What can I pay for the land?
The residual value of a plot of land is the value remaining after deducting all development costs from the gross development value (GDV). It indicates the maximum purchase price an investor or developer can pay for a plot of land without falling below the targeted minimum return.
The residual value assessment is not a standardised ImmoWertV method in the strict sense, but it is recognised as an established methodology in the practice of project development and institutional financing — particularly for bank financing and acquisition decisions.
Residual value — simplified formula:
Residual value = GDV − construction costs − financing costs − ancillary costs − project profit
GDV = gross development value (sales price of fully developed units)
Residual value assessment
- GDV calculation & market analysis
- Complete cost calculation
- Residual value & minimum return
- Sensitivity analysis
- Bank-ready documentation
Areas of application for residual value assessment
The residual value assessment is the central valuation tool in project development — from acquisition due diligence to bank financing.
Land acquisition
Before purchasing a development site, the residual value shows whether the purchase price is economically viable. An indispensable decision-making basis for developers, investors, and banks.
Bank financing
Project financing banks require an independent residual value assessment as part of the lending review. We prepare bank-suitable documentation with transparent, traceable assumptions.
Vendor negotiation
With an independent residual value appraisal report, buyers have a solid negotiating basis vis-à-vis the land seller — particularly in cases involving leasehold rights, municipalities, and communities of heirs.
Development plan amendment scenarios
In the case of planned amendments to the development plan (B-Plan), we analyse multiple development scenarios (e.g. increased floor area ratio, change of use) and determine the residual value for each scenario.
Process of residual value assessment
Project definition & development analysis
Analysis of development rights (B-Plan, Section 34 BauGB), determination of the achievable development volume (gross floor area, units, type of use), and project structuring.
GDV determination (gross development value)
Market analysis for the planned use: sales prices per m² for residential, office, and retail space. Determination of the realistic sales proceeds of the project based on current market data.
Cost calculation
Comprehensive construction cost calculation (building structure, outdoor facilities, building services, ancillary costs, site development) plus project ancillary costs (planning, permitting, marketing, financing, construction interest).
Residual value & return analysis
Calculation of the residual value and derivation of the project return at a given land price — or conversely, the maximum land price given a target minimum return.
Sensitivity analysis
Illustration of the impact of cost overruns, declining sales prices, and construction delays on the residual value — for a risk-adjusted assessment of the project.
Request a residual value assessment
We determine the viable land value for your development project — with a complete cost calculation, GDV analysis, and sensitivity assessment.
