SSUD71-126 Property Finance and Investment Assignment
Assignment 1: Development & Investment Lending Proposal
The due date: 4.00pm on Monday 25 October 2021.
Word limit: around 3,000 words including references
Reference style: APR reference style
The important thing is to solve the problem and support your findings with case study or other
evidence. Please ensure that your assignment is fully referenced and submitted the report
and excel file on iLearn. All assignments will be reviewed for originality and the results made
available to students. Late lodgement of assessment work may attract penalties.
Question: PD Company proposes development of a retail shopping centre of 2,800sqm
located at the corner of Cotlew and Wardoo Streets, Ashmore on the Gold Coast. The retail
area of the completed project will be 1,400sqm and comprise 7 tenancies. The proposed
development of this brownfield site is based on a strategy informed by extensive market
testing indicating a need for a fast-food, a drive-through liquor outlet and a convenience store
in this precinct. The project details are as follows:
• Development approval: approx. 6 months. Cost approximately $280,000
• Estimated construction cost $3,240,000
• Consultants $300,000
• Land cost $1,800,000
• Infrastructure charges $250,000
• Contingency $200,000.
If you require further information, please make your own assumptions and include these in
a supporting Appendix to the advice/report.
PD Company has $1,240,000 to invest in this project and wishes to:
1. Raise a construction loan to meet the building of the centre, and
2. Raise an investment loan for a period of 10 years on completion.
The company holds an expression of interest from KFC, McDonald’s, Nando’s and the Boost
Juice company. A lease agreement has been entered into with the Ashmore Tavern to lease
the drive-through liquor facility and discussions are underway with IGA for a small
supermarket store or a convenience shop. The fast-food outlets are viewed as anchor tenants
and traffic builders for other retailers on the site. A preliminary financial forecast indicates
that net rents after outgoings but before management costs will be in the order of $600,000
per annual from year 3.
PD has asked you for advice about what it needs to do to prepare a loan application for the
project. In particular, you should advise on the matters that PD will need to undertake in order
to meet typical bank lending criteria for construction and investment finance?
Late submissions – the following adjustments will be made to the maximum marks available:
• Up to 1 day late = minus 10% (maximum 90%)
• Up to 2 days late = minus 20% (maximum 80%)
• Up to 3 days late = minus 30% (maximum 70%)
• Up to 4 -5 days late = minus 50% (maximum 50%)
• After 5 days then no marks will be awarded
|Marks & Assessment Criteria|
|High Distinction||85-100||Outstanding or exemplary performance in the following areas:
interpretative ability; intellectual initiative in response to questions;
mastery of the skills required by the subject, general levels of knowledge
and analytic ability or clear thinking.
|Distinction||75-84||Usually awarded to students whose performance goes well beyond the
minimum requirements set for tasks required in assessment, and who
perform well in most of the above areas.
|Credit||65-74||Usually awarded to students whose performance is considered to go
beyond the minimum requirements for work set for assessment.
Assessable work is typically characterised by a strong performance in some
of the capacities listed above.
|Pass||50-64||Usually awarded to students whose performance meets the requirements
set for work provided for assessment.
|Fail||0-49||Usually awarded to students whose performance is not considered to meet
the minimum requirements set for particular tasks. The fail grade may be a
result of insufficient preparation, of inattention to assignment guidelines or
lack of academic ability. A frequent cause of failure is lack of attention to
subject or assignment guidelines.
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