DEVELOPMENT ECONOMICS

The Development Economics is about:

• The development, roles and contribution of the construction industry to national economy
• Process in a property development and factors that influence the development process
• Various techniques of development appraisal and source of finance available
• Importance of market research to the overall development process and its impact of research to the development.

This subject's group assignment is very challenging and required a good team work efforts. The group assignment is regarding of determining whether the development is feasible or not by using residue method of valuation. Aside of residue method of valuation, we also required to do cash flow of such development by adapting "Sell then Build" concept. While preparing the cash flow, the timing of each cash flow is critical for the development and it necessary to keep a good tracks on every cash flow (both inflow and outflow) associated.

The individual assignment of this assignment is closely connected to group assignment's work and the group assignment has to be done first before the individual assignment can be carry out. In the individual assignment, it requested to do a Net Present Value analysis calculation and give the comments on the viability of the project based analyzed result earlier. It also requested to perform an cash flow analysis where the development is based on "Build then Sell" concept and comment whether such development is viable or not.

The learning outcome of this subject as per following:

• ability to compile a developer's budget (total development cost and gross development value) during the initial development process.
• Execute the Cost Benefit Analysis in the early stage of investment proposal and valuation system to help on decision making during the feasibility stage.
• Classify various source of finance available in the construction industry and outline the requirement in a quality market research.