Property development financial modelling tool
The developer compares the project's financial options to the actual progress of construction and sales. It is possible to assess how delays or changed conditions alter capital requirements.
The project model uses an old assumption of sale, lease, construction, or financing and does not distinguish it from a fact already confirmed. The capital requirement or expected outcome is assessed under obsolete conditions.
How the solution works
- For the project model, volume, cash flow level and assumption owners are determined.
- Reliable facts and relevant estimates of the remaining work, income and funding are accepted.
- The change is calculated in a baseline and significant alternative scenario.
- Portfolio review assesses capital time, project dependencies and the decision of mandates granted.
- An approved version of the model is saved with its sources, and another update explains the difference.
Key challenges
- Investment models and project fact not linked
- The project portfolio is managed in different tables
Solution capabilities
Model Boundaries
The calculation separates the project and investor cash flows, the period and the inclusion of funding according to the measurement purpose used.
The fact and the rest of the prediction
Costs incurred and actual payments are separated from future sales, leases or construction volumes, avoiding double aggregation.
Revenue and financing assumptions
The model shows bookings, contracts signed, premiums received and forecasts separately. Borrowing conditions are included according to approved funding documents or clearly marked assumptions.
Sensitivity to significant change
A price, term or cost change and its interaction are evaluated, with a clear indication of what has been changed in the particular variant.
Portfolio capital flow
Project needs and overall commitments are compared in time, bringing about scarcity or interdependence.
Version and Decision History
The approved script has a data date, the origin of the assumptions and a review solution; the working alternative does not replace it automatically.
Business context
- Investment models and project fact not linked
- The project model uses an old assumption of sale, lease, construction, or financing and does not distinguish it from a fact already confirmed. The capital requirement or expected outcome is assessed under obsolete conditions.
- The project portfolio is managed in different tables
- Project scenarios vary over time, in volume of cash flow and in funding assumptions, and total liabilities are not shown. Allegedly comparable results hide different risks or unestimated capital requirements between stages.
- Sales decisions are assessed in conjunction with project funding
- Discount, slower sales or a modified billing schedule affect the project's cash requirement. The linked model allows comparisons of such decisions with the progress of construction and remaining costs. The developer can make more reasonable choices about the terms of sale that they will be able to carry out throughout the project.
Core features
- Model Boundaries
- The fact and the rest of the prediction
- Revenue and financing assumptions
- Sensitivity to significant change
- Portfolio capital flow
- Version and Decision History
Key integrations
- Accounting and Finance Data
- Validated costs, payments, commitments and current funding conditions.
- Construction project management
- Estimate of remaining labor costs and term with known risks.
- Sales or rental process
- A true contractual state, the basis of the income period and the rest of the supply.
- Sources of project stages and permits
- The approved course and significant dependence that cannot be replaced by a financial assumption.
Potential impact (%)
The ranges indicate an illustrative relative change in the metric under the stated assumptions. Results depend on the starting position and actual use of the solution. Percentages for different metrics must not be added together.
Financial review preparation work
12–36%Decreasing
This illustrative scenario assumes that 30-60% of manual data entry and handover work can be addressed. That share is assumed to fall by 40-60%. Company data is needed to verify both the addressable workload and the resulting change.
The active reconciliation and scripting time for the same model scope is compared.
Delayed update of significant assumption
6–25%Decreasing
This illustrative scenario assumes that 20-50% of waiting caused by missing information or unclear responsibility can be addressed. That share is assumed to fall by 30-50%. Company data is needed to verify both the addressable share and the resulting change.
The time from known change to assessed effect is measured, separately from the subsequent investment decision.
Conditional calculation scenarios. The assumptions have not been validated against client measurements.
When this solution is relevant
- The management model left an earlier end to construction, although the project team had already confirmed significant delays.
- The portfolio table compares project and equity returns without marking a different funding basis.
Implementation requirements
For financial modeling, project fact periods, estimates of remaining work and assumptions of sales or leases are combined. The sensitivity of costs and terms is assessed in combination with adverse scenarios while maintaining the difference between confirmed data and forecasts.
Further development options
- Capital allocation options for additional stages by approved dependencies
- Comparison of model assumptions and actual results in completed projects of similar scope