Table 8: Residual value comparison between conventional and sustainable buildings

m2

Rent/sqm

Net rental

Rent/sqm

Net rental

Development returns

Gross rental value

380

399

Staff savings

-

75

380

474

Outgoings

80

70

Net rental value

Net lettable area

8,500

300

2,550,000

404

3,434,000

Net income

2,550,000

3,434,000

Capitalisation rate

8.00%

7.75%

31,875,000

44,309,677

Less sales commissions and costs

1.50%

478,125

1.50%

664,645

31,396,875

43,645,032

Less vacancies

Pre-let

100.00%

100.00%

Letting up period

0.00%

0.00%

Rent lost

-

-

31,396,875

43,645,032

Less letting commissions and costs

15.00%

382,500

15.00%

5,692,830

31,014,375

37,952,202

Development costs

Developer's allowance for profit and risk

10%

2,819,489

15.00%

4,950,287

28,194,886

33,001,915

Building cost

Gross floor area

10,000

1,800

18,000,000

2,000

20,000,000

Consultants' fees

10.00%

1,800,000

12.00%

2,400,000

19,800,000

22,400,000

Construction finance

Interest

8.00%

8.00%

Construction period

24

24

1,584,000

1,792,000

Total construction costs

21,384,000

24,192,000

Gross residual land value

6,810,886

8,809,915

Less rate and taxes

100,000

100,000

6,710,886

8,709,915

Less holding costs

Interest

8.00%

8.00%

Pre-construction period

6

6

1,118,481

1,451,652

5,592,405

7,258,262

6.00%

316,551

6.00%

410,845

Net residual land value

5,275,854

6,847,417