How Feasibility Models Determine Land Value

What's in a Feasibility Model

The model itself is straightforward Excel — but the discipline of building it well is what separates serious developers from amateurs.

A typical Brisbane development feasibility includes:

Inputs (the assumptions):
- Site purchase price + stamp duty + legals
- Construction cost ($ per sqm GFA, by product type)
- Professional fees (% of construction)
- Statutory charges (per dwelling, per sqm)
- Marketing & sales (% of GRV)
- Finance costs (rate, term, LVR)
- Contingency (% of construction)
- Target margin (% of GRV)
- Project timeline (months)

Outputs (the results):
- Total Development Cost (TDC)
- Gross Realisable Value (GRV)
- Net Realisable Value after costs
- Margin / IRR
- Residual Land Value (RLV)

Sensitivity tables: typically a 3 × 3 or 5 × 5 grid showing RLV under different combinations of construction cost and GRV (or finance rate and GRV). The corners of the grid show worst-case and best-case scenarios.

How Models Get Calibrated

The model is only as good as its inputs. Sources used by sophisticated Brisbane developers:

• Construction cost: builder tenders on actual recent projects, plus QS benchmarks (RLB Quarterly Cost Report)
• GRV: settled comparable sales 0-12 months back, adjusted for time, location, finish
• Finance: live lender term sheets, not desktop assumptions
• Statutory costs: current Brisbane City Council infrastructure charges schedule
• Marketing: actual quotes from project marketing agents
• Margin: institutional benchmarks (typically 18-22% for residential)

Models calibrated on assumptions older than 12 months are routinely 10-30% wrong on RLV.

Reading a Developer's Feasibility

When a developer shares part of their feasibility (rare, but it happens), look for:

1. Construction cost line: is it current? Compare to RLB benchmarks. A "$3,500/sqm" assumption in 2026 is materially under-cooked.
2. GRV line: which comparables are referenced? Are they 6-12 months old or 24+?
3. Margin requirement: 20% is fair; 25%+ is the developer being conservative at your expense; 15% is risky.
4. Contingency: 5-7% is standard; 10%+ is conservative.
5. Finance rate: is the rate a current term sheet or a desktop guess? Should be 8-10% in current market.

A vendor or specialist advisor running these checks routinely finds $200k-$1m of compression embedded in conservative inputs.

What Vendors Should Demand

If a developer claims feasibility doesn't support a higher price, you can reasonably ask:

• "What's your construction cost per sqm GFA, and from which builder?"
• "What's your GRV per apartment, and from which recent comparables?"
• "What's your target margin, and how does that benchmark against your last project?"

Most won't share the full model. Many will share these three numbers — and benchmarking them is enough to identify whether the offer is genuinely price-supported.