Scheme viability |
DEVELOPMENT COSTS | £000²õ |
Construction costs | Ìý |
Planning applications and site surveys - 2% of construction cost | 460 |
ºÚ¶´ÉçÇø costs | 20 475 |
External works including pitch, floodlights, fencing, etc | 2 375 |
Loose furniture, furnishings and equipment | 700 |
Professional fees - 10% | 2 400 |
Finance costs @ 10% per annum based on 50% of the constrction period | 1 990 |
Total | 28 400 |
Site purchase | Ìý |
Site | 1 000 |
Acquisition costs and fees - 5% | 50 |
Finance costs @ 10% per annum | 210 |
Total | 1 260 |
INCOME APPRAISAL | Ìý |
Capital receipts | Ìý |
Sale of previous inner-city site | 13 000 |
Grant from the Football Trust, etc | 3 000 |
Sponsorship deals, donations, etc | 4 000 |
Total | 20 000 |
Gross revenue - years one to 10 | Ìý |
(based on 10 years' income with 5% annual inflation) | Ìý |
Ticket sales - based on average premier league attendance of 20 000 spectators per match: | Ìý |
- weekly 15 000 @ £10 | 37 000 |
- season 4 000 @ £300 | 15 100 |
Bond sales of seats 1000 @ £2 300 | 3 750 |
30 nr boxes x 50% @ £10 000 per annum | 1 880 |
Bar food and drink | 8 000 |
Merchandising | 9 000 |
Banqueting and conferencing | 6 280 |
Concessions 320m2 @ £86/m2 per annum | 340 |
Car parking 1000 spaces @ £1.50 x 20 x 2 (for ancillary) | 750 |
Ancillary multi-use facilities | 1 400 |
TV rights | 5 000 |
Total | 88 500 |
Operating costs - years one to 10 | Ìý |
(based on 10 years @ 5% inflation) | Ìý |
Assuming current operating costs of £5.5m per year | 69 000 |
Net operating profit | Ìý |
Gross revenue less operating costs for 10 year | 19 500 |
Equivalent net present values using discount factors of 15% to 12% | 9 260 - 10 540 |
Equivalent average net value per annum | 10 000 |
DEVELOPMENT YIELD (RATE OF RETURN) | Ìý |
(excluding depreciation and interest payments etc) | Ìý |
Development yield = net operating profit ÷ development costs less capital receipts | Ìý |
£1 000 000 ÷ (29 660 000 - 20 000 000) = 10.35% return | Ìý |
This is a simple, hypothetical example of how to compare capital and operating costs with income on a 10-year basis assuming a move away from a city centre to city outskirts. |