Glossary definition
Residual Land Value
The value of a development site calculated by taking the gross development value of the completed scheme and deducting all development costs including build costs, professional fees, finance costs, and developer profit. Residual land value represents the maximum a developer should pay for a site for the project to remain viable.
Definition
The value of a development site calculated by taking the gross development value of the completed scheme and deducting all development costs including build costs, professional fees, finance costs, and developer profit. Residual land value represents the maximum a developer should pay for a site for the project to remain viable. It is the standard method used by valuers and developers to appraise development opportunities.
See also
Closely related terms.
Gross Development Value
The total market value of a development upon completion, encompassing all units and any commercial elements.
Build Cost
The total cost of construction works on a development project, typically including materials, labour, preliminaries, and contractor margins.
Professional Fees
The costs associated with appointing professional advisors on a development project, including architects, structural engineers, quantity surveyors, planning consultants, solicitors, and project managers.
Further reading
Guides that touch this term.
Guide
RICS Red Book Valuations for Development: What Lenders Require
A comprehensive guide to RICS Red Book valuations in development finance, covering what lenders require, how valuations are structured, and how to ensure your scheme is accurately assessed.
11 min read readReadGuide
How Does Development Finance Work? A Complete Guide for UK Developers
A ground-up guide to how development finance is structured in the UK, covering loan mechanics, drawdown schedules, monitoring surveyors, and what lenders look for in your application.
5 min read readReadGuide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readRead
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