A Worked Hypothetical Feasibility: From Site Area to Decision

Direct answer: This is a hypothetical worked appraisal built entirely from labelled assumptions. It exists to demonstrate the sequence and the arithmetic, not to assert market values. Every input below must be replaced with sourced local data before it informs a real decision. No real site, transaction, client or market statistic is described here.

Step 0 — the assumption register

| Input | Assumed value | Status | |---|---|---| | Gross plot area | 22,000 sq ft | hypothetical | | Road widening / deductions | 2,000 sq ft | hypothetical | | Net plot area | 20,000 sq ft | derived | | Base FSI | 2.0 | hypothetical — read from the governing DCR clause on a real site | | Ground coverage limit | 40% | hypothetical — read from the governing DCR clause | | Parking standard | 1 bay/unit + 10% visitor | hypothetical — read from the local bye-law parking clause | | Design efficiency (carpet ÷ GBA) | 57% | hypothetical, architect to confirm | | Loading | 25% | hypothetical, market evidence required | | Achievable rate | ₹7,500 / sq ft saleable | hypothetical, valuer to confirm | | Construction cost | ₹2,600 / sq ft GBA | hypothetical, QS to confirm | | Interest rate | 9.5% p.a. | hypothetical — take from the lender's term sheet | | Programme | 6 months approvals, 24 months build, 12 months tail | hypothetical | | Required developer margin | 20% of development cost | policy input |

Step 1 — planning envelope

Net plot area          = 20,000 sq ft
Countable FSI area     = 2.0 × 20,000 = 40,000 sq ft
Max footprint          = 40% × 20,000 = 8,000 sq ft
Implied floors (countable) = 40,000 ÷ 8,000 = 5 typical floors

Height, setbacks and any airport/heritage constraint must be confirmed before treating five floors as achievable.

Step 2 — gross built-up area

Countable FSI area                        40,000
+ Parking (assumed FSI-free)              12,000
+ Services, plant, refuge                  2,000
= Gross built-up area (GBA)               54,000 sq ft

Step 3 — saleable area

Carpet area   = 57% × 54,000 = 30,780 sq ft
Saleable area = 30,780 × 1.25 = 38,475 sq ft

Unit mix (hypothetical): 24 units at ~1,100 sq ft saleable + 12 units at ~1,000 sq ft ≈ 38,400 sq ft → 36 units.

Step 4 — parking closure test

Bays required = 36 + 10% visitor ≈ 40 bays
Area needed   = 40 × 350 sq ft (assumed, incl. circulation) = 14,000 sq ft
Basement footprint available (assumed) = 12,000 sq ft

Shortfall. Either a second (part) basement is added, or the unit count is reduced. This is the moment most appraisals quietly skip. See https://devpartner.in/insights/parking-feasibility-before-design.

Take the reduction route for this walkthrough: cap at 33 units → 37 bays → 12,950 sq ft required. Still short. Cap at 31 units → 35 bays → 12,250 sq ft. Close enough to test with a layout; saleable area falls to approximately 33,200 sq ft (31 units × ~1,070 sq ft average).

The parking test cost this hypothetical scheme roughly 5,275 sq ft of saleable area — about 13.7% of revenue — with no change to the permitted FSI or to construction cost.

Step 5 — revenue

GDV = 33,200 sq ft × ₹7,500 = ₹24.90 cr

Step 6 — cost

| Line | Basis | ₹ crore | |---|---|---| | Construction | 54,000 sq ft GBA × ₹2,600 | 14.04 | | Professional fees | 5% of construction | 0.70 | | Statutory / approvals | itemised allowance (see approvals draft) | 1.20 | | Infrastructure & site works | assumed | 0.60 | | Contingency | 5% of the above | 0.83 | | Marketing & brokerage | 4% of GDV | 1.00 | | Total development cost | | 18.37 |

Note that construction cost did not fall when units were reduced: the same volume is still built, only fewer sellable units are extracted from it. That asymmetry is the core lesson of the parking test.

Step 7 — finance, risk, margin

| Line | Assumption | ₹ crore | |---|---|---| | Finance | 9.5% on assumed ₹9.0 cr average exposure, 30 months | 2.14 | | Risk allowance | 2% of GDV, explicit | 0.50 | | Developer margin | 20% of development cost | 3.67 |

Step 8 — residual land value

Residual = 24.90 − 18.37 − 2.14 − 0.50 − 3.67 = ₹0.22 cr
Less stamp duty / acquisition costs at assumed 7%      ≈ ₹0.21 cr payable to landowner

Conclusion on these assumptions: the scheme cannot support a meaningful land price. It is a no-go as configured.

Step 9 — before you reject the site

The appraisal has tested one scheme, not the site. Re-test:

1. Parking solution. Mechanical/stack parking, if permitted, could restore units toward 36 and add roughly ₹4.0 cr of GDV (5,275 sq ft × ₹7,500) against a parking capex — a marginal test worth running.
2. Unit mix. Larger units reduce bay count per sq ft sold. Fewer, bigger units may park more easily.
3. Premium FSI. Only if parking closes; otherwise it is unbuildable area (https://devpartner.in/insights/premium-fsi-economics).
4. Efficiency. A plate at 60% rather than 57% adds ~1,600 sq ft of carpet.
5. Structure. A JDA may work where a purchase does not, because it removes the land-finance burden (https://devpartner.in/insights/jda-share-evaluation).
6. Programme. Compressing the approval period or the sales tail reduces finance cost directly.

Then run the sensitivity grid (https://devpartner.in/insights/sensitivity-analysis-feasibility). At a ₹8,200 rate and unchanged cost assumptions, the residual on this hypothetical rises to roughly ₹2.4 cr — which tells you the deal is a price bet, and that diligence money should go into rate evidence first.

Mistakes this walkthrough is designed to expose

• Deriving unit count from FSI instead of from parking capacity.
• Reducing units without noticing that cost stays fixed.
• Presenting a residual as a land value rather than as the output of one scheme.
• Reporting a single number without the breakeven rate.
• Rejecting a site after testing exactly one configuration.

Checklist

• [ ] Assumption register created before any arithmetic
• [ ] Net plot area reconciled to title and survey
• [ ] Envelope confirmed against FSI, coverage, height and setbacks
• [ ] Parking closure tested before unit count fixed
• [ ] Cost held on GBA; revenue held on saleable
• [ ] Finance modelled on the programme
• [ ] Risk and margin stated separately
• [ ] Alternative configurations tested before go/no-go
• [ ] Breakeven rate reported alongside the residual

FAQs

Is this based on a real project? No. It is a hypothetical constructed to demonstrate method. No real site, client, transaction or market statistic is referenced.

Can I use these rates? No. Construction and sales rates vary by city, segment and date. Replace them with sourced inputs.

Why is the residual so small? Because on these assumptions the parking constraint removed revenue while cost stayed fixed. That is the intended lesson, not a market claim.

What should I do first on a real site? Confirm the governing regulation and the parking standard. Those two determine whether any of the later arithmetic is meaningful.

Next step

Re-run this sequence on your own inputs: /fsi-far-calculator → /development-potential → /construction-cost-calculator → /residual-land-value-calculator, or /joint-development-calculator for a share structure. Register the opportunity at /opportunities/new so the assumption set travels with the decision.

Sources

• Model Building Bye-Laws, 2016 — Ministry of Housing and Urban Affairs, Government of India (accessed 6 August 2026): https://mohua.gov.in/cms/model-building-byelaws.php
• National Building Code of India, 2016 (SP 7:2016) — Bureau of Indian Standards (accessed 6 August 2026): https://www.bis.gov.in/standards/technical-department/national-building-code/
• Real Estate (Regulation and Development) Act, 2016 — full text, India Code, Ministry of Law and Justice (accessed 6 August 2026): https://www.indiacode.nic.in/handle/123456789/2158

This article states no jurisdiction-specific rate, fee or market figure as fact. Every number in it is either arithmetic on stated assumptions or an explicitly labelled assumption.

Disclaimer. Hypothetical illustration and decision support only — not valuation, investment, tax, legal or planning advice, and not a representation about any market. Every figure is an assumption. Verify development control regulations, parking and setback rules, premium FSI provisions, approvals and statutory charges, taxes, construction costs, finance terms and achievable prices with qualified architects, quantity surveyors, valuers, chartered accountants, legal counsel, lenders and the competent statutory authorities before acting.

Methodology: `/methodology`.