A Market Feasibility Study is defined as an evaluation or analysis of the proposed project of real estate. A market feasibility study is conducted to assist decision-makers in determining whether or not to implement a particular project.
The Market Feasibility Study will contain extensive data related to site evaluation, i.e. site location, zoning, proximity to demand generators, etc, economic overview, market area and market trends, and statement of projected revenue and expenses.
Scope of Work
- Potential site analysis;
- Analysis of economic trends;
- Analysis of current, and future supply of and demand for the real estate project
- Development of estimate of project characteristics, development budget. Project revenue and net profit.
Methodology
- A study of the proposed development site based on site location, related laws concerning and other relevant information. The site was evaluated based on a number of factors including access and visibility;
- Consideration of economic factors, commercial and industrial development and other demand generators which will influence the demand for real estate in certain district;
- An analysis of future growth rates in the demand for, and the supply of, the real estate project in certain area;
- Determination of appropriate revenues and expenses for the proposed development;
- Preparation of project revenue operating results for the proposed property for projected years;
- Projection of value for the selected scenario for the proposed real estate project, utilizing a discounted cash flow methodology or else.
Proposed Outline for a Feasibility Study
- Executive Summary
- Site Evaluation & Facilities Description
- Economic Overview
- Market Area & Market Trends
- Statement of Projected Revenues and Expenses
- Final Recommendation