Financial Feasibility of the Development Plan
Capital Investment Overview
Financial feasibility starts with identifying all development costs including land acquisition, infrastructure, utilities, legal and registration fees, and working capital. These costs form the baseline for assessing return potential.
- Land acquisition (market rate or negotiated price)
- Infrastructure setup (roads, power, water, drainage)
Revenue Projections
Projected income is based on the intended use—either from end-use (production savings), rental income (warehousing or factory leasing), or resale (capital appreciation). This determines your cash inflow timeline.
- Lease rental value or average selling price per square foot
- Absorption rate in the local market
- Timeframe for development and occupancy/sale
Profitability Metrics
Using key financial indicators like ROI, IRR, NPV, and Payback Period helps assess whether the development plan delivers value over time.
- ROI above 15 to 20 percent typically considered healthy
- IRR should exceed your opportunity cost of capital
- Payback period ideally within 4 to 6 years for industrial land
Risk Assessment and Sensitivity
Feasibility also requires reviewing what-if scenarios such as delays, cost overruns, or slow leasing. A strong plan includes buffers and phased execution to manage risks.
- Demand and pricing sensitivity
- Interest rate or financing risk
- Government policy or zoning changes