Entering your first Appraisal

What follows is intended to be a brief tour of the Data List explaining how to enter the basics of your appraisal. Not all items will be relevant to your project so skip through any of the descriptions that do not apply. A more detailed explanation of the various headings in the Data List can be found in the section 'The Data List categories explained' and further information on the various menus and commands can be found in the sections 'Data List Menus' and 'Data List Commands'.

You must provide some information in the Data List before moving on to enter timescales because until this is done there is no information present in the appraisal with which to work.

At any time you can use the ‘Print/Preview’ button to see how the appraisal format is building up. Remember that no interest will be calculated until interest rates and timescales have been entered.

When you start a new Prodev appraisal, the cursor is located on the Site Value. This is always a good point to start. If the Site Value is not currently highlighted then click on the top line labelled ‘Site Value and Fees’ in the Sections List Box which will position the cursor on the Site Value being the first entry in the Data List.

Type in the amount for the Site Value followed by the Enter key. If you are trying to establish a Residual Site Value then you can omit this item for now and go to the next entry.

The next line is Stamp Duty (British version) / Site Transfer Tax (International Version) which allows you to set the levy which will be charged by government when buying the site. You then enter similar values for Site Legal and Site Agency fees (along with Site Notary fees – only applicable for Europe).

All the Site Fees operate in the same way in that they calculate a cost based on a percentage of the Site Value. They can be entered as total amounts if required.

•	To key in a value, simply start typing the number, it will appear in the entry box under the main Data List. Once complete press the Enter key and it will appear in the main body of the Data List next to the chosen item.

•	The cursor up/down keys have the same effect as pressing the Enter key. During initial data entry it is easier to use the Cursor Down key as this both enters the number then moves the cursor on to the next entry in one keystroke.

•	You can abbreviate large number entries by using the letters ‘k’ and ‘m’. Typing ‘2k’ is the same as entering £2,000. Typing ‘4.75m’ is the same as entering £4,750,000.

•	Site taxes and fees along with building fees and sale fees can be entered as percentages or amounts. You can see from the Units column where these are applicable. The choice depends upon whether the number you enter is greater or less than 100.

•	Prodev will treat any figure up to and including 100 as a percentage; anything greater will be treated as an amount. This is indicated by the suffix immediately following the numeric entry in the Data List which will either show a percentage symbol or the letter ‘a’ (for amount).

•	In the unlikely event that you wish to enter an amount of 100 or less then use the letter ‘a’ in place of the Enter key. If you typed ‘56a’ then this will force an amount of £56.

The next section in the Data List deals with Initial Payments. There are 30 of these and they are used for costs that take place at the start of a project (for example Finance Arrangement Fees, Planning Fees, Survey etc.). The Initial Payments are entered as amounts.

As the title ‘Initial Payment’ is somewhat meaningless you will probably wish to provide your own titles to suit the context of your appraisal. Therefore if ‘Initial Payment’ would be better named ‘Planning Fee’ or ‘Survey Fee’ then you can re-title it as required.

•	Any Prodev entry shown in lower-case can be edited. To do this, highlight the item to be re-titled then click the 'Title' button. Where prompted you can enter the title. Press Enter when you are finished. If at any time you make a mistake, you can abandon your entry by pressing Esc.

•	An easier way is to type letters instead of numbers. If you do this then Prodev will assume you wish to edit the title rather than the value. Press Enter when you are finished.

•	To reset the entry back to its default title then press the Del (delete) key when editing it.

•	Titles shown partially in lower case can be partially altered (e.g. the "Agents Fee" portion of the default "SITE Agents Fee" can be re-titled).

•	If you find that you are continually having to enter the same titles for each appraisal then consider using a Template which will save you having to do this each time. This is described in the section ‘Saving and Opening Files and Templates’.

Building costs generally consist of either Unit Costs (an area multiplied by a rate per sq-ft / sq-m / unit) or Fixed Costs (total sums) or both. Use the Unit Costs section to enter the former and / or the Fixed Costs to deal with the latter. Unit Build and Fixed Build costs can be re-titled (e.g. ‘Offices’, ‘Retail’, ’Infrastructure’). There are 30 separate Unit Build plus 30 separate Fixed Build costs in all.

The categories that you use will largely be determined by the nature of your appraisal. An office development may consist only of unit build costs because these will be all inclusive. A retail park may include unit costs for the main buildings but there will be additional fixed costs for infrastructure and roadways. Alternatively if you already know the sum total of your building costs then omit the Unit costs altogether and just use the Fixed Build costs to enter this information.

Each Unit Build cost is made up of three individual lines which are used to calculate the total cost for the item. These are (1) number of units, (2) area per unit and (3) a price per sq-ft / sq-m / unit. The default setting for the UK version of Prodev is rate per square foot. Each Unit Build cost can be re-titled.

For example, to build 40,000 sq ft of Offices at £120 per sq ft, enter as 1 Unit of 40000 Area at a Rate of 120 (as shown above). For a Residential development of 40 Townhouses of 950 sq ft at £65 per sq ft, enter as 40 Units of 950 Area at a Rate of 65. The ‘number of units’ is generally only used for certain types of residential development and in most cases can be left at its default value of 1.

If you have a known building price of £2,000,000 then enter it as 1 unit of 1 sq ft at a rate of 2000000. Prodev will recognise that the unit and area components are not relevant and exclude them from the report.

The Build Unit type can be tailored as to price per foot / metre / unit / car space / plot. The default setting for the UK version of Prodev is rate per square foot. To change the unit type click the ‘Units’ button and a dropdown box will display showing the options available.

Select (double-click) the appropriate unit type. Note: If you select Sq Feet, Sq Metres or Plots then all three lines are used in the calculation. In other cases (Units and Car Spaces) only the first and third lines are multiplied together because the area component is not relevant to the calculation. A more detailed description of how the ‘Units’ button works is provided in the section ‘Data List Commands’.

These are used for absolute building cost amounts, for instance Infrastructure, and can be re-titled to suit the context of your project.

If you are using a fixed price (QS estimate) building cost then it may be easier to enter it here rather than as a unit cost.

These account for building related fees and costs. They all operate in the same way in that they calculate a figure based on a percentage of the overall building cost. However just like site fees they can be entered as total amounts if required (see: ‘Entering Values as a Percentage or an Amount’).

There are 15 lines in all, notice that the first five of these lines have been pre-titled with commonly used headings. These are optional and just like the others can be re-titled to suit the context of your project.

If you are only working with one Professional Fee item you only need to fill in the Professional Fee line (and maybe Contingency), Prodev will ignore the rest.

In certain cases you may have entered individual building costs to which no professional fees or contingency apply, and you therefore wish to exclude these from the Contingency and Professional Fee calculation.

To do this select each building cost (Unit or Fixed) that you wish to exclude and click the ‘No-Fee’ button. Notice that the letter ‘e’ will appear in a column to the right of the building cost figure indicating that it is excluded from the fee calculation. To remove the exclusion simply click the ‘No-Fee’ button again

Prodev will skip each excluded item when calculating Contingency and Fees on Building Costs, where these have been specified as percentages. The appraisal printout will indicate which items have been excluded.

This section covers Agency and Legal costs in connection with the disposal (sale) of the developed property, whether it be derived from rents and capitalisation rates (for example a rented office building) or from direct sales (such as houses). Prodev applies fees only to the applicable revenues.

Letting and Sale Fees are normally entered as percentages however just like site fees they can be entered as total amounts if required (see: 'Entering Values as a Percentage or an Amount'). The titles can be partially edited, for instance the "Agents Fee" portion of "LETTING Agents Fee" can be re-titled.

Ensure that you enter figures in the correct category. For example with a commercial development you need to provide Letting / Investment Sale Fees; for residential sales you would use Direct Sale fees. Where the project is a mixed development with multiple uses then it may be necessary to use both types of fee.

Funds (Purchasers) Costs are not entered here because they are deducted at source. Prodev provides for the entry of these items later in the Yields and Deductions section.

You can enter up to 20 costs associated with End Payments, as fixed sums. These can be straightforward promotional expenses or other costs that occur at the end of a project, such empty building rates.

Notice that the first of these lines has been pre-titled to “Marketing”. This is optional and just like the others in this category it can be re-titled to suit the context of your appraisal. The End Payments section is another of those where re-titling is predominantly needed. Therefore if ‘End Payment 2’ would be better named ‘Show House’ then you can re-title it as required.

VAT is not normally used in appraisals because generally it is recoverable and therefore has a minimal effect on viability, however Prodev does have the capability to deal with recoverable (and non-recoverable) VAT.

Note: Prodev initially treats all VAT as Zero-Rated (i.e. not used) until instructed to do otherwise. The VAT rates that display in the Data List are the ones that it would use if VAT calculation were to be switched on.

See the section ‘VAT in Prodev’ for more information on VAT. VAT can be a complex subject to understand and apply so you are cautioned to check that its use in your project is correct. Certain versions of Prodev may show all references to ‘VAT’ as ‘Tax’ as the term VAT is UK specific. In use the operation is identical; it is only the terminology that differs.

There are 20 lines devoted to miscellaneous Project Income. They are expressed as either total amounts or annual income and can be re-titled. Note: Do NOT use Project Income for the rental income that is to be capitalised. You could use it for income prior to sale although the Advance Income facility is better suited for this task.

Project Income can be any form of income received during the course of the development. Examples of Project Income are: advertising revenue, government grant and temporary rents received before or during the development period.

•	By default project income is treated as a total amount; this is indicated by the suffix letter ‘a’.

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If you wish to enter project income as an annual income then use the letter ‘r’ in place of the Enter key when inputting your figure. If you type ‘25000r’ then this will set the particular project income to £25,000 per annum (indicated by the suffix letter ‘r’). To change this back to a total amount then re-enter your value using the letter ‘a’ in place of the Enter key.

•	Once your value has been provided either as an total amount or annual income then any subsequent changes will remember the last setting used (total or income) unless you use ‘a’ or ‘r’ in place of the Enter key as described above.

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If entered as an annual amount, the total value for project income is determined by its timescale (which can be edited in either the Time/Finance or Detailed Timing sections). For example if a project income line is entered as £25,000 per annum and its timescale was set to a length of 18 months then the total value for this line will be £37,500 (25000 divided by 12 months over 18 months).

•	If you delete the value then it will be reset to the default of total amount.

These are the capitalisation rates and ancillary items used to derive the end of value for the rental income of the completed development. There are a total of 20 yields available.

In Prodev you enter the investment yields before providing the rental income information. For most simple appraisals you will probably only need one yield in which case enter it under the first one - Yield-A Rate.

For more complex projects you may require more yields either because different yield rates may apply to different parts of the development or for phasing purposes you may wish to divide your capital value into different parcels. In these cases provide appropriate values for Yield-B, Yield-C and so forth.

For example if you have a scheme consisting of offices and shops and you wish to use a different rate to each then you could use Yield-A for one category and Yield-B for the other. For a 3-phase office development use three yields (it doesn't matter if you use the same rate for all three). This will enable you to divide your end sale value into three separate transactions which may be desirable for timing purposes.

Do not worry at this stage about relating your rents to the various yields as this is done at the stage that you enter the rental information.

By default, yields are treated as percentages however if you wish to use a years purchase (YP) then use the letter ‘y’ instead of the Enter key (or ‘g’ for GRM in the International version of Prodev)

Each yield (easily recognised as it has the most decimal places) has factors that apply to it and the rental income to which it refers (the seven lines of information under each yield). These are explained in greater detail later on (see: ‘Yields and Deductions’ in the section ‘The Data List categories explained’). In most cases only the Funds (Investors) Costs are required.

The cost of acquisition incurred by the Investment Purchaser and borne by the vendor (usually so as to preserve the net investment return). This figure must be entered as a percentage. There are separate investors costs item for each yield – bear this in mind when entering multiple yields.

Funds Costs are explained in greater detail later on (see: ‘Yields and Deductions’ in the section ‘The Data List categories explained’).

The Rental Areas and Rates section comprises 120 entries (similar in layout to Unit Build Costs). Each Rental Area is made up of three individual lines which are used to calculate the total income for the item. These are (1) number of units, (2) area per unit and (3) a rent per sq-ft / sq-m / unit. The default setting for the UK version of Prodev is rate per square foot per annum. Each Unit Build cost can be re-titled.

For example, a single office building of 32,000 square feet at £20 per square foot should be entered as 1 unit of 32000 square feet at a rent of £20 (as shown above).

If you have an absolute rental figure of say £250,000 then enter it as 1 unit of 1 sq ft at a rate of 250000. Prodev will recognise that the unit and area components are not relevant and exclude them from the report.

The Rental Unit can also be tailored as to price per foot / metre / unit / car space / plot. The default setting for the UK version of Prodev is rate per square foot per annum. To change the unit type click the ‘Units’ button and a dropdown box will display, showing the options available.

By default Prodev assumes that the rental is a rate per annum. The ‘Units’ facility also allows you to set this as a rate per month which is used in certain countries and for some types of property. You will notice that every type of unit has both annual and monthly equivalents. Note: Prodev does not convert the rate when you switch from annual to monthly or vice versa, so it is essential that you check your rental value is appropriate for the rental frequency chosen.

A more detailed description of how the ‘Units’ button works is provided in the section ‘Data List Commands’.

For a simple development you will probably only have one investment yield set as Yield-A. By default all the rental values are initially set as being capitalised at this yield rate so you only need to apply yields to rentals where multiple yields are used (e.g. for a mixed use development).

For each Rental Category, the last of the three rental entries is the Rental Value, and has a suffix '-A' appended to the value. This indicates it will be capitalised at the rate specified for Yield-A (with all the deductions and other parameters set for Yield-A).

To apply a different yield, highlight the relevant income line (with the suffix '-A'), click the ‘Yield’ button then select (double-click) the relevant Yield item from the drop-down box. This will apply the chosen yield rate (and its associated deductions) to the selected rent which will be indicated by the rent suffix letter.

Direct Sales allow for residential or similar types of sale where there is no rent or yield involved. There are 80 Direct Sale items (similar in layout to Unit Building Costs). Each Direct Sale is made up of three individual lines which are used to calculate the total revenue for the item. These are (1) number of units, (2) area per unit and (3) a rent per unit / sq-ft / sq-m. The default setting for the UK version of Prodev is rate per unit. Each Direct Sale can be re-titled.

If you have a building that you are selling for £2,000,000 then enter it as 1 unit of 1 sq ft at a rate of 2000000. Prodev will recognise that the unit and area components are not relevant and exclude them from the report.

The Direct Sales can also be tailored as to price per unit / foot / metre / car space / plot. The default setting is rate per unit. To change the unit type click the ‘Units’ button and a dropdown will display, showing the options available.

A more detailed description of how the ‘Units’ button works is provided in the section ‘Data List Commands’.

In certain cases you may have entered individual sales items for which sales fees are not applicable. For example you may be selling off a piece of land where no agent is involved.

This is done using the ‘No-Fee’ button which provides a similar function for building costs (described earlier). Select each sales item that you wish to exclude and click the ‘No-Fee’ button. These sales items are defined as follows:

•	To exclude a Sales item from Direct Sale fees select the relevant sales rate.

•	To exclude a Rental value from Letting Fees select the appropriate rental value.

•	To exclude a Capital value from Investment Sale fees select the related investment yield rate. Note: This does not apply to Funds costs (the line provided in the Data List under each Investment Yield) which can be excluded simply by setting its value to zero.

Notice that the letter ‘e’ will appear in a column to the right of the sales item cost indicating that it is excluded from the fee calculation. To remove the exclusion simply click the ‘No-Fee’ button again.

Prodev will skip each excluded item when calculating fees on sales items where these have been specified as percentages. The appraisal printout will indicate which items have been excluded.