ROADMAP · RESIDENTIAL DEVELOPMENT
Residential development
The model connects land price, authorised volume, wanted homes, full construction cost, finance and sales pace.
Who it fits
For investors who can fund phases and accept connected land, permission, construction and sales risks.
When to reject it
Reject it if land lacks a residual valuation, downside capital is missing or sales are the only source of completion funding.
Value-creation logic
Value transforms land rights into completed, wanted homes through staged capital control.
Starting inputs
- Land rights and permitted volume
- Demand, unit mix and comparable evidence
- Design, construction, finance and contingency
- Pre-sales, completed sales or whole-building exit
Documents at the decision gates
| Stage | Documents and control | Decision |
|---|---|---|
| Land | Rights, parameters, restrictions and residual model | Maximum acquisition price |
| Design | Permitted area, product, licence and cost plan | Contingency before construction |
| Funding | Drawdown terms, equity and dates | Cover the downside cash shortfall |
| Works | Certifications, actual costs, changes and reserve | Pay against evidenced stages |
| Exit | Sales, completion papers and delivery costs | Liquidity and capital repayment |
Reconcile the cost plan and funding schedule: project profit does not replace cash for the next payment.
A shared nine-stage process
Objective and capital framework
- Decision
- Decision: define product, phased capital, contingency and exit.
- Evidence
- Evidence: documented inputs and review conclusions for product, phased capital, contingency and exit.
- Risk
- Key risk: committing before the assumptions for product, phased capital, contingency and exit are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for product, phased capital, contingency and exit are confirmed.
Investment thesis
- Decision
- Decision: define value from land rights, an authorised design and wanted homes.
- Evidence
- Evidence: documented inputs and review conclusions for value from land rights, an authorised design and wanted homes.
- Risk
- Key risk: committing before the assumptions for value from land rights, an authorised design and wanted homes are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for value from land rights, an authorised design and wanted homes are confirmed.
Search and first filter
- Decision
- Decision: define site, buildability, demand and unit mix.
- Evidence
- Evidence: documented inputs and review conclusions for site, buildability, demand and unit mix.
- Risk
- Key risk: committing before the assumptions for site, buildability, demand and unit mix are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for site, buildability, demand and unit mix are confirmed.
Preliminary economics
- Decision
- Decision: define residual land value, full budget and sales pace.
- Evidence
- Evidence: documented inputs and review conclusions for residual land value, full budget and sales pace.
- Risk
- Key risk: committing before the assumptions for residual land value, full budget and sales pace are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for residual land value, full budget and sales pace are confirmed.
Legal and technical review
- Decision
- Decision: define title, planning, design, licence, services and ground conditions.
- Evidence
- Evidence: documented inputs and review conclusions for title, planning, design, licence, services and ground conditions.
- Risk
- Key risk: committing before the assumptions for title, planning, design, licence, services and ground conditions are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for title, planning, design, licence, services and ground conditions are confirmed.
Structure and acquisition
- Decision
- Decision: define land acquisition, finance and drawdown rules.
- Evidence
- Evidence: documented inputs and review conclusions for land acquisition, finance and drawdown rules.
- Risk
- Key risk: committing before the assumptions for land acquisition, finance and drawdown rules are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for land acquisition, finance and drawdown rules are confirmed.
Strategy delivery
- Decision
- Decision: define construction, technical control, warranties and marketing.
- Evidence
- Evidence: documented inputs and review conclusions for construction, technical control, warranties and marketing.
- Risk
- Key risk: committing before the assumptions for construction, technical control, warranties and marketing are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for construction, technical control, warranties and marketing are confirmed.
Control and reporting
- Decision
- Decision: define certifications, budget actuals, sales and phased finance.
- Evidence
- Evidence: documented inputs and review conclusions for certifications, budget actuals, sales and phased finance.
- Risk
- Key risk: committing before the assumptions for certifications, budget actuals, sales and phased finance are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for certifications, budget actuals, sales and phased finance are confirmed.
Stabilisation and exit
- Decision
- Decision: define completion, handover and unit-by-unit or whole-building sale.
- Evidence
- Evidence: documented inputs and review conclusions for completion, handover and unit-by-unit or whole-building sale.
- Risk
- Key risk: committing before the assumptions for completion, handover and unit-by-unit or whole-building sale are tested.
- Control gate
- GO/STOP: proceed only when the inputs and owner for completion, handover and unit-by-unit or whole-building sale are confirmed.
Review scenarios
Base case
Design and licence match the model, construction is funded and demand supports the product.
Downside case
Test higher costs, permission or works delay, slower sales and extra capital.
Frequently asked questions
When is the land price set?
After a residual valuation deducts every cost, finance, contingency and safety requirement.
Can the project rely on pre-sales?
No. They need their own legal and financial structure and do not replace completion funding.
What is a STOP gate?
Unclear rights, an incompatible design, unconfirmed finance or insufficient downside capital.
