Background information about financial calculation

Welcome to the Financial Calculations section of the 3D CityPlanner manual. In this section, we will guide you through setting up and understanding financial properties for your urban development projects. Accurate financial calculations are crucial for assessing the feasibility and profitability of your projects. Let's dive into the details.

Quick Overview

You will notice the "Project Statistics" section upon entering your project. This section provides a concise yet informative summary of your project's financial aspects. Here, you can quickly grasp your project's total costs, revenues, and overall financial results. While this overview offers valuable insights, let's explore further for a comprehensive understanding.

Residual Land Value

One of the fundamental concepts in urban development finance is the "Residual Land Value." This concept aids in evaluating the value of a piece of land earmarked for development. The calculation subtracted the total development costs, including expenses and profits, from the real estate revenues. Notably, the cost of the land itself is excluded from this calculation. The resulting value provides an initial insight into the potential value of the land.

It's important to note that this calculation doesn't account for factors such as interest, inflation, and demolition costs. Consider utilizing the Financial Project Dashboard within your account for a more detailed and accurate evaluation.

Project Area Properties

At the project plan level, you can set critical financial parameters. These parameters include interest, inflation, and cost/income increases. Accurate configuration of these parameters is essential, as they are the foundation for various financial calculations throughout your project. Additionally, the cost indicators for land development play a pivotal role in calculating land development costs within the dashboards.

Subarea Properties

Subareas offer a more detailed level of financial configuration. Here, you can define properties that impact spatial and construction costs. Notably, the system automatically recognizes ground-level parking spaces within subareas, influencing the calculations accordingly. Furthermore, you can define cost indicators for acquisition, demolition, preparation, and infrastructure per square meter. These indicators are essential for specific dashboard calculations.

New Real Estate Properties

The "New Real Estate Properties" section allows you to define financial properties on a per-object basis. Let's explore the components in detail:

Construction Costs: These costs are linked to a database containing average construction costs for the chosen type of construction. Accurate input of costs per square meter is crucial for precise calculations.

Yields and Space Ratio: Determine yields using price per square meter or gross initial yield. The space ratio is a key parameter that converts gross floor area (GFA) to sales or lettable area. Efficiently designed buildings tend to have higher space ratios.

Revenues: Revenues vary regionally and need to be entered manually. It's important to input accurate values, as the difference between costs and revenues contributes to the residual land value.

To find information about rent and buy prices of real estate, have a look at numbeo.com: https://www.numbeo.com/cost-of-living/prices_by_city.jsp?displayCurrency=USD&itemId=101&itemId=100&itemId=27&itemId=26&itemId=29&itemId=28 

Beware! The prices at Numbeo include VAT so calculate the value excusing vat before entering it in the financial parameters.

Result and Additional Calculations: The calculated result is integral to dashboard reports, if available. You can also specify factors such as the number of houses within a building block, employment linkage, and parking space count. These factors impact calculations within the tool.

By comprehensively configuring these properties, you empower yourself to make well-informed decisions regarding your urban development project.