Developer wishes to construct an office building of 10,000m2 gross floor area, of which 8,000 m2will be available for letting. The construction costs are estimated to be $6,000/m2. In addition, there are ancillary construction costs of $400,000 in laying roads and sewers to the building. Professional fees are estimated to total 13% of construction costs. Short-term finance is available at 16%. The expected rent is $3,000/m2 p.a. net. The developer wishes to see a return for risk and profit of 20% of development value. The pre-contract period is expected to be 6 months, the building work is estimated to take 15 months, and a period of 3 months has been allowed for letting. The developer intends to sell the completed and fully let development to a financial institution, and it is anticipated that an initial yield of 7% will be required. Within these parameters, the value of the site has to be established.