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The developer’s budget method




This method is used for the assessment of buildings under development or redevelopment.

It is commonly used to estimate the market value of building land in urban areas.

It can be applied to determine the value of an existing building with plans for major restructuring or rebuilding.

The method is also used to determine the value of a development property which is intended to be split and sold at a future date to individual buyers or a developer.

The developer’s budget method, is based on an estimated sales price of a future project, from which the surveyor will deduct the different costs (cost of construction, financial expenses, fees, profit) to determine the present-day value of the land or building in question.


The estimated value at the end of the development program must be based not only on the price of those properties similar to the projected property, but also on an analysis of supply and demand at the time of the future transaction and the foreseeable short-term trend. As a general rule, the developer’s budget method allows a margin for risk compensation or a profit target for the investor.

Taking into account the characteristics of the building plot and the local town planning regulations, we calculate the possible constructible surface area and consequently, the living area or floor area, which is multiplied by the average selling price in the current market conditions.

We deduct :

The cost of demolition HT : surface floor area x price € HT / m²
The overall construction costs : future surface area x price € HT / m²
Miscellaneous charges (architects fees, financial fees and marketing costs).
The profit expected by the developer : between 8 and 10% of the turnover.