01 · Key DecisionsDecisions to make
- Buy this plot or not, and what is the most we can pay? Use Residual Land Value: GDV less costs and target profit.
- Highest & Best Use What type of product suits the land, and how much FAR/OSR, height and setbacks allow to be built.
- Whether to use an SPV The shareholder structure, registered capital, and separating risk from the parent company.
- Initial capital structure The debt-to-equity ratio, and the money shareholders actually commit before external funding is in place.
- How to tie up the land An option or reservation agreement, to hold the right during land due diligence before paying in full.
- Brand or operator For a branded product, this must be decided at this stage, because it affects the selling price, specifications and fees.
02 · Finance · Tax · LegalFinance, tax and legal tasks
Finance
- Prepare an initial feasibility study with a base case and sensitivity, with the output being the ceiling price for the land.
- Once the BOQ is available, convert it into a full CAPEX budget (hard, soft, finance, contingency 5–10%).
- Build a monthly cash flow model to find Peak Funding before talking to funding sources.
- Call capital for the land and soft costs, treating this stage as 100% equity. Conventional banks generally do not lend at this stage.
Tax and accounting
- Land held for development and sale is inventory under TAS 2, not property, plant and equipment under TAS 16.
- For leased land, assess the right-of-use asset and lease liability under TFRS 16.
- Register for VAT and set the revenue recognition policy when the company is set up; do not wait until transfer day.
- If you are considering BOI privileges, check the business category and current conditions before putting them in the model, because condominiums for sale and hotels fall under different categories.
Legal and permits
- Check the title deed, mortgages, easements and access before committing.
- Check zoning, setbacks and height. These restrictions directly reduce GFA and GDV.
- A condominium requires an EIA when it has 80 or more units, or total usable area of 4,000 sq m or more. Confirm the current criteria and area-specific conditions with an EIA consultant.
- The 49% foreign quota on total condominium unit area is still the rule in use. Check the latest law before setting the sales mix.
- Foreigners cannot own land directly. If the structure includes foreign shareholders, have legal counsel review it before buying the land.
03 · RoadmapRoadmap tasks
P0 Land and company
| # | Task | Category | Responsible party | Outcome | Time |
|---|---|---|---|---|---|
| 0.1 | Preliminary feasibility study & Go/No-Go decision | Investment budget | Investor/FA | Feasibility model, GDV, residual land value, IRR target | 1–2 months |
| 0.2 | Market study and pricing strategy | Technical | Sales & marketing | Demand study, comparable prices, absorption assumptions | 3–6 weeks |
| 0.3 | Land due diligence (ownership / encumbrances / access) | Law | Lawyer | Check title deed, mortgages / easements / access | 3–6 weeks |
| 0.5 | Check zoning & land use | Law | Town planner/lawyer | Zoning compliance, land use & FAR/OSR ⚠ Confirm that residential / condominium development is permitted | 2–4 weeks |
| 0.6 | Check setbacks & building height | Law | Architect/lawyer | Record setbacks, height limit, density ⚠ Height / zone restrictions may reduce GFA | 2–4 weeks |
| 0.7 | Option / land reservation agreement | Law | Lawyer | Option / reservation agreement, unconditional right | 1–2 weeks |
| 0.8 | ◆ Set up the company / project SPV | Law | Lawyer | Company registration, memorandum / articles of association, directors' authority | 2–4 weeks |
| 0.9 | Shareholders' agreement & capital structure | Legal/finance | Lawyer/finance | SHA, paid-up capital sufficient for the project | 2–3 weeks |
| 0.10 | Holding structure & foreign shareholding proportion | Law | Lawyer/tax | Holding structure; foreign proportion / channel correct ⚠ Check foreign restrictions | 2–4 weeks |
| 0.11 | Tax registration (VAT / tax ID) | Finance | Tax team | Tax ID, VAT registration | 1–2 weeks |
| 0.12 | Open company bank accounts & treasury system | Finance | Finance team | Operating account + project account, authorised signatories | 1–2 weeks |
| 0.13 | Set up accounting system & accounting policies | Finance | Finance team | Chart of accounts, ERP system, auditor appointment, accounting policies | 2–4 weeks |
| 0.14 | ◆ Buy & transfer ownership of the land | Legal/finance | Lawyer/finance | Transfer completed, transfer fee paid, land held in the SPV | As planned |
| 0.15 | Equity for land & soft costs | Investment budget | Finance team | Call capital for Stage 0–1 | As planned |
P1 Design
| # | Task | Category | Responsible party | Outcome | Time |
|---|---|---|---|---|---|
| 1.1 | Soil boring / geotechnical survey | Technical | Geotechnical engineer | Boring report, foundation / piling criteria | 3–6 weeks |
| 1.2 | Master planning / concept design | Technical | Architect | Building form, unit mix, GFA adjustment | 4–8 weeks |
| 1.7 | Brand / operator agreement (if branded) | Law | Owner/lawyer | Management or licensing agreement (if any) | Done in parallel |
| 1.8 | Value engineering & cost plan (BOQ) | Investment budget | QS | Cost plan by element, BOQ, VE register | In parallel with DD |
| 1.9 | Detailed CAPEX budget (hard + soft + contingency) | Investment budget | Finance/QS | Full project development budget, contingency 5–10% | After the cost plan |
| 1.10 | Project cash flow model (monthly) | Investment budget | Finance/FA | Monthly cash flow, S-curve, Peak Funding, IRR ⚠ State the maximum funding requirement | After the budget |
| 1.11 | Funding strategy (equity + non-bank sources) | Finance | Finance/FA | Capital plan: equity, bonds, JV/mezzanine and a project loan if any ⚠ Non-bank: bonds, JV, mezzanine, Presale | After the model |
P2 EIA
| # | Task | Category | Responsible party | Outcome | Time |
|---|---|---|---|---|---|
| 2.1 | Assess whether an EIA is required | Law | EIA consultant | Eligibility memo (unit / area thresholds) ⚠ Condominiums above the threshold must prepare an EIA | 1–2 weeks |
| 2.4 | Public hearing | Law | EIA/community | Record of the public hearing | 3–6 weeks |
| 2.6 | Submit to the authority | Law | EIA consultant | Submission receipt | 1 week |
| 2.7 | Expert committee review (round 1) | Law | Authority | Comments / required revisions | 30–60 days |
| 2.8 | Revise & resubmit | Technical | EIA consultant | Report revised in line with comments ⚠ Often takes several rounds | 4–8 weeks |
| 2.9 | ◆ EIA approved | Law | Authority | Approval letter | Gate |
P3 Permits
| # | Task | Category | Responsible party | Outcome | Time |
|---|---|---|---|---|---|
| 3.1 | Apply for the building permit (after approval) | Law | Architect/lawyer | Submit application + drawings | 2–4 weeks |
| 3.2 | ◆ Building permit (Or. 1) issued | Law | Authority | Building permit | 30–90 days |
| 3.3 | Wastewater treatment / environmental permit | Law | MEP/lawyer | System approval | Done in parallel |
| 3.4 | Excavation / land-filling permit | Law | Contractor/lawyer | Earthworks approval | Done in parallel |
| 3.5 | Apply for utility connections (electricity / water) | Technical | MEP | Connection approval | Done in parallel |
| 3.6 | Prepare condominium registration | Law | Lawyer | Draft registration documents, common property plan | Done in parallel |
Some detailed design tasks are omitted from the table because they are not financial decision points.
04 · MetricsMetrics to watch
| Figure | Reference level from the source document | What it is used for |
|---|---|---|
| Project IRR | Example hurdle of 18% or above | Decide on the investment before considering the debt structure |
| Equity IRR | Example target of 25% or above | Return to shareholders after repaying debt |
| Profit on Cost | 20–40% | Compare value between projects |
| Land as a share of total cost | 20–35% | Warns when the land price eats into profit |
| Peak Funding | Rule of thumb: 60–75% of total cost | Check whether the funding can actually be raised |
| Absorption Rate | From comparable prices within a 2–5 km radius | Sets the speed of revenue in the model |
| Contingency | 5–10% | Tests how much cost overrun the project can absorb |
Example: sensitivity of Project IRR
Uses the 247-unit sample project from the overview page, calculated excluding financing cost. Base-case Project IRR is about 20.0% per year.
| Case | Project IRR | Change |
|---|---|---|
| Selling price down 10% | 14.0% | -6.0 points |
| Construction cost up 10% | 17.0% | -3.1 points |
| Land price up 10% | 18.3% | -1.8 points |
| Transfers delayed by 6 months | 18.5% | -1.5 points |
| Transfers delayed by 12 months | 17.2% | -2.8 points |
- Below hurdle
- Still clears hurdle
The delay cases do not yet include the additional soft costs and interest, so the real impact is worse. Equity IRR will swing more than Project IRR when there is debt. All figures are examples; run them from the project's own model.
05 · Decision GateDecision gate
This stage has two gates. The first comes before paying for the land; the second comes before committing large sums to sales and construction.
Go: buy the land
- Feasibility clears the agreed hurdles in both the base case and the stress case
- The land price does not exceed the ceiling from Residual Land Value
- The land DD report has no open issues, and zoning permits building as designed
- A funding confirmation letter from the project sponsors is in hand
- The brand agreement has a term sheet, if the product is branded
No-Go or renegotiate
- The project passes only when selling prices above comparable market prices are used
- Ownership or access is disputed
- Height or setback restrictions make GFA lower than assumed
- Peak Funding exceeds what equity and debt facilities can support
- The landowner will not allow due diligence before a commitment is made
Second gate: the EIA is approved and the building permit (Form Or.1) has been issued before any site work begins. The roadmap sets the Presale launch after EIA approval. If the EIA is sent back several times, adjust the timeline in the model immediately, then check whether the funding sources can still cope.
06 · Common PitfallsCommon pitfalls
- Using the feasibility study to confirm a land price that has already been agreed, instead of finding the price ceiling
- Paying for the land before checking zoning, height limits and setbacks
- Allowing for only one round of the EIA, when several rounds of revisions are common
- Setting the timeline in the model shorter than the actual permit status, so interest and soft costs are underestimated
- Looking only at IRR and ignoring Peak Funding
- Not separating project cost accounts from the start, which makes it hard to accumulate costs into inventory retrospectively
- Setting up the company with paid-up capital that does not match the funds the project needs