Gross Development Value (GDV)

The GDV is the value of a development once construction has been completed, or the total sum of the sales values for the finished developement. It is one of the most important performance metrics for property developers and is sometimes used by banks as a basis for lending.

Special assumption 

These are suppositions relating to the valuation of a property or site that could be true in the future but that are not the case at the date of valuation. For example, it could be the assumption that a property has planning permission for a particular development which is yet to be granted.

Residual Land Value (RLV)

The residual land value is one type of output from a residual appraisal. It is the most commonly used method for calculating the value of development land as it takes into account site specific costs. It is commonly used alongside the comparable method. It is calculated by subtracting all development costs, including profit but excluding the cost of land, from the total value of a development or GDV. The amount which remains is the residual land value.

Gross internal area

This is the internal floor area of a completed house or flat, including internal walls, columns, chimney breasts, and so on. This method of measurement is the most commonly used within the residential sector in the UK. However, the RICS has updated its measurement guidance with the aim of creating a standardised method across the world, referred to as the International Property Measurement Standards (IPMS).

IPMS 3B relates most closely to the gross internal area, but the main difference is that you measure to the glass of the window, if the window takes up more than 50 per cent of the given wall.

Gross Acre and Net Developable Acre

Acres are the unit of measurement most often used when quantifying the units of development land, and gross acre refers to the total land available as part of a development site. Net developable acres are the area of land that can be used to build housing. This can differ significantly from the gross acreage on large developments, as land often has to be put aside for things like public open space, children’s play areas or schools, as part of the development.

The difference between net and gross acres can also reflect physical characteristics of the site such as a large area of trees and water courses than cannot be removed.

Further information

Contact Natalie Collins

Contact Savills Development