Strategic Finance Framework · Property Development Lifecycle
Financial decision framework across the project development cycle
From buying the land to returning cash to shareholders, each stage has its key questions, the figures to watch, Go / No-Go gates and a checklist for executives, CFOs and the investment committee.
- 5project stages
- 48checklist items
- 28strategic questions
- 3–10years overall project life
Lifecycle Map
5-stage overview and decision gates
- 01Land Acquisition & FeasibilityLand & Feasibility1–6 monthsShould we buy this land, what is the most we can pay, and can it actually be built?Gates: land Go/No-Go · EIA approval · building permit (Or.1)
- 02Capital Raising & PresaleFunding & Presale6–12 monthsDo we have enough funding and buyers to start construction?Gates: Funding Close · Presale Launch · Notice to Proceed (NTP)
- 03Construction & Cost ControlConstruction18–36 monthsWill we finish within budget and on time, with enough cash to reach transfer day?Gates: topping-out · monthly cost-to-complete report · sales versus plan
- 04Handover, Transfer & ClosingTransfer & Closing6–12 monthsCan we convert all sales into cash and revenue?Gates: condominium registration · ownership transfer ≥ 90% · revenue recognised ≥ 85% of GDV
- 05Exit, Hold & Post-Investment ReviewExit & Hold6–24 monthsHow will we return cash to shareholders, and should we keep the company?Gates: final financial statements · actual IRR versus plan · Hold or Liquidate
- Core duration
- Possible extension
Show figures by stage
| Stage | Core duration (months) | Note |
|---|---|---|
| 01 Land & Feasibility | 1–6 | 6–24 months including EIA and permits |
| 02 Capital & Presale | 6–12 | Overlaps with Stage 1, around months 8–18 |
| 03 Construction | 18–36 | The period of the project's peak cash outflow |
| 04 Transfer & Closing | 6–12 | The period of the project's main cash inflow |
| 05 Exit & Hold | 6–24 | Up to 60 months if the asset is held longer |
How to use: select a stage to see its reference figures, checklist and the questions to ask before deciding. Ticked boxes are saved in this browser only.
Stage 1 · Land Acquisition & Feasibility
Stage 1 Land & Feasibility
Key questionsShould we buy this land, what is the most we can pay, and can it actually be built?
Figures to watch Key Metrics
- Project IRR Hurdle≥ 18%Example
- Equity IRR≥ 25%Example
- Profit on Cost20–40%
- Land / total cost20–35%
- Peak Funding60–75%of total cost
- Contingency5–10%
Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.
Key questions Strategic Questions
- If the selling price falls by 10%, does the project still clear the hurdle? (In the sample project, Project IRR falls from 20.0% to 14.0%.)
- Are we paying for the land up to the ceiling set by the Residual Land Value, or just accepting the price the owner asks for?
- In which month does Peak Funding occur, how much is it, and are shareholders ready to put in 100% of the equity while the bank has not yet lent?
- If the EIA is sent back and delayed by 6–12 months, how much do holding costs, soft costs and interest increase?
- Is the foreign sales mix within the 49% quota, and does the shareholding structure avoid the restrictions on foreign ownership of land?
- If it fails, will we renegotiate the price, change the product or withdraw, and what would withdrawal cost?
Pre-gate checklist Gate Readiness
0 / 11- Knowledge Base
- Feasibility & Returns
- Related parts of the handbook
Strategic Finance
Project Accounting
Real Estate Project Law
Stage 2 · Capital Raising & Presale
Stage 2 Funding & Presale
Key questionsDo we have enough funding and buyers to start construction?
Figures to watch Key Metrics
- Presale before construction starts30–50%50–70% is considered safe
- Loan-to-Cost≤ 65–75%depending on the bank
- Presale Cash Coverage≥ 30%of remaining construction cost
- Cancellation Rate< 10%
- Marketing cost3–5%of project value
- Commission3–7%of sales
Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.
Key questions Strategic Questions
- Has Presale reached the funders' threshold? If it is below 30%, consider re-pricing or relaunching.
- How much equity must be prepared (Peak Funding − loan available for drawdown at the peak + contingency), and who will provide it?
- If the funding source still cannot be drawn even after the term sheet is signed, how many more months can we keep operating on our own cash?
- Which payment terms reduce Peak Equity the most without raising the cancellation rate?
- How much cost risk does the construction contract transfer to the contractor, and who bears the rest?
- In the Stress Case, does project cash turn negative before transfer day?
Pre-gate checklist Gate Readiness
0 / 10- Knowledge Base
- Capital Structure & Banking
- Related parts of the handbook
Strategic Finance
Project Accounting
Real Estate Project Law
Ownership Transfer Operations
Stage 3 · Construction & Cost Control
Stage 3 Construction
Key questionWill the project be completed within budget and on time, with enough cash to reach transfer day?
Figures to watch Key Metrics
- Cost-to-Complete≤ budget + 5–10%Including contingency
- Presale before completion60–80%Target
- DSCR1.25x–1.50xPer Covenant
- Actual vs S-CurveIn line with base planActual work and drawdowns
- Cash RunwayNot negativeTo transfer day in the stress case
Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.
Key questions Strategic Questions
- By how much does the Estimate at Completion exceed the approved budget, and is the remaining contingency enough to cover the difference?
- If we need to call for additional equity, how many months' notice do we have, and have shareholders been informed?
- Is the cost of accelerating the work justified by the interest saved and by the impact of a postponed transfer day?
- If absorption falls below plan, should we adjust the price, promotions or payment terms, and how much does Peak Funding change?
- If we are close to breaching a Covenant, have we spoken to the lender before the reporting date?
- If the main contractor runs into financial difficulty, how much of the loss do the bond and the backup plan cover?
Pre-gate checklist Gate Readiness
0 / 9- Knowledge Base
- Construction Cost & Cash Flow
- Related parts of the handbook
Strategic Finance
Project Accounting
Real Estate Project Law
Stage 4 · Handover, Transfer & Closing
Stage 4 Transfer & Closing
Key questionCan sales be fully converted into cash and revenue?
Figures to watch Key Metrics
- Transfer rate of sold units70–90%Below 80% in the first 12 months, conditions start to tighten
- Buyers refusing transfer5–15%Of units sold
- Net cash remaining from transfers60–80%Of the sale price
- Transfer-day tax (seller)SBT 3.3% + WHT 1%Plus the seller's share of the transfer fee
Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.
Key questions Strategic Questions
- Will the transfer rate reach 80% within the first 12 months? If not, when will liquidity start to tighten?
- In what order is each round of transfer proceeds applied: release price, taxes, reserves and returns to shareholders?
- For units that buyers have abandoned, should we resell immediately or wait for a better price, once holding costs are counted?
- Which units have an appraised value higher than the sale price, making transfer-day tax higher than estimated?
- Has the project debt been fully repaid, or is there a refinancing plan for the remainder?
Pre-gate checklist Gate Readiness
0 / 9- Calculators
- Transfer day costs
- Related parts of the handbook
Strategic Finance
Project Accounting
Real Estate Project Law
Ownership Transfer Operations
Stage 5 · Exit, Hold & Post-Investment Review
Stage 5 Exit & Hold
Key questionHow will the money be returned to shareholders, and should the company be kept?
Figures to watch Key Metrics
- MOIC1.8x–3.0xReference
- Project / Equity IRRActual vs planReview the assumptions
- Profit on CostActual vs planCompare with other projects
- Holding cost per monthPer remaining unitSet the acceptable discounted price
Figures are drawn from the website content; use figures from your own model and the funding terms of the actual project.
Key questions Strategic Questions
- Is holding the inventory for another 12 months worth more than cutting the selling price today, once all holding costs are included?
- Are the accumulated tax losses that can still be used valuable enough to justify keeping the SPV, and in which year do they expire?
- Is there a next phase on the same land, or management and brand agreements that are still binding?
- Do actual returns differ from plan because of price, cost or timing, and what lessons should go into the next project's budget?
- After the company is dissolved, who bears the risk of any remaining defects?
Pre-gate checklist Gate Readiness
0 / 9- Knowledge Base
- Group Companies & TreasuryReal Estate Tax
- Related parts of the handbook
Strategic Finance
Project Accounting
Real Estate Project Law
The checklists and questions on this page are summarised from the decision framework page for each stage, as a starting point for investment committee meetings or project reviews. The Presale and Covenant thresholds apply where a lender has set them. If bonds, a JV or mezzanine funding are used, the terms will come from the contract with that funding source.