ORA EGBUNIKE & ASSOCIATES
A development appraisal is the financial model that determines whether a specific scheme on a specific site at a specific point in the market cycle will generate the returns that justify the risk. Get the inputs wrong -- and developers often do -- and the damage is done before the first pile is driven.
OEA's development appraisal service stress-tests every assumption that determines your return: land value, construction cost benchmarks, professional fees, finance costs, gross development value, absorption rates and phasing. We use 40 years of Nigerian market transaction data, not desk-based estimates, to populate the model with figures that reflect what the market actually bears.
Our appraisals are used by developers to structure land bids, by funders to assess debt serviceability, by investors to underwrite equity commitments, and by developers' boards to approve capital allocation. The common requirement across all of them is the same: numbers that hold under scrutiny.
Residual appraisal and discounted cash flow prepared to RICS guidance -- accepted by lenders and investors
Comparable land transactions, construction cost benchmarks and GDV comparables across all Nigerian markets
Base case, optimistic and pessimistic scenarios with sensitivity analysis on key variables
Appraisal reports accepted by Nigerian commercial banks, development finance institutions and international funders
A development appraisal is only as reliable as the inputs that go into it. OEA uses real market evidence -- not assumptions.
Determination of the maximum supportable land value for a proposed scheme using the residual method -- working back from projected GDV through all costs to establish what the land is actually worth to a developer.
Residual Method · RICSUnit rate benchmarking against comparable completed developments in the same market, specification and timeframe. Construction cost assumptions are the most frequently inflated input in developer appraisals.
Market-Based BenchmarksAssessment of the realistic end value of the completed scheme based on comparable sales and lettings -- not the developer's target price, but the price the market will bear at projected completion date.
Market-Evidenced GDVPhased development cash flow modelling including construction programme, pre-sales, drawdown schedule, finance charges and net cash flow by period. Optimising the phasing sequence can materially improve project IRR.
Cash Flow · IRR · NPVDevelopment finance cost modelling covering debt sizing, interest calculation, arrangement fees, monitoring costs and covenant compliance -- giving the full picture of what debt actually costs over a development cycle.
Development FinanceSystematic variation of key inputs -- cost overrun, delayed sales, lower-than-projected GDV, higher finance costs -- to identify the scheme's resilience and the scenarios under which returns fall below the hurdle rate.
Risk-Adjusted ReturnsSite inspection, planning status review, scheme parameters confirmed, comparables research commissioned, data sources identified.
Construction cost budget developed from market benchmarks, professional fee schedule prepared, finance cost structure modelled.
GDV comparables analysed, sales and rental projections established, phasing programme and absorption rate assessed.
Full appraisal report with residual land value, development return, cash flow, scenario analysis and recommendation on scheme viability.
The Afreximbank African Trade Centre mandate required a full institutional-grade appraisal of one of Sub-Saharan Africa's most significant commercial real estate developments. OEA's capacity to deliver credible, defensible appraisals on assets of this complexity reflects the depth of market intelligence and professional rigour we bring to every development appraisal engagement, regardless of scale.
Why use OEA rather than run the appraisal internally?
Your cost consultant prices what you are building. OEA assesses whether what you are building will sell at the price required to make the scheme viable. These are different questions. An independent appraisal by OEA also gives your funder and board the confidence that the numbers have not been produced by the team advocating for the project.
OEA maintains live comparables databases across Lagos, Abuja, Port Harcourt, Enugu and Onitsha -- updated from our active valuation and transaction advisory mandates. Our market data is current because we are active in the market, not because we subscribe to a database.
Yes. OEA's development appraisals are structured to meet the requirements of Nigerian commercial lenders, the Bank of Industry and international DFIs. We can present the appraisal to the lender's credit committee and defend the assumptions if required.
Then you have saved yourself from a commitment that would have destroyed value. A development appraisal is not a justification document -- it is a decision tool. If the numbers don't work, we will tell you exactly which input is the problem and what would need to change for the scheme to become viable.
Provide basic scheme details and we will confirm the scope, timeline and fee for your appraisal within 48 hours. All development information is treated in strict confidence.
abuja@oraegbunike.com
+234 (0) 70 1023 8888
Ora Egbunike & Associates