nordanney
2024-12-03 23:04:50
- #1
The question would be how to realize the cheapest possible construction of such buildings so that it makes sense for all parties involved. Are there types that specialize in something like this?
You need an architect. And then you can search – but you can forget about modular construction of this size. The building is too small for that. G
Does the business case improve with two rented condominiums on top of the second floor?
Higher land utilization is almost always better. But think about the parking spaces, basement/storage rooms, separate access, etc. Does the plot even allow for such high utilization?
For the apartments, you could probably set €10 per sqm, for the practice €14. Can it currently be built so that it pays off?
You can calculate that yourself. If you leave out the land since you already own it, you can make the project look good on paper.
Are there still supposed to be incentives? Regulations on ancillary costs? Subsidies for tenant fit-outs?
200 sqm practice at €14 (gross or net? The doctor is usually a VAT offender, so you can’t claim input VAT deduction on construction). I assume gross.
==> €33.6K p.a.
2x apartments at 85 sqm each and €10 (rest = common areas etc.)
==> €20.4K p.a.
Total: €54K
For a 5% before tax and operating costs return, the building can then cost no more than €1.1 million. That corresponds to construction costs of €2,900/sqm including incidental costs. You won’t be able to build for that. So rather calculate with a 3.5% return BEFORE operating costs and taxes.
So no, the building really won’t be economical.
This is just a brief pragmatic example of why even in new residential construction such high rents are demanded to make a project profitable.