to change depending on the
economic conditions, rates of the inflation as well as effective demand (d'Amato 2015). The
adjustments will be made depending on the conditions of the market and not the real time
between the sales date and the date of the valuation. Considering that the conditions of the
market have remained unchanged, there would be no necessary adjustment. In this particular
case, the site seems to have relatively stable conditions of the market based on the previous
results obtained prior. This implies that there will be no time adjustment required.
Results and Discussions
With the end goal of sensitivity analysis, reasonableness map for each weighting plan
was made in the GIS. From the tables, furthermore, by contrasting the rate zone of the high
reasonable class (S1) for the diverse weighting plot, the sensitivity of the reasonableness criteria
was surveyed. Table below condenses the estimations of loads for every parameter dependent on
the consequences of varieties of capacity. From the table, in light of profitability in regard to
sensitivity analysis of the profitability of retail project will tend to be seen how the
reasonableness designs have changed with the varieties of the weighting plans.
Table 3: Weighing scheme for soil conditions (Kucharska and Olbińska 2018)

For soil and slant criteria, there were huge changes in the profoundly appropriate class when the
weighting of site changed. For disintegration basis, the outcome demonstrated that there were
minor changes in the profoundly reasonable class, yet lesser changes or adjustments and incline
criteria. The sensitivity analysis attaching on the flood and market share uncovered that there
was just slight change in the exceptionally reasonable class when the incline weighting changed
(Igwe, Onyejiaka and Ugonabo 2019).
Table 4: Weighing scheme for climatic conditions (Kucharska and Olbińska 2018)
The variation of functions as well as sensitivity analysis has assisted in the provision of the
further refinement in regard to the profitability of the project through delineation of the areas of
priority. The viability of the project in relation to the site of allocation was found to be intact and
holds success determinant characteristics.
Table 5: Weighing scheme for slope conditions (Kucharska and Olbińska 2018)
In spite of the fact that this technique is basic, it comes up short on the numerical establishment
and it is troublesome to get exact articulation of relative inclinations on the criteria because of