Financial Appraisal of Design Options Essay Example | Topics and Well Written Essays - 750 words - 1

Financial Appraisal of Design Options - Essay Example This compares with 4.15% for Option 1 and 7.4% for Option 3. Option 1 has the highest profit among all three options. Considering the circumstances, Option 2 causes the least change in terms of density, as it is a design intended to be complementary to existing developments in the area. It is the least of all options in terms of density but the changes in mixed-used areas and the reduction in rents and prices make its basic value lower than the other two options. Shop rental is  £200/m2 while office rental is  £160/m2. In this case, building more shops will gain more profits. Option 1 has more shops proposed and so expected loss of profits is least. Moreover, Option 1 contains more mixed-used elements than the other two options and thus My preference is Option 1 as it will generate the highest profits among the three options. The gross development value of this option is also the highest compared with the other two and its financial viability is much better as profits are the most stable among all the options. Financial appraisal of Option 1 shows a relatively-high profit of  £9,291,385, 54.01% at the end. It is still possible for Option 1 to change during its final detailed design such as a multi-story car park altered to underground car parking. This will definitely increase the building cost but will provide a new additional 840 m2 vacant area. This area can be designed for business use and generate still more profits based on the sites original planning guidance. But on the other hand, a drawback of Option 1 is obviously its high construction costs as all the materials used will be high-class to attain its high value in the future. Some materials can be of lower quality to reduce construction costs. At any rate, Option 1 has a high-profit level so even if portions of it are reduced, there is still the possibility of providing more open green spaces or public parks to increase the attractions and appeal of the place to  the general public.