Site Characteristics Analysis

Every site has unique characteristics and the success of any real estate development is hugely influenced by them.
An Influence Catchment Area (ICA) for the subject site is drawn by clubbing nearby areas with similar population
and real estate characteristics or by simply drawing a circle of 5 km around the site. Frequently the ICA is defined
as the area from where the subject development will draw the maximum support in terms of sales or lease. The
ICA is analyzed on the following parameters: 

 Demographic Characteristics
 Connectivity and Accessibility
 Physical and Social Infrastructure
 Environment and Topography

Influence Catchment Area (ICA) Market Dynamics & Opportunity Analysis

Using REMI a thorough analysis of all relevant real estate segments is done to establish the market opportunity in
the ICA. In several cases, customized ground surveys are launched to bridge any gaps. 

Each market segment and every product category is analyzed to identify the potential development opportunities

Identification of Optimum Development Mix / Product Mix

The inputs from the previous stage are used to finalize the development mix and product mix. Several factors
govern the process of development mix finalization; two of the most important are: 

 Zoning regulations - Development control rules lay down the framework within which developments can
take place in various areas.
 
 Cash Flow Characteristics - Care must be exercised to include development elements that ensure steady
cash flow throughout the development period. Development with front loaded capital outlays and back
loaded cash flows are highly sensitive to availability of credit

Competitive Project Grading Analysis and Scientific Pricing

In real estate, the pricing is mostly done using cost plus approach. However, this approach misses out the
consumers’ perspective by completely ignoring how much value consumer assigns to every additional feature. This
leads to developers’ spending money of many features for which the consumers don’t want to pay. 

LFME’s Competitive Project Grading provides a mathematical solution by benchmarking the subject development
against several existing developments in the market. Each of these projects is divided into small and mutually
exclusive “Value Variables” which add up to the prices of the existing project. The relative sale / lease
performance of all these projects is used to weigh the prices in order to avoid taking projects that are wrongly
priced and thus register poor sales performance. 

Statistical techniques are employed to estimate the weights of these “Value Variables” in the price equation. The
subject development is also defined in terms of “Value Variables” and the price equation is used to derive
scientific price for the development.

Financial Feasibility

The results of all the previous stages go in our proprietary financial model that mimic the project cashflow as they
are expected to take place. Cost estimates are generated from independent consultant and revenues are
projected factoring in the scientifically derived prices through our unique Project Grading Syntax. The financial
model is delivered to the client with in-built flexibility to change the key assumptions and run sensitivity analysis.

Dynamic Catchment Monitoring Services (Optional)

Dynamic Catchment Monitoring Services – LFME offers dynamic monitoring services for the catchment by providing
highly customized reports. These reports will help you understand the behavior of all other projects around you on
a quarterly basis