Feasibility Study Report

February 27, 2024

Feasibility studies play a pivotal role in the success of any project by meticulously examining its technical, operational, economic, and financial viability. These studies offer stakeholders invaluable insights necessary for making informed investment decisions. PropSure, a leading provider of feasibility studies, offers a comprehensive range of assessments to address various aspects of project feasibility.

The screening study conducted by PropSure evaluates whether a proposed project aligns with regulatory requirements, such as master plans and development regulations. This initial analysis helps in determining the project’s feasibility within legal frameworks and regulatory constraints.

Pre-feasibility studies delve deeper into property assessments, including factors like available utilities, title information, and property valuation. These studies provide decision-makers and investors with essential data to decide on proceeding with detailed market studies or feasibility assessments.

For external project acquisitions, PropSure conducts market assessments using the Ownership, Approval, Demand, and Delivery (OADD) model. This assessment method scrutinizes site details, project specifications, and market dynamics to identify strengths, weaknesses, opportunities, and threats, facilitating informed decision-making regarding project acquisitions.

Additionally, PropSure offers highest and best use appraisals, which determine the most suitable utilization of real estate assets. These appraisals consider technical feasibility, legal constraints, and economic viability to maximize the potential of a property.

Moreover, PropSure conducts whole of life feasibility assessments, which provide a comprehensive analysis of a project’s entire lifecycle. This approach evaluates the project’s feasibility, viability, and sustainability from inception to completion and beyond, aiding decision-makers in understanding long-term implications and challenges associated with the project.

Feasibility Studies Process

The feasibility studies encompass three main stages: Screening, Pre-Feasibility, and Highest and Best Use. Each stage involves detailed analysis and evaluation to inform strategic decision-making and maximize project success.

1. Screening

In the screening stage, Propsure evaluates the initial feasibility of the real estate project by considering several key factors:

Status of Site on Master Plan: Propsure examines whether the proposed site aligns with the city's master plan and zoning regulations. This assessment ensures compliance with urban development guidelines and identifies any potential regulatory constraints.

Applicable Bylaws: The team reviews relevant municipal bylaws and regulations governing land use, building codes, and environmental considerations. Understanding these regulations is crucial for assessing project feasibility and mitigating legal and compliance risks.

Concerned Regulatory Authority: Propsure identifies the regulatory authorities responsible for granting approvals and permits for the proposed development. Building relationships with these authorities and understanding their approval processes is essential for navigating the regulatory landscape effectively.

2. Pre-Feasibility

During the pre-feasibility stage, Propsure conducts in-depth analysis and assessment to further refine the project’s feasibility:

Site Analysis: Propsure evaluates the site's location, accessibility, and physical characteristics. Site visits are conducted to assess the terrain, infrastructure availability, and surrounding amenities. Property valuation is also performed to determine the land's market value.

Liveability Analysis: The team analyses the liveability aspects of the proposed development, considering factors such as proximity to essential services, transportation networks, and recreational facilities. This analysis helps determine the project's attractiveness to potential residents or tenants.

Regulatory Affairs: Propsure continues to monitor regulatory developments and assess their impact on the project. Compliance with zoning regulations, land use restrictions, and environmental regulations is re-evaluated to ensure project feasibility.

Market Outlook: Propsure examines the nature of the area surrounding the proposed development, including demographic trends, socio-economic factors, and market demand for real estate. Habitation analysis helps identify target demographics and housing preferences.

Project Proposal: Based on the site analysis and market assessment, Propsure develops a project proposal outlining potential uses and the proposed covered area. This includes determining the optimal mix of residential, commercial, and recreational spaces to maximize project viability.

Basic Financial Analysis: Propsure conducts a preliminary financial analysis to estimate project costs, revenue projections, and potential profitability. This analysis provides stakeholders with an initial understanding of the project's financial feasibility.

Conclusion: A comprehensive conclusion summarizing the findings of the pre-feasibility study is presented to the client. This includes recommendations for further investigation or refinement of the project concept before proceeding to the next stage.

3. Highest and Best Use

In the final stage of the feasibility study process, Propsure conducts a detailed assessment to determine the highest and best use of the property:

Site Analysis: The site's location, accessibility, and valuation are revisited to ensure alignment with the proposed development strategy.

Regulatory Affairs: Regulatory compliance is re-evaluated in light of any changes or updates to relevant laws and regulations.

Market Outlook: Propsure conducts a thorough analysis of the market dynamics, including land use patterns, growth trends, and competition in the area. This analysis informs decisions regarding the optimal use of the property to maximize its value and market appeal.

Scenario Planning: Propsure considers various development scenarios and evaluates their potential impact on project feasibility and profitability. This includes assessing different land use configurations, building designs, and investment strategies.

Basic Financial Analysis: A detailed financial analysis is conducted for each development scenario, including cost estimation, revenue projections, and profit potential. Sensitivity analysis may be performed to assess the project's resilience to changing market conditions.

SWOT Analysis: Propsure identifies the project's strengths, weaknesses, opportunities, and threats (SWOT) to inform strategic decision-making and risk management strategies.

Risk Assessment: Propsure evaluates potential risks and uncertainties associated with the project, including market volatility, regulatory changes, and construction risks. Mitigation strategies are developed to address identified risks and enhance project resilience.

Conclusion: The feasibility study concludes with a comprehensive assessment of the property's highest and best use, including recommendations for project implementation and risk mitigation. Propsure provides strategic guidance to the client based on the findings of the study, helping them make informed decisions regarding the development project.

By conducting thorough feasibility studies, Propsure assists its real estate clients in assessing the viability and potential of their development projects, minimizing risks, and maximizing returns on investment. Through detailed analysis and strategic planning, Propsure helps clients navigate the complex real estate market with confidence and clarity.

The Whole Life of Feasibility

A feasibility study is a comprehensive process that evaluates the viability and potential of a real estate project from inception to implementation. Propsure conducts a thorough analysis encompassing various stages to provide clients with strategic insights and informed decision-making. Here’s a detailed overview of the entire feasibility study process:

1. Site Analysis

Location: Examining the geographical location of the site and its accessibility to key amenities and transportation networks.

Vicinity: Assessing the surrounding environment, including neighbouring developments and land uses.

Circulation Map: Mapping out circulation patterns to understand traffic flow and access points.

Proximity Analysis: Analysing the proximity of the site to essential services, educational institutions, healthcare facilities, and commercial centres.

2. Regulatory Analysis

Revenue Record: Reviewing land revenue records to ascertain ownership and legal status.

Land Use Compliance: Ensuring compliance with local land use regulations and zoning ordinances.

Applicable Bylaws: Understanding municipal bylaws governing building codes, setbacks, and environmental regulations.

Approval Process: Identifying the regulatory approval process for land development and construction projects.

Planning Permission: Obtaining necessary planning permissions from local authorities.

Building Plan Approval: Securing approval for building plans from regulatory agencies.

Documents Required: Compiling all necessary documents for regulatory submissions.

Scrutiny Fee: Assessing the fee associated with regulatory scrutiny and approval processes.

3. Socio-Economic Analysis

Conducting a socio-economic analysis to understand the demographic profile, income levels, employment opportunities, and social infrastructure in the project area.

4. Market Demand Analysis

Assessing market demand for real estate products in the project area, including residential, commercial, and retail spaces.

5. SWOT Analysis

Identifying the project’s strengths, weaknesses, opportunities, and threats to inform strategic decision-making.

6. PESTLE Analysis

Analysing the political, economic, social, technological, legal, and environmental factors impacting the project’s feasibility.

7. Project Proposal

Developing a comprehensive project proposal that outlines the distribution of covered area and proposed land uses, including residential, commercial, and recreational spaces. Proposing sizes and types of units based on market demand and feasibility analysis.

8. Multi-Criteria Decision-Making Matrix

Using a multi-criteria decision-making matrix to evaluate alternative development scenarios based on predefined criteria and priorities.

9. Financial Analysis

Conducting a detailed financial analysis to assess project costs, revenue projections, and financial feasibility. Calculating key financial metrics such as Internal Rate of Return (IRR), Return on Investment (ROI), Net Present Value (NPV), and Cost-Benefit Ratio (CBR).

10. Selection of Best Alternative

Selecting the best alternative based on the findings of the feasibility study, considering factors such as market demand, financial viability, and regulatory compliance.

11. Proposed Corporate Structure

Proposing a corporate structure for project financing and institutional arrangements, including partnerships, joint ventures, and financing options.

12. Risk Assessment

Assessing potential risks and uncertainties associated with the project, including market risks, regulatory changes, construction delays, and financial constraints.

13. Conclusion

Summarizing the findings of the feasibility study and providing recommendations for project implementation. Concluding with strategic insights and actionable steps to mitigate risks and maximize project success.

By following this comprehensive feasibility study process, Propsure provides clients with valuable insights and informed decision-making support to navigate the complex real estate landscape effectively.